<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 28, 1997
Mobil Corporation
_______________
(Exact Name of registrant as specified in its charter)
Delaware 1-7555 13-2850309
- -------------------------------------------------------------------------
(State of Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
3225 Gallows Road
Fairfax, Virginia 22037-0001
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (703) 846-3000
No Change
____________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Exhibits. The documents listed below are filed as Exhibits
with reference to the Registration Statement (the "Registration Statement")
on Form S-3 (Registration No. 333-13457) of Mobil Corporation (the
"Company"), Mobil Chemical Finance (Texas) Inc. (the "Lessee"), and certain
other subsidiaries of the Company. The Registration Statement and the
Prospectus Supplement, dated May 21, 1997, to the Prospectus, dated
November 12, 1996, relate to the offering of the Company's Pass Through
Certificates, Series 1997-A.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
1.1 Underwriting Agreement, among Mobil Corporation, Mobil Chemical
Finance (Texas) Inc. and Goldman, Sachs & Co.
4.1 Form of Pass Through Trust Supplement.
4.2 Form of Indenture relating to the Facility Assets.
4.3 Form of Secured Note relating to the Facility Assets.
4.4 Form of Facility Assets Lease Agreement relating to the Facility
Assets.
4.5 Form of Ground Lease relating to the Facility.
4.6 Form of Trust Agreement relating to the Facility Assets.
4.7 Form of Participation Agreement relating to the Facility Assets.
4.8 Form of Guaranty relating to the Facility Assets.
4.9 Form of Appendix of Definitions.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.
MOBIL CORPORATION
By: /s/ Debra D. Drumheller
----------------------------------
Name: Debra D. Drumheller
Title: Assistant Treasurer
Dated: May 30, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
1.1 Underwriting Agreement, among Mobil Corporation, Mobil Chemical
Finance (Texas) Inc. and Goldman, Sachs & Co.
4.1 Form of Pass Through Trust Supplement.
4.2 Form of Indenture relating to the Facility Assets.
4.3 Form of Secured Note relating to the Facility Assets.
4.4 Form of Facility Assets Lease Agreement relating to the Facility
Assets.
4.5 Form of Ground Lease relating to the Facility.
4.6 Form of Trust Agreement relating to the Facility Assets.
4.7 Form of Participation Agreement relating to the Facility Assets.
4.8 Form of Guaranty relating to the Facility Assets.
4.9 Form of Appendix of Definitions.
<PAGE>
EXHIBIT 1.1
MOBIL CORPORATION
MOBIL CHEMICAL FINANCE (TEXAS) INC.
1997-A PASS THROUGH TRUST
PASS THROUGH CERTIFICATES,
SERIES 1997-A
UNDERWRITING AGREEMENT
Dated: May 22, 1997
<PAGE>
May 22, 1997
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Mobil Chemical Finance (Texas) Inc., a Delaware corporation (the
"Company"), in connection with the financing of the debt portion of a leveraged
lease transaction with respect to certain paraxylene production facility assets
located in Beaumont, Texas, proposes that State Street Bank and Trust Company
("SSB&T"), as trustee (the "Pass Through Trustee"), will issue and sell to you
its Pass Through Certificates, Series 1997-A, in the principal amount and with
the interest rate and final distribution date set forth on Schedule A hereto
(the "Offered Certificates") on the terms and conditions stated herein. The
Offered Certificates will be issued under the Pass Through Trust Agreement,
dated as of October 4, 1996 (the "Basic Agreement") among Mobil Corporation, a
Delaware corporation (the "Guarantor"), the Company, the Pass Through Trustee,
and the other parties described therein, as supplemented by the Pass Through
Trust Supplement No. 1997-A, dated as of May 28, 1997 (the "Trust Supplement"),
among the Guarantor, the Company and the Pass Through Trustee (the Basic
Agreement as supplemented by the Trust Supplement being referred to herein as
the "Designated Agreement"). Capitalized terms used herein without definition
shall have the respective meanings ascribed to such terms in the Designated
Agreement or in the Trust Indenture, Deed of Trust, Assignment of Lease and
Security Agreement, dated effective as of May 28, 1997 ("the Indenture"),
between Wilmington Trust Company, as owner trustee (the "Owner Trustee") and
SSB&T, as Indenture Trustee (the "Indenture Trustee").
The Guarantor and the Company and certain other subsidiaries of the
Guarantor have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-13457),
relating to certain pass through certificates, including the Offered
Certificates, and the offering thereof from time to time in accordance with Rule
415 of the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Securities Act"). The
registration statement as amended at the date hereof, including the exhibits
thereto and the documents incorporated by reference therein, is herein referred
to as the "Registration Statement". The Registration Statement includes a basic
prospectus referred to below which, as supplemented from time to time, will be
used in connection with all offerings of such pass through certificates. A
prospectus supplement reflecting the terms of the Offered Certificates, the
terms of the offering thereof and other matters relating to the Offered
Certificates has been prepared and has been or will be filed (or mailed for
filing) together with the basic prospectus referred to below pursuant to Rule
424 under the Securities Act
<PAGE>
2
(such prospectus supplement, in the form first filed on or after the date hereof
pursuant to Rule 424, is herein referred to as the "Prospectus Supplement" and
any such prospectus supplement in the form or forms filed prior to the
Prospectus Supplement is herein referred to as a "Preliminary Prospectus
Supplement"). The basic prospectus included in the Registration Statement and
relating to all offerings of pass through certificates under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus", except that, if such basic prospectus is amended on or prior to
the date on which the Prospectus Supplement is first filed (or mailed for
filing) pursuant to Rule 424, the term "Prospectus" shall refer to such basic
prospectus as so amended and as supplemented by the Prospectus Supplement, in
either case including the documents filed by the Guarantor with the Commission
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"),
that are incorporated by reference therein. Any reference herein to the terms
"amendment" or "supplement" with respect to the Registration Statement, to the
Prospectus, any Preliminary Prospectus Supplement or to any preliminary
prospectus shall be deemed to refer to and include any documents filed with the
Commission under the Exchange Act after the date hereof, the date the Prospectus
is filed (or mailed for filing) with the Commission, or the date of such
Preliminary Prospectus Supplement or preliminary prospectus, as the case may be,
and incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act.
I.
The Guarantor and the Company represent and warrant to, and agree with, you
that:
(a) The Guarantor and the Company meet the requirements for use of
Form S-3 under the Securities Act; the Registration Statement has become
effective; (i) on the original effective date of the Registration
Statement, on the effective date of the most recent post-effective
amendment thereto, if any, and on the date of the filing by the Guarantor
of any annual report on Form 10-K after the original effective date of the
Registration Statement, the Registration Statement and any amendments and
supplements thereto complied in all material respects with the requirements
of the Securities Act and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (ii) on the
date hereof and at all times subsequent thereto up to the Closing Date
referred to below, neither the Prospectus nor any amendment or supplement
thereto will include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that neither the Guarantor nor the Company makes any representation
or warranty as to statements
<PAGE>
3
or omissions made in reliance upon and in conformity with information
furnished in writing to the Guarantor and/or the Company by or on behalf of
you expressly for use in the Registration Statement or the Prospectus or to
statements or omissions in that part of the Registration Statement which
shall constitute the Statement of Eligibility on Form T-1 (the "Statement
of Eligibility") under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Pass Through Trustee.
(b) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the Securities Act, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act.
(c) The Guarantor and the Company have been informed by Ernst & Young
LLP ("E&Y"), who have reported upon the audited consolidated financial
statements and the financial statement schedules, if any, included or
incorporated by reference in the Registration Statement, that E&Y are
independent public accountants as required by the Securities Act.
(d) This Agreement has been duly authorized, executed and delivered by
the Guarantor and the Company.
(e) The consolidated financial statements included or incorporated by
reference in the Registration Statement present fairly the consolidated
financial position of the Guarantor and its subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows or
changes in financial position of the Guarantor and its subsidiaries for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be
indicated therein. The financial statement schedules, if any, included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein. The selected consolidated
financial data included in the Prospectus (if any) present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statement.
(f) Each of the Guarantor and the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority under such laws to
own, lease and operate its properties and conduct its business as described
in the Prospectus and to perform its obligations under this Agreement, the
Designated Agreement and the other Operative Documents to which it is, or
is to be, a party; and each of the Guarantor and the Company is duly
qualified to transact business as a foreign corporation and is
<PAGE>
4
in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Guarantor and its subsidiaries, taken as a whole, or on the power or
ability of the Guarantor or the Company, as the case may be, to perform its
obligations under this Agreement, the Designated Agreement or the Operative
Documents to which it is, or is to be, a party or to consummate the
transactions contemplated hereby and thereby (any such material adverse
effect, whether with respect to the Guarantor or the Company, as
applicable, is referred to herein as a "Material Adverse Effect").
(g) Each subsidiary of the Guarantor (other than the Company) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus, and is duly qualified
to transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a Material Adverse Effect.
(h) The Designated Agreement and the other Operative Documents to
which the Guarantor and/or the Company is, or is to be, a party, have each
been duly authorized by the Guarantor and/or the Company, as the case may
be, and, when duly executed and delivered by the Guarantor and/or the
Company, as the case may be, and assuming the due authorization, execution
and delivery thereof by the other parties thereto, will constitute valid
and binding obligations of the Guarantor and/or the Company, as the case
may be, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally, and by general
principles of equity and (B) the enforceability of the Lease may be limited
by applicable laws which may affect the remedies provided therein, which
laws, however, do not make such remedies inadequate for the practical
realization of the rights and remedies provided thereby and that, as more
fully set forth in the opinion of Vinson & Elkins delivered pursuant to
Section 4.7(c) of the Participation Agreement, certain of the remedies
provided in the Lease with regard to the Facility Assets may not be
enforceable in accordance with their terms under the laws of the State of
Texas. The Basic Agreement as executed is substantially in the form filed
as an exhibit to the Registration Statement and has been duly qualified
under the Trust Indenture Act. The Offered Certificates, the Secured
Notes, the Indenture, the Designated Agreement and other Operative
Documents to which the Guarantor and/or the Company is, or is
<PAGE>
5
to be, a party will conform in all material respects to the descriptions
thereof in the Prospectus.
(i) The Offered Certificates, when duly executed, authenticated and
delivered by the Pass Through Trustee in accordance with the terms of the
Designated Agreement, this Agreement and any Delayed Delivery Contracts,
will be duly issued under the Designated Agreement and will constitute
valid and binding obligations of the Pass Through Trustee, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and by general principles of equity; and the
holders thereof will be entitled to the benefits of the Designated
Agreement.
(j) The Secured Notes to be issued under the Indenture, when duly
executed and delivered by the related Owner Trustee and duly authenticated
by the Indenture Trustee in accordance with the terms of the Indenture,
will be duly issued under the Indenture and will constitute the valid and
binding obligations of the Owner Trustee and the holders thereof will be
entitled to the benefits of the Indenture.
(k) In the event that any of the Offered Certificates are purchased
pursuant to Delayed Delivery Contracts, each of such Delayed Delivery
Contracts has been duly authorized by the Guarantor and the Company and,
when duly executed and delivered by the Guarantor and the Company, will
constitute a valid and binding obligation of the Guarantor and the Company.
(l) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has not been any material adverse
change, or any development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings, or business
operations of the Guarantor and its subsidiaries, taken as a whole.
(m) The execution and delivery by the Guarantor and/or the Company of
this Agreement, the Designated Agreement and the other Operative Documents
to which the Guarantor and/or the Company is, or is to be, a party, the
consummation by the Guarantor and the Company of the transactions
contemplated in this Agreement, the Designated Agreement and such Operative
Documents, and compliance by the Guarantor and the Company with the terms
of this Agreement, the Designated Agreement and such other Operative
Documents, do not and will not result in any violation of the charter or
by-laws of the Guarantor or the Company, and do not and will not conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance (other than Permitted Liens) upon any property
or
<PAGE>
6
assets of the Guarantor or the Company under (A) any indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the
Guarantor or any of its subsidiaries is a party or by which it may be bound
or to which any of its properties may be subject and which is material to
the Guarantor and its subsidiaries, taken as a whole, or to the Company or
(B) any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court, domestic
or foreign, having jurisdiction over the Guarantor or any of the
subsidiaries or any of their properties other than the securities or Blue
Sky or similar laws of the various states (except, in the case of either
clause (A) or (B), for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect).
(n) No authorization, approval, consent, order or license of or filing
with or notice to any government, governmental instrumentality or court,
domestic or foreign, is required for the valid authorization, issuance,
sale and delivery of the Offered Certificates, the valid authorization,
execution, delivery and performance by the Guarantor or the Company of this
Agreement, the Designated Agreement and the Guaranty and any Delayed
Delivery Contracts or the consummation by the Guarantor or the Company of
the transactions contemplated by this Agreement, the Designated Agreement
and the Guaranty, except (i) such as are required under the Securities Act,
the Trust Indenture Act and the securities or Blue Sky or similar laws of
the various states and (ii) those which if not obtained would not result in
a Material Adverse Effect.
(o) Except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Guarantor,
threatened to which the Guarantor or any of its subsidiaries is a party or
to which any of the properties of the Guarantor or any of its subsidiaries
is subject other than proceedings that if adversely determined would not
have a Material Adverse Effect.
(p) There are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described and filed as
required.
(q) Each of the Company, the Guarantor and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-
regulatory organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business in
the manner described in the Prospectus, except to the extent that the
failure to so obtain or file would not have a Material Adverse Effect.
<PAGE>
7
(r) Neither the Guarantor nor the Company is an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"); and the Pass Through Trust, after giving effect to the offering and
sale of the Offered Certificates and the application of proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act.
(s) Neither the Guarantor nor the Company has taken or will take,
directly or indirectly, any actions prohibited by Regulation M under the
Exchange Act.
(t) The Guarantor and the Company have each complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida), and all regulations promulgated thereunder relating to doing
business with the government of Cuba or with any person or affiliate
located in Cuba.
II.
Subject to the terms and conditions set forth herein and in reliance
upon the representations and warranties herein contained, the Guarantor and the
Company agree to cause the Pass Through Trustee to sell to you, and you agree to
purchase from the Pass Through Trustee, at a purchase price of 100% of the
principal amount thereof, the aggregate principal amount of Offered Certificates
set forth in Schedule A.
The Guarantor and the Company are advised by you that you propose to
make a public offering of the Offered Certificates as soon after this Agreement
has been entered into as in your judgment is advisable. The Guarantor and the
Company are further advised by you that the Offered Certificates are to be
offered to the public initially at 100% of their principal amount -- the public
offering price -- plus accrued interest, if any, and to certain dealers selected
by you at concessions not in excess of the concessions set forth in the
Prospectus, and that you may allow, and such dealers may reallow, concessions,
not in excess of the concessions set forth in the Prospectus, to certain other
dealers.
If specified in Schedule II, you may solicit offers from institutional
investors to purchase Offered Certificates pursuant to delayed delivery
contracts ("Delayed Delivery Contracts") substantially in the form of Schedule
III with such changes therein as the Company may approve. On the Closing Date,
the Guarantor and the Company will enter into Delayed Delivery Contracts (for
the minimum principal amount of Certificates per Delayed Delivery Contract
specified in Schedule II) with all purchasers proposed by you and previously
approved by the Guarantor and the Company as provided below, but not for an
aggregate principal amount of Offered Certificates less than the minimum or
greater than the
<PAGE>
8
maximum aggregate principal amounts specified in Schedule II. You will not have
any responsibility for the validity or performance of Delayed Delivery
Contracts.
You are to submit to the Guarantor and the Company, at least three
business days prior to the Closing Date, the names of any institutional
investors with which it is proposed that the Company enter into Delayed Delivery
Contracts, the principal amount of Offered Certificates to be purchased by each
of them and the date of delivery thereof, and the Company will advise you, at
least two business days prior to the Closing Date, of the names of the
institutions with which the making of Delayed Delivery Contracts is approved by
the Company and the principal amount of Offered Certificates to be covered by
each such Delayed Delivery Contract.
As compensation for arranging Delayed Delivery Contracts, the Company
will pay (by Federal funds check or other immediately available funds) to you on
the Closing Date, a fee equal to that percentage of the principal amount of
Offered Certificates for which Delayed Delivery Contracts are made on the
Closing Date as is specified in Schedule II or the amount of such fee may be
deducted from the check delivered by you pursuant to Article III.
As compensation to you for your commitments and obligations hereunder
in respect of the Offered Certificates, including your undertaking to distribute
Offered Certificates, the Guarantor will pay or cause to be paid by the Owner
Trustee to you an amount equal to that percentage of the aggregate principal
amount of the Offered Certificates purchased by you as set forth in Schedule A.
Such payment shall be made simultaneously with the payment by you to the Pass
Through Trustee of the purchase price of the Offered Certificates as specified
in Article III hereof. Payment of such compensation shall be made by Federal
funds check or other immediately available funds.
III.
Delivery of and payment for the Offered Certificates shall be made at
the offices of Debevoise & Plimpton, 875 Third Avenue, New York, New York, at
9:00 A.M. (New York time) May 28, 1997, or such other date, time and place as
may be agreed upon by the Guarantor, the Company and you (such date and time of
delivery and payment for the Offered Certificates being herein called the
"Closing Date"). Delivery of the Offered Certificates shall be made to your
account at The Depository Trust Company against payment by you of the purchase
price thereof to or upon the order of the Pass Through Trustee by Federal funds
check or other immediately available funds. The Offered Certificates shall be
registered in the name of Cede & Co. or in such other names, and in such
denominations as you may request in writing at least two full business days in
advance of the Closing Date.
<PAGE>
9
The Guarantor and the Company agree to have the Offered Certificates,
which may be in temporary form, available for inspection, checking and packaging
by you in New York, New York not later than 1:00 P.M. on the business day prior
to the Closing Date.
IV.
Your obligations hereunder are subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no
proceedings therefor shall have been instituted or threatened by the
Commission.
(b) You shall have received on the Closing Date an opinion of
Debevoise & Plimpton, counsel for the Guarantor and the Company reasonably
acceptable to you, dated the Closing Date, in form satisfactory to you and
to your counsel, to the effect that:
(i) Assuming that the Offered Certificates have been duly
authorized and validly executed, authenticated, issued and delivered
by the Pass Through Trustee pursuant to the Designated Agreement, when
such Offered Certificates have been paid for in accordance with the
terms of this Agreement, such Offered Certificates will (x) be valid
and binding obligations of the Pass Through Trustee enforceable in
accordance with their terms except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and by general principles of equity and
(y) be entitled to the benefits of the Designated Agreement;
(ii) In the event that any of the Offered Certificates are to be
purchased pursuant to Delayed Delivery Contracts, each Delayed
Delivery Contract that has been executed by the Guarantor and the
Company has been duly authorized, executed and delivered by the
Guarantor and the Company and is a valid and binding obligation of the
Guarantor and the Company enforceable against the Guarantor and the
Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity;
(iii) The Offered Certificates, the Designated Agreement and the
Operative Documents conform in all material respects as to legal
matters to the descriptions thereof, if any, contained in the
Prospectus, and the description of
<PAGE>
10
the Offered Certificates conforms in all material respects to the
rights set forth in the instruments defining the same;
(iv) No authorization, approval, consent, order or license of or
filing with or notice to any government, governmental instrumentality,
regulatory body or authority or court is required for the valid
authorization, issuance and delivery of the Offered Certificates, the
valid authorization, execution, delivery and performance by the
Guarantor and the Company of this Agreement, the Designated Agreement
and the Guaranty, or the consummation by the Guarantor and/or the
Company of the transactions contemplated by this Agreement, the
Designated Agreement and/or the Guaranty, except (i) such as are
required under the Securities Act, the Trust Indenture Act and the
securities or Blue Sky laws of the various states (as to which such
counsel need express no opinion) and (ii) those which if not obtained
would not result in a Material Adverse Effect;
(v) The Registration Statement has become effective under the
Securities Act, the Basic Agreement has been duly qualified under the
Trust Indenture Act and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted
or threatened;
(vi) The Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (except for the financial
statements and other financial data included or incorporated by
reference therein, the documents incorporated by reference in the
Prospectus, and the Statement of Eligibility, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Securities Act;
(vii) This Agreement has been duly authorized, executed and
delivered by the Guarantor and the Company;
(viii) The Participation Agreement has been duly authorized,
executed and delivered by the Company, and the Designated Agreement
has been duly authorized, executed and delivered by the Guarantor and
the Company and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, each of the
Participation Agreement and the Designated Agreement is a valid and
binding obligation of the Guarantor and the Company enforceable
against the Guarantor and/or the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors'
rights generally and by general principles of equity;
<PAGE>
11
(ix) The Guaranty has been duly authorized and upon due execution
and delivery by the Guarantor will be a valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally and by general principles of equity;
(x) The statements in the Registration Statement and Prospectus
under the headings "Federal Income Tax Consequences" and "ERISA
Considerations", to the extent that they constitute matters of law or
legal conclusions with respect thereto, have been prepared or reviewed
by such counsel and are correct in all material respects;
(xi) Based upon an interpretation of analogous authorities under
currently applicable law, the Pass Through Trust created by the
Designated Agreement will be classified as a grantor trust (and not as
an association taxable as a corporation) for federal income tax
purposes and each Certificate Owner will be treated as the owner of a
pro rata undivided interest in each of the Secured Notes or any other
property held in the Pass Through Trust;
(xii) Although counsel is not aware of any judicial authority,
the Pass Through Trust is not required to be registered under the
Investment Company Act of 1940, as amended;
(xiii) Upon consummation of the transactions contemplated by the
Participation Agreement, on the Closing Date, assuming due
authorization, execution and delivery by the Owner Trustee and due
authentication by the Indenture Trustee, the Secured Notes will
constitute valid and binding obligations of the Owner Trustee,
enforceable against the Owner Trustee in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors'
rights generally and by general principles of equity; and the holders
of the Secured Notes will be entitled to the benefits of the
Indenture; and
(xiv) Assuming due authorization, execution and delivery of the
Designated Agreement by the Pass Through Trustee, the Designated
Agreement constitutes the valid and binding obligation of the Pass
Through Trustee, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity;
<PAGE>
12
and to such further effect with respect to other legal matters relating to
this Agreement, the Designated Agreement, the Participation Agreement, the
Guaranty and other Operative Documents to which the Guarantor and/or the
Company is, or is to be, a party and the sale of the Offered Certificates
hereunder as your counsel may reasonably request.
Such opinion may state that, except with respect to the matters set
forth in clauses (iii) and (x) above, such counsel have not verified, and
are not passing upon and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, or the documents incorporated by
reference therein, and have not made an independent investigation of facts
for the purpose of rendering such opinion. Such opinion shall state,
however, that no facts came to such counsel's attention that caused them to
believe that the descriptions of the Offered Certificates, the Designated
Agreement and the Operative Documents set forth under the headings
"Description of the Certificates" and "Description of the Secured Notes" in
the Prospectus or any amendment or supplement thereto, at the time the
Prospectus Supplement was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In addition, such counsel may rely upon the opinions of counsel for
the Owner Trustee and counsel for the Pass Through Trustee and the
Indenture Trustee, and may state that their opinion is limited to matters
governed by the laws of the State of New York, the corporate law of the
State of Delaware and the federal law of the United States, except that
such counsel expresses no opinion as to the securities laws of any state.
(c) You shall have received on the Closing Date an opinion of Ralph N.
Johanson, Jr., Managing Counsel, Corporate, Finance and Securities of the
Guarantor, dated the Closing Date, in form satisfactory to you and to your
counsel, to the effect that:
(i) Each of the Guarantor and the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority under such laws
to own, lease and operate its properties and conduct its business as
described in the Prospectus and to perform its obligations under this
Agreement, the Designated Agreement, the Participation Agreement and
the other Operative Documents to which the Guarantor and/or the
Company is, or is to be, a party;
<PAGE>
13
(ii) Each of Mobil's Significant Subsidiaries (as defined under
Regulation S-X) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus;
(iii) Each of the Guarantor and the Company is duly qualified to
transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse
Effect;
(iv) Each of the Guarantor, the Company and the Guarantor's
Significant Subsidiaries (as defined under Regulation S-X) has all
necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except
to the extent that, with respect to the Guarantor and its Significant
Subsidiaries, the failure to obtain or file would not have a material
adverse effect on the Guarantor and its subsidiaries, taken as a whole
and with respect to the Company, the failure to obtain or file would
not have a Material Adverse Effect;
(v) No authorization, approval, consent, order or license of or
filing with or notice to any government, governmental instrumentality,
regulatory body or authority or court is required for the valid
authorization, issuance and delivery of the Offered Certificates, the
valid authorization, execution, delivery and performance by the
Guarantor and/or the Company of this Agreement, the Designated
Agreement and the Guaranty, or the consummation by the Guarantor
and/or the Company of the transactions contemplated by this Agreement,
the Designated Agreement and the Guaranty, except (i) such as are
required under the Securities Act, the Trust Indenture Act and the
securities or Blue Sky laws of the various states (as to which such
counsel need express no opinion) and (ii) those which if not obtained
would not result in a Material Adverse Effect;
(vi) To the best of such counsel's knowledge, there are no
statutes or regulations, or any pending or threatened legal or
governmental proceedings, required to be described in the Prospectus
that are not described
<PAGE>
14
as required, nor any contracts or documents of a character required to
be described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described, referred to or filed as required;
(vii) The descriptions in the Prospectus of the statutes,
regulations, legal or governmental proceedings, contracts and other
documents therein described are accurate in all material respects and
fairly summarize the information required to be shown;
(viii) To such counsel's knowledge, no default exists in the
Guarantor's or the Company's performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed as an exhibit to the
Registration Statement;
(ix) This Agreement, the Designated Agreement, the Participation
Agreement and the Operative Documents to which the Guarantor and/or
the Company is a party have each been authorized, executed and
delivered by the Guarantor and/or the Company, as the case may be.
The execution and delivery by the Guarantor and/or the Company of this
Agreement, the Designated Agreement, the Participation Agreement and
the Operative Documents to which the Guarantor and/or the Company is a
party, the issuance and sale of the Certificates, the consummation by
the Guarantor and/or Company of the transactions contemplated in this
Agreement, the Designated Agreement and the Participation Agreement,
in the Registration Statement and in such Operative Documents and
compliance by the Guarantor and/or the Company, as the case may be,
with the terms hereof and thereof do not and will not result in any
violation of the charter or by-laws of the Guarantor or the Company,
and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance
(except for Permitted Liens) upon any property or assets of the
Guarantor or the Company under (A) any indenture, mortgage, loan
agreement, note, lease or other agreement or instrument known to such
counsel, to which the Guarantor or the Company is a party or by which
it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), (B) any
existing law, rule or regulation applicable to the Guarantor or the
Company (other than the securities or Blue Sky laws of the various
states, as to which such counsel need express no opinion), or (C) any
judgment, order
<PAGE>
15
or decree of any government, governmental instrumentality or court,
domestic or foreign, known to such counsel having jurisdiction over
the Guarantor or the Company or any of their properties;
(x) The documents incorporated by reference in the Prospectus
(except for the financial statements and other financial data included
or incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), as of the dates they were filed
with the Commission, complied as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder; and
(xi) Neither the Guarantor nor the Company is an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
Such opinion shall also state that such counsel or lawyers on his
staff have participated in the preparation of the Registration Statement,
the Prospectus and the documents incorporated by reference therein and that
no facts have come to his attention to lead him to believe (A) that the
Registration Statement or any amendment thereto (except for (i) the
financial statements and other financial data included therein or omitted
therefrom, (ii) the Statement of Eligibility and Qualification of the
Trustee on Form T-1 and (iii) the descriptions of the Offered Certificates,
the Designated Agreement and the Operative Documents set forth under the
headings "Description of the Certificates" and "Description of the Secured
Notes", as to which such counsel need express no opinion), at the time the
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) that the Prospectus or any amendment or supplement
thereto (except for the financial statements and other financial data
included therein or omitted therefrom and the descriptions of the Offered
Certificates, the Designated Agreement and the Operative Documents set
forth under the headings "Description of the Certificates" and "Description
of the Secured Notes", as to which such counsel need express no opinion),
at the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading
or (C) that the documents incorporated by reference in the Prospectus
(except for the financial statements and other financial data included
therein or omitted therefrom and the Statement of Eligibility, as to which
such counsel need express no opinion), as of the dates they were filed with
the Commission, included an untrue statement of a material
<PAGE>
16
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) You shall have received on the Closing Date an opinion of Bingham,
Dana & Gould LLP, counsel to SSB&T, individually and as Pass Through
Trustee and Indenture Trustee, dated the Closing Date to the effect that:
(i) SSB&T is a state chartered trust company duly organized and
validly existing in good standing under the laws of the Commonwealth
of Massachusetts and, in its individual capacity or as Pass Through
Trustee or Indenture Trustee, as the case may be, has full corporate
power and authority to execute, deliver and perform its obligations
under the Designated Agreement, the Offered Certificates, the
Participation Agreement and the other Operative Documents to which it
is a party;
(ii) SSB&T, in its individual capacity or as Pass Through Trustee
or as Indenture Trustee, as the case may be, has duly authorized the
Designated Agreement, the Participation Agreement, the Indenture and
the other Operative Documents to which it is a party, and has duly
executed and delivered the Designated Agreement, the Participation
Agreement and the Indenture which constitute, and on the Closing Date
the other Operative Documents to which it is a party upon due
execution and delivery thereof will constitute, valid and binding
obligations of SSB&T, in its individual capacity or as Pass Through
Trustee or Indenture Trustee, as the case may be, enforceable against
SSB&T, in its individual capacity or as Pass Through Trustee or
Indenture Trustee, as the case may be, in accordance with their
respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
enforcement of creditors' rights generally, and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law);
(iii) The Offered Certificates have been duly authorized and
validly executed, authenticated, issued and delivered pursuant to the
Designated Agreement by SSB&T in its capacity as Pass Through Trustee,
pursuant to the Designated Agreement and the Offered Certificates
constitute valid and binding obligations of SSB&T, in its capacity as
Pass Through Trustee, enforceable against SSB&T, as Pass Through
Trustee, in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditors' rights generally, and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered
<PAGE>
17
in a proceeding in equity or at law); pursuant to the Designated
Agreement, and the holders of the Offered Certificates are entitled to
the benefits of the Designated Agreement;
(iv) The authorization, execution, delivery and performance by
SSB&T, in its individual capacity or as Pass Through Trustee or
Indenture Trustee, as the case may be, of the Designated Agreement,
the Participation Agreement, the Indenture or the other Operative
Documents to which it is, or is to be, a party and the consummation of
the transactions therein contemplated and compliance with the terms
thereof and issuance of the Offered Certificates under the Designated
Agreement do not and will not result in the violation of the
provisions of the charter documents or by-laws of the SSB&T and do not
and will not conflict with, or result in a breach of any terms or
provisions of, or constitute a default under, or result in the
creation or the imposition of any lien, charge or encumbrance upon any
property or assets of the Trustee under any indenture, mortgage or
other agreement or instrument known to such counsel to which SSB&T is
a party or by which it or any of its property is bound, or any
Massachusetts or federal law, rule or regulation governing SSB&T's
banking or trust powers, or of any judgment, order or decree known to
such counsel to be applicable to SSB&T of any court, regulatory body,
administrative agency, government or governmental body having
jurisdiction over SSB&T or its properties;
(v) No authorization, approval, consent, license or order of,
giving of notice to, registration with, or taking of any other action
in respect of, any federal or state governmental authority or agency
pursuant to any federal or Massachusetts law governing the banking or
trust powers of SSB&T is required for the authorization, execution,
delivery and performance by SSB&T, in its individual capacity or as
Pass Through Trustee or Indenture Trustee, as the case may be, of the
Designated Agreement, the Participation Agreement, the Indenture or
the other Operative Documents to which it is, or is to be, a party or
the consummation of any of the transactions by SSB&T, in its
individual capacity or as Pass Through Trustee or Indenture Trustee,
as the case may be, contemplated thereby or the issuance of the
Offered Certificates under the Designated Agreement (except as shall
have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not
conflict with or result in a breach of the provisions of any such law;
(vi) There are no taxes, fees or other governmental charges
payable under the laws of the Commonwealth of Massachusetts or any
political subdivision of such State in connection with the execution
and delivery by
<PAGE>
18
SSB&T, of the Designated Agreement, the Note Purchase Agreements and
the other Operative Documents or in connection with the issuance,
execution and delivery of the Offered Certificates by SSB&T pursuant
to the Designated Agreement;
(vii) The statements in the Registration Statements and in the
Prospectus under the caption "Certain Massachusetts Taxes", to the
extent that they constitute matters of law or legal conclusions with
respect thereto, have been prepared and reviewed by such counsel and
are correct in all material respects; and
(viii) To such counsel's knowledge, there are no proceedings
pending or threatened against or affecting SSB&T in any court or
before any governmental authority, agency, arbitration board or
tribunal which, if adversely determined, individually or in the
aggregate, would materially and adversely affect the Pass Through
Trust or any trust related to any Indenture or question the right,
power and authority of SSB&T, in its individual capacity or as Pass
Through Trustee or Indenture Trustee as the case may be, to enter into
or perform its obligations under the Designated Agreement, the
Participation Agreement and the other Operative Documents to which it
is, or is to be, a party or to issue the Offered Certificates.
(e) You shall have received on the Closing Date an opinion of Shearman
& Sterling, your counsel, dated the Closing Date, to the effect that the
opinions delivered pursuant to paragraphs (b), (c) and (d) appear on their
face to be appropriately responsive to the requirements of this Agreement
except, specifying the same, to the extent waived by you and with respect
to the issuance and sale of the Offered Certificates, the Registration
Statement, the Prospectus and other related matters as you may reasonably
require.
(f) There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Guarantor and its
subsidiaries, taken as a whole, from that set forth in the Prospectus, that
is material and adverse and that would, in your reasonable judgment after
consultation with the Guarantor, prevent or materially impair the
marketing or enforcement of contracts for sale of the Offered Certificates
on the terms and in the manner contemplated in the Prospectus.
(g) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor
any notice given either publicly or directly to the Guarantor of any
intended or potential downgrading or any review with possible negative
implications, in the rating accorded any of the
<PAGE>
19
Guarantor's or the Company's securities, including the Offered
Certificates, by Standard & Poor's Rating Group or Moody's Investors
Service, Inc.
(h) You shall have received on the Closing Date (i) a certificate,
dated the Closing Date and signed by the President, a Vice President, the
Treasurer or the Controller of the Guarantor, to the effect set forth in
paragraph (g) above and to the effect that the representations and
warranties of the Guarantor contained in this Agreement shall be true and
correct as of the Closing Date and that the Guarantor shall have performed
all of its obligations to be performed hereunder on or prior to the Closing
Date and (ii) a certificate, dated the Closing Date and signed by the
President, a Vice President, the Treasurer or the Controller of the
Company, to the effect that the representations and warranties of the
Company contained in this Agreement shall be true and correct as of the
Closing Date and that the Company shall have performed all of its
obligations to be performed hereunder on or prior to the Closing Date.
(i) You shall have received on the Closing Date a letter from E&Y,
dated the Closing Date, in form and substance satisfactory to you, from the
Guarantor's independent auditors, containing statements and information of
the type ordinarily included in auditors' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Prospectus.
(j) All conditions specified in the Participation Agreement with
respect to the Pass Through Trustee's purchase of the Secured Notes on the
Closing Date shall have been satisfied on the Closing Date; the
representations and warranties of the Company contained in the
Participation Agreement shall be accurate as of the Closing Date (except to
the extent that they relate solely to an earlier date in which case they
shall be accurate as of such earlier date) and you shall have received a
certificate of a Vice President or Treasurer of the Company, dated as of
the Closing Date, to such effect; and you shall have received each opinion
referred to in Section 4.7 of the Participation Agreement.
(k) The representations and warranties of the Guarantor contained in
the Guaranty shall be accurate as of the Closing Date (except to the extent
that they relate solely to an earlier date in which case they shall be
accurate as of such earlier date) and you shall have received a certificate
of a Vice President or Treasurer of the Guarantor, dated as of the Closing
Date, to such effect.
(l) The Guarantor and the Company shall have furnished to you and to
your counsel, in form and substance satisfactory to them, such other
documents, certificates and opinions as such counsel may reasonably request
in order to evidence
<PAGE>
20
the accuracy and completeness of any of the representations, warranties or
statements, the performance of any covenant by the Guarantor or the Company
theretofore to be performed, or the compliance with any of the conditions
herein contained.
V.
In further consideration of the agreements of your agreement herein
contained, the Guarantor and the Company covenant as follows:
(a) To furnish to you, without charge, one signed copy of the
Registration Statement including exhibits and a conformed copy of the
Registration Statement without exhibits and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish you a copy of each such proposed amendment or
supplement, and to file no such proposed amendment or supplement to which
you reasonably object.
(c) If, during such period after the first date of the public offering
of the Offered Certificates as in the opinion your counsel the Prospectus
is required by law to be delivered in connection with sales by you or a
dealer, any event shall occur as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare and furnish, at its own
expense, to you and to the dealers (whose names and addresses you will
furnish to the Guarantor and the Company) to which Offered Certificates may
have been sold by you on behalf of you and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus, as so amended or supplemented,
will comply with law and to cause such amendments or supplements to be
filed promptly with the Commission.
(d) To endeavor to qualify the Offered Certificates for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request, to maintain such qualifications for so long as required
for the distribution of such Offered Securities and to pay all expenses
(including filing fees and reasonable fees
<PAGE>
21
and disbursements of counsel) in connection with such qualification and in
connection with (i) the review (if any) of the offering of the Offered
Certificates by the National Association of Securities Dealers, Inc., (ii)
the determination of the eligibility of the Offered Certificates for
investment under the laws of such jurisdictions as you may designate and
(iii) the preparation of any Blue Sky or Legal Investment Memorandum;
provided, however, that neither the Guarantor nor the Company shall be
-------- -------
obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so
subject.
(e) To make generally available to the Guarantor's security holders as
soon as practicable an earnings statement covering the twelve-month period
ending twelve months after the end of the Guarantor's fiscal quarter in
which the Closing Date occurs that satisfies the provisions of Section
11(a) of the Securities Act.
(f) Between the date of this Agreement and the Closing Date, neither
the Guarantor nor the Company will without your prior written consent
offer, sell, or enter into any agreement to sell, any public debt
securities registered under the Securities Act (other than the Offered
Certificates) or any debt securities which may be resold in a transaction
exempt from the registration requirements of the Securities Act in reliance
on Rule 144A thereunder and which are marketed through the use of a
disclosure document containing substantially the same information as a
prospectus for similar debt securities registered under the Securities Act.
(g) The Guarantor, during the period when a prospectus relating to the
Offered Certificates is required to be delivered under the Securities Act,
will file promptly all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
VI.
The Guarantor and the Company, jointly and severally, agree to
indemnify and hold harmless you and each person, if any, who controls you within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or allegedly untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Guarantor or the
Company shall have furnished any amendments or supplements thereto) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or allegedly untrue statement
<PAGE>
22
or alleged omission based upon information relating to you furnished to the
Guarantor and/or the Company in writing by you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
- -------- -------
Preliminary Prospectus Supplement shall not inure to the benefit of you or any
person controlling you with respect to any person asserting any such losses,
claims, damages or liabilities who purchased Offered Certificates from you or
any person controlling you, if a copy of the Prospectus (as then amended or
supplemented if the Guarantor and the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of you
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Offered Certificates to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities.
You agree to indemnify and hold harmless the Guarantor and the
Company, each of their directors, each of their officers who sign the
Registration Statement and each person, if any, who controls the Guarantor or
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Guarantor and the Company to you, but only with reference to
information relating to you furnished to the Guarantor and/or the Company in
writing by you expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties, and
that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for you and such control persons of you, such
firm shall be designated in writing by you. In the case of any such separate
firm for the Guarantor and the Company, and such directors, officers and control
persons of the
<PAGE>
23
Guarantor and the Company, such firm shall be designated in writing by the
Guarantor or the Company, as the case may be. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second paragraph
of this Article VI is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Guarantor and the Company on the one hand and you on
the other hand from the offering of the Offered Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Guarantor and
the Company on the one hand and of you on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Guarantor and the Company on the one hand and
you on the other hand shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Offered Certificates (before
deducting expenses) received by the Pass Through Trustee and the total
underwriting commissions received by you, in each case as set forth in the table
and footnotes thereto on the cover of the Prospectus Supplement, bear to the
aggregate public offering price of the Offered Certificates. The relative fault
of the Guarantor and the Company on the one hand and you on the other hand shall
be determined by reference to, among other things, whether the untrue or
allegedly untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Guarantor or the Company or by you and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Guarantor, the Company and you agree that it would not be just and
equitable if contribution pursuant to this Article VI were determined by pro
---
rata allocation or by any other method of allocation that does not take account
- ----
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the
<PAGE>
24
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VI, you shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Offered Certificates underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages that you have otherwise been required to pay by reason of such untrue or
allegedly untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided in this
Article VI are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Article VI
and the representations and warranties of the Guarantor and the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of you or any person controlling you or by or on behalf of the
Guarantor or the Company, its officers or directors or any other person
controlling the Guarantor or the Company and (iii) acceptance of and payment for
any of the Offered Certificates.
VII.
This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Guarantor or the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Guarantor or the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event singly or together with any other such event would, in
your reasonable judgement after consultation with the Guarantor, prevent or
materially impair the marketing, or enforcement of contracts for sale, of the
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
<PAGE>
25
VIII.
If this Agreement shall be terminated by you, because of any failure
or refusal on the part of the Guarantor or the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Guarantor or the Company shall be unable to perform its obligations under this
Agreement, the Guarantor and the Company, jointly and severally, will reimburse
you for all out-of-pocket expenses (including the fees and disbursements of your
counsel) reasonably incurred by you in connection with this Agreement or the
offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
<PAGE>
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Very truly yours,
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By:
----------------------------------------
Name:
Title:
MOBIL CORPORATION
By:
----------------------------------------
Name:
Title:
Accepted as of the date first
above written:
GOLDMAN, SACHS & CO.
By:
------------------------------
Name:
Title:
<PAGE>
SCHEDULE A
Pass Through Aggregate Final
Certificate Principal Interest Distribution Underwriting
Designation Amount Rate Date Commissions
- --------------- ----------- --------- --------------- ------------
Series 1997-A $95,331,000 7.29% January 2, 2014 $619,651.50
<PAGE>
SCHEDULE II
to
Underwriting
Agreement
Dated: ______________
MOBIL CHEMICAL FINANCE (TEXAS) INC.
MOBIL CORPORATION, GUARANTOR
Underwriting fees, discounts, commissions or other compensation:
Closing date, time and location:
Location for checking Offered Certificates:
Delayed delivery contracts: [Authorized] [Not Authorized]
[Delivery date:
Minimum principal amount per contract:
Minimum aggregate principal amount:
Maximum aggregate principal amount:
Fee: %]
Listing requirement:
Other terms and conditions:
<PAGE>
SCHEDULE III
to
Underwriting
Agreement
Dated: __________________
MOBIL CHEMICAL FINANCE (TEXAS) INC., ISSUER
MOBIL CORPORATION, GUARANTOR
PASS THROUGH CERTIFICATES
DELAYED DELIVERY CONTRACT
Mobil Chemical Finance (Texas) Inc.
3225 Gallows Road
Fairfax, Virginia 22037
Dear Sirs:
The undersigned hereby agrees with Mobil Chemical Finance (Texas)
Inc., a Delaware corporation (the "Company"), and Mobil Corporation, a Delaware
corporation (the "Guarantor"), to purchase and the Company and the Guarantor
agree with the undersigned to cause State Street Bank and Trust Company, not in
its individual capacity but solely as trustee under a Pass Through Trust
Agreement dated October 4, 1996, as supplemented by the Pass Through Trust
Supplement No. 1997-A, dated May 28, 1997 to issue and sell to the undersigned
on ________, 1997 (the "Delivery Date"), $___ aggregate principal amount of the
Trustee's Pass Through Certificates Series 1997-A (the "Offered Certificates"),
offered by the Company's Prospectus dated November 12, 1996, as supplemented by
its Prospectus Supplement dated May 22, 1997, relating to the Offered
Certificates, receipt of which is hereby acknowledged, at a purchase price of
__% of the principal amount thereof, plus interest accrued on the principal
amount thereof at a rate borne by the Offered Certificates from ___________,
1997 to the Delivery Date, and on the further terms and conditions set forth in
this contract.
Payment for the Offered Certificates which the undersigned has agreed
to purchase shall be made to State Street Bank and Trust as Trustee or its order
by Federal funds check or other immediately available funds, at the offices of
[____________], [__________________], New York, New York, at A.M., New York
time, on the Delivery
<PAGE>
2
Date (or in such other funds and/or at such other place as the Guarantor, the
Company, the Trustee and the undersigned may agree upon in writing) upon
delivery to the undersigned of the Offered Certificates to be purchased by the
undersigned and in such authorized denominations and registered in such names as
the undersigned may request in writing addressed to the Guarantor, the Company
and the Trustee not less than three business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Offered Certificates on the Delivery Date shall be subject only to the
conditions that (1) the purchase of the Offered Certificates to be made by the
undersigned shall not on the Delivery Date be prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment, and (2) the Trustee, on or before ___________, 1997, shall have sold
to the Underwriters of the Offered Certificates (the "Underwriters") such
principal amount of the Offered Certificates as is to be sold to them pursuant
to the Underwriting Agreement dated the date hereof among the Guarantor, the
Company and the Underwriters. The obligation of the undersigned to take delivery
of and make payment for the Offered Certificates shall not be affected by the
failure of any Underwriter or other purchaser to take delivery of and make
payment for the Offered Certificates pursuant to other contracts similar to this
contract.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below a notice
to such effect, accompanied by copies of the opinions of counsel for the
Guarantor and the Company and counsel for the Trustee delivered to the
Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Guarantor and the Company that (1) its investment in the Offered
Certificates is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment, (2) all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Offered
Certificates has been taken by it and no further authorization or approval of
any governmental or other regulatory authority is required for such execution,
delivery, payment or purchase and (3) upon the acceptance hereof by the
Guarantor and the Company and the mailing or delivery of a copy hereof as
provided below, this contract will constitute a valid and binding agreement of
the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that neither the Company nor the Guarantor will
accept Delayed Delivery Contracts for an aggregate principal amount of the
Offered Certificates in
<PAGE>
3
excess of $___ and that the acceptance of any Delayed Delivery Contract is in
the sole discretion of the Company and the Guarantor and, without limiting the
foregoing, need not be on a "first come, first served" basis. If this contract
is acceptable to the Company and the Guarantor, it is requested that the Company
and the Guarantor sign the form of acceptance on a copy hereof and mail or
deliver a signed copy hereof to the undersigned at its address set forth below.
This will become a binding contract among the Guarantor, the Company and the
undersigned when such copy is so mailed or delivered.
THIS CONTRACT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Yours very truly,
-----------------------
(Name of Purchaser)
By:
-------------------
Title:
-----------------------
-----------------------
(Address)
Accepted as of the date first above written.
Mobil Chemical Finance (Texas) Inc.
By:
---------------------------
Mobil Corporation
By:
---------------------------
<PAGE>
4
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed is as
follows: (Please print)
Telephone No.
Name (including Area Code)
---- ---------------------
<PAGE>
EXHIBIT 4.1
This Pass Through Trust Supplement No. 1997-A, dated as of May __, 1997
(herein called the "Trust Supplement"), among Mobil Corporation, a Delaware
----------------
corporation (the "Guarantor"), Mobil Chemical Finance (Texas) Inc., a Delaware
---------
corporation (the "Company"), and State Street Bank and Trust Company (the
-------
"Trustee"), to the Pass Through Trust Agreement, dated as of October 4, 1996,
- --------
among the Guarantor, the Company, seven other companies named therein and the
Trustee (the "Basic Agreement").
---------------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder, has
heretofore been executed and delivered;
WHEREAS, the Owner Trustee, acting at the direction of the Owner
Participant, will issue, on a non-recourse basis, Secured Notes, to finance
approximately 70% of the cost of certain paraxylene production facility assets
located at the Guarantor's refinery complex in Beaumont, Texas to be purchased
by the Owner Trustee and leased to the Company pursuant to the Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement as
supplemented by this Trust Supplement (the "Agreement"), the Trustee shall
---------
purchase such Secured Notes issued by the Owner Trustee and shall hold such
Secured Notes in trust for the benefit of the Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms for the purposes herein expressed, have
been done, performed and fulfilled, and the execution and delivery of this Trust
Supplement in the form and with the terms hereof have been in all respects duly
authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed among
the Guarantor, the Company and the Trustee as follows:
<PAGE>
2
ARTICLE I
DECLARATION OF TRUST
Section 1.01. Declaration of Trust. The Trustee hereby declares the
--------------------
creation of this Trust (the "1997-A Pass Through Trust") for the benefit of the
-------------------------
Certificateholders, and the initial Certificateholders as the grantors of the
1997-A Pass Through Trust, by their respective acceptances of the Certificates,
join in the creation of this 1997-A Pass Through Trust with the Trustee.
ARTICLE II
THE CERTIFICATES
Section 2.01. The Certificates. There is hereby created a series of
----------------
Certificates to be issued under this Agreement to be distinguished and known as
"Pass Through Certificates, Series 1997-A" (hereinafter defined as the "Series
------
1997-A Certificates"). Each Series 1997-A Certificate represents a Fractional
- -------------------
Undivided Interest in the 1997-A Pass Through Trust created hereby.
The terms and conditions applicable to the Series 1997-A Certificates are
as follows:
(a) The aggregate principal amount at maturity of the Series 1997-A
Certificates that shall be authenticated under the Agreement (except for
Series 1997-A Certificates authenticated and delivered pursuant to Sections
3.3, 3.4 and 3.5 of the Basic Agreement) upon their initial issuance is
$__________.
(b) The Cut-off Date is ___________, 1997.
(c) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means each January 2 and July 2 commencing July 2, 1997,
until payment of all of the Scheduled Payments to be made under the Secured
Notes (as defined below) has been made.
(d) The Special Distribution Dates are as follows: (i) when used with
respect to the redemption or purchase of any Secured Notes, the day (which
shall be a Business Day) on which such redemption or purchase is scheduled
to occur pursuant to the terms of the Indenture (as defined below) and (ii)
when used with respect to a
<PAGE>
3
Special Payment other than as described in clause (i) above, 20 days after
the last date on which the Trustee must give notice pursuant to Section
4.2(c) of the Basic Agreement (or the next Business Day after such 20th day
if such date is not a Business Day).
(e) (i) The Series 1997-A Certificates shall be in the form
attached hereto as Exhibit A.
---------
(ii) The Series 1997-A Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter
of Representations among the Guarantor, the Company, the Trustee and The
Depositary Trust Company, the initial Clearing Agency, attached hereto as
Exhibit B.
---------
(f) The Scheduled Payments of principal shall be as set forth in
Exhibit C hereto.
---------
(g) The Owner Trustee, acting at the direction of the Owner
Participant, will issue on a non-recourse basis, the Secured Notes, the
proceeds of which shall be used, among other things, to finance in part the
purchase price to the Owner Trustee of certain paraxylene production
facility assets (the "Facility Assets") located in Beaumont, Texas, as
---------------
identified in Exhibit A of the Facility Assets Lease Agreement between the
Owner Trustee, as lessor (the "Lessor") and the Company, dated as of May
------
__, 1997 (the "Lease").
-----
(h) The proceeds of the Series 1997-A Certificates shall be used to
purchase the Secured Notes in the principal amount and at the purchase
price of $__________.
(i) (i) The Series 1997-A Certificates are not subject to any
intercreditor agreement, liquidity or credit facility or similar agreement
or instrument. Neither the Guarantor nor the Company may deliver Series
1997-A Certificates or cash to the Trustee in exchange for Secured Notes,
except in connection with redemption in accordance with the Indenture; and
(ii) the Secured Notes are not senior or subordinate to any other Secured
Notes or other debt secured by the Property.
(j) The Note Documents are as follows:
(i) The Trust Indenture, Deed of Trust, Assignment of Lease and
Security Agreement, dated as of May __, 1997 (the "Indenture");
---------
(ii) The Series 1997-A Secured Non-Recourse Notes, dated
___________, 1997 (the "Secured Notes");
-------------
<PAGE>
4
(iii) The Lease;
(iv) The Ground Lease between the Guarantor, as lessor and the
Owner Trust, as lessee, dated May __, 1997 (the "Ground Lease");
------------
(v) The Participation Agreement among the Company, the Owner
Participant, the Owner Trustee, the Pass Through Trustee and Loan
Participant, and the Indenture Trustee, dated as of May __, 1997 (the
"Participation Agreement");
------------------------
(vi) The Trust Agreement, dated May __, 1997, between Fleet
National Bank and Wilmington Trust Company (the "Trust Agreement");
---------------
(vii) The Guaranty among the Guarantor, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, the Loan Participants and the
Owner Participant, dated __________, 1997 (the "Guaranty");
--------
(viii) The Special Warranty Deed, Bill of Sale and Assignment of
certain Facility Assets, from Mobil Oil Corporation to the Owner Trustee,
dated _______, 1997 (the "Conveyancing Instruments"); and
------------------------
(ix) The Assignment of Warranties, dated May __, 1997, between
Mobil Oil Corporation and Wilmington Trust Company (the "Assignment of
-------------
Warranties").
----------
ARTICLE III
DEFINITIONS
Section 3.01. Definitions. For the purposes of the 1997-A Pass
-----------
Through Trust the following defined terms shall be added to Section 1.1(b) of
the Basic Agreement or shall be amended to read as set forth below, as the case
may be:
Guaranty: Means the guaranty of the Guarantor of the obligations of
--------
the Company under the Lease.
Note Documents: Means the Indenture, the Participation Agreement, the
--------------
Lease, the Ground Lease, the Trust Agreement, the Guaranty, the
Conveyancing Instruments, the Assignment of Warranties and the other
agreements and documents assigned to the Indenture Trustee pursuant to the
Indenture.
<PAGE>
5
Property: With respect to any Secured Note means all right, title and
--------
interest of the Owner Trustee to the Facility Assets or any part thereof.
ARTICLE IV
THE TRUSTEE
Section 4.01. The Trustee. The Trustee is hereby directed to execute
-----------
and deliver the Participation Agreement, the Guaranty and the Series 1997-A
Certificates on or prior to the Issuance Date in the form delivered to the
Trustee by the Company. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Trust
Supplement or the due execution hereof by the Guarantor or the Company, or for
or in respect of the recitals and statements contained herein, all of which
recitals and statements are made solely by the Company.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Trustee by
reason of this Trust Supplement other than as set forth herein and in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth herein and in the
Basic Agreement, upon the effectiveness thereof, as fully to all intents as if
the same were herein set forth at length.
The Trustee represents and warrants that this Trust Supplement has
been and the Participation Agreement, the Guaranty and the Series 1997-A
Certificates have been or will be duly executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. (a) Assignment of Lease. The Company will not assign
-------------------
its rights pursuant to the first sentence of Section 14.2 of the Lease unless
the assignee enters into a supplement to this Agreement pursuant to which it
shall agree to fulfill the obligations of the Company hereunder.
(b) Final Termination Date. The respective obligations and
----------------------
responsibilities of the Company, the Guarantor and the Trustee created hereby
and the Trust created hereby
<PAGE>
6
shall terminate upon the distribution to all Certificateholders and the Trustee
of all amounts required to be distributed to them pursuant to the Basic
Agreement and this Trust Supplement and the disposition of all property held as
part of the Trust Property; provided, however, that in no event shall the Trust
-------- -------
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the currently living descendants of George H.W. Bush, Former
President of the United States.
Section 5.02. Basic Agreement Ratified. Except and so far as herein
------------------------
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 5.03. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE SERIES
-------------
1997-A CERTIFICATES HAVE BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 5.04. Execution and Counterparts. This Trust Supplement
--------------------------
may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the Guarantor, the Company and the Trustee have
caused this Trust Supplement to be duly executed by their respective officers
thereto duly authorized, as of the day and year first written above.
MOBIL CORPORATION
By: __________________
Name:
Title:
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By: ____________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: ______________________
Name:
Title:
<PAGE>
EXHIBIT 4.2
================================================================================
TRUST INDENTURE, DEED OF TRUST,
ASSIGNMENT OF LEASE, AND SECURITY AGREEMENT
between
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except to
the extent expressly
set forth herein,
but solely as Owner Trustee,
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual
capacity, except to
the extent expressly
set forth herein,
but solely as Indenture Trustee
Dated effective as of May 28, 1997
Sale and Leaseback of Certain Paraxylene Production Facility
Assets Located in Beaumont, Texas
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.01. Definitions................................................. 5
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes............................................... 5
SECTION 2.02. Payment from Indenture Estate Only.......................... 6
SECTION 2.03. Method of Payment........................................... 7
SECTION 2.04. Note Register............................................... 8
SECTION 2.05. Registered Owners........................................... 8
SECTION 2.06. Transfer, Exchange and Replacement of Notes................. 8
SECTION 2.07. New Notes, Payment of Expenses.............................. 9
SECTION 2.08. Additional Notes............................................ 10
SECTION 2.09. Termination of Interest in Indenture Estate................. 13
SECTION 2.10. Equally and Ratably Secured................................. 13
SECTION 2.11. Execution and Delivery of Secured Notes upon Original
Issuance.................................................. 13
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally................................................... 14
SECTION 3.02. Mandatory Redemption........................................ 14
SECTION 3.03. [Intentionally Omitted]..................................... 15
SECTION 3.04. Assumption of Obligations of the Owner Trustee by the
Lessee.................................................... 15
SECTION 3.05. Optional Redemption Refunding............................... 17
SECTION 3.06. Owner Trustee's and Owner Participant's Option to Redeem or
Purchase Secured Notes.................................... 18
SECTION 3.07. Deposited Redemption or Purchase Moneys..................... 19
SECTION 3.08. Acquisition of Secured Notes................................ 19
SECTION 3.09. Condition to Redemption and Refunding....................... 19
SECTION 3.10. Notice of Certain Redemptions............................... 20
</TABLE>
<PAGE>
ii
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.01. Basic Rent Distribution.................................... 21
SECTION 4.02. Certain Distributions...................................... 22
SECTION 4.03. Distribution After Indenture Event of Default.............. 23
SECTION 4.04. Application of Payments on Secured Notes................... 24
SECTION 4.05. Applications of Payments According to Applicable Operative
Document Provisions...................................... 25
SECTION 4.06. Amounts Received for Which No Provision Is Made............ 25
SECTION 4.07. Payment Procedures......................................... 25
SECTION 4.08. Application of Payments Under Guaranty..................... 26
ARTICLE V
COVENANTS OF OWNER TRUSTEE; CERTAIN AGREEMENTS;
INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trustee; Certain Agreements............. 26
SECTION 5.02. Indenture Events of Default................................ 28
SECTION 5.03. Certain Rights............................................. 30
SECTION 5.04. Remedies................................................... 32
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate.......... 34
SECTION 5.06. Remedies Cumulative........................................ 37
SECTION 5.07. Discontinuance of Proceedings.............................. 38
SECTION 5.08. Waiver of Past Defaults.................................... 38
SECTION 5.09. No Action Contrary to Lessee's Rights Under the Lease...... 38
SECTION 5.10. Rights of Holders of Secured Notes......................... 38
SECTION 5.11. Limitation on Suits by Holders............................. 39
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions............................................ 39
SECTION 6.02. Action upon Instructions................................... 40
SECTION 6.03. Release of Lien of Indenture............................... 40
SECTION 6.04. Indemnification............................................ 42
SECTION 6.05. No Implied Duties.......................................... 42
SECTION 6.06. Duties to Remove Certain Liens............................. 42
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
<S> <C>
SECTION 6.07. No Action Except Under Operative Documents or
Instructions............................................. 42
SECTION 6.08. Certain Rights of the Owner Trustee and the Owner
Participant.............................................. 43
SECTION 6.09. Filing of Financing and Continuation Statements............ 44
SECTION 6.10. Publishing of Notices...................................... 44
SECTION 6.11. Taxes; Withholding; Information Reporting.................. 44
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties............................ 45
SECTION 7.02. Absence of Duties Except as Specified...................... 45
SECTION 7.03. No Representations or Warranties........................... 45
SECTION 7.04. No Segregation of Moneys; No Interest; Investments......... 46
SECTION 7.05. Reliance; Agents; Advice of Counsel........................ 46
SECTION 7.06. No Compensation from Holders or Indenture Estate........... 47
SECTION 7.07. [Intentionally Omitted].................................... 47
SECTION 7.08. Moneys for Payments in Respect of Notes to be Held in
Trust.................................................... 47
SECTION 7.09. Disposition of Moneys Held for Payments of Notes........... 47
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustees......................... 48
SECTION 8.02. Resignation of Indenture Trustee; Appointment of Successor. 48
SECTION 8.03. Co-Trustees and Separate Trustees.......................... 50
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of Holders........... 52
SECTION 9.02. Supplements and Amendments to Indenture With Consent of
Holders of Notes......................................... 53
SECTION 9.03. Execution of Indenture Supplement, Amendments, Etc......... 58
SECTION 9.04. Effect of Indenture Supplement............................. 58
SECTION 9.05. Reference in Secured Notes to Indenture Supplements........ 59
</TABLE>
<PAGE>
iv
<TABLE>
<CAPTION>
<S> <C>
SECTION 9.06. Notices of Indenture Supplements and Amendments, Etc....... 59
SECTION 9.07. Lessee's Rights............................................ 59
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture.................................. 59
SECTION 10.02. No Legal Title to Indenture Estate in Holders............. 61
SECTION 10.03. Power of Attorney......................................... 61
SECTION 10.04. Regarding the Owner Trustee............................... 61
SECTION 10.05. Notices................................................... 62
SECTION 10.06. Severability of Provisions................................ 63
SECTION 10.07. No Oral Modification or Continuing Waivers................ 63
SECTION 10.08. Successors and Assigns.................................... 63
SECTION 10.09. Headings; Table of Contents............................... 63
SECTION 10.10. Normal Commercial Relations............................... 64
SECTION 10.11. Governing Law............................................. 64
SECTION 10.12. Execution................................................. 64
SECTION 10.13. Security Agreement........................................ 64
SECTION 10.14. Benefits of Indenture..................................... 64
Appendix A.... Definitions
Schedule 1.... Description of Facility Assets
Exhibit A..... Form of Secured Notes
Exhibit B..... Maturity Dates, etc.
Exhibit C..... Relevant Amendment
Exhibit D..... Form of Indenture Supplement
Exhibit E..... Form of Relevant Date Supplement
</TABLE>
<PAGE>
TRUST INDENTURE, DEED OF TRUST, ASSIGNMENT OF LEASE,
AND SECURITY AGREEMENT
----------------------------------------------
This TRUST INDENTURE, DEED OF TRUST, ASSIGNMENT OF LEASE, AND SECURITY
AGREEMENT, dated effective as of May 28, 1997, between WILMINGTON TRUST COMPANY,
a Delaware banking corporation, not in its individual capacity, except as
expressly provided herein, but solely as Owner Trustee under the Trust Agreement
(the "Owner Trustee") (capitalized terms used herein having the respective
-------------
meanings ascribed thereto in Section 1.01) and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, not in its individual capacity, except
as expressly provided herein, but solely as Indenture Trustee (the "Indenture
---------
Trustee"):
- -------
WITNESSETH:
----------
WHEREAS, the Owner Participant and the Trust Company have heretofore
entered into the Trust Agreement, whereby, among other things, the Trust Company
in its capacity as Owner Trustee thereunder has declared a certain trust for the
use and benefit of the Owner Participant, subject, however, to the Lien of this
Indenture, and the Owner Trustee has been authorized and directed to execute and
deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture to provide, among
other things (i) for the issuance by the Owner Trustee to the Pass Through
Trustee of the Series 1997-A Secured Notes specified in Exhibit B-2 hereto, upon
payment by the Pass Through Trustee of the principal amount of such Series 1997-
A Secured Notes, and (ii) for the assignment, mortgage and pledge by the Owner
Trustee to the Indenture Trustee, as part of the Indenture Estate thereunder,
among other things, of all of the right, title and interest of the Owner
Trustee, other than Excepted Payments, in, to and under, as the case may be, the
Facility Assets, the Lease, the Guaranty, the Conveyancing Instrument, the
Assignment and all payments and other amounts received hereunder and
thereunder, other than Excepted Payments, in accordance with the terms hereof
and thereof, as security for, among other things, the Owner Trustee's
obligations to the Indenture Trustee, the Loan Participants and other Holders
from time to time and for the benefit and security of the Loan Participants and
such Holders;
WHEREAS, all things have been done to make the Secured Notes, when executed
by the Owner Trustee and authenticated, issued and delivered hereunder, the
legal, valid, binding and enforceable obligations of the Owner Trustee in
accordance with their terms; and
WHEREAS, all things necessary to make this Indenture the legal, valid,
binding and enforceable obligation of the Owner Trustee, for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened,
<PAGE>
2
and the Indenture Trustee has duly accepted the trust created hereby and as
evidenced thereof has joined in the execution hereof;
NOW, THEREFORE, THIS TRUST INDENTURE, DEED OF TRUST, ASSIGNMENT OF LEASE
AND SECURITY AGREEMENT, WITNESSETH, that, to secure (i) the prompt payment when
and as due and payable of the principal of, Make-Whole Amount, if any, and
interest on all the Secured Notes from time to time Outstanding hereunder and of
all other amounts payable to the Holders (whether as Holders or Loan
Participants) hereunder, under the Secured Notes and under the other Operative
Documents (other than the Tax Indemnity Agreement), (ii) the performance and
observance by the Owner Trustee of all the provisions, covenants and agreements
for the benefit of the Indenture Trustee or the Holders herein, in the
Participation Agreement, in the Secured Notes and in the other Operative
Documents (other than the Tax Indemnity Agreement), and (iii) the performance
and observance by the Owner Participant of its covenants and agreements
contained in the Operative Documents (other than the Tax Indemnity Agreement)
(the obligations described in the above clauses (i), (ii) and (iii)
collectively, the "Indenture Indebtedness"), and for the uses and purposes and
----------------------
subject to the terms and provisions hereof, and in consideration of the premises
and of the covenants herein contained and of the acceptance of the Secured Notes
by the Holders thereof:
GRANTING CLAUSE
---------------
The Owner Trustee, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to secure the payment and
performance of the Indenture Indebtedness, hereby presently irrevocably grants,
conveys, mortgages, hypothecates, and pledges unto the Indenture Trustee and
creates a security interest to and for the benefit of the Indenture Trustee, in
all of the right, title and interest of the Owner Trustee in and to the
following property, rights and privileges, other than Excepted Payments, now
owned or in the future acquired by the Owner Trustee or in which the Owner
Trustee now has or may in the future acquire any estate, right, title or
interest (which collectively, excluding Excepted Payments but including all
property hereafter subjected to the Lien of this Indenture, shall constitute the
"Indenture Estate"), to wit:
----------------
(a) the leasehold estate created by, and all other estates, rights and
interests of the Owner Trustee under, the Ground Lease, together with all
the estates, rights, titles and interests of the Owner Trustee, if any, in
and to the Site and all improvements thereon and rights, easements and
privileges pertaining thereto, now or hereafter existing, and all rights of
the Owner Trustee to exercise any election or option or to make any
decision or determination or to give any notice, consent, waiver or
approval or to take any other action under or in respect of the Ground
Lease;
<PAGE>
3
(b) the Facility Assets (which are described in Schedule 1),
including, without limitation, any Component or Replacement Component or
Modification to the Facility Assets which, pursuant to the terms of the
Lease, are the property of the Owner Trustee;
(c) the Conveyancing Instrument and all rights, powers and remedies of
the Owner Trustee pursuant thereto, whether arising thereunder or by
statute, at law, in equity or otherwise;
(d) all estate, right, title and interest of the Owner Trustee in and
to all other property of every kind and description, real or personal, now
held or hereafter acquired by the Owner Trustee pursuant to the provisions
of the Ground Lease, the Lease and the Conveyancing Instrument;
(e) the Lease, including, without limitation, (i) all amounts of Rent,
insurance proceeds and requisition, indemnity or other payments of any kind
for or with respect to any asset leased or subleased thereunder, (ii) all
right of the Owner Trustee to exercise any election or option, or to give
any notice, consent, waiver or approval under or in respect of the Lease,
or to accept any surrender or enter into any modification thereof, as the
case may be, and (iii) all rights, powers and remedies of the Owner Trustee
pursuant to the Lease, whether arising thereunder or by statute, at law, in
equity or otherwise, including, without limitation, the right to possession
of any asset demised thereunder;
(f) the Guaranty, including without limitation, (i) all amounts
payable thereunder, (ii) all right of the Owner Trustee to exercise any
election or option, or to give any notice, consent, waiver or approval
under or in respect of the Guaranty, or to accept any surrender or enter
into any modification thereof, as the case may be, and (iii) all rights,
powers and remedies of the Owner Trustee pursuant to the Guaranty, whether
arising thereunder or by statute, at law, in equity or otherwise;
(g) the Assignment and all rights, powers and remedies of the Owner
Trustee pursuant thereto, whether arising thereunder or by statute, at law,
in equity or otherwise;
(h) all moneys and securities now or hereafter required to be paid or
deposited to or with the Indenture Trustee pursuant to any term of any
Operative Document, and required to be held by the Indenture Trustee
hereunder;
(i) to the extent assignable, any and all permits, certificates,
approvals and authorizations, however characterized, issued or in any way
furnished in connection
<PAGE>
4
with the Facility Assets, whether necessary or not for the operation and
use of the Facility Assets;
(j) all the tolls, rents, issues, profits, products, revenues and
other income of the property subjected or required to be subjected to the
Lien of this Indenture; and
(k) all rights or property which may be received upon the exercise of
any remedy or option contained in any of the above-described instruments
and all proceeds in whatever form of all or any part of any of the
foregoing;
EXCLUDING, HOWEVER, from the foregoing grant, and thereby from the
Lien of this Indenture and from the Indenture Estate, any and all Excepted
Payments and provided that, notwithstanding the foregoing provisions or anything
--------
herein to the contrary, the leasehold interest granted to the Lessee under the
Lease shall not be subject to the Lien of this Indenture or be part of the
Indenture Estate, and nothing in this Indenture shall affect the rights of the
Lessee under the Lease as long as no Lease Event of Default has occurred and is
continuing; and
SUBJECT to the rights of the Owner Trustee and the Owner Participant
hereunder;
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee
and its successors and assigns, for the benefit and security of the Holders,
without any priority of any one Secured Note over any other (except as expressly
provided herein or under any Operative Document), and for the uses and purposes
and subject to the terms and conditions set forth in this Indenture. This
Indenture is a deed of trust given to secure the payment of the Indenture
Indebtedness and this Indenture is also intended to operate as, among other
things, a security agreement and an assignment of leases and rents.
It is expressly agreed that anything contained in this Indenture to
the contrary notwithstanding, the Owner Trustee shall remain liable under the
Lease and the other Operative Documents to perform all of the obligations of the
Owner Trustee hereunder and thereunder, all in accordance with and pursuant to
the terms and provisions of each thereof, and the Holders and, except as
expressly provided herein, the Indenture Trustee shall have no obligation or
liability under any Operative Document by reason of or arising out of this
Indenture (except as to the Indenture Trustee, if the Indenture Trustee shall
have become the "Lessor" under the Lease). None of the Indenture Trustee or any
Holder shall be required or obligated in any manner to perform or fulfill any
obligation of the Owner Trustee under or pursuant to any Operative Document or,
except as herein expressly provided, to make any payment, or to make any inquiry
as to the nature or sufficiency of any payment received by
<PAGE>
5
it, or to present or file any claim, or to take any action to collect or enforce
the payment of any amounts which may have been assigned to it or to which it may
be entitled at any time or times.
Accordingly, the Owner Trustee and the Indenture Trustee hereby agree
for themselves and for the benefit and security of the Holders as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise defined herein, for the
-----------
purposes hereof, capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in Appendix A. References in this Indenture
to Sections, subsections, paragraphs, Schedules, Appendices and Exhibits are to
Sections, subsections and paragraphs in, and Schedules, Appendices and Exhibits
to, this Indenture unless otherwise indicated.
ARTICLE II
THE SECURED NOTES
SECTION 2.01. Secured Notes. (a) Generally. Except for Secured
------------- ---------
Notes issued pursuant to Section 2.06 or 2.08, Secured Notes may be issued only
on the Closing Date. On the Closing Date, the Secured Notes to be issued on
such Date pursuant to Section 2.2 of the Participation Agreement, subject to
Section 2.11, shall be duly executed by the Owner Trustee, duly authenticated
and delivered by the Indenture Trustee and registered in the name of the Loan
Participant to which such Secured Note is being issued and shall have attached
thereto the Amortization Schedule for such Secured Note. Receipt by the
Indenture Trustee of Secured Notes duly executed by the Owner Trustee shall
constitute instructions to the Indenture Trustee to authenticate, register and
deliver such Secured Notes on the Closing Date.
(b) Series 1997-A Secured Notes. The Series 1997-A Secured Notes
---------------------------
shall:
(i) be limited in aggregate original principal amount to the
amount specified in Exhibit B hereto;
(ii) be issuable only as registered Secured Notes in
denominations of $1,000, and integral multiples thereof, or if the
remaining principal amount thereof shall be less than $1,000, such
remaining principal amount;
<PAGE>
6
(iii) be dated the Closing Date;
(iv) bear interest on the unpaid principal amount thereof from
the date of such Series 1997-A Secured Notes at the rate specified in
Exhibit B (computed on the basis of a 360-day year consisting of
twelve 30-day months);
(v) provide for payments of interest and otherwise be due and
payable as to principal and interest as specified herein and therein;
(vi) be prepayable only as provided in Sections 3.02, 3.05, 3.06,
4.02 and 4.03; and
(vii) be substantially of the tenor and in the form set forth in
Exhibit A.
(c) Each Secured Note shall be signed on behalf of the Owner Trustee
by a Responsible Officer of the Owner Trustee, manually or in facsimile.
If any officer of the Owner Trustee executing Secured Notes or attesting to
the Owner Trustee's seal no longer holds that office at the time a Secured
Note is executed on behalf of the Owner Trustee, such Secured Note shall be
valid nevertheless. No Secured Note shall be secured by or entitled to any
benefit under this Indenture, or be valid for any purpose, unless there
appears thereon a certificate of authentication executed by or on behalf of
the Indenture Trustee by the manual signature of a Responsible Officer of
the Indenture Trustee, and such certificate on any Secured Note shall be
conclusive evidence that such Secured Note has been duly authenticated and
delivered hereunder.
(d) The Indenture Trustee shall not be required (i) to register the
transfer of or to exchange any Secured Note during a period beginning at
the opening of business 15 Business Days before the day of the mailing of a
notice of redemption (or purchase in lieu of redemption) of Secured Trustee
Notes pursuant to Section 3.02, 3.05 or 3.06 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
to exchange any Secured Note called for redemption (or purchase in lieu of
redemption) pursuant to such Section 3.02, 3.05 or 3.06.
SECTION 2.02. Payment from Indenture Estate Only. All payments of
----------------------------------
principal, Make-Whole Amount, if any, and interest to be made by the Owner
Trustee and, except as otherwise provided in the Operative Documents, all
payments of any other amounts payable by or on behalf of the Owner Trustee under
the Secured Notes and this Indenture, shall be made only from the income and
proceeds from the Indenture Estate, and only to the extent that the Indenture
Trustee shall have received sufficient income or proceeds from the Indenture
Estate to make such payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Secured Note, agrees that it will look solely to the
income and
<PAGE>
7
proceeds from the Indenture Estate to the extent available for payment as herein
provided and that (a) none of the Owner Trustee or the Indenture Trustee
(whether in its individual or trust capacity) shall be personally liable to such
Holder for any amounts payable under the Secured Notes, nor, except as
specifically provided herein or in the other Operative Documents, for any
amounts payable or any liability under this Indenture and (b) the Owner
Participant shall not be liable to the Indenture Trustee or to any Holder under
any circumstances for any reason whatsoever except to the extent expressly
provided herein or in any other Operative Document.
SECTION 2.03. Method of Payment. (a) The principal of, and Make-
-----------------
Whole Amount, if any, and interest, on each Secured Note shall be payable in
immediately available funds, the receipt of which has been confirmed by a
Responsible Officer of the Indenture Trustee (which shall be done promptly upon
receipt thereof) on or before 12:00 p.m., New York time, at the place of
receipt, on the due date therefor, to the Indenture Trustee at the Corporate
Trust Office of the Indenture Trustee. Amounts so received by the Indenture
Trustee shall be paid by the Indenture Trustee to each Holder on the due date
therefor without any presentment or surrender of any Secured Note held by such
Holder by whichever of the following methods shall be specified by prior written
notice from such Holder to the Indenture Trustee: (i) by transferring prior to
2:00 p.m., New York City time, on such date such payment to such Holder in
immediately available funds by crediting the amount to be distributed to any
Holder to any account maintained by such Holder with the Indenture Trustee or
(ii) by initiating a wire transfer prior to the time set forth in clause (i) of
this Section 2.03(a) of such amount in immediately available funds to a banking
institution designated in such notice with bank wire transfer facilities for the
account of such Holder, in all cases without any presentment or surrender of any
Secured Note, except that on the date of the final maturity thereof (whether at
maturity, upon prepayment, acceleration or otherwise), the Holder of each
Secured Note shall surrender such Secured Note promptly after payment; provided
--------
that failure to so present such Secured Note shall not diminish the effect of
full and final payment by the Owner Trustee. If any Holder does not specify one
of the foregoing methods, payment will be made by check mailed to the registered
address of such Holder. In the event the Indenture Trustee shall fail to make
any payment as provided in the preceding sentences after its receipt of funds at
the place and on or before the time specified in this Section 2.03(a), the
Indenture Trustee in its individual capacity agrees to compensate each Holder
for loss of use of funds at the Federal Funds overnight rate.
(b) Whenever any payment to be made hereunder or pursuant to the terms
of any Secured Note shall be stated to be due on a day which is not a Business
Day, such payment shall be due and payable on the next succeeding Business Day
with the same force and effect as if made on such scheduled date and (provided
such payment is timely made on such succeeding Business Day) no interest shall
accrue on the amount of such payment from and after such scheduled date.
<PAGE>
8
(c) If payment of any installment of principal or interest payable in
accordance with the terms hereof and of the Secured Notes is not paid in full
when due, whether as scheduled or upon acceleration and whether before or after
the maturity date of the Secured Notes, such overdue amount of principal or
interest shall (to the extent not prohibited by applicable law) bear interest,
payable on demand, for each day from and including the date payment thereof was
due to the actual date of payment, at the Overdue Rate.
(d) Subject to Section 6.11, the Holder of any Secured Note shall be
entitled to the principal of, and Make-Whole Amount, if any, and interest on
such Secured Note free from all rights of set-off or counterclaims of the Owner
Trustee, the Indenture Trustee or any prior Holder of such Secured Note.
Nothing set forth in this Section 2.03(d) shall impair the right of the Owner
Trustee to receive a return from the Indenture Trustee of any amount
unintentionally overpaid by the Owner Trustee in respect of a Secured Note.
SECTION 2.04. Note Register. The Indenture Trustee shall cause to be
-------------
kept at the Indenture Trustee's corporate trust office a register (the "Note
----
Register") for the registration or transfer of the Secured Notes. The Note
- --------
Register shall be maintained by the Indenture Trustee, and the names and
addresses of the registered Holders of the Secured Notes, the transfers of the
Secured Notes and the names and addresses of the transferees of the Secured
Notes shall be entered in the Note Register under such reasonable regulations as
the Indenture Trustee may prescribe.
SECTION 2.05. Registered Owners. The Owner Trustee and the Indenture
-----------------
Trustee shall deem and treat any registered Holder as the absolute owner of any
Secured Note held by such Holder, as indicated in the Note Register, for the
purpose of receiving payment of all amounts payable with respect to such Secured
Note and for all other purposes, and neither the Owner Trustee nor the Indenture
Trustee shall be affected by any notice to the contrary. All such payments so
made shall be valid and effectual to satisfy and discharge the liability of the
Owner Trustee upon such Secured Note to the extent of the sum or sums so paid.
SECTION 2.06. Transfer, Exchange and Replacement of Notes. (a)
-------------------------------------------
Secured Notes may be transferred only on the Note Register. Any Secured Note
may be transferred on the Note Register if such Secured Note is surrendered for
cancellation at the Corporate Trust Office of the Indenture Trustee and is
accompanied by an instrument of transfer in form and substance reasonably
satisfactory to the Indenture Trustee, which Secured Note or Secured Notes shall
be cancelled by the Indenture Trustee. A new Secured Note or Secured Notes of
the same series, duly executed by the Owner Trustee and registered in the name
of the transferee or transferees in a principal amount or amounts equal to the
principal amount of such transferred Secured Note, shall be duly authenticated
and delivered by the Indenture Trustee to the transferee or transferees named by
the Holder of such transferred Secured Note in exchange for such transferred
Secured Note. Promptly after registration of the
<PAGE>
9
transfer of any Secured Note, the Indenture Trustee shall give notice thereof to
the Lessee and the Owner Trustee specifying the name and address for notices of
the transferee or transferees.
(b) Any Secured Note may be exchanged for a new Secured Note if such
Secured Note to be so exchanged is surrendered for cancellation at the Corporate
Trust Office of the Indenture Trustee and is accompanied by the request of the
Holder thereof specifying the denomination of the new Secured Note (which shall
be in denominations of at least $1,000 or in integral multiples thereof, or if
less, the remaining principal amount thereof) to be issued in exchange therefor.
Upon instructions from the Indenture Trustee, the Owner Trustee shall deliver to
the Indenture Trustee a new Secured Note of the same series, duly executed by
the Owner Trustee and registered in the name of such Holder in the denominations
so requested and in an aggregate principal amount equal to the aggregate
original principal amount of such Secured Note to be so exchanged, and such new
Secured Note shall be duly authenticated by the Indenture Trustee and delivered
by the Indenture Trustee to such Holder in exchange for such Secured Note to be
so exchanged, which Secured Note shall be cancelled by the Indenture Trustee.
(c) If any Secured Note shall become mutilated or be destroyed, lost
or stolen, upon request of the Holder thereof, a new Secured Note of the same
series, duly executed by the Owner Trustee and registered in the name of such
Holder in the same original principal amount as the Secured Note so mutilated,
destroyed, lost or stolen, shall be duly authenticated and delivered by the
Indenture Trustee to such Holder in exchange for such Secured Note, if
mutilated, or in substitution for such Secured Note, if destroyed, lost or
stolen. In the case of a mutilated Secured Note, such Secured Note shall be
surrendered for cancellation at the Corporate Trust Office of the Indenture
Trustee and shall be cancelled by the Indenture Trustee. In the case of a
destroyed, lost or stolen Secured Note, the Holder thereof shall furnish to the
Owner Trustee and the Indenture Trustee (i) evidence to their reasonable
satisfaction of the destruction, loss or theft of such Secured Note and
ownership thereof, and (ii) such security or indemnity as may be reasonably
required by them to save them harmless; provided that if the affected Holder is
--------
a Pass Through Trustee, the written agreement of such Holder to indemnify the
Owner Trustee and the Indenture Trustee (in their respective individual and
trust capacities) with respect to such destroyed, lost or stolen Secured Note,
together with written notice of ownership and destruction, loss or theft
thereof, shall satisfy the conditions of this sentence.
(d) The Indenture Trustee shall cancel all Secured Notes surrendered
for replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy canceled Secured Notes.
SECTION 2.07. New Notes, Payment of Expenses. (a) Each Secured Note
------------------------------
(a "New Note") issued pursuant to Section 2.06 upon transfer of, in exchange for
--------
or in
<PAGE>
10
substitution for a Secured Note (an "Old Note") shall be dated as of the date of
--------
such Old Note. The Indenture Trustee shall mark on each New Note (i) the date to
which principal and interest have been paid on the applicable old Note and (ii)
all payments and prepayments of principal made on such Old Note which are
allocable to such New Note. Interest shall be deemed to have been paid on such
New Note to the date to which interest was paid on the applicable Old Note, and
all payments and prepayments of principal required to have been marked on such
New Note, as provided in clause (ii) of the preceding sentence, shall be deemed
to have been made thereon. All New Notes issued pursuant to Section 2.06 upon
transfer of, in exchange for or in substitution for or in lieu of Old Notes
shall be valid obligations of the Owner Trustee evidencing the same debt as such
Old Notes and shall be entitled to the benefits and security of this Indenture
to the same extent as such Old Notes. Issuance of any New Note shall not for any
purposes be deemed a further advance of funds to the Owner Trustee and the
perfection and priority of the security interest in the Indenture Estate
applicable to such New Note shall for all purposes be the same as that
applicable to the Old Note replaced by such New Note.
(b) Upon the issuance of a New Note or New Notes pursuant to Section
2.06, the Owner Trustee and/or the Indenture Trustee may require from the party
requesting such New Note or New Notes payment of a sum to reimburse the Owner
Trustee and/or the Indenture Trustee for, or to provide funds for, the payment
of any tax or other governmental charge or any other charge or expense paid or
payable with respect to such transfer by the Owner Trustee and/or the Indenture
Trustee, without any right of reimbursement under any Operative Document with
respect to such payments.
SECTION 2.08. Additional Notes. (a) So long as no Lease Event of
----------------
Default or Indenture Event of Default shall have occurred and be continuing,
Additional Notes of one or more series may be issued under and secured by this
Indenture at any time or from time to time, subject to the conditions
hereinafter provided in this Section 2.08, for the purpose of financing all or a
portion of the cost of any Modification to the Facility Assets as provided in
Section 14 of the Participation Agreement.
(b) Prior to the issuance of any Additional Notes of any series
pursuant to this Section 2.08, the Owner Trustee shall have received from the
Lessee and delivered to the Indenture Trustee, not less than thirty (30) days
prior to the proposed date of issuance of such Additional Notes, a request and
authorization to issue Additional Notes (a "Request"), which Request shall
-------
include the amount and series of such Additional Notes, the proposed date of
issuance of such Additional Notes, and other details with respect thereto which
are not inconsistent with this Section 2.08. Such Additional Notes shall have a
designation so as to distinguish such Additional Notes from the Initial Secured
Notes and Additional Notes of any other series, but otherwise shall be
substantially similar in form to the Initial Secured Notes, with such omissions
therefrom, variations therein and additions thereto as shall be appropriate.
Such Additional Notes shall not rank senior in any respect to the Initial
Secured
<PAGE>
11
Notes, but may be subordinate to the Initial Secured Notes and other Secured
Notes issued pursuant to the terms hereof.
(c) The terms, conditions and designations of such Additional Notes
(which shall be consistent with the Request and with the terms of this Indenture
and of the Participation Agreement) shall be set forth in a supplement to this
Indenture, substantially in the form of Exhibit D, which shall be executed by
the Owner Trustee and the Indenture Trustee. Such indenture supplement shall
set forth:
(i) after giving effect to the issuance of the Additional Notes, the
aggregate principal amount outstanding of all Secured Notes, which shall
not exceed 85% of the total Fair Market Sales Value of the Facility Assets
at such time (as determined pursuant to mutual agreement of the Owner
Trustee and the Lessee and otherwise by the Appraisal Procedure) after
giving effect to such Modifications;
(ii) the text of such Additional Notes (which, except for the terms of
payment thereof, shall be of substantially the same effect as the text of
the Initial Secured Notes set forth in this Indenture, with such changes as
are consistent with and permitted by this Indenture and which in all events
shall provide that such Additional Notes are never more than pari passu in
priority of payment, in right of security and in all other respects with
the Initial Secured Notes);
(iii) the date of maturity of such Additional Notes (which shall be
no later than the end of the Basic Lease Term or, if the Lessee shall have
irrevocably exercised an option to renew the Lease, the applicable Renewal
Term);
(iv) the date from which, and the date or dates on which, interest is
payable (which shall be Interest Payment Dates);
(v) the terms for the repayment of the principal amount of such
Additional Notes (each regularly scheduled payment of principal shall be an
Interest Payment Date);
(vi) the terms, if any, as to prepayment or redemption of such
Additional Notes at the option of the Owner Trustee or the Lessee, and as
to the premium, if any, payable on any redemption or prepayment of such
Additional Notes; and
(vii) any other terms and agreements in respect thereof as required
or permitted by this Indenture or necessary to specify the terms and
conditions on which such Additional Notes shall be issued.
<PAGE>
12
(d) Such Additional Notes shall be executed by the Owner Trustee as
provided in Section 2.01 and deposited with the Indenture Trustee for
authentication and delivery, but before such Additional Notes shall be
authenticated and delivered by the Indenture Trustee, there shall be delivered
to or deposited with the Indenture Trustee the following:
(i) the Request;
(ii) the supplement to this Indenture described in Section 2.08(c),
duly executed by the Owner Trustee;
(iii) a supplement to the Lease, duly authorized, executed and
delivered by the Lessee and the Owner Trustee, providing for adjustments to
the Basic Rent Percentages, Stipulated Loss Value Percentages and
Termination Value Percentages, and the definition of Lessor's Cost in
accordance with Section 4 of the Lease, to provide for payments required
hereunder and under the Secured Notes, after giving effect to the issuance
of such Additional Notes, together with such instruments of conveyance,
assignment and transfer, if any, necessary to subject such supplement to
the Lease to the Lien and security interest of this Indenture and to
perfect such Lien and security interest subject to no Liens other than
Permitted Liens, and evidence as to the due recording or filing of each
thereof or of financing or similar statements with respect thereto;
(iv) such instruments of conveyance, assignment and transfer
(including, without limitation, contractors' waivers) duly executed and
delivered by the respective parties thereto, and such evidence of the due
filing thereof or of financing statements with respect thereto, as may be
required to convey title to the Owner Trustee of all property included in
such Modification, if any, and to subject such property to the Lien of this
Indenture, subject to no Liens except Permitted Liens;
(v) originals or certified copies of all corporate actions necessary
for the due and valid issue of such Additional Notes, the due and valid
authorization, execution, delivery and performance by the Owner Trustee of
the supplement to this Indenture relating thereto, and the due and valid
authorization, execution, delivery and performance by the Lessee and the
Owner Trustee of the Supplement to the Lease and the creation of the Lien
and security interest thereon referred to above, all of which corporate
actions shall have been duly obtained and shall be in full force and
effect; together with evidence as to the due occurrence of all such
authorization, execution, delivery and performance;
(vi) documentation, duly executed and delivered, to the extent
practicable, by the respective parties thereto, whereby the proposed
holders of the Additional
<PAGE>
13
Notes agree to be bound by the terms of the Operative Documents (including,
without limitation, representations and covenants corresponding to those
contained in Section 7 of the Participation Agreement);
(vii) an Officer's Certificate of the Lessee certifying (a) as to the
cost of such Modification and (b) that all conditions precedent to the
issuance of the Additional Notes contained in this Section 2.08 and in
Section 14 of the Participation Agreement have been satisfied unless such
conditions have been waived in writing by the Indenture Trustee and Owner
Trustee; and
(viii) opinions of counsel to the Lessee and/or the Owner Trustee as
to the due authorization, execution, delivery and enforceability of such
supplement to this Indenture and such Additional Notes and the creation and
perfection of the security interest in such Modification (subject to usual
or customary exceptions, qualifications and assumptions) and such other
certificates and other documents as may be reasonably requested by the
Indenture Trustee to evidence the validity and binding effect of such
supplement to this Indenture and such Additional Notes and compliance with
this Section 2.08.
(e) When the documents referred to in Section 2.08(d) shall have been
delivered to or deposited with the Indenture Trustee and when such Additional
Notes described in the Request and the supplement to this Indenture have been
executed by the Owner Trustee as required by this Indenture, the Indenture
Trustee shall authenticate and deliver such Additional Notes in the manner
described in such Request, but only upon payment to the Owner Trustee of the sum
or sums specified in such Request, whereupon the Owner Trustee shall pay such
sum or sums to the Lessee.
SECTION 2.09. Termination of Interest in Indenture Estate. A Holder
-------------------------------------------
shall have no further interest in, or other right with respect to, the Indenture
Estate upon the payment of principal of, Make-Whole Amount, if any, and interest
on, any Secured Notes held by such Holder and all other sums payable to such
Holder hereunder with respect to any such Secured Notes, under the other
Operative Documents and under such Secured Notes.
SECTION 2.10. Equally and Ratably Secured. Except as otherwise
---------------------------
expressly provided in this Indenture, all Secured Notes at any time Outstanding
under this Indenture shall be equally and ratably secured by this Indenture
without preference, priority or distinction on account of the series, date, time
of issue or maturity of such Secured Notes.
SECTION 2.11. Execution and Delivery of Secured Notes upon Original
-----------------------------------------------------
Issuance. The Owner Trustee shall issue and execute, and the Indenture Trustee
- --------
shall authenticate and deliver, Secured Notes for original issuance only upon
Lessee's request and
<PAGE>
14
upon payment by the Loan Participants pursuant to the Participation Agreement of
an aggregate amount equal to the aggregate original principal amount of such
Secured Notes.
ARTICLE III
REDEMPTION AND REFUNDING
SECTION 3.01. Generally. The Secured Notes may not be redeemed or
---------
prepaid except to the extent and in the manner expressly permitted or required
by this Indenture. Except as otherwise expressly provided in this Indenture,
any amount prepaid in partial redemption of the Secured Notes Outstanding shall
be distributed by the Indenture Trustee to all Holders ratably, without priority
of any Holder or any series over any other Holder or any other series, in the
proportion that the principal amount of Secured Notes held by such Holder bears
to the principal amount of all Secured Notes then Outstanding.
SECTION 3.02. Mandatory Redemption. (a) Casualty Redemption. If an
-------------------- -------------------
Event of Loss with respect to the Facility Assets shall occur unless the Lessee
shall have elected to rebuild or replace the Facility Assets (or Significant
Portion thereof suffering such Event of Loss) pursuant to Section 12.2(b) of the
Lease, then the Owner Trustee shall redeem on the date on which Stipulated Loss
Value is paid pursuant to the Lease (the date of any redemption under this
Section 3.02(a) being herein called a "Casualty Redemption Date") the entire
------------------------
unpaid principal amount of the Secured Notes Outstanding on such Casualty
Redemption Date, at a redemption price equal to 100% of such unpaid principal
amount of such Secured Notes, together with any accrued and unpaid interest
thereon to, but not including, such Casualty Redemption Date and without Make-
Whole Amount or any other premium.
(b) Early Termination Redemption. If the Lease is terminated with
----------------------------
respect to the Facility Assets pursuant to Section 7 of the Lease, the Owner
Trustee shall redeem on the applicable Termination Date (the date of any
redemption under this Section 3.02(b) being herein called a "Termination
-----------
Redemption Date"), the entire unpaid principal amount of the Secured Notes
- ---------------
Outstanding on such Termination Redemption Date, at a redemption price equal to
100% of such unpaid principal amount of such Secured Notes, together with any
accrued and unpaid interest thereon to, but not including, such Termination
Redemption Date plus, in the case of each Secured Note redeemed prior to the
Premium Termination Date applicable to such Secured Note, a premium, equal to
the Make-Whole Amount, if any, with respect to such Secured Note and otherwise
without Make-Whole Amount or any other premium.
(c) Purchase Redemption. In the event that the Lessee shall purchase
-------------------
the Facility Assets pursuant to Section 6.1(c), 6.1(e) or 7.3 of the Lease prior
to the date of
<PAGE>
15
expiration of the Basic Lease Term, and the Lessee shall not have assumed the
obligations of the Owner Trustee under the Secured Notes pursuant to Section
11.6 of the Participation Agreement, the Owner Trustee shall redeem on the date
of purchase (the date of any redemption under this Section 3.02(c) being herein
called a "Purchase Redemption Date"), the entire unpaid principal of the
------------------------
Secured Notes Outstanding on such Purchase Redemption Date at a redemption price
equal to 100% of the unpaid principal amount of the Secured Notes together with
any accrued and unpaid interest thereon to, but not including, such Purchase
Redemption Date plus, in the case of each Secured Note redeemed prior to the
Premium Termination Date applicable to such Secured Note, a premium equal to the
Make-Whole Amount, if any, with respect to such Secured Note and otherwise
without Make-Whole Amount or any other premium.
SECTION 3.03. [Intentionally Omitted]
----------------------
SECTION 3.04. Assumption of Obligations of the Owner Trustee by the
-----------------------------------------------------
Lessee. In the event that the Lessee shall have elected to assume all of the
- ------
rights and obligations of the Owner Trustee under this Indenture in respect of
the Secured Notes in connection with the purchase by the Lessee of the Facility
Assets pursuant to Section 6.1 of the Lease or pursuant to Section 16.2(d) of
the Participation Agreement (the date of any such assumption being referred to
hereinafter as the "Relevant Date") and, if on or prior to the Relevant Date:
-------------
(a) the Lessee shall have delivered to the Indenture Trustee an
Officer's Certificate of the Lessee, dated the Relevant Date, stating that
the Lessee has paid to the Owner Trustee all amounts required to be paid to
the Owner Trustee pursuant to the Lease, in connection with such purchase
or termination and assumption;
(b) no Indenture Event of Default after giving effect to the Relevant
Amendment (as defined below) shall have occurred and be continuing
immediately subsequent to such purchase or termination and assumption and
the Indenture Trustee shall have received an Officer's Certificate, dated
the Relevant Date, of the Lessee to such effect;
(c) the Indenture Trustee shall have received a supplement to this
Indenture, substantially in the form of Exhibit E (the "Relevant Date
-------------
Supplement"), duly executed by the Lessee, which shall provide that the
----------
Lessee agrees that it is acquiring, subject to the security interest and
Lien thereon granted to the Indenture Trustee under this Indenture, the
Facility Assets, as provided in Section 2 of the form of Relevant Date
Supplement attached as Exhibit E;
<PAGE>
16
(d) the Indenture Trustee shall have received, on or prior to the
Relevant Date, evidence of all filings, recordings and other action
referred to in the opinion of counsel referred to below;
(e) the Guarantor shall have confirmed in writing to the Indenture
Trustee that the Guaranty remains in full force and effect and covers the
Lessee's obligations under this Indenture and under the Secured Notes; and
(f) the Indenture Trustee shall have received an opinion or opinions
of counsel to the Lessee subject to usual or customary qualifications,
exceptions and assumptions, to the effect that, after giving effect to the
Relevant Amendment (as defined below):
(i) on the Relevant Date, this Indenture, as supplemented by the
Relevant Date Supplement and as amended by the Relevant Amendment and
the Secured Notes issued thereunder constitute the legal, valid and
binding obligations of the Lessee, enforceable against the Lessee in
accordance with their terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable laws
which may affect the remedies provided for in this Indenture as so
supplemented, which laws, however, do not in the opinion of such
counsel make the remedies provided for in this Indenture inadequate
for the practical realization of the rights and benefits provided for
in this Indenture as so supplemented;
(ii) on the Relevant Date, the Guaranty constitutes the legal,
valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and by general principles of equity;
(iii) the Lien of this Indenture on the Facility Assets has been
accomplished and creates a security interest in the Indenture Estate
and all filings and recordings and other action necessary or
appropriate to perfect the interests of the Indenture Trustee have
been accomplished; and
(iv) holders of the Secured Notes will not recognize income, gain
or loss for United States federal income tax purposes as a result of
such assumption;
<PAGE>
17
then, simultaneously with the delivery of such documents, the Indenture Trustee
shall execute and deliver the Relevant Date Supplement, and automatically and
without the requirement of further action by any Person, effective as of the
Relevant Date:
(x) this Indenture shall be deemed to have been amended as provided
for in Exhibit C hereto (the "Relevant Amendment"); and
------------------
(y) the Owner Trustee shall be released from all of its obligations
under this Indenture in respect of the Secured Notes or otherwise (other
than any obligations or liabilities of the Owner Trustee in its or his
individual capacity incurred on or prior to the Relevant Date or arising
out of or based upon events occurring on or prior to the Relevant Date,
which obligations and liabilities shall remain the sole responsibility of
the Owner Trustee) and there shall be immediately distributed any funds
then being retained hereunder that are distributable to the Owner Trustee
or the Owner Participant.
SECTION 3.05. Optional Redemption Refunding. (a) The Owner Trustee,
-----------------------------
with the prior written consent of the Lessee, may redeem at any time in whole
all Outstanding Secured Notes, or in whole all Outstanding Secured Notes of any
series, at a redemption price equal to 100% of the unpaid principal amount of
the Secured Notes to be redeemed pursuant to this Section 3.05, together with
any accrued and unpaid interest thereon to, but not including, the date of
redemption plus, in the case of each Secured Note redeemed prior to the Premium
Termination Date applicable to such Secured Note, a premium equal to the Make-
Whole Amount, if any, with respect to such Secured Note and otherwise without
Make-Whole Amount or any other premium.
(b) Following a redemption in whole of the Initial Secured Notes of
any series in accordance with Section 3.05(a), the Owner Trustee, with the prior
written consent of the Lessee, may issue and sell, and the Indenture Trustee
shall authenticate and deliver, one or more new series of Secured Notes having
such terms and provisions (including, without limitation, interest rate,
amortization schedule, maturity date and redemption provisions) as the Owner
Trustee shall deem appropriate and as shall be approved by the Lessee; provided
--------
that if after such redemption any Initial Secured Notes remain outstanding, the
new series of Secured Notes (i) shall be denominated and payable in U.S. Dollars
-
and shall not be in a principal amount greater than 105 percent (105%) of the
Secured Notes redeemed, (ii) shall not rank senior to the Initial Secured Notes
--
which remain outstanding and (iii) shall not have a maturity after or have a
---
weighted average life longer than the Secured Notes redeemed if any of the
Initial Secured Notes which remain Outstanding have a maturity date after or
concurrent with the maturity date of the Secured Notes redeemed; and provided,
--------
further, that prior to the authentication of such new series of Secured Notes,
- -------
the Indenture Trustee shall have received written evidence from Standard & Poors
Ratings Group and Moody's Investors Service, Inc. to the effect that the
issuance of such new series, by
<PAGE>
18
itself, would not result in the downgrading of the credit rating (if any)
assigned to the then outstanding Pass Through Certificates issued in respect of
the Initial Secured Notes.
(c) The Owner Trustee shall not refund or refinance any Secured Notes
unless requested by Lessee.
SECTION 3.06. Owner Trustee's and Owner Participant's Option to
-------------------------------------------------
Redeem or Purchase Secured Notes. In the event that (i) the Indenture Trustee
- --------------------------------
has given the Owner Trustee or the Owner Participant notice of the intent to
accelerate the Secured Notes pursuant to Section 5.04, (ii) the Secured Notes
shall have been accelerated pursuant to Section 5.04 or (iii) at any time one or
more Lease Events of Default shall have occurred during which time the Secured
Notes could, but shall not have been, accelerated pursuant to Section 5.04, the
Owner Trustee or the Owner Participant may, at its option, give at least 30
days' prior irrevocable notice to the Indenture Trustee that it will redeem (or
purchase in lieu of redemption) all Secured Notes then Outstanding, which
redemption or purchase shall be at a redemption or purchase price equal to 100%
of the unpaid principal amount of such Secured Notes, together with any accrued
and unpaid interest thereon to, but not including, the date of such redemption
or purchase, but otherwise without Make-Whole Amount or any other premium and on
or prior to the Business Day preceding such Redemption Date, the Owner Trustee
or the Owner Participant will deposit with the Indenture Trustee an amount
sufficient to redeem or purchase at the applicable Redemption Price all Secured
Notes then Outstanding plus an amount equal to all other sums then due and
payable to the Loan Participants hereunder, and to pay the Indenture Trustee all
amounts then due it hereunder, which funds shall be held by the Indenture
Trustee as provided in Section 7.04. Upon the giving of such notice and the
receipt by the Indenture Trustee of such deposit, the Indenture Trustee shall
deem all instructions received from the Owner Trustee or the Owner Participant
as having been given by the Loan Participants of 100% of the Outstanding
principal amount of Secured Notes for all purposes of this Indenture. If such
notice is given, the Owner Trustee further agrees that it will deposit or cause
to be deposited with the Indenture Trustee, on or prior to the Business Day
preceding the applicable Redemption Date, whether or not an Indenture Event of
Default is then continuing, funds sufficient, when added to the funds already
held by the Indenture Trustee for such purpose, to redeem or purchase at the
applicable Redemption Price (including the premium actually payable in respect
thereof computed as provided for herein), on such Redemption Date all Secured
Notes then Outstanding to pay all other sums then due and payable to a Loan
Participant hereunder and to pay the Indenture Trustee all amounts then due it
hereunder. In the event the Owner Trustee shall have given any such notice to
purchase or redeem, unless the Owner Trustee shall have consented thereto, the
Indenture Trustee shall not during the period from such notice to the Redemption
Date specified therein institute any new remedy or proceeding in respect of any
new remedy under this Indenture, and the Indenture Trustee shall, to the extent
the same may be accomplished without prejudicing the rights of the Indenture
Trustee hereunder, take such actions and forbear from taking actions, in each
case sufficient to maintain the status quo
------ ---
<PAGE>
19
with respect to any pending remedies or proceedings in respect thereof being
then pursued hereunder; provided, however, that in no event shall the Indenture
-------- -------
Trustee sell or assign any portion of the Indenture Estate during the period
from such notice to the Redemption Date specified therein. In the event the
Owner Trustee shall have given any such notice to purchase or redeem, and the
Owner Trustee has deposited with the Indenture Trustee the amounts required to
be deposited pursuant to this Section 3.06, then on the Redemption Date, each
Loan Participant will be deemed to sell, assign, transfer and convey to the
Owner Trustee or its designee (without recourse or warranty of any kind other
than of title to the Secured Notes so conveyed) all of the right, title and
interest of such Loan Participant in and to the Secured Notes held by such Loan
Participant. On and after such Redemption Date, the Indenture Trustee shall no
longer treat the former Loan Participants as the "Loan Participants", except for
purposes of the Loan Participants' right to receive their respective portions of
the amounts paid to the Indenture Trustee as aforesaid and all other amounts due
to such Loan Participants under the Operative Documents with respect to acts,
events, circumstances or conditions occurring or existing prior to such
Redemption Date, and on such date the Indenture Trustee shall register the
transfer of ownership of the Secured Notes into the name of the Owner Trustee or
its designee. If the Owner Trustee elects to purchase the Secured Notes under
this Section 3.06, nothing herein, including the use of the terms "Redemption
Date" and "Redemption Price", shall be deemed to result in a redemption of the
Secured Notes.
SECTION 3.07. Deposited Redemption or Purchase Moneys. Moneys held
---------------------------------------
by the Indenture Trustee for the redemption or purchase of any Secured Note
issued hereunder as provided in this Article III shall be held by the Indenture
Trustee as a separate fund in trust for the account of the respective Holders of
the Secured Notes to be redeemed, shall be invested in accordance with the
provisions of Section 7.04 and shall be delivered to such Holders respectively
in accordance with Section 2.03 on the Redemption Date. Any amounts so held by
the Indenture Trustee shall be deemed paid for purposes of Section 2.09, and
promptly after payment of all amounts of principal of, Make-Whole Amount, if
any, and interest on, and all other amounts due and payable under any such
Secured Notes, the Holders thereof shall deliver such Secured Notes to the
Indenture Trustee for cancellation.
SECTION 3.08. Acquisition of Secured Notes. The Owner Trustee
----------------------------
covenants that it will not, directly or indirectly, acquire or make any offer to
acquire any Secured Note except pursuant to the provisions of this Indenture.
SECTION 3.09. Condition to Redemption and Refunding. It shall be a
-------------------------------------
condition to any redemption, refinancing or refunding of Secured Notes effected
under this Article III other than under Section 3.06 that all amounts of
principal of, Make-Whole Amount, if any, and interest on, and all other amounts
then due and payable under the Secured Notes which are to be the subject of such
redemption, refinancing or refunding, as the case may be, as well as all other
amounts due and payable to the Holders of such
<PAGE>
20
Secured Notes as are to be the subject of such redemption, refinancing or
refunding shall have been paid as specified therein or in any other Operative
Document.
SECTION 3.10. Notice of Certain Redemptions. In connection with a
-----------------------------
redemption of any of the Secured Notes pursuant to Section 3.02 or Section 3.05,
the Owner Trustee shall give irrevocable (except with respect to redemption
notices given pursuant to Section 3.02(a), Section 3.02(b), Section 3.02(c) (to
the extent, in the case of Section 3.02(c), such redemption notice relates to
the Lessee's election to exercise a purchase option under Section 6.1(e) or 7.3
of the Lease) or Section 3.05, which may be withdrawn, (a) in the case of such a
redemption notice given pursuant to 3.02(a) following the occurrence of an Event
of Loss with respect to the Facility Assets, if the Lessee has elected (or shall
be deemed to have elected) the option set forth in Section 12.2(b) of the Lease
with respect to such Event of Loss, (b) in the case of such a redemption notice
given pursuant to Section 3.02(b) or 3.02(c), if the Lease is not terminated
with respect to the Facility Assets, and (c) in the case of such a redemption
notice given pursuant to Section 3.05, not less than three Business Days prior
to the Redemption Date) notice of such redemption at least 25 days and not more
than 60 days prior to the Redemption Date to each Loan Participant of such
Secured Notes to be redeemed, at such Loan Participant's address appearing in
the Note Register.
Any such notice of redemption shall state:
(i) the Redemption Date;
(ii) the applicable basis for determining the redemption price
pursuant to Section 3.02 or Section 3.05 (the "Redemption Price");
----------------
(iii) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Secured Note, and that, if any such Secured
Notes are then Outstanding, interest on such Secured Notes shall cease to
accrue on and after such Redemption Date; and
(iv) the place or places where such Secured Notes are to be
surrendered for payment of the Redemption Price.
<PAGE>
21
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 4.01. Basic Rent Distribution. (a) Generally. Except as
----------------------- ---------
otherwise provided in Sections 4.01(b) and 4.03, each installment of Basic Rent
(other than any portion thereof constituting an Excepted Payment), any payment
of Supplemental Rent representing interest on overdue installments of Basic Rent
(other than any portion thereof constituting an Excepted Payment) and any
payment received by the Indenture Trustee as contemplated by Section 5.03 shall
be promptly distributed by the Indenture Trustee on the date such payment is due
(or as soon thereafter as such payment shall be received by the Indenture
Trustee) in the following order of priority:
first, in accordance with Section 4.04, so much of such installment or
-----
payment as shall be required to pay in full the aggregate amount of the
payment or repayment of principal, interest and other amounts then due
under all Secured Notes shall be distributed to the Holders of such Secured
Notes ratably, without priority of one Holder over any other Holder, in the
proportion that the amount of such payment or payments then due under each
such Secured Note bears to the aggregate amount of the payments then due
under all such Secured Notes; and
second, subject to Section 4.01(b), the balance, if any, of such
------
installment remaining thereafter shall be distributed to the Owner Trustee
for distribution pursuant to the Trust Agreement.
(b) Retention of Amounts by the Indenture Trustee. If, at the time of
---------------------------------------------
receipt by the Indenture Trustee of an installment of Basic Rent (whether or not
then overdue) or of payment of Supplemental Rent representing interest on any
overdue installment of Basic Rent, the Indenture Trustee shall have Actual
Knowledge that there shall have occurred and be continuing an Indenture Event of
Default, the Indenture Trustee shall retain and not distribute any amount
otherwise required to be distributed pursuant to clause "second" of Section
------
4.01(a), and (i) at such time as there shall not be continuing any such
Indenture Event of Default or (ii) on the first Business Day following the date
that is 180 days after the receipt of such amount, whichever shall first occur,
the Indenture Trustee shall distribute such amount pursuant to clause "second"
------
of Section 4.01(a) unless prior thereto the Indenture Trustee (as assignee of
the Owner Trustee) shall have given notice to declare the Lease to be in default
in accordance with Section 16.1 thereof, the Indenture Trustee shall have given
notice to the Owner Trustee pursuant to the first proviso to Section 5.04 of the
Indenture Trustee's intent to declare the Secured Notes due and payable or any
of the Secured Notes shall have been declared or otherwise shall have become
immediately due and
<PAGE>
22
payable pursuant to Section 5.04, in which case such amount shall be distributed
by the Indenture Trustee forthwith in accordance with the terms of Section 4.03.
SECTION 4.02. Certain Distributions. (a) In the event the Secured
---------------------
Notes are to be redeemed pursuant to Section 3.02 or 3.05, any payment received
by the Indenture Trustee from the Owner Trustee or the Lessee pursuant to such
Section 3.02 or 3.05, shall be distributed forthwith in the following order of
priority:
first, in the manner provided in clause "first" of Section 4.03;
----- -----
second, so much of the proceeds remaining as shall be required to pay
------
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and Make-Whole Amount, if any, and all accrued but unpaid
interest thereon to, but not including, the date of distribution, shall be
distributed to the Holder of such Secured Note, and if the proceeds
remaining are insufficient to pay all such amounts in full, they shall be
distributed to all Holders ratably, without priority of any Holder over any
other Holder (except as otherwise expressly provided herein), in the
proportion that the aggregate amount due each such Holder under this clause
"second" bears to the aggregate amount due all such Holders under this
------
clause "second";
------
third, in the manner provided in clause "second" of Section 4.03;
----- ------
fourth, in the manner provided in clause "fourth" of Section 4.03; and
------ ------
fifth, in the manner provided in clause "fifth" of Section 4.03.
----- -----
(b) The portion of each payment referred to in this Section 4.02
distributed to a Holder on account of principal or interest on any Secured Note
held by such Holder shall be applied by such Holder in payment of such Secured
Note in accordance with the terms of Section 4.04.
(c) Application of Certain Payments in Case of Event of Loss. Except
--------------------------------------------------------
as otherwise provided in the second sentence of this Section 4.02(c), any
amounts received directly or through the Lessee from any Governmental Authority
or other Person pursuant to Section 12 of the Lease with respect to the Facility
Assets as the result of an Event of Loss, to the extent that such amounts are
not at the time required to be paid to the Lessee pursuant to said Section 12,
and any amounts of insurance proceeds for damage to the Indenture Estate
received directly or through the Lessee from any insurer pursuant to Section 13
of the Lease with respect thereto as the result of an Event of Loss, to the
extent such amounts are not at the time required to be paid to the Lessee
pursuant to said Section 13, shall, except as otherwise provided in the next
sentence, be applied in reduction of the Lessee's obligations to pay Stipulated
Loss Value as provided in the Lease and the remainder, if any, shall, except
<PAGE>
23
as provided in the next sentence, be distributed to the Owner Trustee to be held
or distributed in accordance with the terms of the Lease. Notwithstanding this
Section 4.02(c) or Section 4.03 hereof, any amounts held by the Indenture
Trustee, including, without limitation, pursuant to Section 12 of the Lease,
which are payable to the Lessee pursuant to the terms of the Lease or held by
the Indenture Trustee in accordance with Section 19.7 of the Lease shall be (i)
so paid to the Lessee or (ii) held by the Indenture Trustee as security for the
obligations of the Lessee, in each case in accordance with the applicable
provisions of the Lease.
SECTION 4.03. Distribution After Indenture Event of Default. Except
---------------------------------------------
as otherwise provided in the second sentence of Section 4.02(c) or in Section
4.05, if (a) an Indenture Event of Default shall have occurred and be
continuing, and (b) either the Indenture Trustee (as assignee of the Owner
Trustee) shall have given notice to declare the Lease to be in default pursuant
to Section 16.1 thereof, the Indenture Trustee shall have given notice to the
Owner Trustee pursuant to the first proviso to Section 5.04 of the Indenture
Trustee's intent to declare the Secured Notes due and payable or any of the
Secured Notes shall have been declared or otherwise shall have become
immediately due and payable pursuant to Section 5.04, then, to the extent that
each such notice or declaration shall not have been rescinded or the Secured
Notes shall remain immediately due and payable, (i) all amounts then held by the
Indenture Trustee pursuant to Section 4.01 or otherwise under the Indenture (but
not including funds described in the second sentence of Section 4.02(c) and
Section 4.05 excluded from the operation of this Section 4.03), in each case
hereunder or under any Operative Document (other than amounts held for its own
account), and (ii) all payments and amounts thereafter realized by the Indenture
Trustee through the exercise of remedies hereunder or under any of the
agreements assigned or pledged to the Indenture Trustee under this Indenture or
otherwise as trustee under this Indenture (for purposes of this Section 4.03,
all such amounts and payments held or realized being herein called "proceeds"),
--------
other than amounts expressly paid to it for its own account and other than
Excepted Payments, shall be distributed forthwith by the Indenture Trustee in
the following order of priority:
first, so much of such proceeds as shall be required to reimburse the
-----
Indenture Trustee for any unpaid fees for its services under this Indenture
and any unreimbursed tax, expense (including reasonable legal fees) or
other loss incurred by it (in each case to the extent reimbursable under
the Operative Documents) shall be distributed to the Indenture Trustee for
application to itself;
second, so much of the remaining proceeds as shall be required to
------
reimburse the then existing or prior Holders for amounts paid or advanced
by the Holders pursuant to Section 6.04 (to the extent not previously
reimbursed), shall be distributed to the then existing and prior Holders as
their respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be
<PAGE>
24
distributed ratably, without priority of any recipient over any other
recipient (except as otherwise expressly provided herein), in the
proportion the aggregate amount due each such Person under this clause
"second" bears to the aggregate amount and interest due all such Persons
------
under this clause "second";
-------
third, so much of the proceeds remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and all accrued but unpaid interest thereon to, but not
including, the date of distribution, shall be distributed to the Holder of
such Secured Note, and if the proceeds remaining are insufficient to pay
all such principal and/or interest (as the case may be) amounts in full,
they shall be distributed to all Holders ratably, without priority of any
Holder over any other Holder (except as otherwise expressly provided
herein), in the proportion that the aggregate amount due each such Holder
under this clause "third" bears to the aggregate amount due all such
-----
Holders under this clause "third";
-----
fourth, so much of the proceeds remaining as shall be required to pay
------
to each Holder all other amounts payable pursuant to the indemnification
provisions of Section 12 of the Participation Agreement or pursuant to any
other provision of any Operative Document and secured hereunder to such
Holder or to its predecessors and remaining unpaid shall be distributed to
such Holder for distribution to itself and such predecessors, as their
respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any Holder over any other Holder (except as
otherwise expressly provided herein), in the proportion that the aggregate
amount due each such Holder under this clause "fourth" bears to the
------
aggregate amount due all such Holders under this clause "fourth"; and
------
fifth, the balance, if any, of the proceeds remaining shall be
-----
distributed to the Owner Trustee for distribution pursuant to the Trust
Agreement.
For the avoidance of doubt, no Make-Whole Amount or any other premium
shall be due and payable on the Secured Notes as a consequence of the
acceleration of the Secured Notes as a result of an Indenture Event of Default.
All amounts distributed to any Holder pursuant to clause "third" of
-----
this Section 4.03 shall be applied by such Holder in payment of the Secured
Notes held by it in accordance with the terms of Section 4.04.
SECTION 4.04. Application of Payments on Secured Notes. Each payment
----------------------------------------
on a Secured Note shall be applied, first, to the payment of accrued interest on
-----
such Secured Note to the date of such payment and second, to the payment of any
------
principal on such Secured Note then due thereunder.
<PAGE>
25
SECTION 4.05. Applications of Payments According to Applicable
------------------------------------------------
Operative Document Provisions. (a) Notwithstanding Section 4.03 or any other
- -----------------------------
provision of this Indenture to the contrary, any payments or amounts (other than
Excepted Payments) received by the Indenture Trustee, provision for the
application of which is made in any Operative Document, shall be applied
promptly as provided in such Operative Document (including in the case of
payments or amounts that would be payable to the Lessee as provided in Sections
12.5 and 19.7 of the Lease).
(b) Notwithstanding any other provision of this Indenture to the
contrary, and whether or not any such provision refers to this Section 4.05, any
Excepted Payment or other amount expressly provided by the terms of this
Indenture to be paid directly to the Owner Trustee or to the Owner Participant
shall be paid or distributed immediately by the Indenture Trustee to the Owner
Trustee or the Owner Participant, as the case may be.
(c) The Indenture Trustee will distribute promptly upon receipt any
indemnity or other payment received by it from the Owner Trustee or the Lessee
in respect of the Indenture Trustee in its individual capacity of any Holder
pursuant to either Section 12.1 or 12.2 of the Participation Agreement directly
to the Person entitled thereto.
SECTION 4.06. Amounts Received for Which No Provision Is Made. (a)
-----------------------------------------------
Any payment received or amounts realized by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Indenture or
in any other Operative Document, except as provided in Section 4.03, and (b) all
payments received and amounts realized by the Indenture Trustee under the Lease,
including, without limitation, Section 11.7(b) of the Lease, or otherwise with
respect to the Facility Assets, to the extent received or realized at any time
after payment in full of the principal of and interest on all Secured Notes
issued hereunder or after the conditions set forth in Section 10.01 for the
defeasance of the Secured Notes shall have been satisfied, as well as any other
amounts remaining as part of or as proceeds of the Indenture Estate after
payment in full of the principal of, Make-Whole Amount, if any, and interest on
all such Secured Notes, shall be distributed forthwith by the Indenture Trustee
in the following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 6.04
shall be applied to pay the Indenture Trustee such amounts; and
second, the balance, if any, of such aggregate amount remaining
------
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Trust Agreement, the Lease
or the Participation Agreement.
SECTION 4.07. Payment Procedures. All amounts which are
------------------
distributable from time to time by the Indenture Trustee to the Owner Trustee,
the Lessee, the Owner
<PAGE>
26
Participant or any Holder shall be paid by the Indenture Trustee in immediately
available funds promptly after such amounts become immediately available to it,
and the Indenture Trustee shall not be obligated to see to the application of
any such payment made by it. All payments made by the Indenture Trustee to the
Owner Participant or to the Owner Trustee shall be made in the manner and to the
address set forth in Schedule 1 to the Participation Agreement or to such other
address as may be specified from time to time by notice to the Indenture Trustee
from the Owner Participant or the Owner Trustee.
SECTION 4.08. Application of Payments Under Guaranty. All payments
--------------------------------------
received by the Indenture Trustee pursuant to the Guaranty shall be distributed
forthwith by the Indenture Trustee in the same order of priority, and in the
same manner, as it would have distributed the payment on the underlying
obligation in respect of which such payment under the Guaranty was received.
ARTICLE V
COVENANTS OF OWNER TRUSTEE; CERTAIN AGREEMENTS;
INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 5.01. Covenants of Owner Trustee; Certain Agreements. (a)
----------------------------------------------
Subject to Section 2.02, the Owner Trustee will duly and punctually perform and
observe all covenants and conditions to be performed and observed by it pursuant
to the terms of any Operative Document. Except as permitted by this Indenture
or the terms of any Operative Document, the Owner Trustee will take no action
and will cooperate with the Indenture Trustee so as to permit no action to be
taken by others which will release, or which may be construed as releasing, the
Owner Trustee or the Lessee from any of its or the Lessee's, as the case may be,
obligations or liabilities under any Operative Document, or which may result in
the termination, amendment or modification, or impair the validity, of any such
Operative Document.
(b) If the Owner Trustee has Actual Knowledge of any Indenture Event
of Default, Indenture Default, Lease Event of Default or Event of Loss, the
Owner Trustee will give prompt written notice thereof to the Indenture Trustee,
the Lessee and the Owner Participant if such notice shall not already have been
given to such party. The notice shall set forth in reasonable detail the
circumstances of such default or loss known to such Owner Trustee.
(c) At any time and from time to time, upon the reasonable request of
the Indenture Trustee, the Owner Trustee shall promptly and duly execute and
deliver any and all such further instruments and documents as the Indenture
Trustee may deem necessary or desirable (and as shall be consistent with the
intent, purposes and provisions hereof) to perfect or maintain the Lien of this
Indenture or to obtain for the Indenture Trustee the full
<PAGE>
27
benefit of the specific rights and powers herein granted, conveyed or assigned,
or which the Owner Trustee may be or may hereafter be bound to convey or assign
to the Indenture Trustee or to facilitate the performance of the terms of this
Indenture, or the filing, registering or recording of this Indenture, including,
without limitation, the execution and delivery of any financing statement (and
any continuation statement with respect to any such financing statement) or any
other similar document specified in such instructions as may be necessary or
desirable to perfect or maintain the Lien of this Indenture.
(d) The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that except as provided herein or
permitted by the other Operative Documents, it will not (other than in respect
of Excepted Payments), except as provided in or permitted by this Indenture or
any other Operative Document, (i) accept any payment from the Lessee, (ii)
terminate or consent to the cancellation or surrender of the Lease or accept any
prepayment of Rent under the Lease, (iii) enter into any agreement amending or
supplementing any Operative Document, (iv) execute or grant any waiver or
modification of, or consent under, the terms of any Operative Document, (v)
settle or compromise any claim arising under any Operative Document, or (vi)
submit or consent to the submission of any dispute, difference or other matter
arising under or in respect of any Operative Document to arbitration thereunder.
(e) The Owner Trustee does hereby ratify and confirm the Lease, and
does hereby agree the Owner Trustee will not, except as provided in or permitted
by this Indenture or the terms of any other Operative Document, take or omit to
take any action, the taking or omission of which might result in an alteration
or impairment of the Lease or any other Operative Document, or of any of the
rights created by the Lease or any Operative Document, or the assignment
hereunder or thereunder, as the case may be.
(f) The Owner Trustee will, in its individual capacity and at its own
cost and expense, promptly take such action as may be necessary to discharge any
Lessor's Lien on any of the Owner Trustee's estate, right, title or interest in
the Trust Estate so pledged or assigned or intended to be conveyed, pledged or
assigned under this Indenture.
(g) Until the release of the security interest in the Indenture Estate
pursuant to Section 6.03, all payments due or to become due under any Operative
Document to the Owner Trustee that are part of the Indenture Estate shall be
made directly to the Indenture Trustee or in accordance with the Indenture
Trustee's instructions, and the Owner Trustee shall give all notices as shall be
required under each Operative Document to direct that such payments be made to
the Indenture Trustee. Promptly on receipt thereof, the Owner Trustee will
transfer to the Indenture Trustee any and all moneys from time to time received
by it and constituting part of the Indenture Estate or otherwise assigned or
pledged to the Indenture Trustee hereunder, in each case for application by the
Indenture Trustee pursuant to this Indenture, except that the Owner Trustee
shall accept for distribution pursuant to the
<PAGE>
28
terms of the Trust Agreement any amounts distributed to it by the Indenture
Trustee under this Indenture.
(h) An executed counterpart of each amendment or supplement to the
Trust Agreement shall be delivered within 20 Business Days after the execution
thereof to the Indenture Trustee, provided that any amendment or supplement
under which a successor trustee is appointed shall be mailed to the Indenture
Trustee within 10 days after the execution thereof. The Lien of this Indenture
shall not be affected by any amendment or supplement to the Trust Agreement or
by any other action taken under or in respect of the Trust Agreement. Without
the prior written consent of the Indenture Trustee, the Trust Agreement may not
in any event be terminated or revoked by the Owner Participant prior to the
termination of this Indenture. In the case of any appointment of a successor to
any Owner Trustee pursuant to the Trust Agreement or any merger, conversion,
consolidation or transfer of all or substantially all of the corporate trust
business of the Owner Trustee pursuant to the Trust Agreement, the successor
Owner Trustee shall give prompt notice thereof to the Indenture Trustee and the
Lessee.
SECTION 5.02. Indenture Events of Default. "Indenture Event of
--------------------------- ------------------
Default" means any of the following events (whatever the reason for such
- -------
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any
Governmental Rule):
(a) any Lease Event of Default (other than a Lease Event of Default
arising from the failure of the Lessee to make an Excepted Payment) shall
have occurred and be continuing; or
(b) to the extent not arising from clause (a) above, any payment of
principal of, Make-Whole Amount, if any, or interest on any Secured Note
shall not have been made when due and such default shall continue
unremedied for ten (10) Business Days after the same shall have become due
and payable; or
(c) the assignment or pledge by the Owner Trustee (except as permitted
under the Operative Documents) of any of its right, title or interest in
the Indenture Estate hereby assigned to anyone other than the Indenture
Trustee, or the failure by either of the Owner Participant or the Owner
Trustee, as the case may be, to perform or observe in any material respect
any covenant or agreement to be performed or observed by it under this
Indenture or any other Operative Document (other than the Tax Indemnity
Agreement), (i) which failure, assignment or pledge, as the case may be,
shall continue for a period of 30 days after receipt by the Owner
Participant or the Owner Trustee, as the case may be, of a written notice
from the Indenture Trustee or from Holders of Secured Notes owning at least
25% in principal amount of
<PAGE>
29
Outstanding Secured Notes specifying such failure, assignment or pledge and
requiring it be remedied or (ii) which failure, assignment or pledge, as
the case may be, if such failure, assignment or pledge is remediable and
the Owner Participant or the Owner Trustee is diligently attempting to
remedy such failure, assignment or pledge, shall continue for a period of
180 days after receipt of notice thereof; or
(d) any representation or warranty made by either of the Owner
Participant or the Owner Trustee pursuant to Section 6 or 8, as the case
may be, of the Participation Agreement shall prove to have been inaccurate
in any material respect when made, unless such inaccurate representation or
warranty shall not be material to the recipient at the time when the notice
referred to below shall have been received by the Owner Participant or the
Owner Trustee or any material adverse impact thereof shall have been cured
within thirty (30) days after receipt by the Owner Participant or the Owner
Trustee, as the case may be, of a written notice thereof from the Indenture
Trustee or from Holders of Secured Notes owning at least 25% in principal
amount of Outstanding Secured Notes; provided that if such material adverse
--------
impact is remediable and the Owner Participant or the Owner Trustee is
diligently attempting to remedy such impact, the Owner Participant or the
Owner Trustee shall have 90 days after receipt of written notice thereof
from the Indenture Trustee to remedy any such material adverse impact; or
(e) either of the Owner Participant or the Owner Trustee shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of its or any substantial part of its property, or
shall consent to any such relief or to the appointment or taking possession
by any such official or agency in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall take any corporate action to authorize any of the
foregoing, or an involuntary case or other proceeding shall be commenced
against either of the Owner Participant or the Owner Trustee seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official or agency of its or any substantial
part of its part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) days, or if, under the provisions of any law providing for
reorganization or winding-up of corporations which may apply to the Owner
Trustee or the Owner Participant, any court of competent jurisdiction shall
assume jurisdiction, custody or control of the Indenture Estate, the Owner
Trustee or the Owner Participant or of any substantial part of its property
and such jurisdiction,
<PAGE>
30
custody or control shall remain in force unrelinquished, unstayed or
unterminated for a period of ninety (90) days.
SECTION 5.03. Certain Rights. (a) If the Lessee shall fail to make
--------------
any payment of Basic Rent under the Lease when the same shall become due, and if
such failure of the Lessee to make such payment of Basic Rent shall not
constitute the fourth consecutive such failure or the seventh or subsequent
cumulative such failure, then as long as no Indenture Event of Default (other
than arising from a Lease Event of Default not involving any failure to make any
payments to which the Indenture Trustee or any Loan Participant is entitled
hereunder when due) shall have occurred and be continuing, the Owner Participant
or the Owner Trustee may (but need not), without consent or concurrence of the
Indenture Trustee or any Holder, in the manner provided in Section 2.03, for
application in accordance with Section 4.01, pay to the Indenture Trustee, at
any time prior to the day which is the 11th day subsequent to the expiration of
the grace period provided for in Section 15(a) of the Lease with respect to the
payment of Basic Rent (and the Indenture Trustee shall not (without the prior
written consent of the Owner Trustee) declare the Lease in default pursuant to
Section 16 thereof or exercise any of the rights, powers or remedies pursuant to
such Section 16 of the Lease or Section 5.04 hereof prior to the occurrence of
such later date), an amount equal to the full amount of such payment of Basic
Rent, together with any interest due thereon on account of the delayed payment
thereof to, but not including, the date of such payment in accordance with
Section 2.03(c) hereof, and such payment by the Owner Participant or the Owner
Trustee shall be deemed to cure as of the date of such payment any Indenture
Event of Default which arose from such failure of the Lessee (including any
Lease Event of Default arising from the Lessee's failure to pay interest in
respect of such overdue Basic Rent for the period commencing on the date of such
payment), but such cure shall not relieve the Lessee of any of its obligations.
If the Lessee shall fail to perform or observe any covenant, condition or
agreement to be performed or observed by it under the Lease or any other Lease
Event of Default shall exist (other than the failure to pay Basic Rent), and if
(but only if) the performance or observance of such covenant, condition or
agreement or the cure of such Lease Event of Default can be effected by the
payment of money alone (it being understood that actions such as the obtaining
of insurance can be so effected), then as long as no other Indenture Event of
Default (other than those arising from a Lease Event of Default) shall have
occurred and be continuing, the Owner Participant or the Owner Trustee may (but
need not), without consent or concurrence of the Indenture Trustee or any
Holder, pay to the Indenture Trustee (or to such other person as may be entitled
to receive the same), at any time prior to the day which is the later of (x) the
11th day subsequent to notice of such failure or such Lease Event of Default by
the Indenture Trustee to the Owner Trustee or the Owner Participant and (y) the
11th day subsequent to the expiration of the grace period, if any, provided with
respect to such failure or such Lease Event of Default on the part of the Lessee
in Section 15 of the Lease (and the Indenture Trustee shall not (without the
prior written consent of the Owner Trustee) declare the Lease in default
pursuant to Section 16 thereof or exercise any of the rights, powers or remedies
pursuant to such Section 16 or
<PAGE>
31
Section 5.04 hereof prior to the occurrence of such later date), all sums
necessary to effect the performance or observance of such covenant or agreement
of the Lessee or to cure such Lease Event of Default, together with any interest
due thereon on account of the delayed payment thereof to, but not including, the
date of such payment, and such payment by the Owner Participant or the Owner
Trustee shall be deemed to cure as of the date of such payment any Indenture
Event of Default which arose from such failure of the Lessee or such Lease Event
of Default (including any Lease Event of Default arising from the Lessee's
failure to pay interest in respect of such overdue payment for the period
commencing on the date of such payment), but such cure shall not relieve the
Lessee of any of its obligations; provided that the Owner Trustee and the Owner
--------
Participant, collectively, shall not be entitled to cure any such default or
Lease Event of Default if the total amount previously expended and not
reimbursed by the Lessee or the Guarantor for curing such Lease Events of
Default and the amount which would be expended in connection with any such Lease
Event of Default would exceed in the aggregate 3% of the Lessor's Cost.
(b) To the extent of any payment made by the Owner Trustee or the
Owner Participant pursuant to Section 5.03(a), the Owner Trustee or the Owner
Participant, as the case may be, shall be subrogated to the rights of the
Indenture Trustee hereunder (or in the case of the second sentence of Section
5.03(a), to the rights of the Indenture Trustee or such other person, as the
case may be) to receive the payment of Basic Rent or other amount for which such
payment was made by the Owner Trustee or the Owner Participant, as the case may
be, and the Owner Trustee or the Owner Participant, as the case may be, shall be
entitled to receive such payment from the Indenture Trustee upon receipt thereof
by the Indenture Trustee; provided, however, that no such amount shall be paid
-------- -------
to the Owner Trustee or the Owner Participant, as the case may be, unless all
principal of and interest on the Secured Notes then due and payable and any
other amounts then due and payable under the Secured Notes and this Indenture
shall have been paid in full and no Indenture Default shall have occurred and be
continuing; provided that neither the Owner Participant nor the Owner Trustee
--------
shall attempt to recover any such amount paid by it on behalf of the Lessee
pursuant to Section 5.03(a) except by demanding of the Lessee payment of such
amount or by commencing an action against the Lessee to require the payment of
such amount.
(c) The Owner Trustee, upon exercising cure rights under Section
5.03(a) or rights under Section 6.08(a)(iii) or under Section 18.1 of the Lease,
shall not obtain any Lien on any part of the Indenture Estate or Trust Estate on
account of such payment for the costs and expenses incurred in connection
therewith nor shall any claims of the Owner Trustee against the Lessee or any
other Person for the repayment thereof impair the prior right and security
interest of the Indenture Trustee in and to the Indenture Estate or otherwise
related to the Indenture Estate.
(d) If there shall occur an Indenture Event of Default pursuant to
Section 5.02(a) arising as a result of a failure by the Lessee to make any
payment of Rent when due,
<PAGE>
32
the Indenture Trustee shall so notify the Owner Trustee in writing promptly upon
such occurrence.
SECTION 5.04. Remedies. (a) If an Indenture Event of Default shall
--------
have occurred and be continuing and so long as the same shall be unremedied,
then and in every such case the Indenture Trustee, subject to Sections 3.06,
5.03, 5.04(d), 5.05, 5.09, 6.01 and 6.08, may exercise any or all of the rights
and powers and pursue any and all of the remedies herein provided or available
under applicable law; provided, however, the Indenture Trustee must give the
-------- -------
Owner Trustee and the Lessee at least 10 Business Days' (or 5 Business Days in
the case of acceleration of the Secured Notes other than an automatic
acceleration of the Secured Notes as provided in Section 5.04(c)) prior written
notice of its intention to exercise remedies pursuant to this Section 5.04 (it
being understood that such notice may be given concurrently with any notice of
default given hereunder or under the Lease and prior to the expiration of any
applicable grace periods). Notwithstanding any contrary provision herein, upon
the occurrence and during the continuance of an Indenture Event of Default, the
Indenture Trustee may exercise, subject to Sections 3.06, 5.03(a), 5.05, 5.09,
5.10 and 6.08, all rights and remedies of the Owner Trustee to the exclusion of
the Owner Trustee under the Lease (other than those rights and remedies to the
extent relating to Excepted Payments), including, without limitation, the right
to take possession of all or any part of the Indenture Estate and exclude the
Owner Trustee and all Persons (including the Lessee except to the extent of the
Lessee's rights described under the provisos to clause (d) and clause (e) of
Section 10.9 of the Participation Agreement) claiming under the Owner Trustee
wholly or partly therefrom. In addition to and without limiting the foregoing,
the Indenture Trustee, upon at least twenty-five (25) days' prior written notice
to the Owner Trustee, the Lessee and the Owner Participant, may invoke and
exercise the power of sale and sell (or cause to be sold) any or all of the
Indenture Estate in the manner required for non-judicial foreclosure sales
pursuant to the Texas Property Code or in any other manner which shall be in
accordance with applicable law, or, in lieu of sale pursuant to the power of
sale, the Indenture Estate may be foreclosed, and the Indenture Trustee has and
may exercise all rights and remedies of a secured party under the Uniform
Commercial Code as in effect in any applicable jurisdiction; provided, however,
-------- -------
that if an Indenture Event of Default has occurred and is continuing solely by
virtue of one or more Lease Events of Default (at a time when no other Indenture
Events of Default shall have occurred and be continuing), the Indenture Trustee
shall not exercise foreclosure remedies under this Indenture without declaring
the Lease to be in default and exercising remedies seeking to terminate the
Lease, unless exercising such remedies under the Lease shall be prohibited by
law, governmental authority or court order, in which case the Indenture Trustee
shall not exercise foreclosure remedies under the Indenture until the later of
(i) the expiration of a period of 90 days from the commencement of such
prohibition and (ii) the expiration of an additional period commencing on the
day immediately following the expiration of such 90-day period and ending on the
earlier of (x) the 180th day after the relevant stay or prohibition is imposed
and (y) rejection of the Lease; provided that such extended period
--------
<PAGE>
33
will not apply unless, on the 90th day following the date upon which such stay
or prohibition becomes effective, all Indenture Events of Default theretofore
existing have been cured (except to the extent arising from the bankruptcy or
similar proceeding giving rise to the applicable stay or similar prohibition)
and to the extent the Lessor exercises its right to cure any Lease defaults or
Lease Events of Default during such 180-day period, the exercise of such rights
will not limit the cure rights otherwise available to Lessor under Section
5.03(a); provided, further, that notwithstanding any provision herein to the
-------- -------
contrary, the Indenture Trustee shall not sell, assign, transfer or deliver any
of the Indenture Estate or take possession of the Indenture Estate unless the
Secured Notes shall have been accelerated pursuant to Section 5.04(b) or
5.04(c). The Indenture Trustee shall notify the Owner Trustee, the Owner
Participant and the Lessee as soon as is reasonably practicable after its
commencement of the exercise of any remedy pursuant to this Section 5.04.
(b) If an Indenture Event of Default (other than an Indenture Event of
Default specified in Section 5.02(e) or an Indenture Event of Default of the
type specified in Section 5.02(a) which arises as a result of any Lease Event of
Default as is specified in Section 15(g) of the Lease) shall have occurred and
be continuing, then, subject to Sections 5.03, 6.01 and 6.08, the Indenture
Trustee may at any time (or shall when instructed by a Majority Interest of
Holders of Notes), by five (5) days' written notice to the Owner Trustee,
declare all (but not less than all) of the Secured Notes to be due and payable.
Upon such declaration, the unpaid principal of all Secured Notes then
Outstanding, together with accrued but unpaid interest thereon and any other
amounts due thereunder, shall immediately become due and payable without
presentment, demand, protest, further notice of intention to accelerate maturity
or other notice, all of which are hereby waived.
(c) If an Indenture Event of Default of the type specified in Section
5.02(e), or an Indenture Event of Default of the type specified in Section
5.02(a) which arises as a result of any Lease Event of Default specified in
Section 15(g) of the Lease shall have occurred and be continuing, the principal
of all Secured Notes then Outstanding, together with accrued but unpaid interest
thereon and any other amounts due thereunder, shall become and be due and
payable automatically, without declaration, notice, demand, or any other action
on the part of the Indenture Trustee or any Holder, all of which are hereby
waived. Each of Section 5.04(a), Section 5.04(b) and this Section 5.04(c),
however, is subject to the condition that, if at any time after the principal of
the Secured Notes shall have become due and payable upon a declared or automatic
acceleration thereof as provided herein, and before any judgment or decree for
the payment of the money so due, or any portion thereof, shall be entered, all
overdue payments of interest upon the Secured Notes and all other amounts
payable under the Secured Notes (except the principal of the Secured Notes which
by such declaration shall have become payable) shall have been duly paid, and
every other Indenture Event of Default with respect to any covenant or provision
of this Indenture shall have been cured or waived, then in every such case a
Majority in Interest of Holders of Notes, by written instrument filed with the
Indenture Trustee, may (but shall not
<PAGE>
34
be obligated to) rescind and annul the Indenture Trustee's declaration and its
consequences; but no such rescission or annulment shall extend to or affect any
subsequent Event of Default or impair any right consequent thereon.
(d) Notwithstanding any provision in any document or instruction that
purports to require the Indenture Trustee to acquire title to any or all of the
Indenture Estate upon foreclosure, or pursuant to instructions, the Indenture
Trustee shall not be obligated to acquire any such title unless: (i) the
Indenture Trustee is provided with such security or indemnity as it shall deem
satisfactory to it, (ii) such acquisition of title complies with all applicable
Operative Documents, laws, rules and regulations, which shall be evidenced by an
opinion of counsel to such effect in form and substance satisfactory to the
Indenture Trustee and (iii) the Indenture Trustee shall have obtained such
executed certificates, instruments or other documents, in accordance with its
reasonable inquiries or requests.
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate. (a)
-------------------------------------------------
The Owner Trustee agrees that, if an Indenture Event of Default shall have
occurred and be continuing and the Indenture Trustee shall be entitled to
exercise remedies hereunder as provided in Section 5.04, the Indenture Trustee
may take possession of all or any part of the Indenture Estate and may exclude
the Owner Trustee, and all Persons claiming under the Owner Trustee, wholly or
partly therefrom; provided, however, that at least 10 Business Days' prior
-------- -------
notice of such taking of possession shall be given to the Owner Trustee. If an
Indenture Event of Default shall have occurred and be continuing and the
Indenture Trustee shall be entitled to exercise remedies hereunder as provided
in Section 5.04, at the request of the Indenture Trustee, the Owner Trustee
shall promptly execute and deliver to the Indenture Trustee such instruments of
title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or any agent or representative
designated by the Indenture Trustee, at such time or times and place or places
as the Indenture Trustee may specify, to obtain possession of all or any part of
the Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If the Owner Trustee shall for any reason fail to execute
and deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession of any property comprising a
portion of the Indenture Estate and requiring the Owner Trustee to execute and
deliver such instruments and documents to the Indenture Trustee, or (ii) pursue
all or part of such property wherever it may be found, and the Indenture Trustee
may enter any of the premises where such property or any portion thereof may be
or is supposed to be and search for such property. All expenses of obtaining
such judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may
make, from time to time and at the expense of the Indenture Estate, such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to
<PAGE>
35
and of the Indenture Estate as it may deem proper. In each such case, the
Indenture Trustee shall have the right to maintain, use, operate, store, lease,
control or manage the Indenture Estate and to exercise all rights and power of
the Owner Trustee relating to the Indenture Estate as the Indenture Trustee
shall deem to be in the best interest of the Holders. The Indenture Trustee
shall be entitled to collect and receive directly all tolls, rents (including
Rent), revenue, issues, income, products and profits of the Indenture Estate and
every part thereof, other than Excepted Payments. Such tolls, rents (including
Rent), revenues, issues, income, products and profits shall be applied (i) to
pay the expenses of the use, operation, storage, leasing, control, management or
disposition of the Indenture Estate, (ii) to pay the expense of all maintenance,
repairs, replacements, alterations, additions and improvements, (iii) to make
all payments which the Indenture Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any portion thereof, including, without limitation, the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of the Owner Trustee, and (iv) to pay
amounts owing in respect of the Secured Notes in accordance with the provisions
thereof and hereof and to make all other payments which the Indenture Trustee
may be required or authorized to make under any provision of this Indenture, as
well as just and reasonable compensation for the services of the Indenture
Trustee and of all Persons properly engaged and employed by the Indenture
Trustee.
(c) Any of the Indenture Trustee, any Holder, the Owner Trustee or the
Owner Participant may be a purchaser of the Indenture Estate or any portion
thereof or any interest therein at any sale thereof, whether pursuant to
foreclosure or power of sale or otherwise. The Indenture Trustee may apply
against the purchase price therefor the amount then due to it hereunder or under
any of the Secured Notes secured hereby and any Holder may apply against the
purchase price therefor the amount then due to it hereunder or under the Secured
Notes held by such Holder, to the extent of such portion of the purchase price
as it would have received had it been entitled to share in any distribution
thereof. The Indenture Trustee or any Holder or any nominee of any such Holder
shall acquire, upon any such purchase, good title to the property so purchased,
free of the Lien of this Indenture and, to the extent permitted by applicable
law, free of all rights of redemption in the Owner Trustee in respect of the
property so purchased.
(d) Any sale or other conveyance of any of the Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture or the Lease
shall bind the Owner Trustee, the Holders and the Owner Participant and shall be
effective to transfer or convey all right, title and interest of the Indenture
Trustee, the Owner Trustee, the Holders and the Owner Participant in and to such
Indenture Estate or portion thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance, or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee. In
the event of any such sale, the Owner Trustee shall execute any and all such
bills of sale and other
<PAGE>
36
documents, and perform and do all other acts and things requested by the
Indenture Trustee in order to permit continuation of such sale and to effectuate
the transfer or conveyance referred to in the first sentence of this Section
5.05(d). The Owner Trustee shall ratify and confirm any such sale or sales by
executing and delivering to the Indenture Trustee or to such purchaser or
purchasers all instruments as may reasonably be requested for such purpose. Any
such sale or sales made hereunder shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
the Owner Trustee in and to the properties and rights so sold, and shall be a
perpetual bar both at law and in equity against the Owner Trustee and against
any and all persons claiming or who may claim the same, or any part thereof
from, through or under the Owner Trustee. Upon any sale or other disposition of
the Indenture Estate by the Indenture Trustee, the Indenture Trustee will
promptly account in writing, in reasonable detail, to the Owner Trustee for the
amount of such sale, the costs and expenses incurred in connection therewith and
any surplus proceeds.
(e) The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof), at any time after an Indenture Event of Default either
before or after declaring due and payable the principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon and any
other amounts due thereunder, for all or any portion of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and, to the extent
permitted by applicable law, the Owner Trustee hereby consents to the
appointment of such a receiver, and agrees that it will not oppose any such
appointment. Any receiver appointed for all or any portion of the Indenture
Estate shall be entitled in addition to any powers available under applicable
law, to exercise all the rights and powers of the Indenture Trustee with respect
to the Indenture Estate.
(f) To the extent now or at any time hereafter enforceable under
applicable law, the Owner Trustee covenants that it will not at any time insist
upon or plead, or in any manner whatsoever claim or take any benefit or
advantage of any stay, extension, moratorium, any exemption from execution or
sale or other similar law or from any law now or hereafter in force providing
for the valuation or appraisement of the Indenture Estate or any part thereof,
prior to any sale or sales thereof to be made pursuant to any provision herein
contained, or prior to any applicable decree, judgment or order of any court of
competent jurisdiction; nor, after such sale or sales, claim or exercise any
right under any statute now or hereafter made or enacted by any state or any
right to have a portion of the Indenture Estate or the security for the Secured
Notes marshalled or otherwise redeem the property so sold or any part thereof,
and hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Owner Trustee acquiring any interest
in or title to the Indenture Estate or any part thereof subsequent to the date
of this Indenture, all benefit and advantage of any such law or laws, and
covenants that it will
<PAGE>
37
not invoke or use any such law or laws, but will suffer and permit the execution
of every such power as though no such law or laws had been made or enacted.
Nothing in this Section 5.05(f) shall be deemed to be a waiver by the Owner
Trustee of its rights under Section 5.03 hereof.
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Secured Notes or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Indenture shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
(g) The Indenture Trustee may adjourn from time to time any sale to be
made under or by virtue of this Indenture for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provision of
law, the Indenture Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(h) Any recovery of any judgment by the Indenture Trustee under the
Secured Notes and any levy of any execution under any such judgment upon the
Indenture Estate shall not affect in any manner or to any extent the security
title and security interest conveyed hereby upon the Indenture Estate or any
part thereof, or any conveyances, powers, rights and remedies of the Indenture
Trustee hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
(i) Notwithstanding anything contained herein, so long as any Pass
Through Trustee is a registered Holder, the Indenture Trustee is not authorized
or empowered to acquire title to all or any portion of the Indenture Estate or
take any action with respect to all or any portion of the Indenture Estate so
acquired by it if such acquisition or action would cause the related Pass
Through Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 5.06. Remedies Cumulative. Each and every right, power and
-------------------
remedy provided the Indenture Trustee specifically or otherwise in this
Indenture shall be cumulative and shall be in addition to every right, power and
remedy herein specifically provided or now or hereafter existing at law, in
equity or otherwise. Each and every such right, power and remedy may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any such right, power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy. No delay or omission by the Indenture Trustee in the exercise
of any right or power or in the pursuit
<PAGE>
38
of any remedy shall impair any such right, power or remedy, or be construed to
be a waiver of any Indenture Event of Default or to be an acquiescence therein.
SECTION 5.07. Discontinuance of Proceedings. In case the Indenture
-----------------------------
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee, then and in every such
case the Owner Trustee, the Indenture Trustee and the Lessee shall, subject to
any determination in such proceeding, be restored to their former positions and
rights hereunder with respect to the Indenture Estate, and all right, powers and
remedies of the Indenture Trustee shall continue as if no such proceeding had
been instituted.
SECTION 5.08. Waiver of Past Defaults. Upon written instruction of a
-----------------------
Majority in Interest of Holders of Notes, the Indenture Trustee shall waive any
Indenture Event of Default specified in such instruction and its consequences,
and upon any such waiver such Indenture Event of Default shall cease to exist
for every purpose of this Indenture; provided, however, that no such waiver
-------- -------
shall extend to any subsequent or other Indenture Event of Default or impair any
right or consequence thereof; and provided further, however, that in the absence
-------- ------- -------
of the written instruction of the Holders of all Secured Notes then Outstanding,
the Indenture Trustee shall not waive any Indenture Event of Default arising
from a default (i) in the payment of the principal of or interest on, or other
amounts due under, any Secured Note then Outstanding, or (ii) in respect of a
covenant or provision hereof which pursuant to the terms of Article IX cannot be
modified or amended without the consent of each Holder of a Secured Note then
Outstanding.
SECTION 5.09. No Action Contrary to Lessee's Rights Under the Lease.
-----------------------------------------------------
Notwithstanding any other provision of this Indenture or any other Operative
Document, including, without limitation, Sections 5.04 and 5.05 hereof, unless a
Lease Event of Default shall have occurred and be continuing and the Lease shall
have been declared to be in default pursuant to Section 16.1 thereof (and then
only in accordance with the Lease), the Indenture Trustee shall not take or
cause to be taken any action contrary to the Lessee's rights under the Lease,
including, without limitation, the rights of the Lessee under Section 9.1
thereof.
SECTION 5.10. Rights of Holders of Secured Notes. Notwithstanding
----------------------------------
any provision herein (including Section 5.11) to the contrary, the Holder of a
Secured Note shall have the absolute and unconditional right to receive payment
from the Indenture Estate of the principal of and interest on such Secured Note
on the dates and as specified in such Secured Note, and to institute suit
against the Owner Trustee for the enforcement of any such payment, subject to
Section 2.02, and such right shall not be impaired without the consent of such
Holder.
<PAGE>
39
SECTION 5.11. Limitation on Suits by Holders. A Holder may pursue a
------------------------------
remedy under this Indenture or under a Secured Note only if:
(i) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Indenture;
(ii) the Holders of at least 25 percent (25%) of the Outstanding
principal amount of the Secured Notes instruct the Indenture Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or
expense to be, or which may be, incurred by the Indenture Trustee in
pursuing the remedy;
(iv) the Indenture Trustee does not comply with the request within 60
days after receipt of the instructions and the offer of indemnity; and
(v) during such 60-day period, a Majority in Interest of Holders do
not give the Indenture Trustee an instruction inconsistent with the
request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
ARTICLE VI
DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.01. Certain Actions. If the Indenture Trustee shall have
---------------
Actual Knowledge of any Indenture Event of Default or any Indenture Default or
any failure on the part of the Lessee to make any payment of Rent when due or
any Event of Loss or other material fact relating to the Facility Assets, the
Indenture Trustee shall (a) give prompt telephonic notice (promptly confirmed in
writing) to the Owner Trustee, the Owner Participant and the Lessee and (b)
within 90 days after obtaining such Actual Knowledge, mail to each Holder,
notice of all Indenture Events of Default unless, in each case, such Indenture
Event of Default has been remedied before the giving of such notice and the
Indenture Trustee has Actual Knowledge that such Indenture Default or Indenture
Event of Default has been so remedied; provided, however, that the failure by
-------- -------
the Indenture Trustee to provide such notice shall not invalidate any actions
subsequently taken by the Indenture Trustee in connection with such Indenture
Event of Default. Except in the case of a default in the payment of the
principal or interest on any Secured Note, the Indenture Trustee shall be
protected in withholding the notice required under clause (b) above if and so
long as
<PAGE>
40
Responsible Officers of the Indenture Trustee in good faith determine that
withholding such notice is in the interest of the Holders.
SECTION 6.02. Action upon Instructions. (a) The Indenture Trustee
------------------------
shall, upon the written instruction at any time and from time to time of a
Majority in Interest of Holders of Notes, give such notice, consent or direction
or exercise such right, remedy or power hereunder or under the Lease or any
other agreement constituting part of the Indenture Estate as shall be specified
in such instruction; provided, however, that nothing set forth in this Section
-------- -------
6.02(a) shall entitle the Holders to cause the Indenture Trustee to give any
notice or exercise any right, power or remedy that is not elsewhere authorized
by, or is otherwise restricted or prohibited by, this Indenture or any other
Operative Document. If the Indenture Trustee shall not have received
instructions as above provided within twenty (20) calendar days after mailing of
the notice pursuant to Section 6.01 to the Holders, the Indenture Trustee may
take such action, or refrain from taking such action, but shall be under no duty
to take or refrain from taking any action, with respect to such Indenture Event
of Default, Event of Loss or fact as it shall determine to be advisable and in
the best interest of the Holders. If the Indenture Trustee receives any
instructions after the expiration of the aforementioned twenty day period, the
Indenture Trustee shall use its best efforts to conform any action being taken
to comply with those instructions.
(b) The Indenture Trustee shall not consent to the assignment by the
Lessee of all or any material portion of its right, title and interest in, to
and under the Lease, except (i) with respect to an assignment permitted under
Section 14.2 of the Lease or (ii) upon the written instruction at any time and
from time to time of a Majority in Interest of Holders of Notes. Nothing set
forth herein shall be construed to permit such assignment without the consent of
the Owner Trustee or to adversely affect any right of the Owner Trustee.
SECTION 6.03. Release of Lien of Indenture. (a) Release of
---------------------------- ----------
Indenture Estate. Upon satisfaction of the conditions for termination of this
- ----------------
Indenture set forth in Section 10.01, the Lien of the Indenture on the Indenture
Estate shall terminate and the Indenture Trustee, upon the written request of
the Owner Trustee or the Lessee, shall execute and deliver to, or as directed
by, the Owner Trustee or the Lessee, all appropriate instruments (in due form
for recording or filing) releasing the Indenture Estate from the Lien of this
Indenture, and the Indenture Trustee shall pay all moneys or other properties or
proceeds held by it under this Indenture to the Owner Trustee and shall give
notice to the Lessee of such payment. The reasonable cost and expense
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03(a) shall be borne by the Lessee.
(b) Release of the Facility Assets upon Transfer. Upon any transfer
--------------------------------------------
by the Owner Trustee of the Facility Assets pursuant to Section 6.1, 7, 11.7(b)
or 12 of the Lease or any retention by the Owner Trustee of the Facility Assets
pursuant to Section 7 of the
<PAGE>
41
Lease and receipt by the Indenture Trustee of all amounts of Rent therefor that
constituted a part of the Indenture Estate due and payable by the Lessee and the
concurrent redemption of Secured Notes as set forth in Sections 3.02 and 4.02
and the payment of any other amounts then due and owing hereunder, the Lien of
the Indenture shall terminate and the Indenture Trustee, upon the written
request of the Owner Trustee or the Lessee, shall execute and deliver to, or as
directed by, the Owner Trustee or the Lessee, all appropriate instruments (in
due form for recording or filing) releasing the Facility Assets, and all
property relating thereto and then constituting a portion of the Indenture
Estate from the Lien of this Indenture. The reasonable cost and expense
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03(b) shall be borne by the Lessee.
(c) Release of Lien upon Full Payment of Secured Notes. Upon payment
--------------------------------------------------
in full of the principal of and interest on and all other amounts due and
payable under the Secured Notes, and all other amounts due and payable to any
Holder or the Indenture Trustee hereunder or under any other Operative Document,
the Indenture Trustee, upon the written request of the Owner Trustee, shall
execute and deliver to, or as directed by, the Owner Trustee or the Lessee, all
appropriate instruments (in due form for recording or filing) releasing the
Facility Assets, and all other property relating thereto and then constituting a
portion of the Indenture Estate from the Lien of this Indenture. The reasonable
cost and expense associated with any action taken by the Indenture Trustee
pursuant to the provisions of this Section 6.03(c) shall be borne by the Lessee.
(d) Disposition, Substitution and Release of Facility Assets Included
-----------------------------------------------------------------
in the Indenture Estate During Continuation of Lease. So long as the Lease is
- ----------------------------------------------------
in effect, any Replacement Components and alterations, improvements and
modifications in and additions to the Facility Assets shall, to the extent
required or specified by the Lease, become subject to the lien of this Indenture
and be leased to the Lessee under the Lease; provided that, to the extent
--------
permitted by and as provided in the Lease, the Lessee shall have the right, at
any time and from time to time, without any release from or consent by the Owner
Trustee or the Indenture Trustee, to remove and/or replace Components or
Replacement Components, to make alterations, improvements and modifications in,
and additions to, the Facility Assets. The Indenture Trustee agrees that, to the
extent permitted by and as provided in the Lease, title to any such removed or
replaced Component or Replacement Components, shall vest in the Lessee. The
Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest of the
Indenture Trustee in any replaced Component or Replacement Components, as
provided in this Section 6.03(d) in each case upon receipt by the Indenture
Trustee of a request of a Lessee stating that said action was duly taken by the
Lessee in conformity with this Section 6.03(d) and that the execution of such
written instrument or instruments is appropriate to evidence such release of a
security interest under this Section 6.03(d). The reasonable cost and expense
<PAGE>
42
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03(d) shall be borne by the Lessee.
SECTION 6.04. Indemnification. The Indenture Trustee shall not be
---------------
required to take any action or refrain from taking any action instructed to be
taken or refrained from being taken pursuant to Section 6.02 or under Article V
unless the Indenture Trustee shall have been indemnified to the Indenture
Trustee's reasonable satisfaction against any liability (including, without
limitation, environmental liability), cost or expense (including, without
limitation, the reasonable fees and expenses of counsel) which may be incurred
in connection therewith, other than any such liability, cost or expense which
results from the willful misconduct or gross negligence of the Indenture Trustee
and for the failure of the Indenture Trustee to exercise ordinary care in
distributing funds in accordance with the terms of the Operative Documents.
Except with respect to actions required by the first sentence of Section 6.01
hereof, the Indenture Trustee shall be under no obligation to take any action
under this Indenture and nothing contained in this Indenture shall require the
Indenture Trustee to expend or risk the Indenture Trustee's own funds or
otherwise incur any financial liability or any other liability (including,
without limitation, environmental liability) in the performance of any of the
Indenture Trustee's duties hereunder or in the exercise of any of the Indenture
Trustee's rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. The Indenture Trustee shall not be
required to take any action under Section 6.02 or Article V, nor shall any other
provision of this Indenture be deemed to impose a duty on any Indenture Trustee
to take any action, if such Indenture Trustee shall have reasonably determined
or been advised in writing by its counsel that such action is contrary to the
terms hereof or of any other Operative Document, or is contrary to applicable
law.
SECTION 6.05. No Implied Duties. No implied duties or obligations of
-----------------
the Indenture Trustee shall be read into this Indenture.
SECTION 6.06. Duties to Remove Certain Liens. The Indenture Trustee,
------------------------------
in its individual capacity, shall comply with Section 11.4(a) of the
Participation Agreement.
SECTION 6.07. No Action Except Under Operative Documents or
---------------------------------------------
Instructions. The Owner Trustee and the Indenture Trustee agree that they will
- ------------
not use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Facility Assets or any other part of the Indenture Estate except
(a) in accordance with the terms of the Lease or the other Operative Documents
or (b) in accordance with the powers granted to, or the authority conferred
upon, the Owner Trustee and the Indenture Trustee pursuant to the express terms
of this Indenture and the Trust Agreement.
<PAGE>
43
SECTION 6.08. Certain Rights of the Owner Trustee and the Owner
-------------------------------------------------
Participant. Notwithstanding the Granting Clause or any other provision in this
- -----------
Indenture to the contrary:
(a) each of the Owner Trustee and the Owner Participant shall have the
right, to the exclusion of the Indenture Trustee, whether or not an
Indenture Event of Default is continuing and whether or not the Indenture
Trustee has foreclosed on the Lien of the Indenture, (i) to receive
Excepted Payments, (ii) to demand, collect, sue for or waive any notice of
default with respect to Excepted Payments, and (iii) to enforce the payment
of Excepted Payments due and payable to it by appropriate judicial
proceedings and to exercise other remedies as provided under any Operative
Document to the extent and with respect to any portion of the Indenture
Estate which shall have been released pursuant to the terms of this
Indenture; provided that the rights referred to in clause (iii) of this
--------
Section 6.08(a) shall not be deemed to include the exercise of any remedies
provided for in Section 16 of the Lease other than the right to proceed by
appropriate court action or actions, either at law or in equity, to enforce
performance by the Lessee of the applicable covenants or to recover damages
for breach thereof;
(b) at all times prior to the foreclosure of the Lien of the
Indenture, whether or not an Indenture Event of Default is continuing, each
of the Owner Trustee and the Owner Participant shall have the right, but
not to the exclusion of the Indenture Trustee, (i) to receive from the
Lessee all notices, financial statements, certificates, opinions of counsel
and other documents and information which the Lessee is permitted or
required to give or furnish to the Owner Trustee or the Owner Participant
pursuant to the terms of any Operative Document, (ii) to retain all rights
with respect to liability insurance which Section 13 of the Lease
specifically confers upon the Owner Trustee or the Owner Participant, or
other insurance under Section 13.4 of the Lease purchased for the benefit
of the Owner Trustee or the Owner Participant (subject, however, to the
provisions of the definition of "Excepted Payments") and (iii) to exercise
inspection rights pursuant to Section 10.7 of the Participation Agreement
and Section 11.2 of the Lease;
(c) prior to the foreclosure of the Lien of the Indenture and whether
or not an Indenture Event of Default shall have occurred and be continuing,
the Owner Trustee shall have the right, to the exclusion of the Indenture
Trustee, to adjust Basic Rent Percentages, Stipulated Loss Value
Percentages and Termination Value Percentages and the Early Buy-Out
Percentage pursuant to Section 4 of the Lease but subject to the
limitations set forth in Section 3.5 of the Lease; and
(d) so long as no Indenture Event of Default shall have occurred and
be continuing (subject to Section 9.02), the Owner Trustee shall retain (to
the exclusion
<PAGE>
44
of the Indenture Trustee) all rights of the "Lessor", the "Ground Lessee"
or the "Owner Trustee" under the Lease, the Ground Lease or any other
Operative Document, as the case may be, under the Lease, other than the
Indenture Trustee's right to receive any funds assigned to the Indenture
Trustee under the terms of this Indenture.
SECTION 6.09. Filing of Financing and Continuation Statements. The
-----------------------------------------------
Indenture Trustee shall, at the expense of the Owner Trustee, execute and file
any continuation or similar statement or document delivered to it by the Owner
Trustee or the Lessee in a form reasonably satisfactory to the Indenture Trustee
and proper for filing.
SECTION 6.10. Publishing of Notices. The Indenture Trustee will
---------------------
furnish to the Owner Trustee and the Owner Participant, promptly upon receipt
thereof, a duplicate or copy of each report, notice, request, demand,
instruction, certificate, financial statement or other instrument furnished to
the Indenture Trustee hereunder or under any other Operative Document.
SECTION 6.11. Taxes; Withholding; Information Reporting. The
-----------------------------------------
Indenture Trustee shall exclude and withhold from each distribution of principal
and interest and other amounts due hereunder or under the Secured Notes any and
all withholding taxes applicable thereto as required by law. The Indenture
Trustee agrees (a) to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Secured
Notes or otherwise due hereunder, to withhold such taxes or charges and timely
pay the same to the appropriate authority in the name of and on behalf of the
Loan Participants, (b) that it will file any necessary withholding tax returns
or statements when due and (c) that, as promptly as possible after the payment
of such withheld amounts, it will deliver to each Loan Participant appropriate
documentation showing the payment of such withheld amounts, together with such
additional documentary evidence as such Loan Participants may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
reports as it may be required to file under United States law. No withholding
or action with respect thereto shall constitute or give rise to any Indenture
Event of Default or any other claims against the Owner Participant or the Owner
Trustee. Any tax withheld by the Indenture Trustee pursuant to this Section
6.11 shall be deemed for all purposes of this Indenture and the Secured Notes to
have been paid to the Holder with respect to which such tax was withheld.
<PAGE>
45
ARTICLE VII
THE INDENTURE TRUSTEE AND THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties. The Indenture Trustee
-------------------------------
accepts the duties hereby created and applicable to it and agrees to perform the
same upon the terms and conditions set forth in this Indenture and the
Participation Agreement. The Indenture Trustee further agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance with
the terms hereof. The Indenture Trustee shall not be answerable or accountable
in its individual capacity under any circumstances, except (a) for its willful
misconduct or gross negligence, (b) for its failure to exercise reasonable care
in safeguarding the security held by it pursuant to the terms hereof, (c) in the
case of the inaccuracy of any representations or warranties, or the breach of
any covenants, made by the Indenture Trustee in its individual capacity and
contained in the Participation Agreement or any other Operative Document or
referred to by reference in Section 7.03 hereof, (d) as provided in Sections
2.03 and 6.06, (e) for any Tax based on or measured by any fees, commissions or
compensation received by it for acting as trustee hereunder, or (f) except as
otherwise expressly provided herein for its failure to use ordinary care in
disbursing funds in accordance with the terms hereof.
SECTION 7.02. Absence of Duties Except as Specified. Except in
-------------------------------------
accordance with written instructions pursuant to Section 6.01 or 6.02, and
except as provided in, and without limiting the generality of, Sections 6.04,
6.05, 6.06, 6.07, 7.01 and 7.03, the Indenture Trustee shall have no duty (a) to
record or file the Lease or this Indenture or any other document, or to maintain
any such recording or filing, or to rerecord or refile any such document, (b) to
effect or maintain any such insurance, whether or not the Lessee shall be in
default with respect thereto, (c) to discharge any Lien of any kind against any
part of the Trust Estate or the Indenture Estate, or (d) to inspect the Facility
Assets at any time, or to ascertain or inquire as to the performance or
observance of any of the Lessee's covenants pursuant to the terms of the Lease.
SECTION 7.03. No Representations or Warranties. NEITHER THE OWNER
--------------------------------
TRUSTEE NOR THE INDENTURE TRUSTEE MAKES (a) ANY REPRESENTATION OR WARRANTY,
WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AS TO THE VALUE, COMPLIANCE WITH
SPECIFICATIONS, DURABILITY, OPERATION, CONSTRUCTION, PERFORMANCE, DESIGN OR
CONDITION OF THE FACILITY ASSETS OR ANY PART THEREOF, THE MERCHANTABILITY
THEREOF OR THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE FACILITY
ASSETS OR ANY COMPONENT OF THE FACILITY ASSETS, THE QUALITY OF THE MATERIALS OR
WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER
<PAGE>
46
OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS
OR IMPLIED, WITH RESPECT TO THE FACILITY ASSETS, OR ANY COMPONENT OF THE
FACILITY ASSETS, or (b) any representation or warranty as to the validity,
legality or enforceability of this Indenture, any of the other Operative
Documents or the Secured Notes, or as to the correctness of any statement
contained in any thereof, except as set forth in Section 7.01 of this Indenture,
Sections 8 and 9 of the Participation Agreement and Section 7.3 of the Trust
Agreement.
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.
--------------------------------------------------
Any moneys paid to or retained by the Indenture Trustee pursuant to any
provision hereof and not then required to be distributed to the Holders, the
Lessee or the Owner Trustee shall be deposited in a separate, interest bearing
cash collateral account; provided that any payments received or applied
--------
hereunder by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof. Any amounts held by the Indenture
Trustee pursuant to the express terms of this Indenture or any other Operative
Document shall be invested and reinvested by the Indenture Trustee from time to
time in Permitted Investments at the written direction of (i) the Lessee if such
amounts would be payable to the Lessee upon satisfaction of any applicable
conditions; or (ii) the Owner Participant in the case of the remaining portion
of such amounts. The Indenture Trustee shall have no liability for any loss
resulting from any investment required to be made hereunder other than by reason
of its own willful misconduct or negligence in failing to comply with such
instructions. Any net income or gain realized as a result of any such
investment or reinvestment shall be held as part of the Indenture Estate and
shall be applied by the Indenture Trustee at the same time, on the same
conditions and in the same manner as the amounts in respect of which such income
or gain was realized are required to be distributed in accordance with the
provisions hereof. Any Permitted Investment may be sold or otherwise reduced to
cash (without regard to maturity) by the Indenture Trustee whenever necessary to
make any application as required by the terms of this Indenture or of any
applicable Operative Document.
SECTION 7.05. Reliance; Agents; Advice of Counsel. Neither the Owner
-----------------------------------
Trustee nor the Indenture Trustee (in their respective individual or trust
capacities for the purposes of this Section 7.05) shall incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and believed by it to be signed by the
proper party or parties. Either of the Owner Trustee or the Indenture Trustee
may accept a copy of a resolution of the Board of Directors or other governing
body of any party to the Participation Agreement or other Operative Agreement,
certified by the Secretary or any Assistant Secretary thereof as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted and that the same is in full force and effect. As to any fact
or matter relating to the Lessee the manner of ascertainment of which is not
specifically described herein, the Owner Trustee and the Indenture Trustee
<PAGE>
47
may for all purposes hereof rely on an Officer's Certificate of the relevant
party as to such fact or matter, and such Officer's Certificate shall constitute
full protection to the Owner Trustee or the Indenture Trustee (in their
individual or trust capacities), as the case may be, for any action taken or
omitted to be taken by it in good faith in reliance thereon. The Indenture
Trustee shall assume, and shall be fully protected in assuming, that the Owner
Trustee is authorized by the Trust Agreement to enter into this Indenture and to
take all action to be taken by the Owner Trustee pursuant to the provisions
hereof, and shall not inquire into the authorization of the Owner Trustee with
respect thereto. The Owner Trustee shall assume, and shall be fully protected in
assuming, that the Indenture Trustee is authorized to enter into this Indenture
and to take all action to be taken by the Indenture Trustee pursuant to the
provisions hereof, and shall not inquire into the authorization of the Indenture
Trustee with respect thereto. In the administration of the trusts hereunder, the
Indenture Trustee may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and at the
expense of the Indenture Estate may consult with counsel, accountants and other
skilled Persons to be selected and retained by it, and the Indenture Trustee
shall not be liable for anything done, suffered or omitted in good faith by it
in accordance with the advice or opinion of any such counsel, accountant or
other skilled Person acting within such Person's area of competence (so long as
the Indenture Trustee shall have exercised due care in selecting such Persons,
provided that, so long as no Lease Event of Default shall have occurred and be
- --------
continuing, no such Persons (other than counsel to the Indenture Trustee or its
accountants) shall be retained by the Indenture Trustee without the consent of
the Lessee, such consent not to be unreasonably withheld.
SECTION 7.06. No Compensation from Holders or Indenture Estate.
------------------------------------------------
Notwithstanding any other provision hereof, the Indenture Trustee shall have no
right against the Holders, the Owner Trustee, the Owner Participant or, except
as otherwise provided in Section 4.03, the Indenture Estate for any fee as
compensation for its services hereunder.
SECTION 7.07. [Intentionally Omitted]
---------------------
SECTION 7.08. Moneys for Payments in Respect of Notes to be Held in
-----------------------------------------------------
Trust. In case the Holder of any Secured Note shall fail to present the same
- -----
for payment on any date on which the principal thereof becomes payable, the
Indenture Trustee may set aside in trust the moneys then due thereon uninvested
and shall pay such moneys to any Holder of such Secured Note upon due
presentation for surrender thereof in accordance with the provisions of this
Indenture, subject to the provisions of Section 7.09.
SECTION 7.09. Disposition of Moneys Held for Payments of Notes. (a)
------------------------------------------------
Any money set aside under Section 7.08 and not paid to Holders under Section
7.08 shall be held by the Indenture Trustee in trust until the date three years
after the date of such setting aside, and thereafter shall be paid to the Owner
Trustee by the Indenture Trustee who
<PAGE>
48
then shall be released from all further liability with respect to such moneys,
and thereafter the Holders of the Secured Notes in respect of which such moneys
were so paid to the Owner Trustee shall have no rights in respect thereof except
to obtain payment of such moneys from the Owner Trustee.
(b) All moneys and United States Government Obligations deposited with
the Indenture Trustee pursuant to Section 10.01 shall be held in trust and
applied by it, in accordance with the provisions of the Secured Notes and this
Indenture, to the payment to the Holders of all sums due and to become due
thereon for principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Indenture Trustee shall promptly pay or return to the Owner
Trustee upon the written request of the Owner Trustee any money or United States
Government Obligations held by it at any time that are not required for the
payment of the amounts described in the preceding sentence for which money or
United States Government Obligations have been deposited pursuant to Section
10.01.
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustees. In the case of any
----------------------------------
appointment of a successor to the Owner Trustee pursuant to the Trust Agreement,
or any merger, conversion or consolidation or transfer of substantially all of
the corporate trust business of the Owner Trustee, the successor Owner Trustee
shall give prompt written notice thereof to the Indenture Trustee and the
Lessee.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
------------------------------------------------
Successor. (a) The Indenture Trustee or any successor thereto may resign at any
- ---------
time without cause by giving at least thirty (30) days prior written notice to
the Owner Trustee, the Owner Participant, the Lessee and each Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee as provided in Section 8.02(b). In addition, a
Majority in Interest of Holders of Notes may at any time remove the Indenture
Trustee without cause by an instrument in writing delivered to the Owner
Trustee, the Owner Participant, the Lessee and the Indenture Trustee, such
removal to be effective upon the acceptance of the trusteeship by a successor
Indenture Trustee as provided in Section 8.02(b). The Owner Trustee (acting
pursuant to instructions from the Lessee) may remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with Section 6.06 hereof or
8.02(c);
<PAGE>
49
(2) the Indenture Trustee is adjudged as bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Indenture Trustee
or its property; or
(4) the Indenture Trustee becomes incapable of acting.
In the case of the resignation or removal of the Indenture Trustee, the Owner
Trustee (acting pursuant to instructions from the Lessee) shall promptly appoint
a successor Indenture Trustee. If a successor Indenture Trustee shall not have
been appointed within thirty (30) days of such notice of resignation or removal,
the Indenture Trustee, the Owner Trustee, the Owner Participant, the Lessee or a
Majority in Interest of Holders may apply to any court of competent jurisdiction
to appoint a successor Indenture Trustee qualified under Section 8.02(c) to act
until such time, if any, as a successor shall have been appointed as above
provided in this Section 8.02. The successor Indenture Trustee so appointed by
such court shall immediately and without further act be superseded by any
successor Indenture Trustee appointed as above provided in this Section 8.02.
(b) Any successor Indenture Trustee, however appointed, shall execute
and deliver to the Owner Trustee and to the predecessor Indenture Trustee an
instrument accepting such appointment, and shall give the Owner Participant, the
Holders and the Lessee written notice of such acceptance. Upon the execution
and delivery of such instrument, such successor Indenture Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Indenture Trustee hereunder with like
effect as if originally named the Indenture Trustee herein. Notwithstanding and
without limiting the foregoing, the predecessor Indenture Trustee, upon the
written request of the successor Indenture Trustee, shall execute and deliver an
instrument transferring to such successor Indenture Trustee, upon the trusts
herein expressed applicable to it, all the estates, properties, rights and
powers of such predecessor Indenture Trustee, and such predecessor Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all moneys or other property then held by such predecessor
Indenture Trustee hereunder and all books and records relating to the
administration of the Indenture Estate.
(c) There shall at all times be an Indenture Trustee hereunder which
shall be a bank or trust company organized and doing business under the laws of
the United States of America or of any State thereof, authorized under such laws
to exercise corporate trust powers, subject to supervision or examination by
Federal or State authority, having a combined capital and surplus of at least
$75,000,000, regularly engaged in or having expertise in leveraged leasing. If
such bank or trust company publishes reports of condition at least annually,
pursuant to applicable law or to the requirements of the aforesaid supervising
or examining authority, then for purposes hereof the combined capital and
<PAGE>
50
surplus of such bank or trust company shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
(d) Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Indenture Trustee may be transferred, shall, subject to
the terms of paragraph (c) of this Section 8.02, be the Indenture Trustee under
this Indenture without further act.
SECTION 8.03. Co-Trustees and Separate Trustees. (a) If, at any
---------------------------------
time it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which property shall be held subject to the Lien of this
Indenture, the Indenture Trustee shall be advised by counsel that it is so
necessary or prudent in the interest of the Holders, or a Majority in Interest
of Holders of Notes in writing shall so request the Indenture Trustee and the
Owner Trustee, the Indenture Trustee and the Owner Trustee shall execute and
deliver all instruments and agreements necessary or proper either (i) to
constitute another bank or trust company or one or more Persons approved by the
Lessee, the Indenture Trustee and the Owner Trustee, either to act as co-trustee
or co-trustees of all or any portion of the Indenture Estate, jointly with the
Indenture Trustee originally named herein or any successor or successors, or to
act as separate trustee or trustees of all or any such portion of the Indenture
Estate in each case with such rights, powers, duties and obligations as may be
provided in such supplemental indenture or such instrument of appointment as the
Indenture Trustee or a Majority in Interest of Holders of Notes may deem
necessary or advisable, or (ii) to clarify, add to or subtract from the rights,
powers, duties and obligations theretofore granted any such additional or
separate trustee, subject in each case to the remaining provisions of this
Section 8.03. In the event that the Lessee or Owner Trustee shall not have
joined in the execution of such instruments and agreements within fifteen (15)
days after the receipt of a written request from the Indenture Trustee to do so,
or if an Indenture Event of Default shall have occurred and be continuing, the
Indenture Trustee may act under the foregoing provisions of this Section 8.03
without the concurrence of the Lessee or Owner Trustee; and the Owner Trustee
hereby appoints the Indenture Trustee its agent and attorney-in-fact to act for
it under the foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute deliver and
perform any such supplemental indenture, or any such instrument, as may be
required for the appointment of any such co-trustee(s) or separate trustee(s) or
for the clarification of, addition to or subtraction from the rights, powers,
duties or obligations theretofore granted to any such co-trustee(s) or separate
trustee(s). In case any co-trustees or separate trustee(s) appointed under this
Section 8.03(a) shall die, become incapable of acting, resign or be removed, all
the assets, property, rights, powers, trusts, duties and obligations of such co-
trustee(s) or separate trustee(s) shall revert to and shall vest in and may be
exercised by the Indenture
<PAGE>
51
Trustee, to the extent permitted by law until a successor, additional or
separate trustee is appointed as provided in this Section 8.03(a).
(b) Every co-trustee and separate trustee hereunder shall, to the
extent permitted by law and except as otherwise expressly provided in any
Operative Document, be appointed and act, and the Indenture Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) the Secured Notes shall be authenticated and delivered by the
Indenture Trustee, and all powers, duties, obligations and rights conferred
upon the Indenture Trustee in respect of the receipt, custody, control,
payment and management of moneys, papers or securities, shall be exercised,
solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such co-trustee or co-
trustees or separate trustee or trustees jointly, except to the extent that
under any applicable law or in any jurisdiction in which any particular act
or acts are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such co-
trustee or co-trustees or separate trustee or trustees; but subject to the
same limitations in any exercise of his, her or its power and authority as
those to which the Indenture Trustee is subject under the terms of this
Indenture;
(iii) notwithstanding anything herein contained to the contrary, no
power given hereby to, or which it is provided hereby may be exercised by,
any such co-trustee or co-trustees or separate trustee or trustees, shall
be exercised hereunder by such additional trustee or trustees except
jointly with, or with consent in writing of, the Indenture Trustee;
(iv) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder;
(v) the powers of any co-trustee(s) or separate trustee(s) appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Indenture Trustee hereunder; and
(vi) the Owner Trustee and the Indenture Trustee, at any time, by an
instrument in writing executed by them jointly, may remove any such
trustee, and in that case, by an instrument in writing executed by them
jointly, may appoint a successor or successors to such co-trustee or co-
trustees or separate trustee or trustees, as the case may be, acceptable to
the Lessee. In the event that the Owner
<PAGE>
52
Trustee shall not have joined in the execution of any such instrument
within fifteen (15) days after the receipt of a written request from the
Indenture Trustee to do so, the Indenture Trustee shall have the power to
remove any such co-trustee or separate trustee and to appoint a successor
co-trustee or separate trustee without the concurrence of the Owner
Trustee. In the event that the Indenture Trustee alone shall have appointed
a separate trustee or trustees or co-trustee or co-trustees as above
provided in this Section 8.03, it may at any time, by an instrument in
writing, remove any such separate trustee or co-trustee, the successor to
any such separate trustee or co-trustee so removed to be appointed by the
Owner Trustee and the Indenture Trustee, or by the Indenture Trustee alone,
as provided in this Section 8.03.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Indenture Supplements Without Consent of Holders. The
------------------------------------------------
Owner Trustee and the Indenture Trustee, without the consent of any Holder and
at any time and from time to time, may enter into one or more amendments or
supplements to this Indenture, in form satisfactory to each of the Owner Trustee
and Indenture Trustee, for any of the following purposes:
(a) to subject to the Lien of this Indenture additional property
constituting part of the Indenture Estate pursuant to a supplement to this
Indenture;
(b) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture;
(c) to add to the covenants of the Owner Trustee for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Owner Trustee, the Owner Participant or the Lessee;
(d) to cure any ambiguity, to correct or supplement any provision
herein or in the Secured Notes which may be defective or inconsistent with
any other provisions of this Indenture, to make any other changes not
inconsistent with the provisions hereof, provided that such action shall
--------
not adversely affect the interests of any Holder or to correct any mistake;
(e) to provide for the assumption by the Lessee of the obligations of
the Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 3.04, including, without
limitation, such amendments to
<PAGE>
53
Exhibit C as may be necessary or desirable in order to effectuate such
assumption and accomplish the purposes thereof (provided that such
--------
amendments to Exhibit C shall not adversely affect the interests of
the Loan Participants);
(f) to evidence the succession of a new Owner Trustee in accordance
with the Trust Agreement or the succession of a new Indenture Trustee
hereunder or the appointment or removal of any co-trustee or separate
trustee thereunder or hereunder;
(g) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Loan Participants;
(h) to add to the rights of the Loan Participants;
(i) to include on the Secured Notes any legend as may be required by
law; or
(j) to provide for the establishment and issuance of (A) Additional
Notes pursuant to Section 14 of the Participation Agreement or Section 2.08
hereof or (B) Refunding Secured Notes in connection with a refunding or
refinancing pursuant to Section 15 of the Participation Agreement or
Section 3.05 hereof.
SECTION 9.02. Supplements and Amendments to Indenture With Consent of
-------------------------------------------------------
Holders of Notes. (a) Without the consent of a Majority in Interest of Holders
- ----------------
of Notes, the Owner Trustee may not modify, amend or supplement any of the
Lease, the Participation Agreement or the Trust Agreement, or give any consent,
waiver, authorization or approval thereunder, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
thereof or of modifying in any manner the rights of the respective parties
thereunder; provided, however, that the actions specified in Section 9.02(c) may
-------- -------
be taken without the consent of the Indenture Trustee or any Holder.
(b) Except as provided in Section 9.01 or 9.02(c) or 9.02(d), at any
time and from time to time, with the consent of a Majority in Interest of
Holders of Notes and, whether or not an Indenture Event of Default exists, upon
the written consent of the Owner Trustee and the Owner Participant, the
Indenture Trustee (x) shall execute an amendment or supplement to this Indenture
for the purpose of adding provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture, or (y) shall execute an
amendment or supplement to, or give a consent, waiver, authorization or
approval, for the purposes of adding any provisions to or changing in any manner
or eliminating any of the provisions of, the Participation Agreement, or (z)
shall consent to any amendment or supplement to, or give a consent, waiver,
authorization or approval, for the purposes of
<PAGE>
54
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Lease or the Trust Agreement; provided, however, that no such
-------- -------
amendment or supplement to this Indenture, or consent, waiver, authorization,
approval, amendment or supplement to the Participation Agreement, the Lease or
the Trust Agreement (whether pursuant to subsection (a) or (c) of this Section
9.02, and anything in such subsections or elsewhere in this Indenture to the
contrary notwithstanding) shall, without the consent of each Holder of a Secured
Note then Outstanding:
(i) change the stated maturity of the principal of, or any installment
of interest on, or the amount of any payment upon any mandatory or optional
repayment, purchase or redemption of any Secured Note, or change the
principal amount thereof or any other amount payable in respect thereof or
reduce the Make-Whole Amount, if any, or interest thereon, or change the
place of payment where, or the coin or currency in which, any Secured Note
or the interest thereon is payable;
(ii) permit the creation of any Lien on the Indenture Estate not
otherwise permitted hereunder or deprive any Holder of the benefit of the
Lien of this Indenture upon the Indenture Estate, or any portion thereof,
for the security of its Secured Notes;
(iii) change the percentage of the aggregate principal amount of
Secured Notes required to take or approve any action hereunder or any other
Operative Document;
(iv) modify the definitions of "Indenture Default", "Indenture Event
of Default", "Majority in Interest of Holders of Notes", "Lease Default" or
"Lease Event of Default";
(v) modify the order of priorities in which distributions are to be
made under Article IV;
(vi) reduce the amount or change the time of any payment of Basic
Rent, Stipulated Loss Value, Early Buy-Out Purchase Price or Termination
Value, except as expressly permitted pursuant to the terms of the Lease or
the Participation Agreement as executed on the date hereof, so that such
payments would be insufficient to pay principal of and interest on the
outstanding Secured Notes as they become due hereunder;
(vii) [Intentionally Omitted]
(viii) modify, amend or supplement any of the provisions of this
Section 9.02;
<PAGE>
55
(ix) modify, amend or supplement the Lease, or consent to any
assignment of the Lease (other than an assignment pursuant to Section 14.2
of the Lease), in either case releasing the Lessee from its obligations in
respect of the payment of Basic Rent, Supplemental Rent payable pursuant to
Section 3.2(b) of the Lease, Stipulated Loss Value, Early Buy-Out Purchase
Price or Termination Value, or changing the absolute and unconditional
character of such obligations as set forth in Section 3.6 of the Lease; or
(x) adversely affect any indemnities in favor of any Holder as
provided pursuant to the terms of any Operative Document, except as may be
consented to by each Person adversely affected thereby.
(c) Notwithstanding anything to the contrary contained in Section
9.02(b) (except as provided in the proviso to Section 9.02(b)), (x) without the
necessity of the consent of any of the Holders or the Indenture Trustee, the
Owner Trustee may and (y) in the case of clauses (iii) and (iv) of this Section
9.02(c), without the consent of any of the Holders, the Indenture Trustee shall,
at the request of the Owner Trustee:
(i) so long as no Indenture Event of Default shall have occurred and
be continuing, modify, amend or supplement the Lease, or give any consent,
waiver, authorization or approval with respect thereto, except that without
compliance with Section 9.02(b), the Owner Trustee shall not modify, amend
or supplement, or give any consent, waiver, authorization or approval for
the purposes of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the respective parties thereunder, with respect to the following
provisions of the Lease as originally executed: Section 2.1 (if the result
thereof would be to shorten the term of the Lease to a period shorter than
the period ending with the maturity date of the Secured Notes), Sections
3.1, 3.2, (except to the extent such Section relates to amounts payable
(whether directly or pursuant to the Indenture) to persons other than the
Loan Participants and the Indenture Trustee in its individual capacity),
Section 3.3 (except insofar as it relates to the address or account
information of the Lessee, the Owner Trustee or the Indenture Trustee)
(other than as such as Section 2.1, 3.1, 3.2 or 3.3 of the Lease may be
amended pursuant to Sections 3.5 and 4 of the Lease), Section 3.5, Section
3.6, Section 7 (except that the procedures for soliciting bids may be
modified and further restrictions may be imposed on the ability of the
Lessee to terminate the Lease with respect to the Facility Assets pursuant
to such Section 7), Section 9.1, Section 10, Sections 11.1, 11.2, 11.3, the
proviso to Section 11.4 (other than with respect to "limited use property"
characterization), Section 11.5(b) or 11.7 (except that additional
requirements may be imposed on the Lessee), Section 12 (other than Sections
12.3 and 12.4, and except that additional requirements may be imposed on
the Lessee), Section 13 (except that additional insurance requirements may
be
<PAGE>
56
imposed on the Lessee), Section 14, Section 15, Section 16, Section 18.1,
Section 19.3 and any definition of terms used in the Lease, to the extent
that any modification of such definition would result in a modification of
the Lease not permitted pursuant to this Section 9.02(c), provided that,
--------
subject to the next proviso, in the event an Indenture Event of Default
shall have occurred and be continuing, the Indenture Trustee shall have all
rights of the Owner Trustee as "Lessor" under the Lease to modify, amend or
supplement the Lease or give any consent, waiver, authorization or approval
thereunder, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the "Lessor" thereunder; provided further that,
-------- -------
without the prior consent of the Owner Trustee, and subject to the
Indenture Trustee's rights hereunder to exercise remedies under Section 16
of the Lease without the prior consent of the Owner Trustee, whether or not
an Indenture Event of Default shall have occurred and be continuing, no
such action shall be taken with respect to any of the provisions of
Sections 1 (if any modification of a definition contained therein would
result in a modification of the Lease not permitted by this proviso), 3, 4,
5, 6, 7, 8.2, 10 (to the extent such action would reduce Lessee's
obligations), 11, 12, 13 (except to increase the amounts or types of
insurance the Lessee must provide thereunder at its expense), 14, 15, 17,
18 and 19 of the Lease, or any other Section of the Lease (including
Section 16 of the Lease) to the extent such action shall affect the amount
or timing of any amounts payable by the Lessee under the Lease as
originally executed (or as subsequently modified with the consent of the
Owner Trustee) which, absent the occurrence and continuance of an Indenture
Event of Default, would be distributable to the Owner Trustee or the Owner
Participant under Article IV;
(ii) modify, amend or supplement the Trust Agreement, or give any
consent, waiver, authorization or approval with respect thereto, except
that without compliance with Section 9.02(b), the Owner Trustee shall not
modify, amend or supplement, or give any consent, waiver, authorization or
approval for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to the
following provisions of the Trust Agreement as originally executed:
Section 1, Section 3.2, Section 5.1, Section 9.1, Section 10, Section 11.1,
Section 12.7 and any definition of terms used in the Trust Agreement, to
the extent that any modification of such definition would result in a
modification of the Trust Agreement not permitted pursuant to this Section
9.02(c), and in each case only to the extent any such action shall
adversely impact the interests of the Holders;
(iii) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without compliance with Section 9.02(b), the Owner Trustee and
the Indenture Trustee shall not modify, amend or supplement, or give any
consent, waiver, authorization or
<PAGE>
57
approval for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to the
following provisions of the Participation Agreement as originally executed:
Section 5, Section 6, Section 8, Section 10 (other than an amendment to add
to the covenants of the Lessee and other than Section 10.10), Section 11.1,
Section 11.2, Section 11.4, Section 11.6, Section 12 (insofar as such
Section 12 relates to the Indenture Trustee, the Indenture Estate and the
Holders) and, to the extent the Loan Participants would be adversely
affected thereby, Section 15 and Section 16 and any definition of terms
used in the Participation Agreement to the extent that any modification of
such definition would result in a modification of the Participation
Agreement not permitted pursuant to this Section 9.02(c); and
(iv) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders unless such provision corrects a mistake or cures an
ambiguity.
(d) The Indenture Trustee, without the consent of any Holder and at
any time and from time to time, may enter into one or more amendments or
supplements to the Participation Agreement, in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to add to the covenants of any other party thereto for the benefit
of the Indenture Trustee or the Holders or to surrender any right or power
therein conferred upon any other party thereto;
(ii) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provisions
thereof, to make any other changes not inconsistent with the provisions
thereof, provided that such action shall not adversely affect the interest
--------
of any Holder or to correct mistakes;
(iii) to provide for the assumption by the Lessee of the obligations
of the Owner Trustee under this Indenture in accordance with the terms and
conditions applicable thereto specified in Section 3.04, including, without
limitation, such amendments to Exhibit C to this Indenture or the
Participation Agreement as may be necessary or desirable in order to
effectuate such assumption and accomplish the purposes thereof (provided
--------
that such amendments to such Exhibit C or the
<PAGE>
58
Participation Agreement shall not adversely affect the interests of the
Loan Participants);
(iv) to evidence the succession of a new Owner Trustee in accordance
with the Trust Agreement or the succession of a new Indenture Trustee
hereunder or the appointment or removal of any co-trustee or separate
trustee thereunder or hereunder;
(v) to make any other provisions with respect to matters or questions
arising under the Participation Agreement so long as such action shall not
adversely affect the interests of the Loan Participants;
(vi) to add to the rights of the Indenture Trustee or the Holders; or
(vii) to provide for the establishment and issuance of (1) Additional
Notes pursuant to Section 14 of the Participation Agreement or Section 2.08
hereof or (2) Refunding Secured Notes in connection with a refunding or
refinancing pursuant to Section 15 of the Participation Agreement or
Section 3.05 hereof.
(e) It shall not be necessary for Holders to approve the particular
form of any proposed amendment or supplement to this Indenture, or any
amendment, consent, waiver or other modification of any other Operative
Document, but it shall be sufficient if such action shall approve the substance
thereof.
SECTION 9.03. Execution of Indenture Supplement, Amendments, Etc. In
---------------------------------------------------
executing or accepting the additional trusts created by any amendment or
supplement to this Indenture, or any amendment, consent, waiver or other
modification permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, each of the Indenture Trustee and the Owner
Trustee shall be entitled to receive, and (subject to Section 6.01 and Section
6.02) shall be fully protected in relying upon, an opinion of independent
counsel stating that the execution of such amendment or supplement to this
Indenture, or of such amendment, consent, waiver or modification, is authorized
or permitted by this Indenture. Either of the Indenture Trustee or the Owner
Trustee may, but shall not be obligated to, enter into any such amendment or
supplement to this Indenture which affects its own rights, duties or immunities
under this Indenture or otherwise.
SECTION 9.04. Effect of Indenture Supplement. Upon the execution of
------------------------------
any amendment or supplement to this Indenture pursuant to this Article IX, this
Indenture shall be modified in accordance therewith, and such amendment or
supplement shall form a part of this Indenture for all purposes; and every
Holder of a Secured Note theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
<PAGE>
59
SECTION 9.05. Reference in Secured Notes to Indenture Supplements.
---------------------------------------------------
Secured Notes authenticated and delivered after the execution of any amendment
or supplement pursuant to this Article IX may, and shall if required by the
Indenture Trustee, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such amendment or supplement. If the amendment or
supplement to this Indenture shall so provide, new Secured Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Owner Trustee, to
any such amendment or supplement may be prepared and executed by the Owner
Trustee and authenticated and delivered by the Indenture Trustee in exchange for
outstanding Secured Notes.
SECTION 9.06. Notices of Indenture Supplements and Amendments, Etc.
-----------------------------------------------------
Promptly after the execution by the Owner Trustee and the Indenture Trustee of
any amendment or supplement to this Indenture, or any amendment, consent, waiver
or other modification pursuant to the provisions hereof, the Indenture Trustee
shall send a conformed copy of such instrument to the Lessee, the Owner Trustee
and the Owner Participant but the failure of the Indenture Trustee to send such
a conformed copy shall not impair or affect the validity of such document.
SECTION 9.07. Lessee's Rights. Without the consent of the Lessee, no
---------------
amendment or supplement to this Indenture or amendment, waiver or other
modification of any provision of this Indenture shall alter or modify the
provisions of Section 3.04, 3.05, 3.10, 5.09 or 9.02(c) or this Section 9.07 (to
the extent that the Lessee's rights or obligations under the Participation
Agreement would be adversely affected.).
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Indenture. Except as provided in this
------------------------
Section 10.01, this Indenture and the trusts created hereby shall terminate,
and this Indenture shall be of no further force or effect, when:
(a) the principal of and interest on and all other amounts due and
payable under all Secured Notes and all other amounts due and payable to
any Holder or the Indenture Trustee hereunder or under any other Operative
Document shall have been paid in full; or
(b) the Indenture Trustee shall have sold or made other final
disposition of all property and all moneys or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms
hereof; or
<PAGE>
60
(c) all Secured Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable (whether upon stated
maturity, as a result of redemption or upon acceleration), or will become
due and payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Secured Notes not theretofore
canceled by the Indenture Trustee or delivered to the Indenture Trustee for
cancellation, an amount in cash sufficient without reinvestment thereof to
discharge such indebtedness, including the principal of and interest on the
Secured Notes to the date of such deposit (in the case of Secured Notes
which have become due and payable), or to the maturity thereof, as the case
may be; or
(d) (i) the Owner Trustee has deposited or caused to be deposited
irrevocably (except as provided in Section 7.09(b)) with the Indenture
Trustee as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders, (A) money in an amount, or
(B) United States Government Obligations which, through the payment of
interest and principal in respect thereof in accordance with their terms,
will provide (not later than one Business Day before the due date or any
payment referred to below in this clause) money in an amount, or (C) a
combination of money and United States Government Obligations referred to
in the foregoing clause (B), sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Indenture Trustee, to pay
and discharge each installment of principal of and interest on the
Outstanding Secured Notes on the dates such payments of principal or
interest are due (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit), and no Lease Event of Default under Section
15(g) of the Lease shall have occurred and be continuing on the date of
such deposit or at any time during the period ending on the 91st day after
such date; provided, however, that upon the making of the deposit referred
-------- -------
to above in clause (A), the right of the Owner Trustee to cause the
redemption of Secured Notes (except a redemption in respect of which
irrevocable notice has theretofore been given) shall terminate; and (ii)
(A) such deposit will not constitute an Indenture Event of Default under
this Indenture or a default or event of default under any other agreement
or instrument to which the Owner Trustee or the Lessee is a party or by
which it is bound and (B) the Lessee has delivered to the Indenture Trustee
an Officer's Certificate to the effect that all conditions precedent
relating to the termination of this Indenture under this Section 10.01(d)
have been complied with; and (iii) the Lessee has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to the
effect that there has been published by the Internal Revenue Service a
ruling to the effect that Loan Participants will not recognize income, gain
or loss for Federal income tax purposes
<PAGE>
61
as a result of the exercise by the Owner Trustee of its option under this
Section 10.01(d) and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been the
case if such option had not been exercised; and (iv) all other amounts then
due and payable hereunder to any Holder or the Indenture Trustee have been
paid;
provided, however, that the obligations of the Indenture Trustee contained in
- -------- -------
Sections 2.01 through 2.11, 6.11 and 7.09 shall survive.
Except as otherwise provided in the preceding sentence, this Indenture
and the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 10.02. No Legal Title to Indenture Estate in Holders. No
---------------------------------------------
Holder shall have legal title to any part of the Indenture Estate. No transfer,
by operation of law or otherwise, of any Secured Note or other right, title and
interest of any Holder in and to the Indenture Estate or hereunder shall operate
to terminate this Indenture or entitle such Holder or any successor or
transferee of such Holder to an accounting or to the transfer to it of any legal
title to any part of the Indenture Estate.
SECTION 10.03. Power of Attorney. The Owner Trustee does hereby
-----------------
constitute the Indenture Trustee its true and lawful attorney-in-fact,
irrevocably and coupled with the interest of the Indenture Trustee created by
this Indenture, so long as any Secured Notes are Outstanding and so long as
there are any other amounts due hereunder, under any other Operative Documents,
or under the Secured Notes, with full power (in the name of and as attorney-in-
fact for the Owner Trustee or otherwise) to ask for, require, demand and receive
any and all moneys and claims for moneys, and all other property, which now or
hereafter constitutes part of the Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action, or to institute any proceedings, which the Indenture Trustee
may deem to be necessary or advisable in the premises. The Owner Trustee has
directed the Indenture Trustee to make all necessary conveyances, assignments,
transfers and deliveries of the Indenture Estate and any rights hereunder
pursuant to the provisions of this Indenture, and for that purpose the Indenture
Trustee may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, and the Owner
Trustee hereby ratifies and confirms all that the Indenture Trustee, acting as
its attorney, or any such substitute, shall lawfully do by virtue hereof and
whether pursuant to the exercise of any remedies hereunder or otherwise.
SECTION 10.04. Regarding the Owner Trustee. (a) Except as expressly
---------------------------
provided herein, all and each of the representations, warranties, undertakings
and agreements herein made on the part of the Owner Trustee are made and
intended not as personal
<PAGE>
62
representations, warranties, undertakings and agreements by or for the purpose
or with the intention of binding the Owner Trustee personally but are made and
intended for the purpose of binding only the Trust Estate, and this Indenture is
executed and delivered by the Owner Trustee solely in the exercise of the powers
expressly conferred upon it as trustee under the Trust Agreement; and no
personal liability or responsibility is assumed hereunder by, or at any time
shall be enforceable against, the Owner Trustee or any successor in trust on
account of any representation, warranty, undertaking or agreement hereunder of
the Owner Trustee, either expressed or implied, all such personal liability, if
any, being expressly waived by the Indenture Trustee; provided, however, that
-------- -------
(a) the Indenture Trustee or any Person claiming by, through or under it, making
claim hereunder, may subject to the terms and conditions hereof, look to the
Trust Estate for satisfaction of such liability or responsibility and (b) the
Owner Trustee or its successor in trust, as applicable, shall be personally
liable, for its own gross negligence and willful misconduct and for the matters
described in clauses (i) through (v) of the last sentence of Section 7.1 of the
Trust Agreement and the provisos contained in Section 17.10(b) of the
Participation Agreement. Subject to the terms and conditions hereof, each time a
successor Owner Trustee is appointed in accordance with the terms of the Trust
Agreement, such successor Owner Trustee shall, without further act, succeed to
all the rights, duties, immunities and obligations of its predecessor Owner
Trustee hereunder and under the other Operative Documents, and the predecessor
Owner Trustee shall be released from all further duties and obligations
hereunder and under the other Operative Documents, all without the necessity of
any consent or approval by the Indenture Trustee and without in any way altering
the terms of this Indenture or such other Operative Documents or the obligations
of the Indenture Trustee hereunder or thereunder.
(b) As to the aggregate unpaid principal amount of Secured Notes
Outstanding as of any date, the Owner Trustee may rely on an Officer's
Certificate of the Indenture Trustee.
(c) No Recourse Against Others. No director, officer, employee or
--------------------------
stockholder, as such, of the Lessee, the Guarantor, the Owner Trustee or the
Owner Participant, as the case may be, shall have any liability for any
obligations of the Lessee, the Guarantor, the Owner Trustee or the Owner
Participant, as the case may be, under this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Loan
Participant by accepting a Secured Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Secured Notes.
SECTION 10.05. Notices. All communications, notices and consents
-------
provided for in this Indenture shall be in writing and shall be given in person
or by courier or by means of telex, telecopy or other wire transmission (with
request for assurance of receipt in a manner typical with respect to
communications of that type), or mailed by first class mail or overnight
courier, addressed, in the case of the Owner Trustee, to Wilmington
<PAGE>
63
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration (telephone: (302)
651-1000; telecopier: (302) 651-8882, in the case of the Indenture Trustee, to
State Street Bank and Trust Company, Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department (telephone: (617)
664-5340; telecopier: (617) 664-5371); and, in the case of all other parties, as
set forth in Schedule I to the Participation Agreement or at such other address
as any such Person may from time to time designate by notice duly given in
accordance with the provisions of this Section 10.05 to the other parties hereto
and shall be deemed given when received by (or when proffered to, if receipt is
not accepted) the party to whom it is addressed.
SECTION 10.06. Severability of Provisions. Any provision of this
--------------------------
Indenture which may be determined by competent authority to be invalid or
unenforceable in such jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable any remaining terms and provisions
hereof, and any such invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
The parties shall negotiate in good faith to replace such provision with an
appropriate legal provision. To the extent permitted by applicable law, the
parties hereto waive any provision thereof that renders any term or provision
hereof invalid or unenforceable in any respect.
SECTION 10.07. No Oral Modification or Continuing Waivers. No term
------------------------------------------
or provision of this Indenture or the Secured Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or the person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Secured Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon each of the parties hereto and their
respective successors and permitted assigns, and inure to the benefit of each of
the parties hereto and their respective successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of such
Holder. This Indenture and the Indenture Estate shall not be affected by any
amendment or supplement to the Trust Agreement or by any other action taken
under or in respect of the Trust Agreement, except as otherwise provided in or
permitted by this Indenture. Each Holder by its acceptance of a Secured Note
agrees to be bound by this Indenture and all provisions of the Operative
Documents applicable to it.
SECTION 10.09. Headings; Table of Contents. The division of this
---------------------------
Indenture into Articles, Sections, subsections and paragraphs, the provision of
a table of
<PAGE>
64
contents and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof.
SECTION 10.10. Normal Commercial Relations. Notwithstanding anything
---------------------------
contained in this Indenture to the contrary, any Participant, the Indenture
Trustee, the Owner Trustee, or bank or other affiliate of any such Person may
conduct any banking or other financial transactions and have banking or other
commercial relationships with the Lessee or the Guarantor fully to the same
extent as if this Indenture were not in effect.
SECTION 10.11. Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN
-------------
THE STATE OF NEW YORK AND SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT MATTERS RELATING TO
TITLE TO THE REAL AND PERSONAL PROPERTY LOCATED IN THE STATE OF TEXAS (THE
"TEXAS PROPERTY"), AND THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE
LIEN ON AND THE SECURITY INTEREST IN THE TEXAS PROPERTY, SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 10.12. Execution. This Indenture may be executed in separate
---------
counterparts by the parties thereto, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.13. Security Agreement. This Indenture shall constitute a
------------------
security agreement and, in addition to all other rights of the Indenture Trustee
hereunder, the Indenture Trustee shall have for the benefit of the Holders all
of the rights conferred upon secured parties by the UCC.
SECTION 10.14. Benefits of Indenture. Nothing in this Indenture,
---------------------
whether express or implied, shall be construed to give to any Person other than
the parties hereto, the Holders, (to the extent expressly provided herein) the
Owner Participant and the Lessee any legal or equitable right, remedy or claim
under or in respect of this Indenture or the Secured Notes, and this Indenture
shall be held for the sole and exclusive benefit of the parties hereto, the
Holders, (to the extent expressly provided herein) the Owner Participant and the
Lessee.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all effective as of the date first written above, but actually
executed by the parties on the dates of their respective acknowledgements set
forth below.
WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly provided herein,
but solely as Owner Trustee
By: ________________________________
Its: _______________________________
THE STATE OF _________ (S)
(S)
COUNTY OF ____________ (S)
This instrument was acknowledged before me on ____________, 1997 by
_____________________________, ______________________________________________
[Name of Officer] [Title of Officer]
of Wilmington Trust Company, a Delaware banking corporation, on behalf of said
trust company.
____________________________________
Notary Public in and for
The State of ______________________
(Affix Notary's Seal) My Commission Expires:
<PAGE>
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity, except as expressly provided
herein, but solely as Indenture Trustee
By: ________________________________
Its: _______________________________
THE STATE OF _________ (S)
(S)
COUNTY OF ____________ (S)
This instrument was acknowledged before me on ____________, 1997 by
_____________________________, ___________________________________________ of
[Name of Officer] [Title of Officer]
State Street Bank and Trust Company, a Massachusetts trust company, on behalf of
said trust company.
____________________________________
Notary Public in and for
The State of ______________________
(Affix Notary's Seal) My Commission Expires:
<PAGE>
Schedule 1
to Indenture
------------
DESCRIPTION OF FACILITY ASSETS
------------------------------
The Facility Assets are described below:
SCH-1-1
<PAGE>
Exhibit A
to Indenture
------------
FORM OF SERIES 1997-A SECURED NOTE
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee under the Trust Agreement
Series 1997-A Secured Non-Recourse Note
Due _____
Sale and Leaseback of Certain Paraxylene Production Facility Assets
-------------------------------------------------------------------
Located in Beaumont, Texas
--------------------------
Registered No. ___________
$ ______________ New York, New York
May __, 1997
Interest Rate Per Annum: _____%
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, dated as of May
__, 1997, as amended (the "Trust Agreement"), among the Owner Participant named
---------------
therein and the Owner Trustee, for value received hereby promises to pay to
State Street Bank and Trust Company, or registered assigns, on or before
____________________, ________, as herein provided, the principal sum of
____________________ DOLLARS ($_____________), and to pay interest on this
Secured Note from time to time from the date hereof until the principal amount
hereof shall have been paid in full, at the rate of [ ]% per annum (based on a
360-day year of twelve 30-day months), and (to the extent not prohibited by
applicable law) to pay interest on any overdue principal and interest at the
Overdue Rate. The principal of this Secured Note shall be payable on each
January 2 or July 2, or both, in accordance with the schedule annexed hereto.
The first payment of accrued and unpaid interest on this Secured Note shall be
payable on July 2, 1997. Thereafter, subject to Section 2.03(b) of the
Indenture (as defined below), all accrued and unpaid interest on this Secured
Note shall be payable on each January 2, and July 2 in each year commencing on
January 2, 1998.
This Secured Note is one of the Secured Notes issued by the Owner Trustee
pursuant to the terms of the Trust Indenture, Deed of Trust, Assignment of Lease
and Security Agreement, dated as of May __, 1997 (the "Indenture"), between the
---------
Owner Trustee and State Street Bank and Trust Company, not in its individual
capacity but solely as Indenture Trustee thereunder
<PAGE>
A-1-2
(the "Indenture Trustee"). Capitalized terms used in this Secured Note and not
-----------------
otherwise defined shall have the respective meanings assigned to them in the
Indenture.
Each payment of principal and interest shall be due and payable at the times,
places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the payment of
-----
accrued interest on this Secured Note to the date of such payment, and second,
------
to the payment of any principal on this Secured Note then due hereunder.
This Secured Note is one of the Series 1997-A Secured Notes of the Owner
Trustee, issued pursuant to the Indenture, which, together with, any Additional
Notes and any note or notes issued upon a transfer in exchange or substitution
for respectively therefor in accordance with the terms of the Indenture, are
equally and ratably secured by the Indenture , except as expressly provided
therein. The property of the Owner Trustee (excluding Excepted Payments)
included in the Indenture Estate is pledged or mortgaged to the Indenture
Trustee to the extent provided in the Indenture as security for the payment of
the principal of and interest on this Secured Note and all other Secured Notes
issued and Outstanding from time to time under the Indenture. Reference is
hereby made to the Indenture for a description of the Indenture Estate, and for
a statement of the rights of the Holders of, and the nature and extent of the
security for, this Secured Note and of the rights of, and the nature and extent
of the security for, the Holders of the other Secured Notes and of certain
rights of the Owner Trustee and the Owner Participant, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture the Holder agrees by its
acceptance of this Secured Note.
This Secured Note is subject to redemption, in whole, all as specified in
Article III of the Indenture. This Secured Note is also subject to refunding,
assumption or purchase, all as specified in Sections 3.02, 3.04, 3.05 and 3.06
of the Indenture.
In the event an Indenture Event of Default shall occur and be continuing, the
unpaid balance of the principal of the Secured Notes, together with all accrued
but unpaid interest, may be declared or may otherwise become due and payable in
the manner and with the effect provided in Article V of the Indenture.
The Secured Notes are issuable only as registered notes. There shall be
maintained a note register for the purpose of registering transfers and
exchanges of the Secured Notes at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. The Owner Trustee and the Indenture Trustee
shall deem and treat the Person in whose name this Secured Note is registered on
the Note Register as the absolute owner hereof (whether or not this Secured Note
shall be overdue) for the purpose of receiving payments of principal and
interest and for all other purposes, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by any notice to the contrary.
<PAGE>
A-1-3
All payments of principal and interest to be made by the Owner Trustee and,
except as otherwise provided in the Operative Documents, all payments of any
other amounts payable by or on behalf of the Owner Trustee under the Secured
Notes or under the Indenture, shall be made only from the income and proceeds
from the Indenture Estate, and only to the extent that the Indenture Trustee
shall have received sufficient income and proceeds from the Indenture Estate to
make such payments in accordance with the Indenture. The Holder, by its
acceptance of this Secured Note, agrees that it will look solely to the income
and proceeds from the Indenture Estate to the extent available for payment as
provided in the Indenture, and that none of the Owner Participant, the Owner
Trustee, the Trust Company, or the Indenture Trustee (whether in its individual
or trust capacity) shall be personally liable to the Indenture Trustee or to the
Holder for any amounts payable under this or any Secured Note, nor, except as
specifically provided in the Indenture or any other Operative Document, for any
amounts payable or any liability, under the Indenture.
This Secured Note shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been signed by the Indenture Trustee.
No delay or omission of the Holder to exercise its rights hereunder shall impair
any such right or power or shall be construed to be a waiver of any Indenture
Event of Default, or an acquiescence therein. No waiver of any Indenture Event
of Default shall be construed, taken or held to be a waiver of any other
Indenture Event of Default, or a waiver, acquiescence in, or consent to any
further or succeeding Indenture Event of Default. The Owner Trustee waives
demand, notice and protest in any defense by reason of extension of time for
payment or other indulgence granted by the Holder.
This Secured Note shall be governed by and construed in accordance with the laws
of the State of New York.
<PAGE>
A-1-4
IN WITNESS WHEREOF, the Owner Trustee has caused this Secured Note to be duly
executed.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement
By: _______________________________________
Title: ____________________________________
<PAGE>
A-1-5
Certificate of Authentication
-----------------------------
This Secured Note is one of the Series 1997-A Secured Notes of WILMINGTON TRUST
COMPANY, as Owner Trustee described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ________________________________
Title: _____________________________
<PAGE>
A-1-6
Series 1997-A Secured Notes
Amortization Schedule
---------------------
<TABLE>
<CAPTION>
<S> <C>
Scheduled Payment
Regular Percentage of Remaining
Distribution Date Unpaid Principal Amount
</TABLE>
<PAGE>
Exhibit B
to Indenture
------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
================================================================================
Maturity Dates, Aggregate Principal Amounts
Interest Rate of Secured Notes
- -------------------------------------------------------------------------------
Maturity Aggregate Interest Rate Premium
Date Principal Amount Per Annum Termination Date
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
</TABLE>
EXHB-7
<PAGE>
Exhibit B-1
to Indenture
------------
<TABLE>
<CAPTION>
<S> <C>
===============================================================================
SCHEDULE OF PRINCIPAL PAYMENTS
- -------------------------------------------------------------------------------
SERIES 1997-A SECURED NOTE
- -------------------------------------------------------------------------------
Regular Scheduled Payment Scheduled
Distribution as a Percentage of Payments of
Date Unpaid Principal Amount Principal
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
</TABLE>
EXHB1-1
<PAGE>
Exhibit B-2
to Indenture
------------
Issuance of Series 1997-A Secured Notes
---------------------------------------
The issuance of the Series 1997-A Secured Notes issued hereunder shall be
issued to and shall be payable to the Pass Through Trustee under the Pass
Through Trust Agreement, with respect to the grantor trust created thereby, as
set forth below.
1997-A Pass Through Trust;
**1 Series 1997-A Secured Notes
<PAGE>
Exhibit C
to Indenture
------------
RELEVANT AMENDMENT
------------------
TABLE OF CONTENTS
LISTED BELOW ARE THE DOCUMENTS WHICH ARE AMENDED OR REPLACED BY THE RELEVANT
AMENDMENT AND THE CORRESPONDING PAGE NUMBERS OF THE RELEVANT AMENDMENT ON WHICH
THE AMENDMENT THERETO OR REPLACEMENT THEREOF, AS THE CASE MAY BE, IS MADE. THIS
TABLE OF CONTENTS IS FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
CONSTRUCTION OR INTERPRETATION OF THE RELEVANT AMENDMENT.
<TABLE>
<CAPTION>
Document Page
-------- ----
<S> <C>
Definitions C-2
Indenture C-8
Participation Agreement C-47
Pass Through Trust
Agreement C-48
</TABLE>
<PAGE>
RELEVANT AMENDMENT
------------------
As provided for in Section 3.04 of the Indenture (to which this is
Exhibit C) and in Section 11.6 of the Participation Agreement, the Indenture,
the other Operative Documents (as defined as amended in (A)(I) below and the
Pass Through Trust Agreement will, subject to the satisfaction of the conditions
specified in such Section 3.04 (including, without limitation, the execution and
delivery of the Relevant Date Supplement), be deemed to have been amended,
automatically and without the requirement of further action by any Person
effective as of the Relevant Date (provided that such amendments shall not
---------
constitute a waiver by any party to the Operative Documents (as defined in
Appendix A to the originally executed documents) of any claims or rights to
indemnity such party has against any other party to the Operative Documents (as
defined in Appendix A to the originally executed documents) accrued in favor of
such party prior to the Relevant Date arising under the Operative Documents (as
defined in Appendix A to the originally executed documents) as in existence
prior to the Relevant Date) and so that:
(A) (I) The following defined terms in Appendix A to each of the
Indenture and the other Operative Documents and, to the extent applicable, in
Section 1.01 of the Pass Through Trust Agreement shall read as follows:
"Additional Notes" shall mean notes issued pursuant to Section 2.08 of
----------------
the Indenture.
"Appraisal Procedure" shall mean a procedure for determining any
-------------------
amount, value or period. Such procedure shall be commenced by the delivery
of written notification as specified in the Operative Documents by Mobil
Chemical Finance (Texas) Inc. ("MCFT") to the Indenture Trustee, or by the
----
Indenture Trustee to MCFT, that it desires to obtain an appraisal with
respect to such amount, value or period. If required by the relevant
provisions of the applicable Operative Document, such parties shall first
attempt to agree on such matter. If such parties are unable to agree on
such matter within the time period specified in the applicable Operative
Document, or if such parties are not required to attempt to agree, such
parties shall thereupon consult for the purpose of selecting a mutually
acceptable Independent appraiser. If within ten (10) days from the date
the parties are required to so consult, they are unable to agree upon the
appointment of a mutually acceptable Independent appraiser, then each of
such parties shall appoint an Independent appraiser, and such Independent
appraisers shall jointly determine such matter. If one party does not so
appoint an Independent appraiser, then the Independent appraiser appointed
by the other shall determine such matter as the sole appraiser. If such
two Independent appraisers cannot agree on such matter within twenty (20)
days after their appointment, such matters shall be determined by such two
Independent appraisers and a third Independent appraiser chosen within ten
(10) days after such twenty (20) day period by such two Independent
appraisers or, if such three (3) Independent appraisers fail to reach an
agreement, the determination of the appraiser that differs most from the
second highest determination shall be excluded (unless such difference is
less than 10% from either of the other determinations), the remaining two
EXHC-2
<PAGE>
determinations shall be averaged (or all three (3) shall be averaged, if
the third determination is not discarded due to the preceding
parenthetical) and such average shall constitute the determination of the
appraisers. If such two Independent appraisers fail to agree upon the
appointment of a third Independent appraiser within the allotted time
period, such appointment shall be made by the New York City office of the
American Arbitration Association or any organization successor thereto,
upon the request of any such parties from a panel of arbitrators having
familiarity with assets similar to the assets comprised by the Facility
Assets. The determination of the appraisers so chosen shall be given
within twenty (20) days of the appointment of such third appraiser. Except
to the extent expressly provided otherwise in any Operative Document, fees
and expenses of the appraisers appointed in connection with an Appraisal
Procedure shall be paid by MCFT.
"Business Day" shall mean any day other than a Saturday or Sunday or
------------
any other day on which banks located in New York, New York, Fairfax,
Virginia or, so long as any Pass Through Certificate is outstanding, the
city in which the Corporate Trust Office of the Pass Through Trustee is
located, are required or authorized to remain closed.
"Event of Loss" shall mean any of the following events: (a) the (i)
-------------
loss, theft, destruction or disappearance of, or (ii) occurrence of damage
(which, in MCFT's reasonable, good faith opinion, renders repair or
replacement uneconomic) to the Facility Assets or a Significant Portion
thereof; (b) the permanent condemnation, confiscation or seizure of, or
requisition of title to, the Facility Assets of a Significant Portion
thereof by any Governmental Authority; (c) the requisition of use of the
Facility Assets or a Significant Portion thereof by any Governmental
Authority for a period (i) which has been ongoing for one year and which is
reasonably expected to exceed the latest Maturity Date or (ii) which
extends beyond the date which is twelve months prior to the latest Maturity
Date; or (d) the receipt of insurance proceeds based upon an actual or
constructive total loss of the Facility Assets or a Significant Portion
thereof. The occurrence of any of the events set forth above in this
definition with respect to the Site or a Significant Portion of the Site
may constitute, as determined in the reasonable judgment of MCFT, an Event
of Loss with respect to the Facility Assets.
"Fair Market Rental Value" or "Fair Market Sales Value" of any
------------------------ -----------------------
property or services as of any date shall mean the cash rent or cash price
that would be obtained in an arm's-length lease or sale, respectively,
between an informed and willing lessee or buyer (under no compulsion to
lease or purchase) and an informed and willing lessor or seller (under no
compulsion to lease or sell) of the property or services in question,
provided that the "Fair Market Rental Value" or "Fair Market Sales Value"
--------
for the Facility Assets shall be (A) determined on an "as-is" basis but on
a stand-alone basis, independent of the Refinery, except that such
determination shall assume that the Facility Assets (i) have been
maintained in accordance with the requirements of the Indenture and are in
the condition required by Section 11.01 of Article XI of the Indenture and
(ii) are in a condition suitable for the production of paraxylene using the
MPTX Technology.
EXHC-3
<PAGE>
"Independent" shall mean, when used with respect to any specified
-----------
Person, a Person who (1) is in fact independent; (2) does not have any
direct financial interest in MCFT, the Indenture Trustee or any Affiliate
of any of them and (3) is not connected with MCFT, the Indenture Trustee or
any Affiliate of any of them as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions. Whenever it is provided that any Independent Person's opinion
or certificate shall be furnished to the Indenture Trustee, such Person
shall be appointed by MCFT and approved by the Indenture Trustee in the
exercise of reasonable care and such opinion or certificate shall state
that the signer has read this definition and that the signer is Independent
within the meaning hereof.
"Lease Event of Default" shall mean an Indenture Event of Default.
----------------------
"Operative Documents" shall mean the Guaranty, the Indenture, each
-------------------
Indenture Supplement and the Participation Agreement.
"Outstanding" shall mean, when used with respect to the Secured Notes
-----------
as of any date of determination, all Secured Notes theretofore
authenticated and delivered under the Indenture, except:
(i) Secured Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Secured Notes or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for the Loan
Participants with respect to such Secured Notes, provided that
--------
if such Secured Notes are to be redeemed or purchased, notice of
such redemption or purchase has been duly given (or provision
thereof satisfactory to the Indenture Trustee has been made) and
not revoked or otherwise withdrawn pursuant to the Indenture;
and
(iii) Secured Notes paid or in exchange for or in lieu of which other
Secured Notes have been authenticated and delivered pursuant to
the Indenture;
provided, however, that in determining whether the Holders of the requisite
-------- -------
principal amount of Secured Notes Outstanding have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Secured Notes owned or pledged to MCFT or any Affiliate thereof, shall be
disregarded and deemed not to be Outstanding, unless such Person owns 100%
of the Secured Notes owned or pledged by all Persons, except that, in
determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Secured Notes which the Indenture Trustee knows to be so
owned or pledged shall be so
EXHC-4
<PAGE>
disregarded. Secured Notes so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Secured Notes and that the pledgee is not MCFT, or any
Affiliate thereof, and;
(b) when used with respect to Pass Through Certificates, shall mean,
as of the date of determination, all Pass Through Certificates theretofore
authenticated and delivered under the Pass Through Trust Agreement, except:
(i) Pass Through Certificates theretofore cancelled by the Registrar
or delivered to the Pass Through Trustee or the Registrar for
cancellation;
(ii) all of the Pass Through Certificates if money in the full amount
required to make the final distribution payment to be made
pursuant to Section 11.01 of the Pass Through Trust Agreement
has been theretofore deposited with the Pass Through Trustee in
trust for the Certificateholders as provided in Section 4.01 of
the Pass Through Trust Agreement pending distribution of such
money to the Certificateholders pursuant to such final
distribution payment; and
(iii) Pass Through Certificates in exchange for or in lieu of which
other Pass Through Certificates have been authenticated and
delivered pursuant to the Pass Through Trust Agreement.
"Overdue Rate" shall mean a rate per annum equal to (i) with respect
------------
to amounts owing to any Loan Participant constituting payments or
prepayments of any Secured Note, the rate of interest on such Secured Note;
and (ii) with respect to amounts owing to MCFT, the rate of interest
publicly announced from time to time by Citibank, N.A. in New York City as
its "prime" or "base" rate plus 1% (computed on the basis of the actual
days elapsed during the relevant period and a 365 day year).
"Permitted Liens" shall mean (a) the respective rights and interests
---------------
of MCFT, the Indenture Trustee and the Holders, as provided in the
Operative Documents, (b) Lessor's Liens, Owner Participant's Liens, Loan
Participant's Liens, Indenture Trustee's Liens and Pass Through Trustee's
Liens, (c) Liens for Taxes either not delinquent or being contested in good
faith and by appropriate proceedings, so long as such proceedings do not
involve any material danger of the sale, forfeiture or loss of any material
part of, the Facility or title thereto or any interest therein; (d)
materialmen's, mechanics', workers', repairmen's, employees' or other like
Liens, arising in the ordinary course of business of MCFT or Operator or
any other lessee, sublessee or operator under any lease, sublease,
assignment, operating or other agreement permitted by the Indenture, or
arising in the course of constructing, repairing, equipping or installing,
modifying or expanding the Facility or any part thereof, for amounts either
not yet delinquent or being contested in good faith and by appropriate
proceedings so long as such proceedings do not involve
EXHC-5
<PAGE>
any material danger of the sale, forfeiture or loss of any material part of
the Facility or title thereto or any interest therein; (e) Liens arising
out of judgments or awards with respect to which at the time an appeal or
proceeding for review is being prosecuted in good faith so long as
execution of such judgment or award shall have been stayed or otherwise
lifted pending such appeal or proceeding for review and so long as during
such proceeding there is no material danger of the sale, forfeiture or loss
of any material part of the Facility or title thereto or any interest
therein; (f) Liens, assignments and subleases permitted by Section 14.02 of
Article XI of the Indenture and the rights of the Operator under the
Initial Sublease and the rights of any other Operator or any sublessee
under any other lease (or sublease) permitted by Section 14.02 of Article
XI of the Indenture; (g) Liens that do not materially adversely affect the
use of the Facility for its intended purposes, do not secure the payment or
performance of any obligations with respect to borrowed money, and do not
create any material risk of loss of title or possession of the Site or the
Facility Assets; and (h) the rights and interests of the Ground Lessor as
permitted by the Ground Lease.
"Relevant Amendment" shall have the meaning specified in Section 3.04
------------------
of the Indenture, as originally executed.
"Relevant Date" shall have the meaning specified in Section 3.04 of
-------------
the Indenture, as originally executed.
"Responsible Officer", when used with respect to the Indenture Trustee
-------------------
or the Pass Through Trustee, shall mean an officer in its corporate trust
administration department (or any successor group of the Indenture Trustee
or the Pass Through Trustee, as the case may be) or any other officer
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Severable Modification" shall mean any Modification to the Facility
----------------------
Assets permitted under Section 11 of Article XI of the Indenture and which
can be readily removed from the Facility Assets without causing material
damage to the Facility Assets.
(B) (I) Section 2.01(e) of the Indenture shall read as follows:
(e) Each Secured Note issued after the Relevant Date shall be signed
on behalf of Mobil Chemical Finance (Texas) Inc. ("MCFT") by the Chairman, the
----
President, any Senior Vice President, any Vice President, any Assistant Vice
President, the Controller, the Treasurer or the Secretary (or any other officer
or employee authorized in writing by one of the foregoing officers) of MCFT,
manually. No Secured Note shall be secured by or entitled to any benefit under
this Indenture, or be valid for any purpose, unless there appears thereon a
certificate of authentication executed by or on behalf of the Indenture Trustee
by the manual signature of a
EXHC-6
<PAGE>
Responsible Officer of the Indenture Trustee, and such certificate on any
Secured Note shall be conclusive evidence that such Secured Note has been duly
authenticated and delivered hereunder. Notwithstanding any provision to the
contrary contained herein, any Secured Note issued after the Relevant Date shall
be issued substantially in the form set forth in Exhibit A to Exhibit C hereto.
(II) Sections 2.02 and 2.08 of the Indenture shall read as follows:
SECTION 2.02. Payments from Indenture Estate and MCFT. All payments
---------------------------------------
of principal, Make-Whole Amount, if any, and interest to be made by MCFT and,
except as otherwise provided in the Operative Documents, all payments of any
other amounts payable by, or on behalf of MCFT under the Secured Notes and this
Indenture, shall be payable from the income and proceeds from the Indenture
Estate and shall be direct obligations of MCFT. Each Holder, by its acceptance
of a Secured Note, agrees that it will look solely to MCFT, the Guarantor and
the income and proceeds from the Indenture Estate to the extent available for
payment as herein provided and that the Indenture Trustee (whether in its
individual or trust capacity) shall not be personally liable to such Holder for
any amounts payable under the Secured Notes, or, except as specifically provided
herein or in the other Operative Documents, for any amounts payable or any
liability under this Indenture.
SECTION 2.08. Additional Notes. (a) So long as no Indenture Event
----------------
of Default shall have occurred and be continuing, Additional Notes of one or
more series may be issued under and secured by this Indenture at any time or
from time to time, and subject to the conditions hereinafter provided in this
Section 2.08, for the purpose of financing all or a portion of the cost of any
Modification to the Facility Assets or any Component thereof.
(b) Prior to the issuance of any Additional Notes of any series
pursuant to this Section 2.08, MCFT shall have delivered to the Indenture
Trustee, not less than thirty (30) days prior to the proposed date of issuance
of such Additional Notes, a request and authorization to issue Additional Notes
(a "Request"), which Request shall include the amount and series of such
-------
Additional Notes, the proposed date of issuance of such Additional Notes, and
other details with respect thereto which are not inconsistent with this Section
2.08. Such Additional Notes shall have a designation so as to distinguish such
Additional Notes from the Initial Secured Notes and Additional Notes of any
other series, but otherwise shall be substantially similar in form to the
Initial Secured Notes, with such omissions therefrom, variations therein and
additions thereto as shall be appropriate. Such Additional Notes shall not rank
senior in any respect to, but may be subordinate to the Initial Secured Notes
and other Secured Notes issued pursuant to the terms hereof.
(c) The terms, conditions and designations of such Additional Notes
(which shall be consistent with the Request and with the terms of this
Indenture) shall be set forth in a supplement to this Indenture, substantially
in the Form of Exhibit D, which shall be executed by MCFT and the Indenture
Trustee. Such indenture supplement shall set forth:
EXHC-7
<PAGE>
(i) after giving effect to the issuance of the Additional Notes, the
aggregate principal amount outstanding of all Secured Notes
which shall not exceed 85% of the total Fair Market Sales Value
of the Facility Assets at such time (as determined pursuant to
the Appraisal Procedure) after giving effect to such
Modifications;
(ii) the text of such Additional Notes (which, except for the terms
of payment thereof, shall be of substantially the same effect as
the text of the Initial Secured Notes set forth in this
Indenture, with such changes as are consistent with and
permitted by this Indenture and which in all events shall
provide that such Additional Notes are never more than pari
passu in priority of payment, in right of security and in all
other respects with the Initial Secured Notes);
(iii) the date of maturity of such Additional Notes;
(iv) the date from which, and the date or dates on which, interest is
payable (which shall be Interest Payment Dates);
(v) the terms for the repayment of the principal amount of such
Additional Notes (each regularly scheduled payment of principal
shall be an Interest Payment Date);
(vi) the terms, if any, as to prepayment or redemption of such
Additional Notes at the option of MCFT, and as to the premium,
if any, payable on any redemption or prepayment of such
Additional Notes; and
(vii) any other terms and agreements in respect thereof as required or
permitted by this Indenture or necessary to specify the terms
and conditions on which such Additional Notes shall be issued.
(d) Such Additional Notes shall be executed by MCFT as provided in
Section 2.01 and deposited with the Indenture Trustee for authentication and
delivery, but before such Additional Notes shall be authenticated and delivered
by the Indenture Trustee, there shall be delivered to or deposited with the
Indenture Trustee the following:
(i) the Request;
(ii) the supplement to this Indenture described in Section 2.08(c),
duly executed by MCFT;
(iii) such instruments as may be necessary to perfect the security
interest in such Modification under this Indenture;
(iv) such evidence of the due filing of financing statements and
other filings with respect to the Modification as may be
required to subject such property to the Lien of this Indenture,
subject to no Liens except Permitted Liens;
EXHC-8
<PAGE>
(v) originals or certified copies of all corporate actions
necessary for the due and valid issue of such Additional Notes,
the due and valid authorization, execution, delivery and
performance by MCFT of the supplement to this Indenture
relating thereto, and the creation of the Lien and security
interest thereon referred to above, all of which corporate
actions shall have been duly obtained and shall be in full
force and effect; together with reasonable evidence as to the
due occurrence of all such authorization, execution, delivery
and performance;
(vi) documentation, duly executed and delivered to the extent
practicable, by the respective parties thereto, whereby the
proposed holders of the Additional Notes agree to be bound by
the terms of the Operative Documents (including, without
limitation, representations and covenants corresponding to
those contained in Section 7 of the Participation Agreement);
(vii) an Officer's Certificate of MCFT certifying as to the cost of
such Modification; and
(viii) opinions of counsel to MCFT as to the due authorization,
execution, delivery and enforceability of such supplement to
the Indenture and such Additional Notes and the creation and
perfection of the security interest in such Modification
(subject to usual or customary exceptions, qualifications and
assumptions) and such Additional Notes and such other
certificates and other documents as may be reasonably requested
by the Indenture Trustee to evidence the validity and binding
effect of such supplement to this Indenture and such Additional
Notes and compliance with this Section 2.08.
(e) When the documents referred to in Section 2.08(d) shall have been
delivered to or deposited with the Indenture Trustee and when such Additional
Notes described in the Request and the supplement to this Indenture have been
executed by MCFT as required by this Indenture, the Indenture Trustee shall
authenticate and deliver such Additional Notes in the manner described in such
Request, but only upon payment to MCFT of the sum or sums specified in such
Request.
SECTION 2.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 2.01, 2.03, 2.05, 2.06
and 2.07 shall be deemed amended to provide that any reference to, or right or
obligation of the Owner Trustee contained in such Sections shall after the
Relevant Date be deemed to be a reference to, or right or obligation of MCFT.
(C) Sections 3.02, 3.04, 3.06, 3.08 and 3.11 of the Indenture shall
read as follows:
SECTION 3.02. Mandatory Redemption. Casualty Redemption. (i) If an
-------------------- -------------------
Event of Loss shall occur with respect to the Facility Assets unless MCFT shall
have elected to rebuild
EXHC-9
<PAGE>
or replace the Facility Assets (or Significant Portion thereof suffering such
Event of Loss) in accordance with Section 12.02(b) of Article XI, then, MCFT
shall redeem on the date of payment of the amount required to be paid as a
result of such Event of Loss pursuant to Section 12.02 of Article XI (the date
of any redemption under this Section 3.02 being herein called a "Casualty
--------
Redemption Date") the entire unpaid principal amount of the Secured Notes
- ----------------
Outstanding on such Casualty Redemption Date, at a redemption price equal to
100% of such unpaid principal amount of such Secured Notes, together with any
accrued and unpaid interest thereon to, but not including, such Casualty
Redemption Date and without Make-Whole Amount or any other premium.
SECTION 3.04. [Intentionally Omitted]
SECTION 3.06. [Intentionally Omitted]
SECTION 3.08. [Intentionally Omitted]
SECTION 3.11. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 3.05 and 3.10 shall be
deemed amended to provide that any reference to, or right or obligation of the
Owner Trustee contained in such Section shall after the Relevant Date be deemed
to be a reference to, or right or obligation of MCFT.
(D) Article IV of the Indenture shall read as follows:
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 4.01. [Intentionally Omitted]
SECTION 4.02. Certain Distributions. (a) Any payment received by
---------------------
the Indenture Trustee (i) pursuant to Section 12 of Article XI as a result of
the occurrence of an Event of Loss with respect to the Facility Assets or (ii)
pursuant to Section 3.05, shall be distributed on the Redemption Date in the
following order of priority:
first, in the manner provided in clause "first" of Section 4.03;
-----
second, so much of the proceeds remaining as shall be required to pay
------
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and Make-Whole Amount, if any, and all accrued but unpaid
interest thereon to, but not including, the date of distribution, shall be
EXHC-10
<PAGE>
distributed to the Holder of such Secured Note, and if the proceeds
remaining are insufficient to pay all such amounts in full, they shall be
distributed to all Holders ratably, without priority of any Holder over any
other Holder (except as otherwise expressly provided herein), in the
proportion that the aggregate amount due each such Holder under this clause
"second" bears to the aggregate amount due all such Holders under this
------
clause "second";
------
third, in the manner provided in clause "second" of Section 4.03;
-----
fourth, in the manner provided in clause "fourth" of Section 4.03; and
------
fifth, in the manner provided in clause "fifth" of Section 4.03.
-----
(b) The portion of each payment referred to in this Section 4.02
distributed to a Holder on account of principal or interest on any Secured Note
held by such Holder shall be applied by such Holder in payment of such Secured
Note in accordance with the terms of Section 4.04.
(c) Notwithstanding Section 4.03, any amounts held by the Indenture
Trustee, including, without limitation, pursuant to Section 12 of Article XI
herein, which are payable to MCFT pursuant to the terms of this Indenture or
held by the Indenture Trustee in accordance with Section 7.04 herein shall be
(i) so paid to MCFT, or (ii) held by the Indenture Trustee as security for the
obligations of MCFT.
SECTION 4.03. Distribution After Indenture Event of Default. Except
---------------------------------------------
as otherwise provided in Section 4.02(c) or in Section 4.05, if (a) an Indenture
Event of Default shall have occurred and be continuing, and (b) either the
Indenture Trustee shall have given notice to declare this Indenture to be in
default pursuant to Section 5.04(a), or any of the Secured Notes shall have been
declared or otherwise shall have become immediately due and payable pursuant to
Section 5.04 then, to the extent that each such declaration shall not have been
rescinded or the Secured Notes shall remain immediately due and payable, (i) all
amounts then held by the Indenture Trustee pursuant to Section 4.01 or otherwise
under the Indenture (but not including funds described in Sections 4.02(c) and
4.05 excluded from the operation of this 4.03) in each case hereunder or under
any Operative Document (other than amounts held for its own account), and (ii)
all payments and amounts thereafter realized by the Indenture Trustee through
the exercise of remedies hereunder or under any of the agreements assigned or
pledged to the Indenture Trustee under this Indenture or otherwise as trustee
under this Indenture (for purposes of this Section 4.03, all such amounts and
payments held or realized being herein called "proceeds"), other than amounts
--------
expressly paid to it for its own account, shall be distributed forthwith by the
Indenture Trustee in the following order of priority:
first, so much of such proceeds as shall be required to reimburse the
-----
Indenture Trustee for any unpaid fees for its services under this Indenture
and any unreimbursed tax, expense (including reasonable legal fees) or
other loss incurred by it (in each case to the extent reimbursable under
the Operative Documents) shall be distributed to the Indenture Trustee for
application to itself;
EXHC-11
<PAGE>
second, so much of the remaining proceeds as shall be required to
------
reimburse the then existing or prior Holders for amounts paid or advanced
by the Holders pursuant to Section 6.04 (to the extent not previously
reimbursed), shall be distributed to the then existing and prior Holders as
their respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any recipient over any other recipient (except
as otherwise expressly provided herein), in the proportion the aggregate
amount due each such Person under this clause "second" bears to the
aggregate amount and interest due all such Persons under this clause
"second";
third, so much of the proceeds remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of each Secured Note then
Outstanding and all accrued but unpaid interest thereon to, but not
including, the date of distribution, shall be distributed to the Holder of
such Secured Note, and if the proceeds remaining are insufficient to pay
all such principal and/or interest (as the case may be) amounts in full,
they shall be distributed to all Holders ratably, without priority of any
Holder over any other Holder (except as otherwise expressly provided
herein), in the proportion that the aggregate amount due each such Holder
under this clause "third" bears to the aggregate amount due all such
Holders under this clause "third";
fourth, so much of the proceeds remaining as shall be required to pay
------
to each Holder all other amounts payable pursuant to the indemnification
provisions of Section 12 of the Participation Agreement or pursuant to any
other provision of any Operative Document and secured hereunder to such
Holder or to its predecessors and remaining unpaid shall be distributed to
such Holder for distribution to itself and such predecessors, as their
respective interests may appear, and if the proceeds remaining are
insufficient to pay all such amounts in full, they shall be distributed
ratably, without priority of any Holder over any other Holder (except as
otherwise expressly provided herein), in the proportion that the aggregate
amount due each such Holder under this clause "fourth" bears to the
aggregate amount due all such Holders under this clause "fourth"; and
fifth, the balance, if any, of the proceeds remaining shall be
-----
distributed to MCFT.
For the avoidance of doubt, no Make-Whole Amount or any other premium
shall be due and payable on the Secured Notes as a consequence of the
acceleration of the Secured Notes as a result of an Indenture Event of Default.
All amounts distributed to any Holder pursuant to clause "third" of
-----
this Section 4.03 shall be applied by such Holder in payment of the Secured
Notes held by it in accordance with the terms of Section 4.04.
SECTION 4.04. Application of Payments on Secured Notes. Each payment
----------------------------------------
on a Secured Note shall be applied, first, to the payment of accrued interest on
-----
such Secured Note
EXHC-12
<PAGE>
to the date of such payment, and second, to the payment of any principal on such
------
Secured Note then due thereunder.
SECTION 4.05. Applications of Payments According to Applicable
------------------------------------------------
Operative Document Provisions. (a) Notwithstanding Section 4.03 or any other
- -----------------------------
provision of this Indenture to the Contrary, any payments or amounts received by
the Indenture Trustee, provision for the application of which is made in any
Operative Document, shall be applied promptly as provided in such Operative
Document.
SECTION 4.06. Amounts Received for Which No Provision Is Made. (a)
-----------------------------------------------
Any payment received or amounts realized by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Indenture or
in any other Operative Document, except as provided in Section 4.03, and (b) all
payments received and amounts realized by the Indenture Trustee under this
Indenture including, without limitation, Section 11.7 of Article XI or otherwise
with respect to the Facility Assets, to the extent received or realized at any
time after payment in full of the principal of and interest on all Secured Notes
issued hereunder or the conditions set forth in Section 10.01 for the defeasance
of the Secured Notes shall have been satisfied, as well as any other amounts
remaining as part of or as proceeds of the Indenture Estate after payment in
full of the principal of and interest on all such Secured Notes or the
conditions set forth in Section 10.01 for the defeasance of the Secured Notes
shall have been satisfied, shall be distributed forthwith by the Indenture
Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 6.04
shall be applied to pay the Indenture Trustee such amounts; and
second, the balance, if any, of such aggregate amount remaining
------
thereafter shall be distributed to MCFT to be held or distributed in
accordance with the terms of the Participation Agreement.
SECTION 4.07. Payment Procedures. All amounts which are
------------------
distributable from time to time by the Indenture Trustee to MCFT or any Holder
shall be paid by the Indenture Trustee in immediately available funds promptly
after such amounts become immediately available to it, and the Indenture Trustee
shall not be obligated to see to the application of any such payment made by it.
All payments made by the Indenture Trustee to MCFT shall be made in the manner
and to the address set forth in Schedule 1 to the Participation Agreement or to
such other address as may be specified from time to time by notice to the
Indenture Trustee from MCFT.
SECTION 4.08. Application of Payments Under Guaranty. All payments
--------------------------------------
received by the Indenture Trustee pursuant to the Guaranty shall be distributed
forthwith by the Indenture Trustee in the same order of priority, and in the
same manner, as it would have
EXHC-13
<PAGE>
distributed the payment on the underlying obligation in respect of which such
payment under the Guaranty was received.
(E) Sections 5.01, 5.02, 5.03, 5.04, 5.05, 5.09 and 5.12 of the
Indenture shall read as follows:
SECTION 5.01. [Intentionally Omitted]
SECTION 5.02. Indenture Events of Default. "Indenture Event of
--------------------------- -------------------
Default" means any of the following events (whatever the reason for such
- -------
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or be pursuant to
or in compliance with any judgment, decree or order of any court or any
Governmental Rule):
(a) any payment of principal of, Make-Whole Amount, if any, or
interest on any Secured Note shall not have been made on or prior to the
tenth (10th) Business Day after the same shall have become due and payable;
or
(b) MCFT shall fail to maintain the insurance required to be
maintained pursuant to Section 13.01(a) of Article XI of this Indenture; or
(c) MCFT shall fail in any material respect to perform or observe any
material covenant or agreement to be performed or observed by it under this
Indenture or any other Operative Document (but in the case of the
Participation Agreement, only as such covenant or agreement relates to the
Indenture Trustee and the Loan Participants and other than any failure to
make any payment referred to in Section 5.02(a)) and such failure shall
continue for a period of thirty (30) days after receipt by MCFT of a
written notice from the Indenture Trustee or from Holders of Secured Notes
owning at least 25% in principal amount of Outstanding Secured Notes
specifying such failure and requiring it to be remedied; provided, however,
-------- -------
that the continuation of any such failure for such period of thirty (30)
days or such longer period (not to exceed 365 days) after receipt of such
notice shall not constitute an Indenture Event of Default so long as (i)
such failure is curable or correctable and (ii) MCFT is diligently pursuing
the cure or correction of such failure; or
(d) the Guarantor shall fail in any material respect to perform or
observe any covenant or agreement to be performed or observed by it under
the Guaranty (other than any covenant or agreement in respect of MCFT's
obligations under the Operative Documents) and such failure shall continue
for a period of thirty (30) days after receipt by the Guarantor of a
written notice from the Indenture Trustee or from Holders of Secured Notes
owning at least 25% in principal amount of Outstanding Secured Notes
specifying such failure and requiring it to be remedied; provided, however,
-------- -------
that the continuation of any such failure for such period of thirty (30)
days or such longer period
EXHC-14
<PAGE>
(not to exceed 365 days) after receipt of such notice shall not constitute
an Indenture Event of Default so long as (i) such failure is curable or
correctable and (ii) the Guarantor is diligently pursuing the cure or
correction of such failure; or
(e) any material representation or warranty made by MCFT in Section 5
of the Participation Agreement or in any Officer's Certificate of MCFT
delivered pursuant to the Participation Agreement shall prove to have been
inaccurate in any material respect when made, unless such inaccuracy shall
not be material to the recipient at the time when the notice referred to
below shall have been received by MCFT or any adverse material impact
thereof shall have been cured within thirty (30) days after receipt by MCFT
of a written notice thereof from the Indenture Trustee or from Holders of
Secured Notes owning at least 25% in principal amount of Outstanding
Secured Notes; provided, however, that the continuation of any such
-------- -------
inaccuracy for such period of thirty (30) days or such longer period (not
to exceed 365 days) after receipt of such notice shall not constitute an
Indenture Event of Default so long as (i) any material adverse impact of
such inaccuracy is curable or correctable and (ii) MCFT is diligently
pursuing the cure or correction of such material adverse impact; or
(f) any material representation or warranty made by the Guarantor in
the Guaranty or in any Officer's Certificate of the Guarantor delivered
pursuant to the Participation Agreement shall prove to have been inaccurate
in any material respect when made, unless such inaccuracy shall not be
material to the recipient at the time when the notice referred to below
shall have been received by the Guarantor or any material adverse impact
thereof shall have been cured or corrected within thirty (30) days after
receipt by MCFT of a written notice thereof from the Indenture Trustee;
provided, however, that the continuation of any such inaccuracy for such
-------- -------
period of thirty (30) days or such longer period (not to exceed 365 days)
after receipt of such notice shall not constitute an Indenture Event of
Default so long as (i) any material adverse impact of such inaccuracy is
curable or correctable and (ii) the Guarantor is diligently pursuing the
cure or correction of such material adverse impact;
(g) MCFT or the Guarantor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to
the appointment or taking possession by any such official or agency in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall take any
corporate action to authorize any of the foregoing, or an involuntary case
or other proceeding shall be commenced against MCFT or the Guarantor
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official or agency of it or any
substantial part of its property, and such involuntary case
EXHC-15
<PAGE>
or other proceeding shall remain undismissed and unstayed for a period of
ninety (90) days; or
(h) the Guaranty shall cease to be in full force and effect or to be
valid, binding and enforceable agreement of the Guarantor;
provided, however, that notwithstanding anything to the contrary contained in
- -------- -------
this Section 5.02, any failure of MCFT to perform or observe any covenant or
agreement specified in Section 5.02(c) shall not constitute an Indenture Event
of Default if such failure is caused solely by reason of any event that
constitutes an Event of Loss to the Facility Assets (or any event which with
lapse of time would constitute such an Event of Loss) so long as MCFT is
continuing to comply with all the applicable terms of Section 12 of Article XI.
SECTION 5.03. [Intentionally Omitted]
SECTION 5.04. Remedies. (a) If an Indenture Event of Default shall
--------
have occurred and be continuing and so long as the same shall be unremedied,
then and in every such case the Indenture Trustee subject to Sections 5.04(d),
5.05 and 6.01 may declare this Indenture to be in default by written notice to
such effect given to MCFT, and at any time thereafter, provided that such
--------
declaration shall not have been rescinded, the Indenture Trustee, to the extent
permitted by applicable law and subject to Sections 5.05 and 5.09 may: (i) upon
at least 10 days' written notice, exercise any or all of the rights and powers
and pursue any and all of the remedies herein provided or available under
applicable law, (ii) upon at least 10 days' written notice, take possession of
all or any part of the Indenture Estate and exclude MCFT and all Persons
claiming under MCFT wholly or partly therefrom, (iii) upon at least 25 days'
prior written notice to MCFT, invoke and exercise the power of sale and sell (or
cause to be sold) any or all of the Indenture Estate it the manner for non-
judicial foreclosure sales pursuant to the Texas Property Code or in any other
manner which shall be in accordance with applicable law, or, in lieu of sale
pursuant to the power of sale, foreclose the Indenture Estate and (iv) exercise
all rights and remedies of a secured party under the Uniform Commercial Code as
in effect in any applicable jurisdiction. The Indenture Trustee shall notify
MCFT as soon as is reasonably practicable after its commencement of the exercise
of any remedy pursuant to this Section 5.04.
(b) If an Indenture Event of Default (other than an Indenture Event of
Default specified in Section 5.02(g)) shall have occurred and be continuing,
then the Indenture Trustee may at any time (or shall when instructed by a
Majority Interest of Holders of Notes), by five (5) days' written notice to
MCFT, declare all (but not less than all) of the Secured Notes to be due and
payable. Upon such declaration the unpaid principal of all Secured Notes then
Outstanding, together with accrued but unpaid interest thereon and any other
amounts due there under, shall immediately become due and payable without
presentment, demand, protest further notice of intention to accelerate maturity
or other notice of intention to accelerate maturity or other or notice, all of
which are hereby waived.
EXHC-16
<PAGE>
(c) If an Indenture Event of Default of the type specified in Section
5.02(g) shall have occurred and be continuing, the principal of all Secured
Notes then Outstanding, together with accrued but unpaid interest thereon and
any other amounts due thereunder, shall become and be due and payable
automatically, without declaration, notice, demand or any other action on the
part of the Indenture Trustee or any Holder, all of which are hereby waived.
Each of Section 5.04(a), Section 5.04(b) and this Section 5.04(c), however, is
subject to the condition that, if at any time after the principal of the Secured
Notes shall have become due and payable upon a declared or automatic
acceleration thereof as provided herein, and before any judgment or decree for
the payment of the money so due, or any portion thereof, shall be entered, all
overdue payments of interest upon the Secured Notes and all other amounts
payable under the Secured Notes (except the principal of the Secured Notes which
by such declaration shall have become payable) shall have been duly paid, and
every other Indenture Event of Default with respect to any covenant or provision
of this Indenture shall have been cured or waived, then and in every such case a
Majority in Interest of Holders of Notes, by written instrument filed with the
Indenture Trustee, may (but shall not be obligated to) rescind and annul the
Indenture Trustee's declaration and its consequences; but no such rescission or
annulment shall extend to or affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
(d) Notwithstanding any provision in any document or instruction that
purports to require the Indenture Trustee to acquire title to any or all of the
Indenture Estate upon foreclosure, or pursuant to instructions, the Indenture
Trustee shall not be obligated to acquire any such title unless: (i) the
Indenture Trustee is provided with such security or indemnity as it shall deem
satisfactory to it, (ii) such acquisition of title complies with all applicable
Operative Documents, laws, rules and regulations, which shall be evidenced by an
opinion of counsel to such effect in form and substance satisfactory to the
Indenture Trustee and (iii) the Indenture Trustee shall have obtained such
executed certificates, instruments or other documents, in accordance with its
reasonable inquiries or requests.
SECTION 5.05. Suit; Possession; Title; Sale of Indenture Estate. (a)
-------------------------------------------------
MCFT agrees that, if an Indenture Event of Default shall have occurred and be
continuing and the Indenture Trustee shall be entitled to exercise remedies
hereunder as provided in Section 5.04, the Indenture Trustee may take possession
of all or any part of the Indenture Estate and may exclude MCFT, and all Persons
claiming under MCFT, wholly or partly therefrom; provided, however, that at
-------- --------
least 10 Business Days' prior notice of such taking of possession shall be given
to MCFT. If an Indenture Event of Default shall have occurred and be continuing
and the Indenture Trustee shall be entitled to exercise remedies hereunder as
provided in Section 5.04, at the request of the Indenture Trustee, MCFT shall
promptly execute and deliver to the Indenture Trustee such instruments of title
and other documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or any agent or representative designated by the
Indenture Trustee, at such time or times and place or places as the Indenture
Trustee may specify, to obtain possession of all or any part of the Indenture
Estate to which the Indenture Trustee shall at the time be entitled hereunder.
If MCFT shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee,
EXHC-17
<PAGE>
the Indenture Trustee may (i) obtain a judgment conferring on the Indenture
Trustee the right to immediate possession of any property, comprising a portion
of the Indenture Estate and requiring MCFT to execute and deliver such
instruments and documents to the Indenture Trustee or (ii) pursue all or part of
such property wherever it may be found, and the Indenture Trustee may enter any
of the premises where such property or any portion thereof may be or is supposed
to be and search for such property; provided, further, that notwithstanding any
-------- -------
provision herein to the contrary, the Indenture Trustee shall not sell, assign,
transfer or deliver any of the Indenture Estate or take possession of the
Indenture Estate unless the Secured Notes shall have been accelerated pursuant
to Section 5.04(b) or 5.04(c). All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may
make, from time to time and at the expense of the Indenture Estate, such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Indenture Estate as it may deem proper.
In each such case, the Indenture Trustee shall have the right to maintain, use,
operate, store, lease, control or manage the Indenture Estate and to exercise
all rights and power of MCFT relating to the Indenture Estate as the Indenture
Trustee shall deem to be in the best interest of the Holders. The Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents,
revenue, issues, income, products and profits of the Indenture Estate and every
part thereof, other than Excepted Payments. Such tolls, rents, revenues,
issues, income, products and profits shall be applied (i) to pay the expenses of
the use, operation, storage, leasing, control, management or disposition of the
Indenture Estate, (ii) to pay the expense of all maintenance, repairs,
replacements, alterations, additions and improvements, (iii) to make all
payments which the Indenture Trustee may be required or may elect to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any portion thereof, including, without limitation, the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of MCFT, and (iv) to pay amounts owing
in respect of the Secured Notes in accordance with the provisions thereof and
hereof and to make all other payments which the Indenture Trustee may be
required or authorized to make under any provision of this Indenture, as well as
just and reasonable compensation for the services of the Indenture Trustee and
of all Persons properly engaged and employed by the Indenture Trustee.
(c) Any of the Indenture Trustee, any Holder or MCFT may be a
purchaser of the Indenture Estate or any portion thereof or any interest therein
at any sale thereof, whether pursuant to foreclosure or power of sale or
otherwise. The Indenture Trustee may apply against the purchase price therefor
the amount then due to it hereunder or under any of the Secured Notes secured
hereby and any Holder may apply against the purchase price therefor the amount
then due to it hereunder or under the Secured Notes held by such Holder, to the
extent of such portion of the purchase price as it would have received had it
been entitled to share in any distribution thereof. The Indenture Trustee or
any Holder or any nominee of any such Holder shall acquire, upon any such
purchase, good title to the property so purchased, free of the Lien
EXHC-18
<PAGE>
of this Indenture and, to the extent permitted by applicable law, free of all
rights of redemption in MCFT in respect of the property so purchased.
(d) Any sale or other conveyance of any of the Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture shall bind MCFT
and the Holders and shall be effective to transfer or convey all right, title
and interest of the Indenture Trustee, MCFT and the Holders in and to such
Indenture Estate or portion thereof, as the case may be. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance, or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee. In
the event of any such sale, MCFT shall execute any and all such bills of sale
and other documents, and perform and do all other acts and things requested by
the Indenture Trustee in order to permit continuation of such sale and to
effectuate the transfer or conveyance referred to in the first sentence of this
Section 5.05 (d). MCFT shall ratify and confirm any such sale or sales by
executing and delivering to the Indenture Trustee or to such purchaser or
purchasers all instruments as may reasonably be requested for such purpose. Any
such sale or sales made hereunder shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
MCFT in and to the properties and rights so sold, and shall be a perpetual bar
both at law and in equity against MCFT and against any and all persons claiming
or who may claim the same, or any part thereof from, through or under MCFT.
Upon any sale or other disposition of the Indenture Estate by the Indenture
Trustee, the Indenture Trustee will promptly account in writing, in reasonable
detail, to MCFT for the amount of such sale, the costs and expenses incurred in
connection therewith and any surplus proceeds.
(e) The Indenture Trustee shall as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof), at any time after an Indenture Event of Default either
before or after declaring due and payable the principal of all Secured Notes
then Outstanding, together with accrued but unpaid interest thereon and any
other amounts due thereunder, for all or any portion of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and, to the extent
permitted by applicable law, MCFT hereby consents to the appointment of such a
receiver, and agrees that it will not oppose any such appointment. Any receiver
appointed for all or any portion of the Indenture Estate shall be entitled in
addition to any powers available under applicable law, to exercise all the
rights and powers of the Indenture Trustee with respect to the Indenture Estate.
(f) To the extent now or at any time hereafter enforceable under
applicable law, MCFT covenants that it will not at any time insist upon or
plead, or in any manner whatsoever claim or take any benefit or advantage of any
stay, extension, moratorium, any exemption from execution or sale or other
similar law or from any law now or hereafter in force providing for the
valuation or appraisement of the Indenture Estate or any part thereof, prior to
any sale or sales thereof to be made pursuant to any provision herein contained,
or prior to any applicable decree, judgment or order of any court of competent
jurisdiction; nor, after such sale or sales, claim or exercise any right under
any statute now or hereafter made or enacted by any
EXHC-19
<PAGE>
state or any right to have a portion of the Indenture Estate or the security for
the Secured Notes marshalled or otherwise redeem the property so sold or any
part thereof, and hereby expressly waives for itself and on behalf of each and
every Person, except decree or judgment creditors of MCFT acquiring any interest
in or title to the Indenture Estate or any part thereof subsequent to the date
of this Indenture, all benefit and advantage of any such law or laws, and
covenants that it will not invoke or use any such law or laws, but will suffer
and permit the execution of every such power as though no such law or laws had
been made or enacted.
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Secured Notes or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Indenture shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
(g) The Indenture Trustee may adjourn from time to time any sale to be
made under or by virtue of this Indenture for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provision of
law, the Indenture Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(h) Any recovery of any judgment by the Indenture Trustee under the
Secured Notes and any levy of any execution under any such judgment upon the
Indenture Estate shall not affect in any manner or to any extent the security
title and security interest conveyed hereby upon the Indenture Estate or any
part thereof, or any conveyances, powers, rights and remedies of the Indenture
Trustee hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
(i) Notwithstanding anything contained herein, so long as the relevant
Pass Through Trustee or a registered Holder, the Indenture Trustee is not
authorized or empowered to acquire title to all or any portion of the Indenture
Estate or take any action with respect to all or any portion of the Indenture
Estate so acquired by it if such acquisition or action would cause the relevant
Pass Through Trust to fail to qualify as a "grantor trust" for federal income
tax purposes.
(j) MCFT shall be liable for all reasonable legal fees and other
reasonable costs and expenses incurring by each Loan Participant and the
Indenture Trustee by reason of the occurrence of any Indenture Event of Default
or the exercise of remedies with respect thereto.
SECTION 5.09. Quiet Enjoyment. Notwithstanding any other provision
---------------
of this Indenture or any other Operative Document, including, without
limitation, Sections 5.04 and 5.05, unless an Indenture Event of Default shall
have occurred and be continuing and this Indenture shall have been declared in
default pursuant to Section 5.04 (a), MCFT shall be
EXHC-20
<PAGE>
entitled to the quiet use and enjoyment of the benefits of the Facility
including the right to uninterrupted possession, use and operation of the
Facility, and the Indenture Trustee shall not take or permit any Person claiming
by, through or under it to take any action inconsistent with MCFT's rights
hereunder or under any of the other Operative Documents or otherwise, through
its own actions or inactions, interfere or permit any such Person to interfere
with such quiet use or enjoyment or such possession, use or operation or the
rights of any permitted sublessee or assignee to such quiet use or enjoyment or
such possession, use or operation under any sublease or assignment permitted
hereunder (including, without limitation, the rights of the Operator under the
Initial Sublease).
SECTION 5.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) the reference to the Lessee
in Section 5.07 shall after the Relevant Date be deemed to be deleted and (b)
Sections 5.07 and 5.10 shall be deemed amended to provide that any reference to,
or right or obligation of the Owner Trustee contained in such Sections shall
after the Relevant Date be deemed to be a reference to, or right or obligation
of MCFT.
(F) Sections 6.01, 6.02, 6.03, 6.07, 6.08, 6.10 and 6.12 of the
Indenture shall read as follows:
SECTION 6.01. Certain Actions. If the Indenture Trustee shall
---------------
have Actual Knowledge of any Indenture Event of Default or any Indenture Default
or any material fact relating to the Facility Assets, the Indenture Trustee
shall (a) give prompt telephonic notice (promptly confirmed in writing) to MCFT
and (b) within 90 days after obtaining such Actual Knowledge, mail to each
Holder, notice of all Indenture Events of Default unless, in each case, such
Indenture Event of Default has been remedied before the giving of such notice
and the Indenture Trustee has Actual Knowledge that such Indenture Event of
Default has been so remedied; provided, however, that the failure by the
-------- -------
Indenture Trustee to provide such notice shall not invalidate any actions
subsequently taken by the Indenture Trustee in connection with such Indenture
Event of Default. Except in the case of a default in the payment of the
principal or interest on any Secured Note, the Indenture Trustee shall be
protected in withholding the notice required under clause (b) above if and so
long as Responsible Officers of the Indenture Trustee in good faith determine
that withholding such notice is in the interest of the Holders.
SECTION 6.02. Action Upon Instructions. The Indenture Trustee shall,
------------------------
upon the written instruction at any time and from time to time of a Majority in
Interest of Holders of Notes, give such notice, consent or direction or exercise
such right, remedy or power hereunder or any other agreement constituting part
of the Indenture Estate as shall be specified in such instruction; provided,
--------
however, that nothing set forth in this Section 6.02 shall entitle the Holders
- -------
to cause the Indenture Trustee to give any notice or exercise any right, power
or remedy that is not elsewhere authorized by, or is otherwise restricted or
prohibited by, this Indenture or any other Operative Document. If the Indenture
Trustee shall not have received instructions as above provided within twenty
(20) calendar days after mailing of the notice pursuant to Section 6.01 to the
Holders, the Indenture Trustee may take such action, or refrain from taking
EXHC-21
<PAGE>
such action, but shall be under no duty to take or refrain from taking any
action, with respect to such Indenture Event of Default or fact as it shall
determine to be advisable and in the best interest of the Holders. If the
Indenture Trustee receives any instructions after the expiration of the
aforementioned twenty day period, the Indenture Trustee shall use its best
efforts to conform any action being taken to comply with those instructions.
SECTION 6.03. Release of Lien of Indenture. (a) Release of
---------------------------- ----------
Indenture Estate. Upon satisfaction of the conditions for termination of this
- ----------------
Indenture set forth in Section 10.01, the Lien of the Indenture on the Indenture
Estate shall terminate and the Indenture Trustee, upon the written request of
MCFT, shall execute and deliver to, or as directed by, MCFT, all appropriate
instruments provided by MCFT (in due form for recording or filing) releasing the
Indenture Estate from the Lien of this Indenture and terminating the Easements,
and the Indenture Trustee shall pay all moneys or other properties or proceeds
held by it under this Indenture to MCFT. The reasonable cost and expense
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03(a) shall be borne by MCFT.
(b) Release of Facility Assets Upon Event of Loss. Upon the
---------------------------------------- ----
occurrence of an Event of Loss with respect to the Facility Assets and receipt
by the Indenture Trustee of all amounts due and payable by MCFT as a result of
such Event of Loss pursuant to Section 12.02 of Article XI and the concurrent
redemption of Secured Notes as set forth in Section 3.02, the Indenture Trustee,
upon the written request of MCFT, shall execute and deliver to, or as directed
by, MCFT, all appropriate instruments provided by MCFT (in due form for
recording or filing) releasing the Facility Assets and all other property solely
relating thereto and then constituting a portion of the Indenture Estate (or if
not solely relating thereto, but such other property can be reasonably
partitioned without undue burden or delay, such other property), as the case may
be, from the Lien of this Indenture. The reasonable cost and expense associated
with any action taken by the Indenture Trustee pursuant to the provisions of
this Section 6.03 (b) shall be borne by MCFT.
(c) Release of Liens Upon Full Payment of Secured Notes. Upon payment
---------------------------------------------------
in full of the principal of and interest on and all other amounts due and
payable under the Secured Notes, and all other amounts due and payable to any
Holder or the Indenture Trustee hereunder or under any other Operative Document,
the Indenture Trustee, upon the written request of MCFT, shall execute and
deliver to, or as directed by, MCFT, all appropriate instruments provided by
MCFT (in due form for recording or filing) releasing the Facility Assets, and
all other property relating thereto and then constituting a portion of the
Indenture Estate from the Lien of this Indenture. The cost and expense
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03 (c) shall be borne by MCFT.
(d) Disposition, Substitution and Release of Facility Assets Included
-----------------------------------------------------------------
in the Indenture Estate. Any Replacement Components and alterations,
- -----------------------
improvements and modifications in and additions to the Facility Assets shall, to
the extent required or specified in Section 11.07 of Article XI, become subject
to the Lien of this Indenture; provided that, to the
--------
EXHC-22
<PAGE>
extent permitted by and as provided in Section 11.07 of Article XI, MCFT shall
have the right, at any time and from time to time, without any release from or
consent by the Indenture Trustee, to remove and/or replace Components or
Replacement Components, to make alterations, improvements and modifications in,
and additions to, the Facility Assets. The Indenture Trustee agrees that, to the
extent permitted by and as provided in Section 11.07 of Article XI, the title to
any such removed or replaced Component or Replacement Components, shall vest in
MCFT. The Indenture Trustee shall from time to time execute an appropriate
written instrument or instruments to confirm the release of the security
interest of the Indenture Trustee in any replaced Component or Replacement
Components, as provided in this Section 6.03(d) in each case upon receipt by the
Indenture Trustee of a request of MCFT stating that said action was duly taken
by MCFT in conformity with this Section 6.03(d) and that the execution of such
written instrument or instruments is appropriate to evidence such release of a
security interest under this Section 6.03(d). The reasonable cost and expense
associated with any action taken by the Indenture Trustee pursuant to the
provisions of this Section 6.03(d) shall be borne by MCFT.
SECTION 6.07. No Action Except Under Operative Documents or
---------------------------------------------
Instructions. The Indenture Trustee agrees that it will not use, operate, store,
- ------------
lease, control, manage, sell, dispose of or otherwise deal with the Facility
Assets or any other part of the Indenture Estate except (a) in accordance with
the terms of the Operative Documents or (b) in accordance with the powers
granted to, or the authority conferred upon, the Indenture Trustee pursuant to
the express terms of this Indenture.
SECTION 6.08. [Intentionally Omitted]
SECTION 6.10. [Intentionally Omitted]
SECTION 6.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) the reference to the Lessee
in Section 6.09 shall after the Relevant Date be deemed to be deleted, (b)
Sections 6.09 and 6.11 shall be deemed amended to provide that any reference to,
or right or obligation of the Owner Trustee contained in any such Section shall
after the Relevant Date be deemed to be a reference to, or right or obligation
of MCFT and (c) the phrase "the Owner Participant or" in Section 6.11 shall
after the Relevant Date be deemed to be deleted.
(G) Sections 7.02, 7.03, 7.04, 7.05, 7.07 and 7.10 of the Indenture
shall read as follows:
SECTION 7.02. Absence of Duties Except as Specified. Except in
-------------------------------------
accordance with written instructions furnished pursuant to Section 6.01 or 6.02,
and except as provided in, and without limiting the generality of, Sections
6.04, 6.05, 6.06, 6.07, 7.01 and 7.03, the Indenture Trustee shall have no duty
(a) to record or file this Indenture or any other document, or to maintain any
such recording or filing, or to rerecord or refile any such document, (b) to
effect or maintain any such insurance, whether or not MCFT shall be in default
with respect
EXHC-23
<PAGE>
thereto, (c) to discharge any Lien of any kind against any part of the Indenture
Estate, or (d) to inspect the Facility Assets at any time, or to ascertain or
inquire as to the performance or observance of any of MCFT's covenants
hereunder.
SECTION 7.03. No Representations or Warranties. NEITHER MCFT NOR
--------------------------------
THE INDENTURE TRUSTEE MAKES (a) ANY REPRESENTATION OR WARRANTY, WHETHER WRITTEN,
ORAL, EXPRESS OR IMPLIED, AS TO THE VALUE, COMPLIANCE WITH SPECIFICATIONS,
DURABILITY, OPERATION, CONSTRUCTION, PERFORMANCE, DESIGN OR CONDITION OF THE
FACILITY OR ANY COMPONENT THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS
THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE FACILITY OR ANY COMPONENT OF
THE FACILITY, THE QUALITY OF THE MATERIALS OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE FACILITY, OR ANY COMPONENT
OF THE FACILITY ASSETS, except, in the case of MCFT, as expressly provided in
Section 5 of the Participation Agreement, or (b) any representation or warranty
as to the validity, legality or enforceability of this Indenture, any of the
other Operative Documents or the Secured Notes, or as to the correctness of any
statement contained in any thereof, except as set forth in Section 7.01 of this
Indenture, or Sections 5 and 9 of the Participation Agreement.
SECTION 7.04. No Segregation of Moneys; No Interest; Investments.
--------------------------------------------------
Any moneys paid to or retained by the Indenture Trustee as security hereunder
that would be payable to MCFT upon satisfaction of any applicable conditions
shall be invested and reinvested by the Indenture Trustee from time to time in
Permitted Investments at the written direction of MCFT. The Indenture Trustee
shall have no liability for any loss resulting from any investment required to
be made hereunder other than by reason of its own willful misconduct or
negligence in failing to comply with such instructions. Any net income or gain
realized as a result of any such investment or reinvestment shall be held as
part of the Indenture Estate and shall be applied by the Indenture Trustee at
the same time, on the same conditions and in the same manner as the amounts in
respect of which such income or gain was realized are required to be distributed
in accordance with the provisions hereof. MCFT shall be responsible for any net
loss realized as a result of any such investment or reinvestment and shall
reimburse the Indenture Trustee therefor on demand. Any Permitted Investment
may be sold or otherwise reduced to cash (without regard to maturity) by the
Indenture Trustee whenever necessary to make any application as required by the
terms of this Indenture or of any applicable Operative Document.
SECTION 7.05. Reliance; Agents; Advice of Counsel. The Indenture
-----------------------------------
Trustee (in its individual or trust capacity) shall not incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Indenture Trustee may accept a copy of a
resolution of the Board of Directors or other governing body of any party to the
Participation
EXHC-24
<PAGE>
Agreement or other Operative Document, certified by the Secretary or any
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to any fact or matter relating to MCFT the
manner of ascertainment of which is not specifically described herein, the
Indenture Trustee may for all purposes hereof rely on an Officer's Certificate
of MCFT as to such fact or matter, and such Officer's Certificate shall
constitute full protection to the Indenture Trustee (in its individual or trust
capacity), for any action taken or omitted to be taken by it in good faith in
reliance thereon. In the administration of the trusts hereunder, the Indenture
Trustee may execute any of the trusts or powers hereof and perform its powers
and duties hereunder directly or through agents or attorneys and at the expense
of the Indenture Estate may consult with counsel, accountants and other skilled
Persons to be selected and retained by it, and the Indenture Trustee shall not
be liable for anything done, suffered or omitted in good faith by, it in
accordance with the advice or opinion of any such counsel, accountant or other
skilled Person acting within such Person' s area of competence (so long as the
Indenture Trustee shall have exercised due care in selecting such Persons,
provided that, so long as no Lease Event of Default shall have occurred and be
- --------
continuing, no such Persons (other than counsel to the Indenture Trustee or its
accountants) shall be retained by the Indenture Trustee without the consent of
the Lessee, such consent not to be unreasonably withheld.
SECTION 7.10. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, Sections 7.06 and 7.09 shall be
deemed amended to provide that any reference to, or right or obligation of the
Owner Trustee contained in such Section shall after the Relevant Date be deemed
to be a reference to, or right or an obligation of MCFT.
(H) Sections 8.01 and 8.04 of the Indenture shall read as follows:
SECTION 8.01. [Intentionally Omitted]
SECTION 8.04. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein, (a) Sections 8.02 and 8.03 shall
be deemed amended to provide that any reference to, or right or obligation of
the Owner Trustee contained in any such Section shall after the Relevant Date be
deemed to be a reference to, or right or obligation of MCFT and (b) Section 8.02
shall be deemed amended to provide that any reference to the Lessee or the Owner
Participant contained in such Section shall be deemed to be deleted.
(I) (I) Sections 9.02(a), 9.02(b) and 9.02(c) of the Indenture shall
read as follows:
(a) [Intentionally Omitted]
(b) Except as provided in Section 9.01 or 9.02(c) or 9.02(d), at any
time and from time to time, with the written consent of a Majority in Interest
of Holders of Notes and, whether or not an Indenture Event of Default exists,
upon the written consent of MCFT, the
EXHC-25
<PAGE>
Indenture Trustee (x) shall execute an amendment or supplement to this Indenture
for the purpose of adding provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or (y) shall execute an
amendment or supplement to, or give a consent, waiver, authorization or
approval, for the purposes of adding any provisions to or changing in any manner
or eliminating any of the provisions of, the Participation Agreement; provided,
--------
however, that no such amendment or supplement to this Indenture, or consent,
- -------
waiver, authorization, approval, amendment or supplement to the Participation
Agreement shall, without the consent of each Holder of a Secured Note then
Outstanding:
(i) change the stated maturity of the principal of, or any installment
of interest on, or the amount of any payment upon any mandatory or optional
repayment, purchase or redemption of any Secured Note, or change the
principal amount thereof or any other amount payable in respect thereof or
reduce the Make-Whole Amount, if any, or interest thereon, or change the
place of payment where, or the coin or currency in which, any Secured Note
or the interest thereon is payable;
(ii) permit the creation of any Lien on the Indenture Estate not
otherwise permitted hereunder or deprive any Holder of the benefit of the
Lien of this Indenture upon the Indenture Estate, or any portion thereof,
for the security of its Secured Notes;
(iii) change the percentage of the aggregate principal amount of
Secured Notes required to take or approve any action hereunder or any other
Operative Document;
(iv) modify the definitions of "Indenture Default", "Indenture Event
of Default" or "Majority in Interest of Holders of Notes";
(v) modify the order of priorities in which distributions are to be
made under Article IV;
(vi) [Intentionally Omitted]
(vii) modify, amend or supplement any of the provisions of this
Section 9.02;
(viii) [Intentionally Omitted]
(ix) adversely affect any indemnities in favor of any Holder as
provided pursuant to the terms of any Operative Document, except as may be
consented to by each Person adversely affected thereby.
(c) Notwithstanding anything to the contrary contained in Section
9.02(b) (except as provided in the proviso to Section 9.02(b)), without the
necessity of the consent of any of the Holders, the Indenture Trustee shall, at
the request of MCFT:
EXHC-26
<PAGE>
(i) [Intentionally Omitted]
(ii) [Intentionally Omitted]
(iii) modify, amend or supplement the Participation Agreement, or
give any consent, waiver, authorization or approval with respect thereto,
except that without compliance with Section 9.02(b), the Indenture Trustee
shall not modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder,
with respect to the following provisions of the Participation Agreement as
originally executed: Section 5 (insofar as such Section 5 relates to the
Indenture Trustee, the Indenture Estate and the Holders), Section 10 (other
than an amendment to add to the covenants of MCFT and other than Section
10.10), Section 11.4, Section 12 (insofar as such Section 12 relates to the
Indenture Trustee, the Indenture Estate and the Holders) and, to the extent
the Loan Participant would be adversely affected thereby, Section 15 and
any definitions of terms used in the Participation Agreement to the extent
that any modification of such definition would result in a modification of
the Participation Agreement not permitted pursuant to this Section 9.02(c);
(iv) [Intentionally Omitted]
(v) modify, amend or supplement any of said agreements in order to
cure any ambiguity, to correct or supplement any provisions thereof which
may be defective or inconsistent with any other provision thereof or of any
provision of this Indenture, or to make any other provision with respect to
matters or questions arising thereunder or under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided the
making of any such other provision shall not adversely affect the interests
of the Holders unless such provision corrects a mistake or cures an
ambiguity.
(II) Sections 9.07 and 9.08 of the Indenture shall read as follows:
SECTION 9.07. [Intentionally Omitted]
SECTION 9.08. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein:
(a) the phrase "the assumption by the Lessee of the obligations of the
Owner Trustee hereunder in accordance with the terms and conditions applicable
thereto specified in Section 3.04, including, without limitation, in Sections
9.01(e) and 9.02(d), and the phrases "the succession of a new Owner Trustee in
accordance with the Trust Agreement or" and "thereunder or" in each of Sections
9.01(f) and 9.02(d) (iv) shall after the Relevant Date be deemed to be deleted;
EXHC-27
<PAGE>
(b) the reference to the Lessee in each of Sections 9.01(c),
9.02(d)(iii) and 9.06 shall after the Relevant Date be deemed to be deleted; and
Sections 9.01, 9.03, 9.05 and 9.06 shall be deemed amended to provide that any
reference to, or right or obligation of the Owner Trustee contained in such
Sections shall after the Relevant Date be deemed to be a reference to, or right
or obligation of MCFT; and
(c) all provisions requiring delivery of documents to the Owner
Participant in Section 9.06 shall be deemed to be deleted.
(J) Sections 10.01, 10.04, 10.05, 10.08, 10.10, and 10. 14 of the
Indenture shall read as follows:
SECTION 10.01. Termination of Indenture. This Indenture and the
------------------------
trusts created hereby shall terminate, and this Indenture shall be of no further
force or effect, when:
(a) the principal of and interest on and all other amounts due and
payable under all Secured Notes and all other amounts due and payable to
any Holder or the Indenture Trustee hereunder or under any other Operative
Document shall have been paid in full; or
(b) the Indenture Trustee shall have sold or made other final
disposition of all property and all moneys or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms
hereof; or
(c) all Secured Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable (whether upon stated
maturity, as a result of redemption or upon acceleration), or will become
due and payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Secured Notes not theretofore
cancelled by the Indenture Trustee or delivered to the Indenture Trustee
for cancellation, an amount in cash sufficient without reinvestment thereof
to discharge such indebtedness, including the principal of and interest on
the Secured Notes to the date of such deposit (in the case of Secured Notes
which have become due and payable), or to the maturity thereof, as the case
may be; or
(d) (i) MCFT has deposited or caused to be deposited irrevocably
(except as provided in Section 7.09(b)) with the Indenture Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Loan Participants, (A) money in an amount, or (B)
United States Government Obligations which, through the payment of interest
and principal in respect thereof in accordance with their terms, will
provide (not later than one Business Day before the due date or any payment
referred to below in this clause) money in an amount, or (C) a combination
of
EXHC-28
<PAGE>
money and United States Government Obligations referred to in the foregoing
clause (B), sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay and
discharge each installment of principal of and interest on the Outstanding
Secured Notes on the dates such payments of principal or interest are due
(including as a result of redemption in respect of which irrevocable notice
has been given to the Indenture Trustee on or prior to the date of such
deposit), and no Indenture Event of Default under Section 5.02(g) shall
have occurred and be continuing on the date of such deposit or at any time
during the period ending on the 91st day after such date; provided,
--------
however, that upon the making of the deposit referred to above in clause
-------
(A), the right of MCFT to cause the redemption of Secured Notes (except a
redemption in respect of which irrevocable notice has theretofore been
given) shall terminate; and (ii) MCFT has delivered to the Indenture
Trustee an Officer's Certificate of MCFT to the effect that (A) such
deposit will not constitute an Indenture Event of Default under this
Indenture or a default or event of default under any other agreement or
instrument to which MCFT is a party or by which it is bound and (B) all
conditions precedent relating to the termination of this Indenture under
this Section 10.01(d) have been complied with; and (iii) MCFT has delivered
to the Indenture Trustee an Officer's Certificate of MCFT and an Opinion of
Counsel to the effect that there has been published by the Internal Revenue
Service a ruling to the effect that Loan Participants will not recognize
income, gain or loss for Federal income tax purposes as a result of the
exercise by MCFT of its option under this Section 10.01(d) and will be
subject to Federal income tax in respect of the interest received from such
deposit on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised; and (iv)
all other amounts then due and payable hereunder to any Holder or the
Indenture Trustee have been paid;
provided, however, that the obligations of the Indenture Trustee contained in
- -------- -------
Sections 2.01 through 2.11, 6.11 and 7.09 shall survive. Except as otherwise
provided in the preceding sentence, this Indenture and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.03. [Intentionally Omitted]
SECTION 10.04. (a) Aggregate Unpaid Principal Amount of Secured Notes
--------------------------------------------------
Outstanding. As to the aggregate unpaid principal amount of Secured Notes
- -----------
Outstanding as of any date, MCFT may rely on an Officer's Certificate of the
Indenture Trustee.
(b) No director, officer, employee or stockholder (other than the
Guarantor as stockholder of MCFT), as such, of MCFT or the Guarantor, as the
case may be, shall have any liability for any obligations of MCFT or the
Guarantor, as the case may be, under this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Loan
Participant by accepting a Secured Note waives and releases all such
EXHC-29
<PAGE>
liability. The waiver and release are part of the consideration for the issue of
the Secured Notes.
SECTION 10.05. Notices. All communications, notices and consents
-------
provided for in this Indenture shall be in writing and shall be given in person
or by courier or by means of telex, telecopy or other wire transmission (with
request for assurance of receipt in a manner typical with respect to
communications of that type), or mailed by first class mail, addressed, in the
case of MCFT, to Mobil Chemical Finance (Texas) Inc., 3225 Gallows Road,
Fairfax, Virginia 22037-0001 Attention: Treasurer; telecopier (703) 846-1469,
in the case of the Indenture Trustee, to State Street Bank and Trust Company,
Two International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department (telephone: (617) 664-5340; telecopier: (617) 664-
5371); and, in the case of all other parties, as set forth in Schedule 1 to the
Participation Agreement or at such other address as any such Person may from
time to time designate by notice duly given in accordance with the provisions of
this Section 10.05 to the other parties hereto and shall be deemed given when
received by (or when proffered to, if receipt is not accepted) the party to whom
it is addressed.
SECTION 10.08. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon each of the parties hereto and their
respective successors and permitted assigns, and inure to the benefit of each of
the parties hereto and their respective successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of such
Holder. Each Holder by its acceptance of a Secured Note agrees to be bound by
this Indenture and all provisions of the Operative Documents applicable to it.
SECTION 10.10. Normal Commercial Relations. Notwithstanding anything
---------------------------
contained in this Indenture to the contrary, any Loan Participant, the Indenture
Trustee or bank or other affiliate of any such Person may conduct any banking or
other financial transactions and have banking or other commercial relationships
with MCFT fully to the same extent as if this Indenture were not in effect.
SECTION 10.14. Benefits of Indenture. Nothing in this Indenture,
---------------------
whether express or implied, shall be construed to give to any Person other than
the parties hereto and the Holders any legal or equitable right, remedy or claim
under or in respect of this Indenture or the Secured Notes, and this Indenture
shall be held for the sole and exclusive benefit of the parties hereto and the
Holders.
(K) The Indenture shall include the following Article XI:
ARTICLE XI
CERTAIN ADDITIONAL PROVISIONS
EXHC-30
<PAGE>
This Article XI consists of Sections 10 through 14 and 20. Sections 1
through 9 and 15 through 19 are intentionally omitted.
SECTION 10. LIENS.
-----
MCFT will not, directly or indirectly, create, incur, assume or suffer
to exist any Liens on or with respect to all or any part of the Facility Assets,
title thereto or any interest therein, other than Permitted Liens, and MCFT
promptly, at its own expense, will take such actions as may be necessary duly to
discharge any such Lien not excepted above.
SECTION 11. OPERATION AND MAINTENANCE;
INSPECTION; REPLACEMENTS AND
MODIFICATIONS; IDENTIFICATION.
-----------------------------
11.01. Operation and Maintenance. So long as the Facility Assets are
-------------------------
subject to the Lien of the Indenture, MCFT shall, at its own expense, operate
and maintain (or cause the operator thereof to operate and maintain) the
Facility Assets in accordance with Operator's established maintenance, rebuild
and repair programs so as to keep the Facility Assets (a) in good working order
and condition, ordinary wear and tear excepted and (b) in compliance in all
material respects with all applicable Governmental Rules and Governmental
Actions; provided, however, that MCFT shall not be obligated to comply with any
-------- -------
Governmental Rule or Governmental Action (i) whose application or validity is
being contested diligently and in good faith by appropriate proceedings, (ii)
compliance with which shall have been excused or exempted by a nonconforming use
permit, waiver, extension or forbearance exempting it from such Governmental
Rule or Governmental Action but only to the extent that MCFT's noncompliance is
in accordance therewith, (iii) if good faith efforts and appropriate steps are
being taken to comply, or (iv) if failure of compliance (individually and in the
aggregate with all other instances of continuing noncompliance by MCFT) would
result in no material adverse consequences to MCFT, so long as, in the case of
each of clauses (i) through (iv) of this proviso, neither such failure of
compliance nor such contest shall result (1) in any material risk or danger of
the sale, forfeiture or loss of any material part of or interest in the Facility
Assets or the Facility Assets or the Indenture Estate or title thereto or
interest therein, (2) or any interference with the payment of principal or
interest hereunder or any other amount due by MCFT hereunder or under the
Operative Documents to the Indenture Trustee or any Holder, or (3) any material
adverse effect on, the Indenture Trustee, any Loan Participant, the Indenture
Estate or the Facility Assets.
11.02. Inspection and Reports. The Indenture Trustee shall have the
----------------------
right (at each party's risk and expense (including, without limitation, as to
personal injury and death (other than as a result of the gross negligence or
willful misconduct of MCFT or its employees)) to inspect the Facility Assets and
the books and records of MCFT relating thereto to the extent provided in, and
subject to the restrictions set forth in, Sections 10.7 and 11.5 of the
Participation Agreement. MCFT shall cause to be prepared and filed in timely
fashion, or, in
EXHC-31
<PAGE>
the event the Indenture Trustee shall be required to file, MCFT shall prepare
and deliver (or cause to be prepared and delivered) to the Indenture Trustee
within a reasonable time prior to the date for filing, any reports with respect
to the condition or operation of the Facility Assets that shall be required to
be filed by any Governmental Rule or Governmental Action.
11.03. Required Modifications. MCFT shall make (or cause to be made)
----------------------
all Severable and Nonseverable Modifications to the Facility Assets as may be
required from time to time to meet the requirements of clause (b) of Section
11.01 of this Article XI or to maintain any insurance coverage required by
Section 13.01 of this Article XI (subject to the qualifications set forth in
such Section). MCFT shall complete (or cause to be completed) all such
Modifications in a good and workmanlike manner, with reasonable dispatch and
(but only to the extent practicable) in a manner which does not decrease the
Fair Market Sales Value of the Facility Assets or the remaining useful life or
utility of the Facility Assets.
11.04. Optional Modifications. MCFT may, at no expense to the
----------------------
Indenture Trustee, make (or cause or allow to be made) such other Severable and
Nonseverable Modifications to the Facility Assets not required by Section 11.03
of this Article XI as MCFT (or the Operator) in its sole discretion deems
desirable in the proper conduct of its business, provided that such
--------
Modifications are done in a good and workmanlike manner and as do not decrease
the Fair Market Sales Value (except to a de minimis extent) of the Facility
----------
Assets or decrease the remaining useful life.
11.05. Title to Modifications and Components; Purchase Option for
----------------------------------------------------------
Severable Modifications. (a) Title to all Severable Modifications to the
- -----------------------
Facility Assets not required by any Governmental Rule or Governmental Action
shall vest in MCFT or any Person designated by MCFT, free and clear of the Lien
of this Indenture. MCFT may remove (or allow to be removed) any such Severable
Modification prior to or on the latest Maturity Date.
(b) All of (i) Replacement Components of the Facility Assets, (ii)
Severable Modifications to the Facility Assets required by any Governmental Rule
or Governmental Action and (iii) Nonseverable Modifications to the Facility
Assets shall without further act be subject to the Lien of this Indenture.
11.06. Payment for Modifications and Replacement Components. (a)
----------------------------------------------------
MCFT shall be permitted at any time to finance its share of the cost of any
Severable Modification to the Facility Assets not required by any Governmental
Rule or Governmental Action, directly or indirectly, including, without
limitation, on a third party ownership basis.
(b) MCFT shall be permitted at any time to finance its share of the
cost of any Modification whether or not any such Modification is required by any
Governmental Rule or Governmental Action to be made to the Facility Assets
through the issuance of Additional Notes in accordance with Section 2.08 or any
alternative means of financing; provided, however, that such alternative
-------- -------
financing does not and will not result in any Lien (other than Permitted Liens)
on or with respect to the Facility Assets as modified by such Modification.
EXHC-32
<PAGE>
11.07. Replacement of Components; Removal of Property. (a) In the
---------------------------------------------
ordinary course of maintenance, service, repair or testing, any Component or
Replacement Component may be removed and replaced with a Replacement Component
and, upon such replacement, MCFT (or its designee) shall be entitled to retain
the amount of the net proceeds of any sale or disposition of any such removed
Component or Replacement Component. Any such Replacement Components shall be
free and clear of all Liens, except Permitted Liens, and in as good operating
condition as, and with a value, utility and useful life at least equal to, the
Components or Replacement Components replaced, assuming such replaced Components
or Replacement Components were in at least the condition and repair required to
be maintained hereunder. Immediately upon any Replacement Component becoming
incorporated in the Facility Assets, without further act, (i) such Replacement
Component shall become subject to the Lien of the Indenture, (ii) such
Replacement Component shall be deemed a part of the Facility Assets for all
purposes hereof to the same extent as the Component or Replacement Component it
replaced and (iii) title to such removed Component or Replacement Component
shall vest in MCFT or such Person as shall be designated by MCFT, free and clear
of all rights of the Indenture Trustee and shall no longer be deemed a Component
or a Replacement Component hereunder.
(b) If, at any time MCFT (or the Operator) shall conclude that any
property included in the Facility Assets is obsolete, redundant or unnecessary
and can be removed without diminishment of the value or utility of the Facility
Assets or reduction of the remaining useful life of the Facility Assets, MCFT
may remove (or allow to be removed) such property and upon such removal, without
further act, title to such property shall vest in MCFT or in such Person as
shall be designated by MCFT, free of the Lien of this Indenture. In addition,
notwithstanding anything contained in this Indenture to the contrary, if an
event occurs with respect to any Component or Components or any Replacement
Component or Replacement Components) which would constitute an Event of Loss if
such event occurred with respect to the Facility Assets or a Significant Portion
thereof, MCFT shall have no obligation to redeem or pay any amounts with respect
to a redemption (including, without limitation, principal, Make-Whole Amount, if
any, or interest) of any Secured Note in respect of, or to otherwise replace,
repair or rebuild, such Component or Components (or any Replacement Component or
Replacement Components), so long as the absence or condition of such Component
or Components (or any Replacement Component or Replacement Components) is not
material to the overall operation of the Facility Assets.
SECTION 12. EVENT OF LOSS.
-------------
12.01. Notice of Event of Loss. If there shall occur an Event of
-----------------------
Loss, MCFT shall promptly notify the Indenture Trustee of the occurrence
thereof.
12.02. Payment Upon Event of Loss, Etc. (a) If an Event of Loss
-------------------------------
with respect to the Facility Assets shall occur, unless the Lessee shall have
elected to rebuild the Facility Assets pursuant to Section 12.02(b), MCFT shall
pay to the Indenture Trustee as compensation for such Event of Loss, on the date
which is the latest monthly anniversary of the Basic Lease
EXHC-33
<PAGE>
Term Commencement Date not later than 180 days after the date of such Event of
Loss, an amount in cash which is sufficient to redeem each outstanding Secured
Note required to be redeemed pursuant to Section 3.02 as a result of such Event
of Loss.
(b) At MCFT's option, MCFT may determine to rebuild or cause to be
rebuilt (or replace or cause to be replaced) the Facility Assets or Significant
Portion thereof suffering such Event of Loss so that the Facility Assets will
have at least the same value, utility and remaining useful life as the Facility
Assets had immediately prior to the Event of Loss (assuming the Facility Assets
have been maintained in accordance with the terms of Section 11.01 of this
Indenture) and each replacement shall immediately become subject to the Lien of
the Indenture to the same extent as Components or Replacement Components or
previous Modifications being replaced or rebuilt. In the event MCFT determines
to rebuild or cause to be rebuilt (or replace or cause to be replaced) the
Facility Assets in accordance with this Section 12.02(b), MCFT shall provide
written notice of such election within 120 days of the occurrence of the Event
of Loss; provided that MCFT may not elect the option set forth in this Section
--------
12.02(b) during such time as an Indenture Event of Default described in Sections
5.02(a), 5.02(g) or 5.02(h) of this Indenture, shall have occurred and be
continuing. In the event that MCFT shall have elected the option set forth in
this Section 12.02(b), no amounts shall be payable under Section 12.02(a) and
the Facility Assets shall remain subject to the Lien of the Indenture. Prior to
or at the time that MCFT determines to rebuild or cause to be rebuilt (or
replace or cause to be replaced) the Facility Assets or Significant Portion
thereof in accordance with this Section 12.02(b), MCFT will (i) enter into such
amendments to the Operative Documents as may be reasonably necessary, (ii)
furnish the Indenture Trustee with an appraisal as to the value and utility of
such Facility Assets or Significant Portion thereof and (iii) so long as the
Indenture shall not have been satisfied and discharged, cause a financing
statement or statements with respect to such Facility Assets or Significant
Portion thereof or other requisite documents or instruments to be filed in such
place or places as may be necessary in order to perfect the security interest
created by or pursuant to the Indenture.
12.03. Application of Other Payments upon the Occurrence of an Event
-------------------------------------------------------------
of Loss. Any amounts of condemnation or requisition proceeds received at any
- -------
time by the Indenture Trustee of MCFT as a result of the occurrence of an Event
of Loss shall be paid over to or retained, as the case may be, by MCFT.
12.04. Application of Payments Not Relating to an Event of Loss.
--------------------------------------------------------
Payments (except for payments under insurance policies described in Section 13
of this Article XI) received at any time by the Indenture Trustee or MCFT from
any Governmental Authority or other Person with respect to any destruction,
damage, loss, condemnation, confiscation, theft or seizure of or requisition of
title to or use of the Facility Assets or any part thereof not constituting an
Event of Loss shall be paid over to MCFT or as it may direct and all such
amounts paid to MCFT shall be retained by MCFT.
12.05. Other Dispositions. Notwithstanding the foregoing provisions
------------------
of this Section 12, so long as any Indenture Event of Default described in
Section 5.02(a), (g) or (h)
EXHC-34
<PAGE>
shall have occurred and be continuing, any amount (except for payments under
insurance policies described in Section 13) that otherwise would be payable to
or for the account of, or that otherwise would be retained by, MCFT pursuant to
this Section 12 shall be paid to the Indenture Trustee as security for the
obligations of MCFT under this Indenture and, at such time thereafter as no
Indenture Event of Default described in Section 5.02(a), (g) or (h) shall be
continuing, such amount shall be paid promptly to MCFT or as it may direct,
provided that if any such amount has been so held as security for more than
- --------
ninety (90) days after an Indenture Event of Default described in Section
5.02(a), (g) or (h) shall have occurred and during which period, (i) the
Indenture Trustee shall not have been limited by operation of law or otherwise
from exercising remedies hereunder or (ii) the Indenture Trustee shall not have
commenced to exercise any remedy available to it under Section 5.04, then such
amount shall be paid to MCFT or as it may direct.
SECTION 13. INSURANCE.
---------
13.01. Coverage. (a) MCFT, at its own cost and expense, shall carry
--------
and maintain or cause to be carried and maintained at all times with respect to
the Facility Assets (i) insurance against loss or damage by fire, lightning and
other risks from time to time included under "all-risk" policies to the extent
such insurance is available, in such amounts and in such forms as is consistent
with MCFT's or its Affiliate's practice for other properties owned or leased by
MCFT or its Affiliates and (ii) public liability, including personal injury and
property damage and comprehensive general liability insurance against claims
arising out of or connected with the possession, use, leasing, operation or
condition of the Facility Assets in such amounts and in such forms as is
consistent with MCFT's or its Affiliate's practice for other properties similar
to the Facility Assets owned or leased by MCFT, or its Affiliates. The
insurance required under clause (i) or (ii) of this Section 13.01(a) may he
subject to deductible amounts and self-insured retentions as is consistent with
MCFT's or its Affiliate's practice for other properties similar to the Facility
Assets owned or leased by MCFT's Affiliates. Such insurance may be carried
under blanket policies maintained by or on behalf of MCFT so long as such
policies otherwise comply with the provisions of this Section 13.
(b) Any insurance carried in accordance with Sections 13.0l(a)(i) and
(ii) shall, to the extent the following can be effected without MCFT or the
Operator incurring any material costs in connection therewith, provide in the
policy or by special endorsement that:
(i) the Indenture Trustee (in its individual and trust capacities) and
each Loan Participant are included as additional insureds in respect of the
liability insurance carried in accordance with Section 13.01(a)(ii) and
shall provide that no such Person shall have any obligation or liability
for payment of premiums in respect of any insurance carried in accordance
with Section 13.01(a);
(ii) the insurer thereunder waives all rights of subrogation against
the Indenture Trustee (in its individual and trust capacities) and each
Loan Participant, and
EXHC-35
<PAGE>
waives any right of set-off and counterclaim and any other right to
deduction whether by attachment or otherwise;
(iii) such insurance shall be primary without right of contribution
of any other insurance carried by or on behalf of the Indenture Trustee (in
its individual and trust capacities) and each Loan Participant;
(iv) the respective interests of the Indenture Trustee (in its
individual and trust capacities) and each Loan Participant under all
insurance policies required hereunder shall not be invalidated by any
action or inaction of MCFT or any other Person (other than, with respect to
any such insured, such insured) and such insurance shall insure the
Indenture Trustee and each Loan Participant as their interests may appear,
regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by MCFT or any other Person (other
than, with respect to any such insured, such insured);
(v) if the insurers cancel such insurance for any reason whatsoever or
any materially adverse change is made in policy terms or conditions, or if
such insurance is allowed to lapse for nonpayment of premium, such
cancellation, change or lapse shall not be effective as to each Loan
Participant or the Indenture Trustee (in its individual and trust
capacities) for thirty days after receipt by each Loan Participant or the
Indenture Trustee (in its individual and trust capacities), respectively,
of written notice from such insurers of such cancellation, change or lapse;
and
(vi) with respect to all liability insurance, in as much as the
policies are written to cover more than one insured, all terms, conditions,
insuring agreements and endorsements, with the exception of the limits of
liability shall operate in the same manner as if there were a separate
policy covering each insured.
13.02. Adjustment of Losses. Losses, if any, with respect to the
--------------------
Facility Assets under any property damage policies required to be carried under
Section 13.01(a) of this Article XI shall be adjusted with the insurance
companies, including the filing of appropriate proceedings, by MCFT.
13.03. Application of Insurance Proceeds. All proceeds of insurance
---------------------------------
maintained pursuant to Section 13.01(a)(i) on account of any damage to or
destruction of the Facility Assets or any part thereof shall be paid over to
MCFT or as it may direct.
13.04. Additional Insurance. Nothing in this Section 13 shall
--------------------
prohibit MCFT or the Indenture Trustee from acquiring or maintaining, at its own
expense, additional insurance for its own account with respect to loss or damage
to the Facility Assets or any part thereof provided that any such additional
--------
insurance shall not interfere with or in any way limit insurance maintained
under Section 13.01(a) of this Article XI or increase the amount of any premium
EXHC-36
<PAGE>
payable with respect to any such insurance. The proceeds of any such additional
insurance will be for the account of the party maintaining such additional
insurance.
13.05. Annual Insurance Report. Prior to December 31 of each year,
-----------------------
MCFT will provide to the Indenture Trustee an insurance report and certificate,
substantially in the form of the report and the certificate provided by MCFT
pursuant to Section 4.6 of the Participation Agreement, with respect to the
insurance then required to be maintained by MCFT pursuant to Section 13 of this
Article XI.
SECTION 14. RIGHTS TO SUBLEASE.
------------------
14.01. [Intentionally Omitted]
14.02. MCFT may, without the consent of the Indenture Trustee, at any
time and from time to time, lease the Facility Assets to another Person
(including to Operator pursuant to the Initial Sublease); provided that (i) such
--------
lease shall be subject and subordinate to this Indenture (and such lease shall
contain a provision providing that any sublease permitted thereunder shall be so
subject and subordinate), (ii) MCFT shall remain primarily liable under this
Indenture, and all terms and conditions hereof and of the other Operative
Documents shall be complied with as though no such lease was in existence and
(iii) the Guaranty shall remain in full force and effect. Any lessee under a
lease permitted hereunder may sublease the Facility Assets to another Person
under a sublease that otherwise complies with the provisions hereunder
applicable to a lease hereunder. MCFT shall give prompt written notice to the
Indenture Trustee of any lease or sublease of the Facility Assets.
18.01. [Intentionally Omitted]
18.02 Performance by Affiliates, Etc.; Rights. Any payment by the
---------------------------------------
Guarantor, any Affiliate of MCFT, any lessee or the operator of any amount
payable by MCFT under any Operative Document shall constitute, as between the
Indenture Trustee and MCFT, payment of such amount by MCFT for all purposes of
this Indenture (including, without limitation, Section 5.02), and any
performance by the Guarantor, any Affiliate of the MCFT, any lessee or the
Operator of any obligation required to be performed by MCFT under any Operative
Document shall constitute, as between MCFT and the Indenture Trustee,
performance by MCFT of such obligation for all purposes of this Indenture.
Except as otherwise expressly provided herein, any right granted to MCFT in this
Indenture shall grant MCFT the right to exercise such right or permit such right
to be exercised by any assignee, lessee or transferee or MCFT permitted
hereunder or the Operator. The inclusion of specific references to obligations
or rights of any such assignee, lessee or transferee or the Operator in certain
provisions of this Indenture shall not in any way prevent or diminish the
application of the provisions of the sentences immediately preceding with
respect to obligations or rights in respect of which specific reference to any
such assignee, lessee or transferee or the Operator has not been made in this
Indenture.
EXHC-37
<PAGE>
SECTION 20. General. (a) As provided in the Relevant Date
-------
Supplement, effective upon the execution and delivery by MCFT and the Indenture
Trustee of the Relevant Date Supplement on the Relevant Date, MCFT assumed on a
full recourse basis all of the obligations of the Owner Trustee under this
Indenture and the Secured Notes and shall be entitled to all the rights and
benefits of the Owner Trustee hereunder and thereunder, in each case to the
extent provided for in Exhibit C hereto, and the Owner Trustee is, effective
upon such execution and delivery on the Relevant Date, released from all
obligations and rights under this Indenture and the Secured Notes; provided,
--------
however, that any obligations or liabilities of the Owner Trustee in its
- -------
individual capacity incurred on or prior to the Relevant Date or arising out of
or based upon events occurring on or prior to the Relevant Date, shall remain
the responsibility of the Owner Trustee.
(b) As provided in Section 2 of the Relevant Date Supplement, MCFT
confirmed and ratified the security interest which the Owner Trustee granted to
the Indenture Trustee pursuant to the Granting Clause of this Indenture in all
of the Owner Trustee's right, title and interest in and to the Indenture Estate
and MCFT explicitly agreed that MCFT is acquiring the Facility Assets identified
in such Section 2 subject to such security interest, which shall remain in full
force and effect until the Lien of this Indenture on the Facility Assets is
discharged in accordance with the terms hereof, and the Indenture Trustee
acknowledges that the Lease and the obligations of MCFT thereunder as the Lessee
have been terminated, except as specifically provided for therein. Each of MCFT
and the Indenture Trustee hereby agree that: MCFT is acquiring the Facility
Assets identified in such Section 2 subject to such security interest, which
shall remain in full force and effect until the Lien of this Indenture on the
Facility Assets is discharged in accordance with the terms hereof, and the
Indenture Trustee acknowledges that the Lease and the obligations of MCFT
thereunder as the Lessee have been terminated, except as specifically provided
for therein. Each of MCFT and the Indenture Trustee hereby agrees that:
(i) the comma at the end of clause (i) of the paragraph preceding the
Granting Clause of this Indenture shall after the Relevant Date be deemed
to be "and"; the reference to the Owner Trustee in clause (ii) of the
paragraph preceding the Granting Clause of this Indenture shall after the
Relevant Date be deemed to be a reference to MCFT; the phrase "(other than
the Tax Indemnity Agreement)" shall after the Relevant Date be deleted, the
phrase ", and (iii) the performance and observance by the Owner Participant
of its covenants and agreements in the Operative Documents (other than the
Tax Indemnity Agreement)" in the paragraph preceding the Granting Clause of
this Indenture shall after the Relevant Date be deemed to be deleted; and
the phrase "(the obligations described in the above clauses (i), (ii) and
(iii) collectively, the "Indenture Indebtedness")" in the paragraph
----------------------
preceding the Granting Clause of this Indenture shall after the Relevant
Date be deemed to be "(the obligations described in the above clauses (i)
and (ii) collectively, the "Indenture Indebtedness")";
----------------------
EXHC-38
<PAGE>
(ii) the paragraph preceding clause (a) of the Granting Clause of this
Indenture shall be deemed amended to provide that any reference to the
Owner Trustee contained in such paragraph shall after the Relevant Date be
deemed to be a reference to MCFT;
(iii) clauses (a) through (j) of the Granting Clause of this
Indenture and the two paragraphs following clause (j) of such Granting
Clause shall be deemed amended to read as follows after the Relevant Date:
(a) the Facility Assets, which is both (x) described in Schedule
1 or as may be described in any Indenture Supplement or any other
supplement to this Indenture and (y) as to which MCFT agrees, pursuant to
Section 2 of the Relevant Date Supplement, is subject to the security
interest and Lien of the Indenture, including, without limitation, any
Component or Replacement Component thereof or Modification thereto which,
pursuant to the terms of Article XI of this Indenture, are at any time
subject to the Lien of this Indenture; and
(b) all rights or property which may be received upon the
exercise of any remedy or option contained in any of the above-described
instruments and all proceeds in whatever form of all or any part of any of
the foregoing;
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
(e) [Intentionally Omitted]
(f) [Intentionally Omitted]
(g) [Intentionally Omitted]
(h) [Intentionally Omitted]
SUBJECT to the rights of MCFT hereunder.
Section 21. Statement of Intention. The Indenture Trustee, MCFT and
----------------------
the Owner Trustee acknowledge that the intent of the provisions contained in
this Article XI is, following the termination of the Lease pursuant to Section
6.1 thereof or 16.2(d) of the Participation Agreement, to provide for the
Indenture Trustee to have rights similar to those enjoyed by the Owner Trustee
under the Lease and for MCFT to have rights similar to those enjoyed by it under
the Lease. The Indenture Trustee and MCFT hereby agree that this Article XI
shall be construed and interpreted in a manner consistent with the intent
expressed in this Section 21.
EXHC-39
<PAGE>
(L) Sections 10.6 and 14 of the Participation Agreement shall read as
follows:
10.6. Further Assurances. MCFT, at its own cost and expense, will
------------------
cause to be promptly and duly taken, executed, acknowledged and delivered all
such further acts, documents and assurances as the Owner Trustee, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee reasonably may
request from time to time in order to carry out more effectively the intent and
purposes of this Agreement, the Pass Through Trust Agreement and the other
Operative Documents and the transactions contemplated hereby and thereby. MCFT,
at its own cost and expense, will cause the Indenture and supplements or
amendments thereto and restatements thereof and all financing statements,
fixture filings and other documents, to be recorded or filed at such places and
times and in such manner, as may be necessary or as may be reasonably requested
so long as any Secured Notes are Outstanding, by the Indenture Trustee or the
Pass Through Trustees in order to establish, preserve, protect and perfect the
mortgage and security interest of the Indenture Trustee in the Indenture Estate
granted or intended to be created under the Indenture and the Indenture
Trustee's rights under this Agreement and the other Operative Documents, subject
only to Permitted Liens.
10.13. Certain References and Obligations. (a) After the Relevant
----------------------------------
Date, the provisions of Section 10 which require or permit any action by, any
consent, approval or authorization of, the furnishing of any document, paper or
information to, or the performance of any other obligation to, the Owner Trustee
or the Owner Participant shall not be effective, and the Sections containing
such provisions shall be read as though there were no such references to any
such requirements or permissions.
Section 14. [Intentionally Omitted]
(M) (I) Section 1.4(c) of the Pass Through Trust Agreement shall read
as follows:
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates Outstanding have given any
direction, consent or waiver (a "Direction"), under this Agreement, Certificates
---------
owned by the Guarantor, MCFT or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding for purposes of any such determination. In
determining whether the Trustee shall be protected in relying upon any such
Direction, only Certificates about which the Trustee knows to be so owned shall
be so disregarded. Notwithstanding the foregoing, (i) if any such Person owns
100% of the Certificates Outstanding, such Certificates shall not be so
disregarded as aforesaid, and (ii) if any amount of Certificates so owned by any
such Person have been pledged in good faith, such Certificates shall not be
disregarded as aforesaid if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Certificates and that
the pledgee is not the Guarantor, MCFT or any Affiliate thereof.
EXHC-40
<PAGE>
(II) Sections 6.3 and 12.12 of the Pass Through Trust Agreement shall
read as follows:
Section 6.03. Judicial Proceedings Instituted by Trustee
------------------------------------------
(a) Trustee May Bring Suit. If there shall be a failure to make
----------------------
payment of the principal of or interest on any Secured Note held in the Trust
when due and payable, then the Trustee, in its own name, and as trustee of an
express trust, as holder of such Secured Notes, shall be, to the extent
permitted by and in accordance with the terms of the Note Documents, entitled
and empowered to institute any suits, actions or proceedings at law, in equity
or otherwise, for the collection of the sums so due and unpaid on such Secured
Notes and may prosecute any such claim or proceeding to judgment or final decree
with respect to the whole amount of any such sums so due and unpaid.
(b) Trustee May File Proofs of Claim; Appointment of Trustee as
-----------------------------------------------------------
Attorney-in-Fact in Judicial Proceedings. The Trustee in its own name, or as
- ----------------------------------------
trustee of an express trust, or as attorney-in-fact for the Certificateholders,
or in any one or more of such capacities (irrespective of whether distributions
on the Certificates shall then be due and payable, or the payment of the
principal on the Secured Notes shall then be due and payable, as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand to the Indenture Trustee for the payment of overdue
principal, premium (if any) or interest on the Secured Notes), shall be entitled
and empowered to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Certificateholders allowed in any receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or any other judicial proceedings
relative to the Guarantor or the Indenture Trustee, their respective creditors
or property. Any receiver, assignee, trustee, liquidator, sequestrator (or
similar official) in any such judicial proceeding is hereby authorized by each
Certificateholder to make payments in respect of such claim to the Trustee, and
in the event that the Trustee shall consent to the making of such payments
directly to the Certificateholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. Nothing contained in this Agreement shall be
deemed to give to the Trustee any right to accept or consent to any plan of
reorganization or otherwise by action of any character for any such proceeding
to waive or change in any way any right of any Certificateholder.
Section 12.12. Certain References and Obligations. Notwithstanding
----------------------------------
any provision to the contrary contained herein:
(a) The phrase "(with the consent of the Owner Trustee, if any,
relating to such Certificates, which consent shall not be unreasonably
withheld)" in Section 9.2 shall after the Relevant Date be deemed to be deleted;
and
(b) Sections 1.2, 7.2, 7.8(b), 7.8(c), 7.8(e), 7.8(f), 7.11(a),
7.11(d), 9.2, 11.1 and 12.3 shall be deemed amended to provide that any
reference to the Owner Trustee contained
EXHC-41
<PAGE>
in such Sections (but not any reference to the "Owner Trustee or its designee
the Company" in such Sections) shall after the Relevant Date be deemed to be
deleted.
- --------------------------------------------------------------------------------
All provisions of this Indenture, the other Operative Documents and
the Pass Through Trust Agreement not specifically amended by operation of this
Exhibit C shall remain in full force and effect.
EXHC-42
<PAGE>
Exhibit A to Exhibit C
to Indenture
------------
(FORM OF SERIES 1997-A SECURED NOTE)
MOBIL CHEMICAL FINANCE (TEXAS) INC.
Series 1997-A Secured Non-Recourse Note
Due _________ __, ____
Sale and Leaseback of Certain Paraxylene Production Facility Assets
-------------------------------------------------------------------
Located in Beaumont, Texas
--------------------------
Registered No. _____
$ ________ New York, New York
May __, 1997
Interest Rate Per Annum: ___ %
MOBIL CHEMICAL FINANCE (TEXAS) INC., a Delaware Corporation ("MCFT"),
----
for value received hereby promises to pay to State Street Bank and Trust
Company, or registered assigns, on or before _________ __, ____, as herein
provided, the principal sum of ____ DOLLARS ($_____), and to pay interest on
this Secured Note from time to time from the date hereof until the principal
amount hereof shall have been paid in full at the rate of [ ]% per annum (based
on a 360-day year of twelve 30-day months), and (to the extent not prohibited by
applicable law) to pay interest on any overdue principal and interest at the
Overdue Rate. The principal of this Secured Note shall be payable on each
January 2 and July 2, or both, in accordance with the schedule annexed hereto.
Subject to 2.03(b) of the Indenture, all accrued and unpaid interest on this
Secured Note shall be payable on each January 2 and July 2 in each year
commencing _________ __, ____.
This Secured Note is one of the Secured Notes issued by MCFT pursuant
to the terms of the Trust Indenture, Deed of Trust, Assignment of Lease, and
Security Agreement, dated as of May __, 1997, between the Owner Trustee and
State Street Bank and Trust Company, not in its individual capacity but solely
as Indenture Trustee thereunder for the Holder of this Secured Note and the
Holders of all other Secured Notes Outstanding thereunder (the "Indenture
---------
Trustee"), as such Trust Indenture, Deed of Trust, Assignment of Lease, and
- -------
Security Agreement has been assumed by MCFT pursuant to the Indenture Supplement
dated the date hereof between MCFT and the Indenture Trustee and as such Trust
Indenture, Deed of Trust, Assignment of Lease, and Security Agreement has been
amended pursuant to the Relevant Amendment (such Trust Indenture, Deed of Trust,
Assignment of Lease, and Security Agreement as so assumed and amended, the
"Indenture"). Capitalized terms used in this
---------
EXHC-43
<PAGE>
Secured Note and not otherwise defined shall have the respective meanings
assigned to them in the Indenture.
Each payment of principal and interest shall be due and payable at the
times, places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the
-----
payment of accrued interest on this Secured Note to the date of such payment and
second, to the payment of any principal on this Secured Note then due hereunder.
- ------
This Secured Note is one of MCFT's Series 1997-A Secured Notes and the
Series 1997-A Secured Notes issued pursuant to the Indenture, which together
with any Additional Notes and any note or notes issued upon a transfer of, in
exchange or substitution respectively therefor in accordance with the terms of
the Indenture, are equally and ratably secured by the Indenture, except as
expressly provided therein. The property of MCFT (excluding Excepted Payments)
included in the Indenture Estate are pledged or mortgaged to the Indenture
Trustee to the extent provided in the Indenture as security for the payment of
the principal of and interest on this Secured Note and all other Secured Notes
issued and Outstanding from time to time under the Indenture. Reference is
hereby made to the Indenture for a description of the Indenture Estate, and for
a statement of the rights of the Holders of, and the nature and extent of the
security for, this Secured Note and of the rights of, and the nature and extent
of the security for, the Holders of the other Secured Notes and of certain
rights of MCFT, as well as for a statement of the terms and conditions of the
trust created by the Indenture, to all of which terms and conditions in the
Indenture the Holder agrees by its acceptance of this Secured Note.
This Secured Note is subject to redemption, in whole, all as specified
in Article III of the Indenture. This Secured Note is also subject to
refunding, or purchase, all as specified in Sections 3.02 and 3.05 of the
Indenture.
In the event an Indenture Event of Default shall occur and be
continuing, the unpaid balance of the principal of the Secured Notes, together
with all accrued but unpaid interest, may be declared or may otherwise become
due and payable in the manner and with the effect provided in Article V of the
Indenture.
The Secured Notes are issuable only as registered notes. There shall
be maintained a note register for the purpose of registering transfers and
exchanges of the Secured Notes at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. MCFT and the Indenture Trustee shall deem and
treat the Person in whose name this Secured Note is registered on the Note
Register as the absolute owner hereof (whether or not this Secured Note shall be
overdue) for the purpose of receiving payments of principal and interest and for
all other purposes, and neither MCFT nor the Indenture Trustee shall be affected
by any notice to the contrary.
EXHC-44
<PAGE>
All payments of principal and interest to be made by MCFT and, except
as otherwise provided in the Operative Documents, all payments of any other
amounts payable by or on behalf of MCFT under the Secured Notes or under the
Indenture, shall be made only from the income and proceeds from the Indenture
Estate, and only to the extent that the Indenture Trustee shall have received
sufficient income and proceeds from the Indenture Estate to make such payments
in accordance with the Indenture. The Holder, by its acceptance of this Secured
Note, agrees that it will look solely to the income and proceeds from the
Indenture Estate to the extent available for payment as provided in the
Indenture, and that the Indenture Trustee (whether in its individual or trust
capacity) shall not be personally liable to the Indenture Trustee or to the
Holder for any amounts payable under this or any Secured Note, nor, except as
specifically provided in the Indenture or any other Operative Document, for any
amounts payable or any liability, under the Indenture.
This Secured Note shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been signed by the Indenture
Trustee.
No delay or omission of the Holder to exercise its rights hereunder
shall impair any such right or power or shall be construed to be a waiver of any
Indenture Event of Default, or an acquiescence therein. No waiver of any
Indenture Event of Default shall be construed, taken or held to be a waiver of
any other Indenture Event of Default, or a waiver, acquiescence in, or consent
to any further or succeeding Indenture Event of Default. MCFT waives demand,
notice and protest in any defense by reason of extension of time for payment or
other indulgence granted by the Holder.
This Secured Note shall be governed by and construed in accordance
with the laws of the State of New York.
EXHC-45
<PAGE>
IN WITNESS WHEREOF, Mobil Chemical Finance (Texas) Inc. has caused
this Secured Note to be duly executed.
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By: ______________________________
Title: ___________________________
EXHC-46
<PAGE>
Certificate of Authentication
-----------------------------
This Secured Note is one of the Series 1997-A Secured Notes of Mobil
Chemical Finance (Texas) Inc. described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity but solely as Indenture
Trustee
By: __________________________________________
Title: _______________________________________
EXHC-47
<PAGE>
Series 1997-A Secured Notes
Amortization Schedule
---------------------
<TABLE>
<CAPTION>
<S> <C>
Regular Scheduled Payment
Distribution Percentage of Remaining
Date Unpaid Principal Amount
---- -----------------------
</TABLE>
EXHC-48
<PAGE>
Exhibit D
to Indenture
------------
TRUST INDENTURE, MORTGAGE, ASSIGNMENT OF
LEASE AND SECURITY AGREEMENT
SUPPLEMENT NO. ____
This Trust Indenture Supplement No. ____, dated ____________, between
[_________________________________], [____________] not in its individual
capacity, except as expressly provided herein, but solely as Owner Trustee under
the Trust Agreement (the "Owner Trustee") and STATE STREET BANK AND TRUST
-------------
COMPANY, a Massachusetts trust company, not in its individual capacity, except
as expressly provided herein, but solely as Indenture Trustee (the "Indenture
---------
Trustee"):
- -------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the respective
meanings assigned to them in the Indenture;
WHEREAS, the Indenture was recorded in [ ]; and
WHEREAS, the Indenture provides for the execution and delivery of one or more
supplements substantially in the form of this Indenture Supplement, which
supplement shall describe the property from time to time included in the
Indenture Estate;
NOW, THEREFORE, THIS INDENTURE SUPPLEMENT WITNESSETH, that, to secure (i) the
prompt payment when and as due and payable of the principal of and interest on
all the Secured Notes from time to time Outstanding under the Indenture and all
other amounts payable to the Holders thereunder, under the Participation
Agreement and under the Secured Notes, (ii) the performance and observance by
the Owner Trustee of all its covenants and agreements for the benefit of the
Indenture Trustee or the Holders in the Indenture, in the Participation
Agreement and in the Secured Notes contained, and (iii) the performance and
observance by the Owner Participant of its covenants and agreements in the
Participation Agreement contained, and for the uses and purposes and subject to
the terms and provisions of the Indenture, and in consideration of the premises
and of the covenants contained in the Indenture and of the acceptance of the
Secured Notes by the Holders thereof, the Owner Trustee, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, has
granted, assigned, bargained, released, conveyed, transferred, mortgaged,
hypothecated, pledged, confirmed and created a security interest in and hereby
presently grants, assigns, bargains, releases, conveys, transfers, mortgages,
hypothecates, pledges, confirms and creates a security interest in, to and for
the benefit of the Indenture Trustee in all of the estate right, title and
interest of the Owner Trustee in and to the Facility Assets described in Annex I
to this Indenture Supplement, including, without limitation, any Component or
Replacement Component thereof
<PAGE>
or Modification thereto which, pursuant to the terms of the Lease, are at any
time the property of the Owner Trustee, and any Lease Supplement covering such
Asset.
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee, its
successors and assigns, for the benefit and security of the Holders, without any
priority of any Secured Note over any other except as otherwise expressly
provided in the Indenture, and for the uses and purposes and subject to the
terms and provisions set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the Indenture
and shall form a part thereof, and the Indenture is hereby incorporated by
reference in this Indenture Supplement and is hereby ratified, approved and
confirmed.
This Indenture Supplement may be executed by the Owner Trustee and the Indenture
Trustee in separate counterparts, each of which, when so executed and delivered,
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
This Indenture Supplement has been delivered in the State of New York and shall
be governed by, and shall be construed in accordance with, the laws of the State
of New York except matters relating to title to the real and personal property
located in the State of Texas (the "Texas Property"), and the creation,
perfection, priority and enforcement of the lien on and the security interest in
the Texas Property, shall be governed by, and shall be construed in accordance
with, the laws of the State of Texas.
EXHD-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed, all as of the date first written above.
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as Owner Trustee
By:_________________________________
Its:________________________________
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as expressly
provided herein, but solely as Indenture
Trustee
By:__________________________________
Its: ________________________________
EXHD-3
<PAGE>
Exhibit E
to Indenture
------------
RELEVANT DATE SUPPLEMENT
This Relevant Date Supplement, dated _________, between Mobil Chemical
Finance (Texas) Inc., a Delaware corporation ("MCFT"), and STATE STREET BANK
----
AND TRUST COMPANY, a Massachusetts trust company, not in its individual
capacity, except as expressly provided herein, but solely as Indenture Trustee
(the "Indenture Trustee"):
-----------------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Indenture;
WHEREAS, the Indenture was recorded [ ]; and
WHEREAS, the Indenture provides for the execution and delivery of a
supplement substantially in the form of this Supplement, which supplement shall
provide for certain matters relating to the assumption by MCFT of the
obligations of the Owner Trustee pursuant to Section 3.04 of the Indenture;
NOW, THEREFORE, the parties hereto agree as follows:
1. Effective as of the date of this Supplement (the "Relevant Date"),
-------------
MCFT assumes on a full recourse basis all of the obligations of the Owner
Trustee under the Indenture and the Secured Notes and shall be entitled to all
the rights and benefits of the Owner Trustee thereunder, in each case to the
extent provided for in Exhibit C thereto, and the Owner Trustee is, effective
upon the Relevant Date, released from all obligations and rights under the
Indenture and the Secured Notes; provided, however, that any obligations or
-------- -------
liabilities of the Owner Trustee in its individual capacity incurred on or prior
to the Relevant Date or arising out of or based upon events occurring on or
prior to the Relevant Date, shall remain the responsibility of the Owner
Trustee.
2. MCFT confirms and ratifies the security interest and Lien which the
Owner Trustee granted to the Indenture Trustee pursuant to the Granting Clause
of the Indenture in all of the Owner Trustee's right, title and interest in and
to the Indenture Estate and MCFT explicitly agrees that MCFT is acquiring the
Facility Assets, and all property relating thereto, constituting a portion of
the Indenture Estate, subject to such security interest and Lien, which shall
remain in full force and effect until the Lien of the Indenture on the Facility
Assets is discharged in accordance with the terms thereof, and the Indenture
Trustee acknowledges that the Lease and the obligations of MCFT thereunder as
the Lessee have been terminated, except as specifically provided for therein.
<PAGE>
2. MCFT confirms and ratifies the security interest and Lien which
the Owner Trustee granted to the Indenture Trustee pursuant to the Granting
Clause of the Indenture in all of the Owner Trustee's right, title and interest
in and to its undivided interest in the Facility Assets and MCFT explicitly
agrees that MCFT is acquiring the Owner Trustee's interest in the Facility
Assets, and all property relating thereto subject to the Lien of the Indenture,
subject to such security interest and Lien, which shall remain in full force and
effect until the Lien of the Indenture in the Facility Assets is discharged in
accordance with the terms thereof, and the Indenture Trustee acknowledges that
the Lease and the obligations of MCFT thereunder as the Lessee have been
terminated, except as specifically provided for therein.
3. This Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference in this Supplement and is hereby ratified, approved
and confirmed.
4. This Supplement may be executed by MCFT, and the Indenture Trustee
in separate counterparts, each of which, when so executed and delivered, shall
be an original, but all such counterparts shall together constitute but one and
the same instrument.
5. This Supplement has been delivered in the State of New York and
shall be governed by, and shall be construed in accordance with, the laws of the
State of New York except matters relating to title to the real and personal
property located in the State of Texas (the "Texas Property"), and the creation,
--------------
perfection, priority and enforcement of the lien on and the security interest in
the Texas Property, shall be governed by, and shall be construed in accordance
with, the laws of the State of Texas.
EXHE-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed, all as of the date first written above.
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By:_________________________________
Its:________________________________
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as expressly
provided herein, but solely as Indenture
Trustee
By:_________________________________
Its: ________________________________
EXHE-3
<PAGE>
EXHIBIT 4.3
SERIES 1997-A SECURED NOTE
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee under the Trust Agreement
Series 1997-A Secured Non-Recourse Note
Due January 2, 2014
Sale and Leaseback of Certain Paraxylene Production Facility Assets
-------------------------------------------------------------------
Located in Beaumont, Texas
--------------------------
Registered No. R-1
$95,331,000 New York, New York
May 28, 1997
Interest Rate Per Annum: 7.29%
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement, dated as of May
19, 1997, as amended (the "Trust Agreement"), among the Owner Participant named
---------------
therein and the Owner Trustee, for value received hereby promises to pay to
State Street Bank and Trust Company, or registered assigns, on or before January
2, 2014, as herein provided, the principal sum of NINTY-FIVE MILLION THREE
HUNDRED AND THIRTY-ONE THOUSAND DOLLARS ($95,331,000) , and to pay interest on
this Secured Note from time to time from the date hereof until the principal
amount hereof shall have been paid in full, at the rate of 7.29% per annum
(based on a 360-day year of twelve 30-day months), and (to the extent not
prohibited by applicable law) to pay interest on any overdue principal and
interest at the Overdue Rate. The principal of this Secured Note shall be
payable on January 2 or in certain years, in accordance with the schedule
annexed hereto. The first payment of accrued and unpaid interest on this Secured
Note shall be payable on July 2, 1997. Thereafter, subject to Section 2.03(b) of
the Indenture (as defined below), all accrued and unpaid interest on this
Secured Note shall be payable on each January 2 and July 2 in each year
commencing on January 2, 1998.
This Secured Note is one of the Secured Notes issued by the Owner Trustee
pursuant to the terms of the Trust Indenture, Deed of Trust, Assignment of Lease
and Security Agreement, dated effective as of May 28, 1997 (the "Indenture"),
----------
between the Owner Trustee and State Street Bank and Trust Company, not in its
individual capacity, but solely as Indenture Trustee thereunder
<PAGE>
2
(the "Indenture Trustee"). Capitalized terms used in this Secured Note and not
-----------------
otherwise defined shall have the respective meanings assigned to them in the
Indenture.
Each payment of principal and interest shall be due and payable at the times,
places and in the manner as specified herein and in the Indenture.
Each payment on this Secured Note shall be applied, first, to the payment of
-----
accrued interest on this Secured Note to the date of such payment, and second,
------
to the payment of any principal on this Secured Note then due hereunder.
This Secured Note is one of the Series 1997-A Secured Notes of the Owner
Trustee, issued pursuant to the Indenture, which, together with any Additional
Notes and any note or notes issued upon a transfer, in exchange or substitution
for respectively therefor in accordance with the terms of the Indenture, are
equally and ratably secured by the Indenture, except as expressly provided
therein. The property of the Owner Trustee (excluding Excepted Payments)
included in the Indenture Estate is pledged or mortgaged to the Indenture
Trustee to the extent provided in the Indenture as security for the payment of
the principal of and interest on this Secured Note and all other Secured Notes
issued and Outstanding from time to time under the Indenture. Reference is
hereby made to the Indenture for a description of the Indenture Estate, and for
a statement of the rights of the Holders of, and the nature and extent of the
security for, this Secured Note and of the rights of, and the nature and extent
of the security for, the Holders of the other Secured Notes and of certain
rights of the Owner Trustee and the Owner Participant, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture the Holder agrees by its
acceptance of this Secured Note.
This Secured Note is subject to redemption, in whole, all as specified in
Article III of the Indenture. This Secured Note is also subject to refunding,
assumption or purchase, all as specified in Sections 3.02, 3.04, 3.05 and 3.06
of the Indenture.
In the event an Indenture Event of Default shall occur and be continuing, the
unpaid balance of the principal of the Secured Notes, together with all accrued
but unpaid interest, may be declared or may otherwise become due and payable in
the manner and with the effect provided in Article V of the Indenture.
The Secured Notes are issuable only as registered notes. There shall be
maintained a note register for the purpose of registering transfers and
exchanges of the Secured Notes at the principal corporate trust office of the
Indenture Trustee, or of any successor Indenture Trustee, in the manner provided
in Section 2.05 of the Indenture. The Owner Trustee and the Indenture Trustee
shall deem and treat the Person in whose name this Secured Note is registered on
the Note Register as the absolute owner hereof (whether or not this Secured Note
shall be overdue) for the purpose of receiving payments of principal and
interest and for all
<PAGE>
3
other purposes, and neither the Owner Trustee nor the Indenture Trustee shall be
affected by any notice to the contrary.
All payments of principal and interest to be made by the Owner Trustee and,
except as otherwise provided in the Operative Documents, all payments of any
other amounts payable by or on behalf of the Owner Trustee under the Secured
Notes or under the Indenture, shall be made only from the income and proceeds
from the Indenture Estate, and only to the extent that the Indenture Trustee
shall have received sufficient income and proceeds from the Indenture Estate to
make such payments in accordance with the Indenture. The Holder, by its
acceptance of this Secured Note, agrees that it will look solely to the income
and proceeds from the Indenture Estate to the extent available for payment as
provided in the Indenture, and that none of the Owner Participant, the Owner
Trustee, the Trust Company, or the Indenture Trustee (whether in its individual
or trust capacity) shall be personally liable to the Indenture Trustee or to the
Holder for any amounts payable under this or any Secured Note, nor, except as
specifically provided in the Indenture or any other Operative Document, for any
amounts payable or any liability, under the Indenture.
This Secured Note shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been signed by the Indenture Trustee.
No delay or omission of the Holder to exercise its rights hereunder shall impair
any such right or power or shall be construed to be a waiver of any Indenture
Event of Default, or an acquiescence therein. No waiver of any Indenture Event
of Default shall be construed, taken or held to be a waiver of any other
Indenture Event of Default, or a waiver, acquiescence in, or consent to any
further or succeeding Indenture Event of Default. The Owner Trustee waives
demand, notice and protest in any defense by reason of extension of time for
payment or other indulgence granted by the Holder.
This Secured Note shall be governed by and construed in accordance with the laws
of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee has caused this Secured Note to be duly
executed.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as Owner
Trustee under the Trust Agreement
By: ______________________________
Title: _____________________________
<PAGE>
Certificate of Authentication
-----------------------------
This Secured Note is one of the Series 1997-A Secured Notes of WILMINGTON TRUST
COMPANY, as Owner Trustee described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: _________________________
Title: ________________________
<PAGE>
Series 1997-A Secured Notes
Amortization Schedule
---------------------
Scheduled Payment
Regular Percentage of Remaining
Distribution Date Unpaid Principal Amount
- ------------------- -----------------------
<PAGE>
EXHIBIT 4.4
================================================================================
FACILITY ASSETS LEASE AGREEMENT
between
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement,
Lessor
and
MOBIL CHEMICAL FINANCE (TEXAS) INC.,
Lessee
Dated as of May 28, 1997
================================================================================
Certain Paraxylene Production Facility
Assets Located in Beaumont, Texas
================================================================================
AS SET FORTH IN SECTION 14.1 OF THIS LEASE, CERTAIN OF THE RIGHT, TITLE AND
INTEREST OF THE LESSOR IN AND TO THIS LEASE HAVE BEEN ASSIGNED TO AND ARE
SUBJECT TO A SECURITY INTEREST IN FAVOR OF STATE STREET BANK AND TRUST COMPANY,
AS INDENTURE TRUSTEE, UNDER THE TRUST INDENTURE, DEED OF TRUST, ASSIGNMENT OF
LEASE AND SECURITY AGREEMENT, DATED EFFECTIVE AS OF MAY 28, 1997, BETWEEN THE
LESSOR AND THE INDENTURE TRUSTEE, AS SUCH INDENTURE MAY BE AMENDED, MODIFIED OR
SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE PROVISIONS THEREOF. THIS
LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT
THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OF POSSESSION OF ANY
EXECUTED COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL
BE IDENTIFIED AS THE COUNTERPART THAT CONTAINS THE RECEIPT THEREFOR EXECUTED BY
THE INDENTURE TRUSTEE ON OR IMMEDIATELY FOLLOWING THE SIGNATURE PAGE THEREOF.
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 1. Definitions; Interpretation...................................... 1
Section 2. Lease of Facility Assets, Etc.................................... 1
2.1. Facility Assets.................................................. 1
2.2. Personal Property................................................ 2
2.3. Descriptions..................................................... 2
2.4. Site Sublease.................................................... 2
Section 3. Rent............................................................. 4
3.1. Basic Rent....................................................... 4
3.2. Supplemental Rent................................................ 5
3.3. Method of Payment................................................ 5
3.4. Late Payment..................................................... 5
3.5. Minimum Payment.................................................. 6
3.6. Net Lease; No Set-off; Etc....................................... 6
3.7. [Intentionally Omitted].......................................... 8
3.8. Premium.......................................................... 8
Section 4. Recomputation of Basic Rent Percentages,
Stipulated Loss Value Percentages, Termination
Value Percentages and EBO Percentages............................ 8
4.1. Adjustments to Basic Rent Percentages............................ 8
4.2. Limitations on Adjustments....................................... 10
4.3. Timing of Adjustments............................................ 10
4.4. Confirmation of Adjustments...................................... 11
4.5. Further Assurances............................................... 12
Section 5. Renewal.......................................................... 12
5.1. Renewal.......................................................... 12
5.2. Rent............................................................. 13
5.3. Notice........................................................... 13
5.4. Stipulated Loss Values and Termination
Values........................................................... 14
Section 6. Purchase Options................................................. 14
6.1. Purchase Options................................................. 14
6.2. Notice of Election; Manner of Purchase;
Transfer After Purchase.......................................... 16
6.3. Assumption of Secured Notes...................................... 20
Section 7. Early Termination................................................ 21
7.1. Early Termination Decision....................................... 21
7.2. Notice of Termination............................................ 21
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
7.3. Right of Lessee to Purchase; Sale of
Facility; Termination Payment...................... 22
7.4. Retention of Facility by Lessor upon an
Obsolescence Termination........................... 25
Section 8. Relinquishment of Possession and Use of
Facility Assets.................................... 26
Section 9. Quiet Enjoyment; Disclaimer of
Warranties......................................... 28
9.1. Quiet Enjoyment.................................... 28
9.2. Disclaimer of Warranties........................... 28
9.3. Enforcement of Warranties.......................... 29
Section 10. Liens.............................................. 30
Section 11. Operation and Maintenance; Inspection;
Replacements and Modifications; Operator........... 30
11.1. Operation and Maintenance.......................... 30
11.2. Inspection and Reports............................. 31
11.3. Required Modifications............................. 31
11.4. Optional Modifications............................. 32
11.5. Title to Modifications and Components;
Purchase Option for Severable
Modifications...................................... 32
11.6. Payment for Modifications and Replacement
Components......................................... 33
11.7. Replacement of Components; Removal of
Property........................................... 34
11.8. Operator........................................... 35
Section 12. Event of Loss...................................... 35
12.1. Notice of Event of Loss............................ 35
12.2. Payment of Stipulated Loss Value, Etc.............. 35
12.3. Application of Other Payments upon the
Occurrence of an Event of Loss..................... 37
12.4. Application of Payments Not Relating to
an Event of Loss................................... 37
12.5. Other Dispositions................................. 37
Section 13. Insurance.......................................... 38
13.1. Coverage........................................... 38
13.2. Adjustment of Losses............................... 40
13.3. Application of Insurance Proceeds.................. 40
13.4. Additional Insurance............................... 40
13.5. Annual Insurance Report............................ 40
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
Section 14. Rights to Assign or Lease.......................... 41
14.1. Assignment by Lessor; Security for
Lessor's Obligations to Indenture
Trustee............................................ 41
14.2. Assignment and Sublease by Lessee.................. 42
Section 15. Lease Events of Default............................ 43
Section 16. Remedies........................................... 46
16.1. In General......................................... 46
16.2. Continuing Obligations............................. 50
16.3. Remedies Cumulative................................ 51
Section 17. Notices............................................ 51
Section 18. Other Rights....................................... 51
18.1. Lessor's Right to Perform.......................... 51
18.2. Performance by Affiliates, Etc.; Rights............ 52
Section 19. Miscellaneous...................................... 52
19.1. Amendments in Writing.............................. 52
19.2. Severability of Provisions......................... 52
19.3. Governing Law...................................... 53
19.4. Headings........................................... 53
19.5. Counterpart Execution.............................. 53
19.6. Successors and Assigns............................. 53
19.7. Investment of Security Funds....................... 53
19.8. Immunities; Satisfaction of Undertakings;
Successor Owner Trustee............................ 54
19.9. Performance of Obligations to Indenture
Trustee and Holders................................ 55
19.10. True Lease......................................... 55
19.11. Survival of Agreements............................. 55
19.12. Rule Against Perpetuities.......................... 56
19.13. No Merger.......................................... 56
19.14. Usury.............................................. 56
19.15. No Joint Venture................................... 56
</TABLE>
iii
<PAGE>
SCHEDULES
Schedule 1 Basic Rent Accrual
Schedule 2 Stipulated Loss Value Schedule
Schedule 3 Termination Value Percentages
Schedule 4 EBO Dates, EBO Percentages and Installment Schedules
EXHIBITS
Exhibit A Description of Facility Assets
iv
<PAGE>
FACILITY ASSETS LEASE AGREEMENT
-------------------------------
THIS FACILITY ASSETS LEASE AGREEMENT, dated as of MAY 28, 1997, is
between WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity, except as provided in Section 19.8, but solely as Owner
Trustee under the Trust Agreement, as Lessor, and MOBIL CHEMICAL FINANCE (TEXAS)
INC., a Delaware corporation, as Lessee.
RECITALS:
A. Pursuant to the Conveyancing Instrument, Mobil Oil Corporation, a New
York corporation, is selling all of its right, title and interest in and to the
Facility Assets to the Lessor and, pursuant to the Ground Lease, the Ground
Lessor is entering into the Ground Lease with the Lessor.
B. Pursuant to this Lease, the Lessor desires to lease the Facility Assets
and sublease the Site to the Lessee, and the Lessee desires to lease the
Facility Assets and sublease the Site from the Lessor.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions; Interpretation. For the purposes hereof,
---------------------------
capitalized terms used herein (including those used in the preamble and in the
foregoing recitals) and not otherwise defined herein shall have the meanings
assigned to them in Appendix A, which Appendix A shall for all purposes
constitute part of this Lease and shall be subject to amendment in accordance
with the terms and provisions hereof. References in this Lease to Sections,
subsections, Schedules, Appendices and Exhibits are to Sections and subsections
of, and Schedules, Appendices and Exhibits to, this Lease unless otherwise
indicated.
Section 2. Lease of Facility Assets, Etc.
-----------------------------
2.1. Facility Assets. Upon the terms and subject to the conditions of
---------------
this Lease, the Lessor agrees to lease and hereby leases the Facility Assets to
the Lessee, and the Lessee agrees to lease and hereby leases the Facility Assets
from the Lessor, for the Basic Lease Term and, subject to the exercise by the
Lessee of its renewal
<PAGE>
option or options as provided in Section 5, the Renewal Term or Renewal Terms.
2.2. Personal Property. To the maximum extent permitted by law, the
-----------------
parties hereto stipulate and agree that the Facility Assets and all
Modifications to the Facility Assets and every portion thereof are severed, and
shall be and remain severed, to the maximum extent permitted by law, from any
real estate underneath the Facility Assets, even if physically attached thereto.
To the maximum extent permitted by law, the parties hereto agree that the
Facility Assets and all Modifications to the Facility Assets and every portion
thereof, shall constitute personal property and shall not be or become fixtures
or otherwise part of the real estate underneath the Facility Assets or of any
other real property.
2.3. Descriptions. The Facility Assets are described in Exhibit A.
------------
2.4. Site Sublease. (a) The Lessor hereby subleases the Site to the
-------------
Lessee and the Lessee hereby subleases the Site from the Lessor, for a period
ending on the final day of the Lease Term. During the Basic Lease Term, the
Lessee shall pay on each anniversary of the Closing Date, the amount equal to
the rent payments due under Section 5.1(a) of the Ground Lease as a sublease
rental payment for the Site for the one-year period ending on such anniversary
or, in the case of the first anniversary of the Closing Date, for the period
commencing on the Closing Date and ending on such anniversary, and during any
Renewal Term, the Lessee shall make payments on each anniversary of the Closing
Date of amounts equal to the rent payments under Section 5.1(b) of the Ground
Lease as a sublease rental payment for the Site for the one-year period ending
on such anniversary; provided that the Lessor hereby irrevocably directs the
--------
Lessee to pay directly all such sublease rental payments to the Ground Lessor,
as payment, on behalf of the Ground Lessee, of the rental payments due under the
Ground Lease for the lease period or periods under the Ground Lease
corresponding to the Lease Term.
(b) During the Lease Term, the Lessor shall (i) not terminate, modify or
-
amend the Ground Lease without the prior written consent of the Lessee; (ii)
--
promptly make all payments due and owing under the Ground Lease; provided that,
--------
except as provided in Section 2.4(c), the Lessor shall be obligated hereunder to
make any rent payments under the Ground Lease only if it has received from the
Lessee the
2
<PAGE>
amounts required to be paid by the Lessee pursuant to this Section 2.4 and (iii)
---
exercise such renewals and extensions of the Ground Lease as may be necessary to
afford the Lessee the ability to remain in possession of the Facility Assets for
the Lease Term.
(c) During the Lease Term, the Lessee agrees that it shall perform all of
the obligations of the Lessor as Ground Lessee under the Ground Lease that arise
or are otherwise attributable to the period prior to the end of the Lease Term,
other than the Lessor's obligations under Section 8 of the Ground Lease. Upon
the terms and subject to the conditions of this Lease, the Lessor hereby also
assigns to the Lessee, for the Basic Lease Term and, subject to the exercise by
the Lessee of its renewal option or options as provided in Section 5, the
Renewal Term or Renewal Terms, the right to exercise, to the exclusion of the
Lessor for so long as the Lessee shall rightfully be in possession of the
Facility under this Lease, all of the rights granted to the Lessor pursuant to
the Ground Lease. From and after the end of the Lease Term, the Lessee shall
have no obligation to perform any of the Lessor's obligations as Ground Lessee
under the Ground Lease.
(d) So long as no Specified Lease Event of Default has occurred and is
continuing, the Lessor, from time to time at the request of the Lessee or the
Operator, shall, subject to the terms of the Ground Lease, (i) sell, assign,
-
convey or otherwise transfer any interest in the Site to any Person legally
empowered to take such interest under the power of eminent domain in
anticipation thereof; (ii) grant easements and other rights in the nature of
--
easements in respect of the Site; (iii) release existing easements or other
---
rights in the nature of easements which are for the benefit of the Site; (iv)
--
dedicate or transfer unimproved portions of the Site for road, highway or other
public purposes; (v) execute petitions to have the Site annexed to any municipal
-
corporation or utility district; (vi) execute amendments to any covenants and
--
restrictions affecting the Site and (vii) execute and deliver to any Person any
---
instrument appropriate to confirm or effect such grants, releases, dedications
and transfers, but only if (x) such sale, assignment, conveyance, grant,
-
release, dedication or transfer does not in any material respect impair the
usefulness of the Site for the purposes for which the Site is being used in
respect of the Facility Assets or the possessory interests of the Lessor in the
Site under the terms and conditions of the Ground Lease or in any material
respect adversely affect the Fair Market Sales Value,
3
<PAGE>
residual value, utility or remaining useful life of the Facility Assets or cause
the Facility Assets to constitute "limited use property" within the meaning of
Revenue Procedure 76-30 or effect a transfer of title to any of the Facility
Assets and the Lessor shall have received a certificate or certificates of a
Vice President or other duly authorized officer of the Lessee or the Operator to
such effect and, if such grant, release, dedication or transfer is to any Person
legally empowered to take such interest under the power of eminent domain, also
to the effect that such action is being taken in anticipation that the interest
in question would otherwise be taken under the power of eminent domain and (y)
-
the Lessor shall have received a duly authorized and binding undertaking of the
Lessee to remain obligated under this Lease. As between the Lessor and the
Lessee, the Lessee shall be entitled to receive any consideration paid in
connection with any such grant, release, dedication or transfer. In addition,
the Lessee shall have the right to grant easements or other rights for the
benefit of the Facility or which are deemed reasonably necessary for the
Lessee's, any sublessee's or the Operator's use of the Facility; provided that
such easements or other rights satisfy the definition of Permitted Lien. As
between the Lessor and the Lessee, if the Lessee or any Affiliate thereof
receives any monetary or other consideration for such easements, such Person
shall be entitled to retain such consideration in every event. The Lessee may
exercise its right to grant easements and other rights without the joinder of or
the consent of the Lessor; provided that the Lessor agrees to cooperate and join
in the execution of any such easement or other instrument, at the Lessee's sole
cost and expense.
Section 3. Rent.
----
3.1. Basic Rent. The Lessee shall pay to the Lessor, as Basic Rent for
----------
the Facility Assets, semi-annual installments of Basic Rent on the Basic Rent
Payment Dates during the Basic Lease Term. Basic Rent with respect to any
Renewal Term shall be payable as provided in Section 5.2. Subject to adjustment
as provided herein, each such installment of Basic Rent during the Basic Lease
Term shall be in an amount equal to the percentage set forth in Schedule 1
opposite the applicable Basic Rent Payment Date multiplied by Lessor's Cost.
Each installment of Basic Rent shall be in advance or in arrears and shall apply
to a specific semi-annual period, in each case as specified in Schedule 1. The
Lessor and Lessee agree that Basic Rent shall be allocated as follows: each
installment of Basic Rent that is
4
<PAGE>
indicated as payable in advance will be allocated over the period beginning on
the Basic Rent Payment Date on which such advance payment is scheduled to be
made and ending on the day immediately preceding the next Basic Rent Payment
Date or the end of the Lease Term, as applicable, and each installment of Basic
Rent that is indicated as payable in arrears will be accrued over the period
commencing on the Closing Date or the Basic Rent Payment Date, as applicable,
immediately preceding the Basic Rent Payment Date on which such arrears payment
is scheduled to be made and ending on the day immediately preceding the Basic
Rent Payment Date on which such arrears payment is scheduled to be made.
3.2. Supplemental Rent. The Lessee shall pay to the Lessor, for its
-----------------
own account, or to the Person entitled thereto, as provided herein or in any
other Operative Document, any and all Supplemental Rent, promptly as the same
shall become due and payable, and, in the event of any failure on the part of
the Lessee to pay any Supplemental Rent, the Lessor shall have all rights,
powers and remedies provided for herein in the case of non-payment of Basic
Rent.
3.3. Method of Payment. Subject to Section 14.1, all Basic Rent and
-----------------
Supplemental Rent payable to the Lessor shall be paid to the Owner Trustee's
account specified in Schedule 1 to the Participation Agreement or to such other
account at such other place in the United States of America as the Lessor shall
specify in writing to the Lessee at least five (5) Business Days prior to the
due date thereof. All Supplemental Rent payable to any Person other than the
Lessor pursuant to any Operative Document shall be paid directly to such Person
as provided in such Operative Document. Each payment of Rent shall be made by
the Lessee in immediately available funds, on or before 12:00 noon, New York
time at the place of receipt, on the scheduled date on which such payment shall
be due, unless such scheduled date shall not be a Business Day in which case
such payment shall be due and payable on the next succeeding Business Day with
the same force and effect as if made on such scheduled date and (provided such
payment is made on such next succeeding Business Day) no interest shall accrue
on the amount of such payment from and after such scheduled date.
3.4. Late Payment. If any Rent shall not be paid when due, the Lessee
------------
shall pay to the Lessor (or, in the case of Supplemental Rent, to the Lessor for
its own account or to the Person entitled thereto as provided herein or in any
other Operative Document), as Supplemental Rent,
5
<PAGE>
interest (to the extent permitted by applicable law) on such overdue amount from
and including the due date thereof to but excluding the date of payment thereof
(unless payment is made after 12:00 noon, New York time at the place of receipt,
in which event such date of payment shall be included) at the Overdue Rate, but
not to exceed the Maximum Rate (as defined in Section 19.14).
3.5. Minimum Payment. Notwithstanding any other provision of this
---------------
Lease (including, without limitation, Section 4) or any other Operative Document
(a) the amount of Basic Rent payable on each Basic Rent Payment Date, as the
-
same may be adjusted pursuant to Section 4, shall be at least equal to the
aggregate amount of scheduled principal and accrued interest due and payable on
the Secured Notes Outstanding on such Basic Rent Payment Date, and (b) the
-
amount of Stipulated Loss Value and Termination Value as of any date and the
amount of the initial installment of the applicable EBO Purchase Price as of any
applicable EBO Date, as each such amount may be adjusted pursuant to Section 4,
together with the Rent payable under this Lease on such date (excluding, in each
case, any portion thereof constituting an Excepted Payment), shall be at least
equal to the aggregate amount of principal and accrued interest which would be
due and payable on the Secured Notes Outstanding on such date assuming such date
or EBO Date, as the case may be, was the date such payment was due on the
Secured Notes in respect of any payment by the Lessee of Stipulated Loss
Value, Termination Value or EBO Purchase Price.
3.6. Net Lease; No Set-off; Etc. This Lease is a net lease and,
--------------------------
notwithstanding any other provision of this Lease, the obligation of the Lessee
to pay Rent hereunder or any amount due and owing under Section 2.4 shall be
absolute and unconditional and shall not be affected by any circumstance of any
character, including, without limitation: (a) counterclaim, set-off, deduction,
-
defense, abatement, suspension, deferment, diminution or reduction; (b) any
-
defect in the condition, design, quality or fitness for use of the Facility
Assets or the Site or any part thereof or interest therein or any environmental
condition affecting the Facility; (c) any damage to, removal, abandonment,
-
salvage, loss, scrapping or destruction of or any requisition or taking of the
Facility Assets or the Site or any part thereof or interest therein; (d) any
-
restriction, prevention, interruption or curtailment of or interference with any
use, operation or possession of the Facility Assets or the Site or any part
thereof or interest therein; (e) any defect in, or any Lien on, title
-
6
<PAGE>
to the Facility Assets or the Site or any part thereof or interest therein; (f)
-
any change, waiver, extension, indulgence or other action or omission in respect
of any obligation or liability of the Lessee or the Lessor; (g) any bankruptcy,
-
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to the Lessee, the Guarantor, the Indenture
Trustee, the Lessor, the Owner Participant, the Loan Participant, any Holder
or any other Person, or any action taken with respect to this Lease by any
trustee or receiver of any Person mentioned above or by any court; (h) any claim
-
that the Lessee or the Guarantor has or might have against any Person,
including, without limitation, the Indenture Trustee, the Loan Participant, the
Lessor, the Owner Participant or any Holder (but this Section 3.6 shall not
constitute a waiver of any such claim); (i) any failure on the part of the
-
Lessor, the Indenture Trustee, the Owner Participant or the Loan Participant to
perform or comply with any of the terms hereof or of any other agreement (but
this Section 3.6 shall not constitute a waiver of a claim that has arisen or
might arise out of or relating to such failure); (j) any invalidity or
-
unenforceability or disaffirmance of this Lease or any of the other Operative
Documents or any provision hereof or thereof, whether against or by the Lessee
or otherwise or (k) any other occurrence whatsoever, whether similar or
-
dissimilar to the foregoing, whether or not the Lessee shall have notice or
knowledge of any of the foregoing. Except as expressly provided herein, the
Lessee, to the extent permitted by law, waives all rights now or hereafter
conferred by statute or otherwise to quit, terminate or surrender this Lease, or
to any diminution or reduction of Rent payable by the Lessee hereunder. All
payments by the Lessee of Basic Rent, Stipulated Loss Value, Termination
Value, EBO Purchase Price or Fixed Price Purchase Amount (or amounts payable by
reference thereto) made hereunder as required hereby shall be final absent
manifest error, and the Lessee shall not seek to recover any such payment or any
part thereof for any reason whatsoever absent manifest error. If this Lease
shall be terminated in whole or in part for any reason whatsoever, the Lessee
shall, except as expressly provided herein, nonetheless pay to the Lessor (or,
in the case of Supplemental Rent, to the Person entitled to such Supplemental
Rent as specified herein or in the appropriate Operative Document) an amount
equal to each Rent payment at the time and in the manner that such payment would
have become due and payable under the terms of this Lease if it had not been
terminated in whole or in part. Nothing contained in this Section 3.6 shall be
construed as (a) a guaranty of (i) the value of the
- -
7
<PAGE>
Facility upon the expiration or termination of the Basic Lease Term or any
Renewal Term, (ii) the useful life of the Facility Assets or (iii) payment of
-- ---
any of the Secured Notes, (b) a prohibition of assertion of any claim against
-
any manufacturer, supplier, dealer, vendor, contractor, subcontractor or
installer with respect to the Facility Assets or any part thereof or (c) a
-
waiver by the Lessee of any of its rights under any of the Operative Documents
or under any of the Pass Through Trust Documents or of its right to assert and
sue upon any claims it may have against any other Person in one or more separate
actions.
3.7. [Intentionally Omitted].
3.8. Premium. The Lessee shall also pay to the Indenture Trustee on
-------
behalf of the Lessor, as Supplemental Rent, an amount on an After-Tax Basis
equal to any amount payable by the Lessor as Premium, as and when any such
Premium shall be due and payable under the Indenture; provided, however, that
-------- -------
the Lessee shall have no obligation to pay on behalf of the Lessor or the Owner
Participant any Premium payable by the Lessor or the Owner Participant (or to
otherwise reimburse the Lessor or the Owner Participant, whether hereunder or
under any of the other Operative Documents, for any Premium paid by the Lessor
or the Owner Participant) (x) pursuant to Section 3.06 of the Indenture or (y)
- -
with respect to any Indenture Event of Default that is not a Lease Event of
Default.
Section 4. Recomputation of Basic Rent Percentages, Stipulated Loss
---------------------------------------------------------
Value Percentages, Termination Value Percentages and EBO Percentages.
--------------------------------------------------------------------
4.1. Adjustments to Basic Rent Percentages. (a) Subject to the
-------------------------------------
following provisions of this Section 4, the Basic Rent Percentages shall be
appropriately adjusted by such amounts and in such a manner as shall preserve
the Owner Participant's Net Economic Return in the event that for any reason:
(i) after the Closing Date, the actual amount of Transaction Expenses
paid by the Lessor (and not paid or otherwise reimbursed by the Lessee as
contemplated by Section 2.9(b) of the Participation Agreement) as a
percentage of Lessor's Cost is other than such amount specified in Schedule
2 to the Participation Agreement, as the amount has been theretofore
adjusted pursuant to Section 2.12 of the Participation Agreement;
8
<PAGE>
(ii) the Secured Notes are refinanced or refunded at any time pursuant
to Section 15 of the Participation Agreement;
(iii) Additional Notes are issued by the Lessor (without the investment
of additional equity by the Owner Participant) in connection with a
Supplemental Financing pursuant to Section 14 of the Participation
Agreement;
(iv) Additional Notes are issued by the Lessor, and the Owner
Participant makes an additional equity investment, in connection with a
Supplemental Financing pursuant to Section 14 of the Participation
Agreement (in which case the adjustment of the Basic Rent Percentages
pursuant to this Section 4 shall preserve the Owner Participant's Net
Economic Return except as necessary to reflect the terms and conditions
agreed to by the Owner Participant and the Lessee pursuant to Section 14 of
the Participation Agreement); or
(v) the actual Closing Date is a date other than the date specified as
the Closing Date in the notice of closing delivered by the Lessee pursuant
to Section 2.4 of the Participation Agreement; provided that such event
--------
shall result in adjustments hereunder only to the extent no adjustments
were made with respect to such event under Section 2.12 of the
Participation Agreement.
(b) In connection with any such adjustment to the Basic Rent Percentages
made pursuant to this Section 4.1, appropriate corresponding adjustments shall
be made to the Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages. Subject to the following provisions of this Section 4 and
the provisions of Section 3.5 hereof, the Stipulated Loss Value Percentages and
Termination Value Percentages shall also be appropriately adjusted upon the
occurrence of a Tax Loss for which the Lessee has become obligated to make
payments to the Owner Participant under Section 5 of the Tax Indemnity
Agreement. Any adjustment pursuant hereto shall be made in such manner as to
comply in all respects with Section 3.5 and, to the extent consistent with the
foregoing provisions of this Section 4.1 (including preserving the Owner
Participant's Net Economic Return), minimize (to the greatest extent possible)
the Lessee's Net Present Value Cost.
9
<PAGE>
4.2. Limitations on Adjustments . (a) Any adjustment to the Basic Rent
---------------------------
Percentages, Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages pursuant to this Section 4 shall be computed in a manner so
as to satisfy the requirements of sections 4.02(5) and 4.07(1) and (2) of
Revenue Procedure 75-28, 1975-1 C.B. 752, and the safe harbor for purposes of
Section 467(b)(2) of the Code and the Treasury Regulations thereunder as in
effect at the time of such adjustment for rent within a range of 10% above or
below the average rent (the "90/110 test"); provided, that an adjustment of the
----------- --------
Basic Rent Percentages shall be governed by the foregoing requirements of
section 4.07 of Revenue Procedure 75-28 and the 90/110 test only to the extent
that Basic Rent as of the Closing Date satisfied such requirements unless there
has been a change in tax law.
(b) In making any adjustment pursuant to this Section 4, each of the Non-
tax and Tax Pricing Assumptions set forth in Schedule 2 to the Participation
Agreement and the other assumptions and methods of calculation and constraints
employed in the calculation of the Basic Rent Percentages, Stipulated Loss Value
Percentages, Termination Value Percentages and EBO Percentages as reflected in
Schedule 2 to the Participation Agreement (as such pricing assumptions shall
have been modified as a result of the event giving rise to the adjustment under
Section 4.1 or previous adjustments under this Section 4 or under Section 2.12
of the Participation Agreement) shall be used consistently in such adjustment
subject to the constraints specifically provided herein.
(c) In making any adjustment required pursuant to Section 4.1, no
adjustment shall be made to reflect the application of section 861 or 168(d)(3)
of the Code.
(d) No adjustment shall be made to an EBO Percentage if the adjusted EBO
Percentage will be less than the estimated Fair Market Sales Value of the
Facility Assets at the applicable EBO Date (taking into account inflation), as
determined by the Appraiser in the Final Appraisal.
4.3. Timing of Adjustments. All adjustments to be made pursuant to
---------------------
this Section 4 shall be made as soon as practicable after the event giving rise
to the adjustment (except that the adjustments pursuant to Section 4.1(a)(i) and
(v) shall be made prior to the first Basic Rent Payment Date) and, in the case
of adjustments to Basic Rent Percentages, shall be made in respect of
installments of
10
<PAGE>
Basic Rent becoming due on and after the date such adjustment is made;
provided that all adjustments to the Stipulated Loss Value Percentages,
- --------
Termination Value Percentages and EBO Percentages shall be effective
immediately; provided, however, that no adjustment shall be final, if subject to
-------- -------
verification pursuant to Section 4.4, until such verification is completed.
4.4. Confirmation of Adjustments. (a) The amount of any adjustment
---------------------------
pursuant to this Section 4 shall be determined by the Owner Participant, which
shall provide to the Lessee, the Lessor and the Indenture Trustee notice of such
adjustment accompanied by an Officer's Certificate of the Owner Participant,
which Officer's Certificate shall set forth the amount of and the reason for any
such adjustment, specify in reasonable detail (but without disclosure of
confidential information) the basis of the calculation of such adjustment (which
basis shall be consistent with the provisions of this Section 4) and confirm
that such adjustment was made in accordance with the provisions of this
Section 4. Such adjustment shall become effective as of the date therein set
forth (determined in accordance with Section 4.3 and subject to later revision,
if any, pursuant to Section 4.4(b)) upon delivery by the Owner Participant to
the Lessee of such notice and Officer's Certificate.
(b) Within thirty (30) Business Days after receipt of such Officer's
Certificate, the Lessee may request that such adjustment and confirmation be
verified by a nationally recognized, independent public accounting firm that
regularly audits the financial statements of, or is selected by, the Owner
Participant and reasonably acceptable to the Lessee. In performing such
verification pursuant to the preceding sentence, such accounting firm shall be
given access by the Owner Participant to the assumptions, methods, constraints,
computations, programs and files utilized by the Owner Participant in
calculating such proposed adjustment and employed in the calculation of the
Basic Rent Percentages, Stipulated Loss Value Percentages, Termination Value
Percentages and EBO Percentages, subject to the execution of such
confidentiality agreements as the Owner Participant shall reasonably request
(which agreements shall prohibit disclosure of the Owner Participant's
assumptions, methodology, constraints, programs or files to any third party,
including the Lessee). Under no circumstances shall such independent public
accounting firm or any other Person be entitled to review the tax returns of the
Owner Participant. Any revised adjustment resulting from such verification
shall become effective in the case of Basic
11
<PAGE>
Rent on the next Basic Rent Payment Date or otherwise immediately after such
verification has been concluded, and shall take into account any underpayment or
overpayment resulting from the original proposed adjustment.
(c) Such verification by such accounting firm shall be at the expense of
the Lessee unless the net present value (using the Debt Rate) of Basic Rent, or
the amount of any EBO Purchase Price, Termination Value or Stipulated Loss
Value, as determined by the Owner Participant, exceeds by more than ten (10)
basis points the net present value of Basic Rent, or the amount of such EBO
Purchase Price, Termination Value or Stipulated Loss Value, as determined by
such accounting firm.
4.5. Further Assurances. At the time any adjustment is made pursuant
------------------
to this Section 4, the parties hereto shall, at the Lessee's expense, enter into
an amendment or supplement to this Lease to reflect such adjustment and shall
enter into such amendments and supplements to the other Operative Documents and
do such further acts as may be reasonably required in order to effectuate such
adjustment; provided that such adjustment shall become effective as provided in
--------
Section 4.4 without regard to the date on which such amendment or supplement to
this Lease is executed and delivered .
Section 5. Renewal.
-------
5.1. Renewal. The Lessee shall have the right to renew this Lease:
-------
(a) at the end of the Basic Lease Term for a Fair Market Renewal Term; or
(b) at the end of any Fair Market Renewal Term for an additional Fair
Market Renewal Term;
provided that (i) the term of any Fair Market Renewal Term shall be two years,
- -------- -
except that at the Lessee's election the initial Fair Market Renewal Term may be
four (4) years and (ii) the term of any Fair Market Renewal Term may not extend
--
beyond four (4) years after the end of the Basic Lease Term. It shall be a
condition to the renewal of this Lease for any Renewal Term that no Specified
Lease Event of Default shall have occurred and be continuing at the time of
notice or the commencement of such Renewal Term.
12
<PAGE>
5.2. Rent. All of the terms and provisions of this Lease shall be
----
applicable during any Renewal Term, except that (1) the Lessee shall pay to
-
the Lessor as Basic Rent in arrears on each Basic Rent Payment Date during any
Fair Market Renewal Term, an amount equal to the semi-annual installment of the
Fair Market Rental Value of the Facility Assets (pro rated in the case of a
partial rent period of a Fair Market Renewal Term), as determined in accordance
with Section 5.3 and (2) Stipulated Loss Values and Termination Values during
-
any such Renewal Term shall be calculated as set forth in Section 5.4.
5.3. Notice. At any time at least 365 days prior to (x) the scheduled
------ -
expiration of the Basic Lease Term or (y) the scheduled expiration of any
-
Renewal Term then in effect, as the case may be (but in any case not earlier
than nine (9) months prior to the commencement of the applicable Return
Arrangement Period), the Lessee may notify the Lessor that it desires to obtain
an appraisal with respect to the Fair Market Sales Value of the Facility Assets
as of such expiration and, if applicable or if requested by the Lessee, the Fair
Market Rental Value of the Facility Assets as of such expiration. Promptly
after the Lessee shall have delivered such notice, the Lessee and the Lessor
shall attempt to agree upon such amounts. If the Lessee and the Lessor shall
fail to agree within thirty (30) days after the giving of such notice, such
amounts shall be determined pursuant to the Appraisal Procedure. If the Lessee
elects to renew this Lease for a Renewal Term, the Lessee shall provide the
Lessor at least 270 days prior to (x) the scheduled expiration of the Basic
-
Lease Term or (y) the scheduled expiration of a Renewal Term then in effect, as
-
the case may be (but in any case not earlier than six (6) months prior to the
commencement of the Return Arrangement Period) with an irrevocable written
notice of its intention to renew this Lease but the Lessee need not specify the
Renewal Term (any such notice, a "Renewal Notice"); provided that the Lessee
-------------- --------
shall, by irrevocable written notice delivered to the Lessor at any time prior
to the sixtieth (60th) day preceding the scheduled expiration of the Basic Lease
Term or prior to the thirtieth (30th) day preceding the scheduled expiration of
any Renewal Term then in effect, (i) elect to renew the Lease pursuant to any
-
one of the options provided for in Section 5.1(a) or (b) by specifying such
option or (ii) elect to purchase the Facility pursuant to Section 6.1(a) so long
--
as, in each case, the Lessee would have been entitled hereunder to elect to
exercise such other option on the date of the delivery by the Lessee of the
applicable Renewal Notice and so long as the Lessee shall
13
<PAGE>
have otherwise complied with the requirements of Section 5.3 or 6.2(a), as the
case may be (including, if necessary, the requirement to have obtained the
appropriate appraisals but not including the requirement to have given the
applicable 270 days' prior written notice of the Lessee's election to exercise
such other option), to the extent applicable to the option specified in any
notice delivered by the Lessee pursuant to this proviso. Any notice to renew
this Lease delivered by the Lessee pursuant to the proviso to the preceding
sentence shall specify the term of the applicable Renewal Term.
5.4. Stipulated Loss Values and Termination Values. Concurrently with
---------------------------------------------
the Lessee's exercise of an option to renew this Lease pursuant to Section 5.1,
Schedules 2 and 3 shall be modified in order to provide for Stipulated Loss
Values and Termination Values for the Facility Assets applicable during the
applicable Renewal Term. The amounts which are payable during a Renewal Term as
Stipulated Loss Value and Termination Value for the Facility Assets shall equal
the Fair Market Sales Value of the Facility Assets at the time.
Section 6. Purchase Options.
----------------
6.1. Purchase Options. So long as no Specified Lease Event of Default
----------------
shall have occurred and be continuing, and subject to Sections 6.2 and 6.3,
the Lessee shall have the right to purchase all, but not less than all, of the
Facility:
(a) on the date of expiration of the Basic Lease Term or any Renewal
Term, at a purchase price equal to the lesser of the Fair Market Sales
Value of the Facility Assets as of such date, determined in accordance
with Section 6.2(a), and the Fixed Price Purchase Amount;
(b) [intentionally omitted];
(c) on either EBO Date, at a purchase price equal to the applicable EBO
Purchase Price;
(d) [intentionally omitted]; and
(e) if:
(i) the Lessee shall notify the Lessor that the Lessee or the
Operator intends to make
14
<PAGE>
(or cause or allow to be made) any Modification or series of related
Modifications to the Facility Assets under Section 11.3 and/or 11.4
pursuant to a modification plan of the Lessee or the Operator with an
estimated cumulative cost exceeding $12,000,000 and, at or following
such notice, it is determined that such Modification or series of
related Modifications (w) is prohibited by the terms of this Lease or
-
(x) is prohibited by Revenue Procedure 79-48, 1979-2 C.B. 529 or (y)
- -
notwithstanding a request by the Lessee for financing pursuant to
Section 11.6(b) hereof, is not to be financed pursuant to a
Supplemental Financing,
(ii) the Lessee shall notify the Lessor that the Lessee or the
Operator intends to make (or cause or allow to be made) any Required
Modification or series of related Required Modifications to the
Facility Assets with an estimated cumulative cost exceeding
$12,000,000, and, at or following such notice, it is determined that
such Required Modification or series of related Required Modifications
(w) is prohibited by the terms of this Lease or (x) is prohibited by
- -
Revenue Procedure 79-48, 1979-2 C.B. 529 or (y) notwithstanding a
-
request by the Lessee for financing pursuant to Section 11.6(b)
hereof, is not to be financed pursuant to a Supplemental Financing,
(iii) the Lessee shall notify the Lessor that the Facility Assets
or any portion thereof has suffered damage that the Lessee is
obligated to repair, restore or rebuild under Section 11 and the cost
of such repair, restoration or rebuilding will be equal to or in
excess of $10,000,000 but such damage does not constitute an Event of
Loss, and the Lessee or the Operator has elected not to repair,
restore or rebuild the Facility Assets as required by Section 11, or
(iv) (x) as a result of a Change in Tax Law, there is a material
-
risk that the aggregate amount of Relevant Taxes resulting therefrom
would have a present value as of the Monthly Date specified in the
notice to purchase given as provided in the fifth sentence of Section
6.2(e) (which Monthly Date shall not, without the Owner Participant's
consent, be prior to the second anniversary of the Closing Date),
discounted at
15
<PAGE>
the Debt Rate, in excess of 0.75% of the Termination Value on such
Monthly Date (such 0.75% of the Termination Value on such Monthly
Date, the "Threshold Amount") and (y) in the event (I) of the
- -
termination of the Lease and the purchase of the Facility by the
Lessee on such Monthly Date or (II) the purchase of the Beneficial
--
Interest by the Lessee on such Monthly Date, an amount of such
Relevant Taxes with a present value as of such Monthly Date
(calculated as above) at least equal to the Threshold Amount would
likely be avoided, as confirmed in reasonable detail by an Officer's
Certificate and a legal opinion from independent tax counsel delivered
by the Lessee to the Lessor,
on the Basic Rent Payment Date (or, in the case of Section 6.1(e)(iv), the
Monthly Date) specified in the notice to purchase given as provided in the
fifth sentence of Section 6.2(e) (which notice shall specify the event
giving rise to the Lessee's right to purchase the Facility Assets pursuant
to this Section 6.1(e)), at a purchase price equal to (A) the higher of the
-
applicable Termination Value or the Fair Market Sales Value on the
applicable Basic Rent Payment Date (or, in the case of Section 6.1(e)(iv),
the Monthly Date) in the case of an event described in Section 6.1(e)(i) or
6.1(e)(iii) above or in the case of an event described in Section
6.1(e)(iv) above that results in a purchase after the Second EBO Date (such
Fair Market Sales Value to be determined as provided in Section 6.2(e)) or
(B) the applicable Termination Value on the applicable Basic Rent Payment
-
Date (or, in the case of Section 6.1(e)(iv), the Monthly Date) in the case
of an event described in Section 6.1(e)(ii) above or in the case of an
event described in Section 6.1(e)(iv) above that results in a purchase
before the Second EBO Date.
6.2. Notice of Election; Manner of Purchase; Transfer After Purchase.
--------------------------------------- -----------------------
(a) In order to exercise its right to purchase the Facility pursuant to Section
6.1(a), the Lessee shall notify the Lessor in writing at least 365 days prior to
(x) the scheduled expiration of the Basic Lease Term or (y) the scheduled
- -
expiration of any Renewal Term then in effect, as the case may be (but in any
case not earlier than nine (9) months prior to the applicable Return Arrangement
Period), that it desires to obtain an appraisal of the Fair Market Sales Value
of the Facility Assets as of such expiration (and, if the Lessee elects, an
appraisal as to the matters referred to in the first sentence of Section
16
<PAGE>
5.3). Promptly after the Lessee shall have delivered such notice, the Lessee
and the Lessor shall attempt to agree upon such Fair Market Sales Value (and
such other matters). If the Lessee and the Lessor shall fail to agree within
thirty (30) days after the giving of such notice, such Fair Market Sales Value
(and such other matters) shall be determined pursuant to the Appraisal
Procedure. At least 270 days prior to the (x) scheduled expiration of the Basic
-
Lease Term or (y) the scheduled expiration of the Renewal Term then in effect,
-
as the case may be (but in any case not earlier than six (6) months prior to the
commencement of the Return Arrangement Period), the Lessee shall, if it desires
to exercise an option pursuant to Section 6.1(a), give irrevocable notice to the
Lessor in writing stating that the Lessee will purchase the Facility pursuant to
Section 6.1(a) (any such notice, a "Purchase Notice"); provided that the Lessee
--------------- --------
may, by irrevocable written notice delivered to the Lessor at any time prior to
the 60th day preceding the expiration of the Basic Lease Term or prior to the
thirtieth (30th) day preceding the scheduled expiration of the Renewal Term then
in effect, deem the Lessee's election (pursuant to the applicable Purchase
Notice) to purchase the Facility pursuant to Section 6.1(a) at the end of the
Basic Lease Term or such Renewal Term an election to renew this Lease pursuant
to Section 5.1(a) or (b) so long as, in each case, the Lessee would have been
entitled hereunder to elect to exercise such other option on the date of the
delivery by the Lessee of the applicable Purchase Notice and so long as the
Lessee shall have otherwise complied with the requirements of Section 5.3
(including the requirement to have obtained any necessary appraisals but not
including the requirement to have given at least 270 days' prior written notice
of the Lessee's election to exercise such other option) to the extent applicable
to the renewal option specified in any notice delivered by the Lessee pursuant
to this proviso. Any notice to renew this Lease delivered by the Lessee
pursuant to the proviso to the preceding sentence shall specify the term of the
applicable Renewal Term.
(b) [Intentionally Omitted].
(c) In order to exercise its right to purchase the Facility pursuant to
Section 6.1(c), the Lessee shall, at least sixty (60) days but not more than 540
days prior to the applicable EBO Date, give irrevocable notice to the Lessor in
writing stating that the Lessee will purchase the Facility pursuant to Section
6.1(c).
(d) [Intentionally Omitted].
17
<PAGE>
(e) In order to exercise its right to purchase the Facility pursuant to
Section 6.1(e)(i) or 6.1(e)(iii) or, after the Second EBO Date, Section
6.1(e)(iv), the Lessee shall notify the Lessor in writing that the Lessee
desires to obtain an appraisal of the Fair Market Sales Value of the Facility
Assets as of one or more Basic Rent Payment Dates (or, in the case of a purchase
pursuant to Section 6.1(e)(iv), Monthly Dates) occurring not more than eighteen
(18) months after the date of such notice. Such appraised Fair Market Sales
Value shall be determined without regard to (x) in the case of Section
-
6.1(e)(i), the proposed Modification or Modifications and (y) in the case of
-
Section 6.1(e)(iii), the damage to the Facility Assets referred to therein;
provided that the giving of an appraisal notice pursuant to the preceding
- --------
sentence shall not (i) constitute a notice to purchase under the fifth sentence
-
of this Section 6.2(e) or (ii) require the Lessee to give any notice to
--
purchase. Promptly after the Lessee shall have given such notice of appraisal,
the Lessee and the Lessor shall attempt to agree upon such Fair Market Sales
Value. If the Lessee and the Lessor shall fail to agree within thirty (30) days
after the giving of such notice, such Fair Market Sales Value shall be
determined pursuant to an Appraisal Procedure; provided that the timetable for
--------
such Appraisal Procedure shall be appropriately accelerated to meet the
deadlines set forth in the next sentence. In order to exercise its right to
purchase under Section 6.1(e), the Lessee shall give irrevocable notice to the
Lessor in writing stating that the Lessee intends to purchase the Facility
pursuant to Section 6.1(e) on the Basic Rent Payment Date (or, in the case of
Section 6.1(e)(iv), the Monthly Date) specified in such notice occurring not
less than sixty (60) days and not more than 365 days after the date of such
notice to purchase; provided that any notice to purchase given pursuant to this
--------
Section 6.2(e) (i) may be revoked at any time on or prior to the tenth (10th)
-
Business Day preceding the applicable purchase date if, in the reasonable
judgment of the Lessee, the circumstances giving rise to the Lessee's right to
exercise a purchase option under Section 6.1(e) have changed and (ii) subject to
--
Section 6.2(g), shall be deemed to have been revoked if in the case of such a
notice relating to (1) the exercise of a purchase option relating to a situation
-
contemplated by Section 6.1(e)(i)(w) or 6.1(e)(ii)(w), the Lessor and the
Owner Participant shall have waived, by the fifteenth (15th) day following the
giving of such notice, any default, Lease Default or Lease Event of Default or
any right to any indemnification under any Operative Document that arises or
results from or that may arise or result from
18
<PAGE>
the proposed Modification or Modifications being prohibited by the terms of this
Lease and (2) the exercise of a purchase option relating to a situation
-
contemplated by Section 6.1(e)(i)(x) or 6.1(e)(ii)(x), the Owner Participant
shall have waived, by the fifteenth (15th) day following the giving of such
notice, any right to any indemnification that it may be entitled to under the
Tax Indemnity Agreement arising or resulting from the proposed Modification or
Modifications not being permitted by Revenue Procedure 79-48, 1979-2 C.B. 529.
(f) On the date of purchase of the Facility pursuant to this Section 6,
(A) the Lessor shall transfer all right, title and interest of the Lessor in and
- --
to the Facility, "as is and where is, and with all faults," to the Lessee or as
the Lessee may direct, free and clear of Lessor's Liens and Owner Participant's
Liens but otherwise without any representation or warranty, upon payment to the
Lessor of the purchase price therefor (or, if the Lessee shall have elected to
pay the EBO Purchase Price in accordance with the penultimate sentence of this
Section 6.2(f), upon payment of the first installment of such EBO Purchase
Price), together with (i) all Basic Rent due and owing prior to such date of
-
purchase,(ii) all Supplemental Rent due and owing on or prior to such date of
--
purchase and any other Supplemental Rent as to which there is no dispute and
which is agreed to become due and owing within thirty (30) days of such date and
(iii) if such date of purchase is a Basic Rent Payment Date, all Basic Rent
---
payable in arrears on such Basic Rent Payment Date (but, for the avoidance of
doubt, not Basic Rent payable in advance in such Basic Rent Payment Date), (B)
-
the Lessor shall, at the Lessee's expense, execute and deliver to the Lessee or
its designee a deed, bill of sale and assignment, and such other instruments,
documents and opinions as the Lessee may reasonably request to evidence the
valid consummation of such transfer and shall, at the Lessee's expense, take
such actions under Section 6.03 of the Indenture as the Lessee may reasonably
request and (C) pursuant to an instrument reasonably satisfactory to the Ground
-
Lessor, the Lessor and the Lessee, the Lessee shall assume all the obligations
of the Lessor as "ground lessee" under the Ground Lease accruing after such date
of purchase and the Lessor thenceforth shall be released from such obligations.
Notwithstanding anything to the contrary contained herein, so long as no
Specified Lease Event of Default exists, the Lessee may, in connection with the
exercise by the Lessee of its purchase option under Section 6.1(c), elect to pay
the EBO Purchase Price in installments; provided that if (x) the
-------- -
19
<PAGE>
Lessee shall have so elected to pay the EBO Purchase Price in installments and
(y) none of the unsecured debt obligations of the Guarantor shall be rated by
- --
either Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service,
Inc. ("Moody's") within any of such organization's four (4) highest rating
categories (AAA, AA, A and BBB and gradations thereof, in the case of S&P, or
Aaa, Aa, A and Baa and gradations thereof in the case of Moody's, or any
successor categories implemented by either such organization) (or, if neither
such organization shall rate such obligations at such time, by any nationally
recognized rating organization in the United States of America), the Lessee
shall provide or cause to be provided such security for the remaining
installments of the EBO Purchase Price as shall be reasonably acceptable to
the Owner Participant (it being understood that a continuing lien on the
Facility Assets shall meet the requirement of this proviso). Each installment
shall be in the amount, and payable on the date, set forth in Schedule 4.
(g) Notwithstanding anything to the contrary contained in clause (ii) of
the proviso to the last sentence of Section 6.2(e), neither the Lessor nor the
Owner Participant shall have the right to give the waiver referred to in such
clause (and any waiver given thereunder shall be deemed to have been rescinded)
if the Lessee notifies the Lessor, not later than ten (10) Business Days after
the receipt of a notice of such waiver, that independent tax counsel selected by
the Lessee has advised the Lessee that the continuation of this Lease following
such waiver will result in a material risk that this Lease will not continue to
qualify as a true lease for Federal income tax purposes.
6.3. Assumption of Secured Notes. Notwithstanding the provisions of
---------------------------
Sections 6.1 and 6.2 and subject to compliance with Section 3.04 of the
Indenture, if, in connection with a purchase by the Lessee of the Facility
Assets pursuant to Section 6.1(c) or 6.1(e), as the case may be, the Lessee
assumes the Secured Notes pursuant to Section 11.6 of the Participation
Agreement, the obligation of the Lessee to pay the purchase price pursuant to
Section 6.1(c) or 6.1(e), as the case may be, shall be satisfied by such
assumption of the Secured Notes to the extent of the principal amount of and
accrued but unpaid interest, if any, on the Secured Notes so assumed and payment
of the remaining portion of the applicable purchase price in cash.
20
<PAGE>
Section 7. Early Termination.
-----------------
7.1. Early Termination Decision. If (i) the Lessee shall have
-------------------------- -
determined in good faith that the Facility Assets are obsolete, uneconomic or
surplus to the needs of the Lessee or the Guarantor for any reason (including,
without limitation, because of the imposition of burdensome Governmental Rules
or because the production of paraxylene or benzene by the Facility Assets, as
intended by the Lessee on the Closing Date (including in terms of grade and
commercial volume), using the MTPX Technology or any part thereof, as intended
by the Lessee to be used with the Facility Assets on the Closing Date, is not
reasonably feasible as a result of technological problems) or (ii) (A) the
-- -
Refinery or any portion thereof becomes the subject of a sale, assignment or
other transfer agreement to a third party over which the Guarantor, directly or
through a Subsidiary, does not exercise majority "control", as defined in the
definition of "Affiliate" in Appendix A, and (B) the inclusion of the Site or
-
the Facility or any portion thereof in such transfer is determined by the Lessee
or the Guarantor to be an operational or economic prerequisite to the conclusion
of the transactions contemplated by such transfer agreement, then, in each case,
the Lessee may elect to terminate this Lease in accordance with this Section 7.
7.2. Notice of Termination. (a) In order to exercise its right to
---------------------
terminate this Lease pursuant to Section 7.1, as the case may be, the Lessee
shall provide the Lessor with notice in writing at least 120 days but not more
than 545 days prior to the Basic Rent Payment Date as of which the Lessee is
electing to terminate this Lease (the "Termination Date"), which such notice
----------------
shall (a) specify whether the Lessee is electing to terminate this Lease
-
pursuant to clause (i) of Section 7.1 (an election pursuant to such clause (i)
being referred to herein as an "Obsolescence Termination Election" and a
---------------------------------
termination pursuant thereto being referred to as an "Obsolescence
------------
Termination") or clause (ii) of Section 7.1 (an election pursuant to such clause
- -----------
(ii) of Section 7.1 being referred to herein as a "Special Termination
-------------------
Election" and a termination pursuant thereto being referred to as a "Special
- -------- -------
Termination") (a Special Termination Election or an Obsolescence Termination
- -----------
Election being referred to herein as a "Termination Election"); (b) specify the
-------------------- -
Termination Date; (c) specify the Termination Value as of the Termination Date
-
and (d) in the case of an Obsolescence Termination, specify whether or not the
-
Lessee is electing to purchase the Facility on the Termination Date pursuant to
Section 7.3(a)(i).
21
<PAGE>
(b) The Lessee may, at its option, by written notice to the Lessor at any
time prior to the date that is twenty-five (25) days prior to the scheduled
Termination Date, revoke any Termination Election, in which event this Lease
shall not terminate and the reasonable out-of-pocket expenses incurred by the
Lessor, the Owner Participant and the Indenture Trustee in connection with such
Termination Election shall be borne by the Lessee; provided that the Lessee may
--------
not exercise its right to revoke a Termination Election more than two times;
provided, however, that if such notice of revocation is given (or deemed to have
- -------- -------
been given pursuant to the penultimate sentence of Section 7.4) as a result of
the Lessor's failure to make the payments required to be made by it under
Section 7.4, the Lessee shall have no obligation to so reimburse the Lessor or
the Owner Participant nor shall the revocation be deemed to be a revocation of a
Termination Election for purposes of the penultimate proviso to this sentence.
7.3. Right of Lessee to Purchase; Sale of Facility; Termination
----------------------------------------------------------
Payment. (a) (i) In the case of an Obsolescence Termination Election, the
Lessee shall have the right to purchase the Facility on the Termination Date for
a purchase price (the "Termination Purchase Price") equal to the higher of the
--------------------------
Termination Value as of the Termination Date and the Fair Market Sales Value of
the Facility as of the Termination Date, if, together with such Obsolescence
Termination Election, an officer of the Lessee shall have delivered an Officer's
Certificate stating that (1) the premises of the Site or the Facility or any
-
portion thereof, as the case may be, are required in connection with another
business of the Guarantor and (2) no Subsidiary or Affiliate of the Guarantor
-
intends to operate the Facility Assets as a paraxylene and benzene production
facility whether in its current configuration or after modification. In the
case of a Special Termination, the Lessee shall purchase the Facility on the
Termination Date at the Termination Purchase Price. Promptly after the Lessee
shall have delivered a Termination Election pursuant to Section 7.2(a), for an
Obsolescence Termination pursuant to which the Lessee is electing to purchase
the Facility or for a Special Termination, the Lessee and the Lessor shall
attempt to agree upon the Fair Market Sales Value of the Facility Assets. If
the Lessee and the Lessor shall fail to agree within twenty (20) days after the
giving of such Termination Election, such Fair Market Sales Value shall be
determined pursuant to the Appraisal Procedure (provided that the timetable for
--------
such Appraisal Procedure shall be accelerated appropriately). In the event of
any such purchase by the
22
<PAGE>
Lessee, on the Termination Date, the Lessor shall transfer to the Lessee or as
the Lessee may direct all right, title and interest of the Lessor in and to the
Facility "as is and where is, and with all faults," free and clear of Lessor's
Liens and Owner Participant's Liens but otherwise without representation or
warranty, upon payment to the Lessor of the Termination Purchase Price, together
with (i) all Basic Rent due and owing on or prior to the Termination Date (but
-
excluding any Basic Rent payable in advance on the Termination Date) and (ii)
--
all Supplemental Rent due and owing on or prior to the Termination Date and any
other Supplemental Rent as to which there is no dispute and which is agreed to
become due and owing within thirty (30) days of the Termination Date. On the
Termination Date, (A) the Lessor shall, at the Lessee's expense, execute and
-
deliver to the Lessee or as the Lessee may direct a deed, bill of sale or
assignment and such other instruments, documents and opinions as the Lessee may
reasonably request to evidence the valid consummation of such transfer and
shall, at the Lessee's expense, take such actions under Section 6.03 of the
Indenture as the Lessee may reasonably request and (B) pursuant to an instrument
-
reasonably satisfactory to the Ground Lessor, the Lessor and the Lessee, the
Lessee shall assume all the obligations of the Lessor as "ground lessee" under
the Ground Lease accruing after such date of purchase and the Lessor thenceforth
shall be released from such obligations. This Lease and the obligations of the
Lessee hereunder shall, on the Termination Date upon the payments set forth in
the second preceding sentence, terminate, other than those provisions which by
their terms survive the termination or expiration of this Lease.
(ii) If the Lessee shall have made an Obsolescence Termination Election
and shall not have exercised its rights to purchase the Facility as contemplated
by clause (i) of this Section 7.3(a), subject to Section 7.4, the Lessee shall,
as agent for the Lessor, use commercially reasonable efforts to solicit bids
from third parties unaffiliated with the Lessee, the Lessor and the Owner
Participant for the cash purchase of the Facility on the Termination Date. The
Lessor may also solicit such bids for the cash purchase of the Facility on the
Termination Date independent of the Lessee. The Lessee and the Lessor, as the
case may be, shall certify to the other in writing the amount and terms of each
bid received by it and the name and address of the Person submitting such bid.
Subject to Section 7.4, in the event that the Lessee or the Lessor shall have
obtained any such bids from any Person other than the Lessee, the Lessor, the
Owner Participant or an Affiliate of
23
<PAGE>
any thereof, the Lessor shall sell the Facility on the Termination Date, to
the Person that shall have submitted the highest bona fide cash bid. Upon
---- ----
payment to the Lessor of the applicable purchase price in immediately available
funds (and all other amounts due pursuant to the second succeeding sentence) on
the Termination Date, the Lessor shall sell to the highest bona fide bidder all
---- ----
right, title and interest of the Lessor in and to the Facility "as is and where
is, and with all faults," free and clear of Lessor's Liens and Owner
Participant's Liens but otherwise without representation or warranty. This
Lease and the obligations of the Lessee hereunder shall terminate concurrently
with such sale and such payment, other than those provisions which by their
terms survive the termination or expiration of this Lease. As a condition to
the sale of the Facility pursuant to the second preceding sentence, the Lessee
shall pay on the Termination Date to the Lessor, in immediately available funds,
(i) an amount equal to the excess, if any, of (A) the Termination Value as of
- -
the Termination Date over (B) the proceeds of such sale net of sales and other
-
transfer taxes and of reasonable out-of-pocket expenses incurred by the Lessor
and the Owner Participant in connection with such sale (other than the fees of
any broker or finder appointed by the Lessor or the Owner Participant (except a
contingent fee payable only upon successful completion of the sale arranged by
such broker or finder)); (ii) all Basic Rent due and owing on or prior to the
--
Termination Date (but excluding any Basic Rent payable in advance on the
Termination Date) and (iii) all Supplemental Rent due and owing on or prior to
---
the Termination Date and any other Supplemental Rent as to which there is no
dispute and which is agreed to become due and owing within thirty (30) days of
the Termination Date. On the Termination Date, (A) the Lessor shall, at the
-
Lessee's expense, execute and deliver to the proposed purchaser a deed, bill of
sale and assignment and such other instruments, documents and opinions as such
Person or the Lessee may reasonably request to evidence the valid consummation
of such transfer and shall, at the Lessee's expense, take such actions under
Section 6.03 of the Indenture as the Lessee may reasonably request and (B)
-
pursuant to an instrument reasonably satisfactory to the Ground Lessor, the
Lessor and the third party purchaser, the third party purchaser shall assume all
the obligations of the Lessor as "ground lessee" under the Ground Lease accruing
after such date of purchase and the Lessor thenceforth shall be released from
such obligations. The Lessee shall not enter into any transaction with the
purchaser of the Facility under this Section 7.3(a)(ii) whereby the Lessee or
any Affiliate of the Lessee obtains
24
<PAGE>
the use of the Facility thereafter (and this provision shall survive the
termination of this Lease).
(b) In the event that (i) the Lessee shall have exercised (or shall be
-
deemed to have exercised pursuant to the penultimate sentence of Section 7.4) a
right to revoke a notice of termination pursuant to Section 7.2, (ii) the Lessee
--
shall not have purchased the Facility pursuant to Section 7.3(a)(i) or (iii) the
---
highest bona fide final bidder under Section 7.3(a)(ii) shall have failed to
---- ----
purchase the Facility pursuant to Section 7.3(a)(ii), then, unless the Lessor
shall have retained the Facility pursuant to Section 7.4, this Lease shall
remain in full force and effect with respect thereto; provided that the Lessee's
--------
rights hereunder to effect a termination as of a later date shall not be
prejudiced or affected.
7.4. Retention of Facility by Lessor upon an Obsolescence Termination.
----------------------------------------------------------------
If the Lessee shall have made an Obsolescence Termination Election with respect
to the Facility and the Lessee shall have not exercised its right to purchase
the Facility pursuant to Section 7.3(a)(i) and the Lessee has not exercised or
been deemed to have exercised its right of revocation pursuant to Section 7.2 or
this Section 7.4, the Lessor may elect to retain, rather than sell pursuant to
Section 7.3(a)(ii), the Facility by giving irrevocable notice to the Lessee and
the Indenture Trustee no earlier than forty-five (45) nor later than thirty (30)
days prior to the Termination Date. If the Lessor so elects to retain the
Facility and if the Lessee shall not have revoked its Termination Election
pursuant to Section 7.2, on the Termination Date (a) the Lessor shall pay to the
-
Indenture Trustee an amount equal to the unpaid principal amount of, and accrued
and unpaid interest on, the Secured Notes then Outstanding to the date of
payment and (b) the Lessee shall pay to the Lessor or the Person entitled
-
thereto as provided in the Operative Documents (i) all Basic Rent due and owing
-
on or prior to the Termination Date (but excluding any Basic Rent payable in
advance on the Termination Date) and (ii) all Supplemental Rent (including,
--
without limitation, any Premium) due and owing on or prior to the Termination
Date and any other Supplemental Rent as to which there is no dispute and which
is agreed to become due and owing within thirty (30) days of the Termination
Date but the Lessee shall not be required to pay any amounts pursuant to Section
7.3. Upon payment of the amounts due pursuant to clause (b) of the preceding
sentence, this Lease and the obligations of the Lessee hereunder shall terminate
(except for provisions which by their terms survive the
25
<PAGE>
termination of the Lease) and the Lessor shall, at the Lessee's expense, execute
and deliver to the Lessee on the Termination Date such instruments as the Lessee
shall reasonably request to evidence such termination of this Lease; provided
--------
that the Lessee shall only be required to pay the reasonable costs and expenses
incurred by the Lessor and the other parties to the Operative Documents in
connection with the execution and delivery of the documents terminating this
Lease (it being agreed that the Lessee shall not be liable for any other amounts
in connection with such retention and termination). In the event the Lessor
fails to pay the amounts specified in clause (a) of the second sentence of this
Section 7.4 or the Lessee fails to pay the amounts specified in clause (b) of
such sentence, the Lessee shall be deemed to have revoked its Obsolescence
Termination Election pursuant to Section 7.2. If the Lessor shall fail to
perform any of its obligations pursuant to this Section 7.4 and, as a result
thereof, this Lease shall not be terminated with respect to the Facility on a
proposed Termination Date, the Lessor shall thereafter no longer be entitled to
exercise its election to retain the Facility upon any subsequent Obsolescence
Termination Election pursuant to this Section 7, and the Lessee may at its
option, at any time thereafter, submit a new Obsolescence Termination Election
pursuant to Section 7.2(a).
Section 8. Relinquishment of Possession and Use of Facility Assets.
-------------------------------------------------------
Unless the Facility Assets shall have been transferred to the Lessee or its
designee pursuant to this Lease, the Lessee, at its own expense, shall
relinquish possession and use of the Facility Assets to the Lessor upon the
expiration or termination of the Lease Term by surrendering the same to the
Lessor at the Site. Upon the return of the Facility Assets pursuant to this
Section 8, the Facility Assets shall be (i) in compliance in all material
-
respects with Section 11 and (ii) in a condition suitable for the production of
--
paraxylene using the MTPX Technology or any successor, replacement or improved
technology for the production of paraxylene developed by any Affiliate of the
Guarantor and necessary for the operation of the Facility Assets following any
Modification described in Section 11.5(b) or, if the Lessee so elects in its
sole discretion, using any improved disproportionation technology similar to the
MTPX Technology or to such successor, replacement or improved technology,
developed after the Closing Date, for the production of paraxylene with the
Facility Assets; provided that, if and to the extent the Lessee shall have
--------
elected not to repair, replace or rebuild any Component or Components (or
Replacement Component or Replacement
26
<PAGE>
Components) suffering damage pursuant to the last sentence of Section 11.7(b)
and the failure to do so shall have adversely affected in any material respect
the value, utility or remaining useful life of the Facility Assets, in addition
to the foregoing, on or before such return, the Lessee shall repair, replace or
rebuild (or cause to be repaired, replaced or rebuilt) such Component or
Components (or Replacement Component or Replacement Components) such that the
value, utility and remaining useful life of the Facility Assets as of such
return shall be at least equal to the value, utility and remaining useful life
the Facility Assets would have had if such Component or Components (or
Replacement Component or Replacement Components) had been repaired, replaced or
rebuilt upon such damage; provided, further, that, without limiting the
-------- -------
obligations of the Lessee under Section 10.9 of the Participation Agreement,
nothing contained herein shall be deemed to require the leasing, licensing or
other provision of the MTPX Technology or such other disproportionation
technology by the Lessee or any Affiliate thereof. In addition, upon the return
of the Facility Assets, the Facility Assets shall be free and clear of all Liens
other than the Liens described in clauses (a) (other than those of the Lessee)
and (b) of the definition of Permitted Liens, and other than such other
Permitted Liens as to which the Lessee has provided security or indemnities
satisfactory to the Owner Participant. At such time, the Lessee shall cause the
assignment, or otherwise arrange for the Lessor to receive the benefit, of any
material exemption referred to in clause (ii) to the proviso to the first
sentence of Section 11.1. The obligations of the Lessee under this Section 8
shall survive the termination of this Lease.
Prior to the return of the Facility Assets pursuant to this Section 8, the
Lessee shall, at its expense, cause to be conducted an environmental audit of
the Facility by an independent environmental engineering firm selected by the
Lessee and reasonably acceptable to the Lessor, and, with respect to
Environmental Claims arising out of existing circumstances or conditions
identified in such environmental audit, the Lessee shall provide an indemnity to
the Owner Participant and the Owner Trustee, in form, scope and substance
reasonably satisfactory to the Owner Participant, covering such Environmental
Claims.
27
<PAGE>
Section 9. Quiet Enjoyment; Disclaimer of Warranties.
------------------------------------------
9.1. Quiet Enjoyment. The Lessor warrants and covenants that, unless a
---------------
Lease Event of Default shall have occurred and be continuing and this Lease
shall have been declared to be in default pursuant to Section 16.1, the Lessee
shall be entitled to the quiet use and enjoyment of the benefits of the Facility
including the right to uninterrupted possession, use and operation of the
Facility, and the Lessor shall not take or permit any Person claiming by,
through or under it to take any action inconsistent with the Lessee's rights
hereunder or under any of the other Operative Documents or otherwise, through
its own actions or inactions, interfere or permit any such Person to interfere
with such quiet use or enjoyment or such possession, use or operation or the
rights of any permitted sublessee or assignee to such quiet use or enjoyment or
such possession, use or operation under any sublease or assignment permitted
hereunder (including, without limitation, the rights of the Operator under the
Initial Sublease) (it being agreed that, without limiting the liability of the
Loan Participant or the Indenture Trustee for any action taken by it in
violation of the covenant contained in this sentence, the Owner Trustee shall
have no liability for any such action taken by the Loan Participant or the
Indenture Trustee unless such action was taken with the consent or at the
direction of the Owner Trustee).
9.2. Disclaimer of Warranties. Neither the Lessor, in its individual
------------------------
capacity or as Owner Trustee, nor the Owner Participant makes any
representations or warranties whether written, oral or implied, with respect
to the Facility or any part thereof, except as expressly set forth herein, in
Section 6 or 8 of the Participation Agreement, in any other Operative Document
or in any Officer's Certificate of the Trust Company, the Owner Trustee or the
Owner Participant, in each case delivered pursuant to the Participation
Agreement. As between the Lessor and the Lessee, execution by the Lessee of
this Lease shall be conclusive proof of the Lessee's acceptance of the Facility
for all purposes hereof and of the commencement of this Lease with respect
thereto and that the Facility is satisfactory to the Lessee in all respects.
THE LESSEE ACKNOWLEDGES THAT NEITHER THE LESSOR, IN ITS INDIVIDUAL CAPACITY OR
AS OWNER TRUSTEE, NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR DEALER IN
PROPERTY OF THE KIND OF THE FACILITY OR THE COMPONENTS THEREOF AND THE LESSOR
LEASES AND THE LESSEE TAKES THE FACILITY AND EACH PART THEREOF "AS IS
28
<PAGE>
AND WHERE IS, AND WITH ALL FAULTS," AND NEITHER THE LESSOR IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE NOR THE OWNER PARTICIPANT SHALL BE DEEMED TO HAVE
MADE, AND THE LESSOR IN ITS INDIVIDUAL CAPACITY AND AS OWNER TRUSTEE HEREBY
DISCLAIMS, ANY REPRESENTATION OR WARRANTY OTHER THAN THOSE REFERRED TO IN THE
SECOND PRECEDING SENTENCE, EITHER EXPRESS OR IMPLIED, AS TO THE FACILITY,
INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE FACILITY OR ANY
PART THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY
PARTICULAR PURPOSE, THE ABILITY OF THE FACILITY TO PERFORM ANY FUNCTION, TITLE
TO THE FACILITY OR ANY PART THEREOF, THE QUALITY OF THE MATERIALS OR WORKMANSHIP
THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS OR THE PRESENCE OR ABSENCE OF
ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. THE LESSEE CONFIRMS
THAT IT HAS SELECTED THE FACILITY AND EACH PART THEREOF ON THE BASIS OF ITS OWN
JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE IN CONNECTION WITH SUCH SELECTION UPON
ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY THE LESSOR OR THE OWNER
PARTICIPANT AND THAT THE LESSOR HAS PURCHASED THE FACILITY ASSETS FROM AN
AFFILIATE OF THE LESSEE. Nothing contained in this Section 9.2 shall be
construed as a waiver of any warranty or other claim against any manufacturer,
supplier, dealer, vendor, contractor, subcontractor or installer. The
disclaimer of representations and warranties in this Section 9.2 shall survive
the expiration or other termination of this Lease.
9.3. Enforcement of Warranties. The Lessor hereby appoints and
-------------------------
constitutes the Lessee its agent and attorney-in-fact during the Lease Term to
assert and enforce, from time to time, in its sole discretion, in the name and
for the account of the Lessee, but in all cases at no cost or expense to the
Lessor, whatever claims and rights the Lessor may have as the owner of the
Facility or otherwise against any manufacturer, supplier, dealer, vendor,
contractor, subcontractor or installer of any Component or Replacement
Component of the Facility, and any amount recovered with respect to any such
claim or right shall be paid to or retained by the Lessee; provided, however,
-------- -------
that if this Lease shall have been declared in default pursuant to Section 16.1,
such power of attorney shall, at the option of the Lessor, terminate and the
Lessor may assert, at the Lessee's expense, such claims and rights. The Lessor
shall, at the Lessee's expense, cooperate with the Lessee in connection with the
assertion of any such claim or right by the Lessee hereunder.
29
<PAGE>
Section 10. Liens. The Lessee will not, directly or indirectly, create,
-----
incur, assume or suffer to exist any Liens on or with respect to all or any part
of the Facility Assets, title thereto or any interest therein, other than
Permitted Liens, and the Lessee promptly, at its own expense, will take such
actions as may be necessary duly to discharge any such Lien not excepted above.
Section 11. Operation and Maintenance; Inspection; Replacements and
-------------------------------------------------------
Modifications; Operator.
-----------------------
11.1. Operation and Maintenance. So long as this Lease is in effect,
-------------------------
the Lessee will, at its own expense, operate and maintain (or cause the Operator
thereof to operate and maintain) the Facility Assets in accordance with the
established maintenance, rebuild and repair programs of the Guarantor and its
Subsidiaries (and without discriminating against the Facility Assets based on
the leased status of the Facility Assets) (including, without limitation, any
discrimination with respect to the installation of Required Modifications that
may be phased in over a period of time that commences prior to and extends
beyond the end of the Lease Term)) so as to keep the Facility Assets in (a) good
-
working order and condition and good physical condition, ordinary wear and tear
excepted, and in compliance with any applicable requirements of the insurance
required to be maintained under Section 13 hereof and (b) compliance in all
-
material respects with all applicable Governmental Rules and Governmental
Actions; provided, however, that the Lessee shall not be obligated to comply
-------- -------
with any Governmental Rule or Governmental Action (i) whose application or
-
validity is being contested diligently and in good faith by appropriate
proceedings; (ii) compliance with which shall have been excused or exempted by a
--
nonconforming use permit, waiver, extension or forbearance exempting it from
such Governmental Rule or Governmental Action but only to the extent that the
Lessee's noncompliance is in accordance therewith; (iii) if good faith efforts
---
and appropriate steps are being taken to comply or (iv) if failure of compliance
--
(individually and in the aggregate with all other instances of continuing
noncompliance by the Lessee) would result in no material adverse consequences to
the Lessee, the Lessor, any Participant or the Facility so long as, in the case
of each of clauses (i) through (iv) of this proviso, neither such failure of
compliance nor such contest shall result in (1) any material risk of the sale,
-
forfeiture or loss of any material part of or interest in the Facility, title
thereto or the Indenture Estate; (2) any interference with the
-
30
<PAGE>
payment of Basic Rent when due or (3) the imposition of any criminal liability
-
on the part of, or any other material adverse effect on, the Lessor, the Owner
Participant or the Indenture Trustee. The Lessor shall have no obligation to
maintain, alter, repair, rebuild or replace the Facility or any part thereof,
and the Lessee expressly waives (to the extent legally permitted to do so) the
right to perform any such action at the expense of the Lessor pursuant to any
law at any time in effect.
Subject to the terms hereof, the Lessee will permit the Facility Assets to
be used or operated only for the purposes for which such Facility Assets were
designed, by qualified personnel, in accordance with good business practice.
The Lessee shall maintain, or cause to be maintained, books and records relating
to operation and maintenance of the Facility Assets and the acquisition and
installation of Modifications and the purchase price thereof, all in accordance
with the standards applied by any of the Lessee, the Guarantor or the
Guarantor's Affiliates with respect to similar equipment owned or leased by any
such Person.
11.2. Inspection and Reports. The Lessor, the Owner Participant and the
----------------------
Indenture Trustee shall have the right (at each such party's risk and expense
(including, without limitation, as to personal injury and death (other than as a
result of the gross negligence or willful misconduct of the Lessee or its
employees)) to inspect the Facility and the books and records of the Lessee
relating thereto to the extent provided in, and subject to the restrictions set
forth in, Sections 10.7 and 11.5 of the Participation Agreement. The Lessee
shall cause to be prepared and filed in timely fashion, or, in the event the
Lessor shall be required to file, the Lessee shall prepare and deliver (or cause
to be prepared and delivered) to the Lessor within a reasonable time prior to
the date for filing, any reports with respect to the condition or operation of
the Facility Assets that shall be required to be filed by any Governmental Rule
or Governmental Action.
11.3. Required Modifications. During the Lease Term, the Lessee shall
----------------------
make (or cause to be made) all Severable and Nonseverable Modifications to the
Facility Assets as may be required from time to time to meet the requirements
of clause (b) of Section 11.1 or to maintain any insurance coverage required by
Section 13.1 (subject to the qualifications set forth in such Section) (all such
Modifications, "Required Modifications") unless the Lessee shall
----------------------
31
<PAGE>
have elected to purchase the Facility Assets pursuant to Section 6.1 or to
terminate this Lease pursuant to Section 7.2. The Lessee shall complete (or
cause to be completed) all such Required Modifications in a good and workmanlike
manner, with reasonable dispatch and (but only to the extent practicable) in a
manner which does not decrease the Fair Market Sales Value of the Facility
Assets or the remaining useful life or utility of the Facility Assets or cause
the Facility Assets to become "limited use property" within the meaning of
Revenue Procedure 76-30.
11.4. Optional Modifications. The Lessee may, at no expense to the
----------------------
Lessor, make (or cause or allow to be made) such other Severable and
Nonseverable Modifications to the Facility Assets not required by Section 11.3
as the Lessee (or the Operator) in its sole discretion deems desirable in the
proper conduct of its business; provided that such Modifications are done in a
--------
good and workmanlike manner, and do not decrease the Fair Market Sales Value
(except to a de minimis extent) of the Facility Assets or decrease the remaining
-- -------
useful life or utility thereof, assuming that the Facility Assets are then in
the condition required by this Lease, or cause the Facility Assets to become
"limited use property" within the meaning of Revenue Procedure 76-30.
11.5. Title to Modifications and Components; Purchase Option for
----------------------------------------------------------
Severable Modifications. (a) (i) Subject to Section 11.5(b), title to all
- -----------------------
Severable Modifications to the Facility Assets not required by any Governmental
Rule or Governmental Action shall vest in the Lessee or any Person designated by
the Lessee. The Lessee may remove (or allow to be removed) any such Severable
Modification prior to or upon the expiration of the Lease Term.
(ii) Subject to Section 11.5(b), at the time the Facility Assets are
returned to the Lessor, the Lessor may purchase at its option for fair market
value (determined on a stand-alone basis) any Severable Modifications other than
Severable Modifications that contain, relate to or otherwise embody any
technology or know-how that is not at the time being marketed by the Lessee (or
any of its Affiliates) on a generally commercially available basis to Persons
not Affiliated with the Lessee (or any of its Affiliates). The Lessor may
exercise its option to purchase such Severable Modifications by giving written
notice to such effect delivered to the Lessee not later than ninety (90) days
prior to the Support Effective Date (as defined in Section
32
<PAGE>
10.9 of the Participation Agreement) during the applicable Return Arrangement
Period. The Lessor and the Lessee shall attempt to agree upon the Fair Market
Sales Value of such Severable Modifications as of the expiration of the Basic
Lease Term or Renewal Term, as the case may be. If the Lessor and the Lessee
shall fail to agree within fifteen (15) days after such written notice, such
Fair Market Sales Value of any such Severable Modifications shall be determined
by the Appraisal Procedure. If the Lessor shall have exercised its option to
purchase any such Severable Modification pursuant to this Section 11.5(a)(ii),
the Lessee, if requested by the Lessor, shall furnish to the Lessor a bill of
sale or assignment in form and substance reasonably satisfactory to the Lessor,
conveying the right, title and interest of the Lessee in and to such Severable
Modification.
(b) Title to (i) all Replacement Components of the Facility Assets, (ii)
- --
Severable Modifications to the Facility Assets required by any Governmental
Rule or Governmental Action, (iii) Nonseverable Modifications to the Facility
---
Assets and (iv) any Severable Modifications not referred to in clause (ii) above
--
that are financed by the Lessor pursuant to Section 11.6(b) hereof and Section
14 of the Participation Agreement shall vest in the Lessor free and clear of all
Liens except Permitted Liens.
11.6. Payment for Modifications and Replacement Components. (a) The
----------------------------------------------------
Lessee shall be permitted at any time to finance the cost of any Severable
Modification to the Facility Assets not required by any Governmental Rule or
Governmental Action, directly or indirectly, including, without limitation, on a
third party ownership basis.
(b) The Lessee shall have the right to seek financing from the Lessor as
provided in Section 14 of the Participation Agreement for the cost of any
Modification, whether or not any such Modification is required by any
Governmental Rule or Governmental Action to be made to the Facility Assets. If
the Lessee intends to seek financing for any such Modification, the Lessee shall
first provide the Lessor and the Owner Participant with written notice of such
Modification at least forty-five (45) days prior to the date of such proposed
financing. If mutually acceptable terms for any such financing shall not have
been agreed to between the Owner Participant and the Lessee within forty-five
(45) days after the receipt by the Owner Participant of the notice from the
Lessee referred to in the second sentence of this Section 11.6(b), the cost of
such Modification
33
<PAGE>
may, at the Lessee's option, be financed by the Lessor as provided in the third
sentence of Section 14 of the Participation Agreement and subject to the
conditions set forth therein.
11.7. Replacement of Components; Removal of Property. (a) In the
----------------------------------------------
ordinary course of maintenance, service, repair or testing, any Component or
Replacement Component may be removed and replaced with a Replacement Component.
Any such Replacement Component shall be free and clear of all Liens, except
Permitted Liens, and in as good operating condition as, and with a value,
utility and useful life at least equal to, the Component or Replacement
Component replaced, assuming such replaced Component or Replacement Component
was in at least the condition and repair required to be maintained hereunder.
Immediately upon any Replacement Component becoming incorporated in the
Facility Assets, without further act, (i) title to such Replacement Component
-
thereupon shall vest in the Lessor and be subject to the Lien of the Indenture,
(ii) such Replacement Component shall become subject to this Lease and be deemed
--
a part of the Facility Assets for all purposes hereof to the same extent as the
Component or Replacement Component it replaced and (iii) title to such removed
---
Component or Replacement Component shall vest in the Lessee or such Person as
shall be designated by the Lessee, free and clear of all rights of the Lessor,
the Indenture Trustee and any Person claiming through the Lessor or the
Indenture Trustee and all Lessor's Liens and Owner Participant's Liens, and
shall no longer be deemed a Component or a Replacement Component hereunder.
(b) If, at any time during the Lease Term, the Lessee (or the Operator)
shall conclude that any property included in the Facility Assets is obsolete,
redundant or unnecessary and can be removed without diminishment of the value or
utility of the Facility Assets or reduction of the remaining useful life of the
Facility Assets and without causing the Facility Assets to become "limited use
property" within the meaning of Revenue Procedure 76-30, the Lessee may remove
(or allow to be removed) such property and upon such removal, without further
act, title to such property shall vest in the Lessee or in such Person as shall
be designated by the Lessee, free of the Lien of the Indenture. In addition,
notwithstanding anything contained in this Lease to the contrary but subject to
Section 8 hereof, if an event occurs with respect to any Component or Components
(or any Replacement Component or Replacement Components) which would constitute
an Event of Loss if such event occurred with respect to the Facility Assets or a
Significant Portion
34
<PAGE>
thereof, the Lessee shall have no obligation to pay any Stipulated Loss Value in
respect of, or to otherwise replace, repair or rebuild, such Component or
Components (or any Replacement Component or Replacement Components), so long as
the absence or condition of such Component or Components (or any Replacement
Component or Replacement Components) is not material to the overall operation
of the Facility Assets.
11.8. Operator. The Lessor acknowledges that the Facility Assets will
--------
be operated initially by the Operator under the Initial Sublease. The Lessee
may, in its sole discretion, replace such Operator, with respect to the Facility
Assets at any time with any Affiliate of the Lessee or any other Person who is,
in the Lessee's reasonable discretion, qualified to operate the Facility Assets.
Section 12. Event of Loss.
-------------
12.1. Notice of Event of Loss. If there shall occur an Event of Loss,
-----------------------
the Lessee shall promptly, upon the obtaining of Actual Knowledge thereof,
notify the Lessor, the Owner Participant and the Indenture Trustee of the
occurrence thereof.
12.2. Payment of Stipulated Loss Value, Etc. (a) If an Event of Loss
-------------------------------------
with respect to the Facility Assets shall occur, unless the Lessee shall have
elected to rebuild the Facility Assets pursuant to Section 12.2(b), the Lessee
shall pay to the Lessor as compensation for such Event of Loss, on the date
which is the latest Stipulated Loss Value Determination Date occurring not later
than 180 days after the date of such Event of Loss, the Stipulated Loss Value
for the Facility Assets as of such Stipulated Loss Value Determination Date.
The Lessee shall pay, simultaneously therewith, all Basic Rent due and owing
prior to the date of such payment, all Supplemental Rent due and owing on or
prior to the date of such payment and any other Supplemental Rent as to which
there is no dispute and which is agreed to become due and owing within thirty
(30) days of the date of such payment, and if such Stipulated Loss Value
Determination Date is a Basic Rent Payment Date, all Basic Rent payable in
arrears on such Basic Rent Payment Date (but, for the avoidance of doubt, not
Basic Rent payable in advance on such Basic Rent Payment Date), whereupon (1)
-
this Lease and the obligations of the Lessee hereunder shall terminate as of the
date of such payment (other than those provisions which by their terms survive
the termination or expiration of the Lease), (2) the Lessor shall transfer all
-
35
<PAGE>
right, title and interest of the Lessor in and to the Facility, "as is and where
is, and with all faults," to the Lessee or as the Lessee shall direct, free and
clear of Lessor's Liens and Owner Participant's Liens but otherwise without
representation or warranty, and the Lessor shall, at the Lessee's expense,
execute and deliver to the Lessee or as the Lessee shall direct a deed, bill of
sale and assignment and such other instruments and documents as the Lessee may
reasonably request to evidence the valid consummation of such transfer and
shall, at the Lessee's expense, take such actions under Section 6.03 of the
Indenture as the Lessee may reasonably request and (3) pursuant to an
-
instrument reasonably satisfactory to the Ground Lessor, the Lessor and the
Lessee, the Lessee shall assume all the obligations of the Lessor as "ground
lessee" under the Ground Lease accruing on or after such date of transfer and
the Lessor thenceforth shall be released from such obligations.
(b) At the Lessee's option, the Lessee may determine to rebuild or cause
to be rebuilt (or replace or cause to be replaced) the Facility Assets or
Significant Portion thereof suffering such Event of Loss so that the Facility
Assets will have at least the same value, utility and remaining useful life as
the Facility Assets had immediately prior to the Event of Loss (assuming the
Facility Assets have been maintained in accordance with the terms of this Lease)
and title to each replacement shall immediately vest in the Lessor to the same
extent as Components or previous Modifications being replaced or rebuilt. In
the event that the Lessee determines to rebuild or cause to be rebuilt (or
replace or cause to be replaced) the Facility Assets in accordance with this
Section 12.2(b), the Lessee shall provide written notice of such election within
120 days of the occurrence of the Event of Loss; provided that the Lessee may
--------
not elect the option set forth in this Section 12.2(b) during such time as a
Specified Lease Event of Default shall have occurred and be continuing. In the
event that the Lessee shall have elected the option set forth in this Section
12.2(b), no amounts shall be payable under Section 12.2(a) and this Lease shall
remain in full force and effect with respect to the Facility Assets. Prior to
or at the time that the Lessee determines to rebuild or cause to be rebuilt (or
replace or cause to be replaced) the Facility Assets or Significant Portion
thereof in accordance with this Section 12.2(b), the Lessee will (i) furnish the
-
Lessor with a special warranty bill of sale (which special warranty shall except
Permitted Liens) with respect to such Facility Assets or Significant Portion
36
<PAGE>
thereof, (ii) enter into such amendments to the Operative Documents as may be
--
reasonably necessary, (iii) furnish the Lessor with an opinion of the Lessee's
---
counsel (which may be Lessee's general counsel) to the effect that the bill of
sale referred to in clause (i) above constitutes an effective instrument for the
conveyance of title to such Facility Assets or Significant Portion thereof, (iv)
--
furnish the Lessor with an appraisal as to the value and utility of such
Facility Assets or Significant Portion thereof and (v) so long as the Indenture
-
shall not have been satisfied and discharged, cause a financing statement or
statements with respect to such Facility Assets or Significant Portion thereof
or other requisite documents or instruments to be filed in such place or places
as may be necessary in order to perfect the security interest created by or
pursuant to the Indenture.
12.3. Application of Other Payments upon the Occurrence of an Event of
----------------------------------------------------------------
Loss. Any amounts of condemnation or requisition proceeds received at any time
- ----
by the Lessor, the Indenture Trustee or the Lessee as a result of the occurrence
of an Event of Loss shall be divided between the Lessee and the Lessor as their
respective interests may appear, and the amount paid to the Lessor shall reduce
the amount that the Lessee is required to pay to the Lessor (but not below zero)
pursuant to Section 12.2 (or, if the amount payable pursuant to Section 12.2 has
already been paid by the Lessee, the Lessee shall be entitled to retain out of
the amounts otherwise payable to the Lessor pursuant to this Section 12.3, the
amount that would have been applied in reduction of the amount payable by the
Lessee under Section 12.2).
12.4. Application of Payments Not Relating to an Event of Loss.
--------------------------------------------------------
Payments (except for amounts referred to in Section 9.3 and payments under
insurance policies described in Section 13, which shall be paid as set forth in
Section 9.3 and Section 13, as the case may be) received at any time by the
Lessor, the Indenture Trustee or the Lessee from any Governmental Authority or
other Person with respect to any destruction, damage, loss, condemnation,
confiscation, theft or seizure of or requisition of title to or use of the
Facility Assets or any part thereof not constituting an Event of Loss with
respect to the Facility Assets shall be paid over to the Lessee or as it may
direct, and all such amounts paid to the Lessee shall be retained by the Lessee.
12.5. Other Dispositions. Notwithstanding the foregoing provisions of
------------------
this Section 12, so long as any
37
<PAGE>
Specified Lease Event of Default shall have occurred and be continuing, any
amount (except for amounts referred to in Section 9.3 and payments under
insurance policies described in Section 13, which shall be paid as set forth in
Section 9.3 and Section 13, as the case may be) that otherwise would be payable
to or for the account of, or that otherwise would be retained by, the Lessee
pursuant to this Section 12 shall be paid to the Owner Trustee (or to the
Indenture Trustee so long as the Facility Assets are subject to the Lien of the
Indenture) as security for the obligations of the Lessee under this Lease and,
subject to the Indenture, applied against the Lessee's payment obligations
hereunder when and as they become due and payable and, at such time thereafter
as no Specified Lease Event of Default shall be continuing, such amount shall,
to the extent not theretofore applied as provided herein or in the Indenture, be
paid promptly to the Lessee or as it may direct; provided that if any such
--------
amount has been so held as security for more than ninety (90) days after a
Specified Lease Event of Default shall have occurred and during which period (i)
-
the Lessor shall not have been limited by operation of law or otherwise from
exercising remedies hereunder or (ii) the Lessor shall not have commenced to
--
exercise any remedy available to it under Section 16.1, then such amount shall
be paid to the Lessee or as it may direct.
Section 13. Insurance.
---------
13.1. Coverage. (a) The Lessee, at its own cost and expense, shall
--------
carry and maintain or cause to be carried and maintained at all times during the
Lease Term with respect to the Facility Assets (i) insurance against loss or
-
damage by fire, lightning and other risks from time to time included under "all-
risk" policies, to the extent such insurance is available, in such amounts and
in such forms as is consistent with the practice of the Lessee or its Affil-
iates for other properties owned or leased by the Lessee's Affiliates and (ii)
--
public liability, including personal injury and property damage and
comprehensive general liability insurance against claims, including, without
limitation, environmental claims arising out of or connected with the
possession, use, leasing, operation or condition of the Facility Assets, to the
extent such insurance is available, in such amounts and in such forms as is
consistent with the practice of the Lessee or its Affiliates for other
properties similar to the Facility Assets owned or leased by the Lessee's
Affiliates. The insurance required under clause (i) or (ii) of this Section
13.1(a) may be subject to deductible amounts and self-insured retentions as is
consis-
38
<PAGE>
tent with the Lessee's or its Affiliates' practice for other properties
similar to the Facility Assets owned or leased by the Lessee's Affiliates. Such
insurance may be carried under blanket policies maintained by or on behalf of
the Lessee so long as such policies otherwise comply with the provisions of this
Section 13.
(b) Any insurance carried in accordance with Section 13.1(a)(i) and (ii)
shall provide in the policy or by special endorsement that:
(i) the Lessor, the Trust Company, the Owner Participant, the Indenture
Trustee and the Loan Participant are included as additional insureds in
respect of the liability insurance carried in accordance with Section
13.1(a)(ii) and shall provide that no such Person shall have any obligation
or liability for payment of premiums in respect of any insurance carried in
accordance with Section 13.1(a);
(ii) the insurer thereunder waives all rights of subrogation against
the Lessor, the Indenture Trustee, the Owner Participant and the Loan
Participant and waives any right of set-off and counterclaim and any other
right to deduction whether by attachment or otherwise;
(iii) such insurance shall be primary without right of contribution of
any other insurance carried by or on behalf of the Lessor, the Indenture
Trustee, the Owner Participant and the Loan Participant;
(iv) the respective interests of the Lessor, the Indenture Trustee,
the Loan Participant and the Owner Participant under all insurance policies
required hereunder shall not be invalidated by any action or inaction of
the Lessee or any other Person (other than, with respect to any such
insured, such insured), and such insurance shall insure the Lessor, the
Indenture Trustee, the Loan Participant and the Owner Participant as their
interests may appear, regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Lessee
or any other Person (other than, with respect to any such insured, such
insured);
(v) if the insurers cancel such insurance for any reason whatsoever or
any materially adverse change is made in policy terms or conditions, or if
such insur-
39
<PAGE>
ance is allowed to lapse for non-payment of premium, such
cancellation, change or lapse shall not be effective as to the Lessor,
the Owner Participant, the Loan Participant or the Indenture Trustee for
thirty (30) days after receipt by the Lessor, the Owner Participant, the
Loan Participant or the Indenture Trustee, respectively, of written notice
from such insurers of such cancellation, change or lapse; and
(vi) with respect to all liability insurance, in as much as the
policies are written to cover more than one insured, all terms, conditions,
insuring agreements and endorsements, with the exception of the limits of
liability, shall operate in the same manner as if there were a separate
policy covering each insured.
13.2. Adjustment of Losses. Losses, if any, with respect to the
--------------------
Facility Assets under any property damage policies required to be carried under
Section 13.1(a) shall be adjusted with the insurance companies, including the
filing of appropriate proceedings, by the Lessee.
13.3. Application of Insurance Proceeds. All proceeds of insurance
---------------------------------
maintained pursuant to Section 13.1(a)(i) on account of any damage to or
destruction of the Facility Assets or any part thereof shall be paid over to, or
retained by, the Lessee or as it may direct.
13.4. Additional Insurance. Nothing in this Section 13 shall prohibit
--------------------
the Lessee, the Lessor, the Owner Participant or the Indenture Trustee from
acquiring or maintaining, at its own expense, additional insurance for its own
account with respect to loss or damage to the Facility Assets or any part
thereof provided that any such additional insurance shall not interfere with or
in any way limit insurance maintained under Section 13.1(a) or increase the
amount of any premium payable with respect to any such insurance. The proceeds
of any such additional insurance will be for the account of the party
maintaining such additional insurance.
13.5. Annual Insurance Report. Prior to December 31 of each year,
-----------------------
commencing with December 31, 1997, the Lessee will provide to the Lessor, the
Owner Participant and the Indenture Trustee an insurance certificate or
Officer's Certificate, substantially in the form of the certificate or Officer's
Certificate provided by the Lessee pursuant to Section 4.6 of the Participation
Agreement, with respect to
40
<PAGE>
the insurance then required to be maintained by the Lessee pursuant to this
Section 13.
Section 14. Rights to Assign or Lease.
-------------------------
14.1. Assignment by Lessor; Security for Lessor's Obligations to
----------------------------------------------------------
Indenture Trustee. (a) EXCEPT AS SET FORTH IN SECTION 14.1(B) OR IN THE THIRD-
- -----------------
TO-LAST SENTENCE OF SECTION 19.8, OR UNLESS THE LESSEE AND THE LOAN
PARTICIPANT SHALL HAVE GIVEN THEIR PRIOR WRITTEN CONSENT, THE LESSOR MAY NOT
ASSIGN, TRANSFER OR ENCUMBER THIS LEASE OR ALL OR ANY PART OF ITS INTERESTS AND
RIGHTS HEREUNDER EXCEPT IN CONNECTION WITH THE EXERCISE OF REMEDIES BY THE
LESSOR PURSUANT TO SECTION 16.1 FOLLOWING A DECLARATION BY THE LESSOR PURSUANT
TO SUCH SECTION THAT THIS LEASE IS IN DEFAULT.
(b) In order to secure the indebtedness evidenced by the Secured Notes
and certain other obligations as provided in the Indenture, the Indenture
provides, among other things, for the assignment by the Lessor to the Indenture
Trustee of its right, title and interest in, to and under this Lease to the
extent set forth in the Indenture, and for the creation of liens on and security
interests in the Facility in favor of the Indenture Trustee. The Lessee hereby
consents to such assignment and to the creation of such liens and security
interests pursuant to the terms and provisions of the Indenture and to any
assignment or other transfer of the Lessor's right, title and interest in, to
and under this Lease, which may occur pursuant to the exercise of any remedy set
forth in the Indenture. The Lessee (i) acknowledges that such assignment, liens
-
and security interests provide for the exercise by the Indenture Trustee of all
rights of the Lessor hereunder to give any consents, approvals, waivers, notices
or the like, to make any elections, demands or the like or to take any other
discretionary action hereunder, but only in accordance with the Indenture; (ii)
--
acknowledges receipt of an executed counterpart of the Indenture as in effect
on the date hereof and (iii) agrees that, to the extent provided in the
---
Indenture, the Indenture Trustee shall have all the rights of the Lessor
hereunder and, in exercising any right or performing any obligation of the
Lessor hereunder, shall be subject to the terms hereof, including, without
limitation, Section 9.1 hereof. The Lessee will furnish to the Indenture
Trustee counterparts of all notices, certificates, opinions or other documents
of any kind required to be delivered hereunder by the Lessee to the Lessor.
Notwithstanding any other provision herein, so long as any Secured Notes
remain Outstanding, the Lessor hereby directs, and the Lessee agrees
41
<PAGE>
that all payments of Basic Rent and all other Rent payable hereunder to the
Lessor, other than Excepted Payments and amounts payable under Section 2.4,
shall be paid directly to the Indenture Trustee at its account specified in
Schedule 1 to the Participation Agreement or to such other account in the United
States of America as may be specified in writing by the Indenture Trustee to the
Lessee at least five (5) Business Days prior to the due date thereof.
14.2. Assignment and Sublease by Lessee. The Lessee may, without the
---------------------------------
consent of the Lessor, the Owner Participant, the Indenture Trustee, the Loan
Participant or any other Person, at any time and from time to time, assign this
Lease and all or any of its interests and rights hereunder (including, without
limitation, the interests and rights under Section 2.4) to any Person or Persons
so long as (i) after giving effect to such assignment, the Guaranty shall remain
-
in full force and effect and shall constitute a full and unconditional guaranty
of the obligations of the assignee hereunder to the same extent as the guaranty
of the Lessee's obligations hereunder prior to giving effect to any such
assignment; (ii) no Specified Lease Event of Default shall be continuing on the
--
date any such assignment is effected or after giving effect thereto and (iii)
---
such assignment shall not subject the Lessor or the Owner Participant to
regulation by any Governmental Authority to which the Lessor or the Owner
Participant would not have been subject but for such assignment. The Lessee
may, without the consent of the Lessor, the Owner Participant, the Indenture
Trustee, the Loan Participant or any other Person, at any time and from time to
time, sublease the Facility and provide any easements or other rights permitted
by Section 2.4 to another Person or Persons (including, without limitation, to
the Operator pursuant to the Initial Sublease); provided that (i) such sublease
-------- -
shall be expressly subject and subordinate to this Lease (and such sublease
shall contain a provision providing that any sublease permitted thereunder shall
be so subject and subordinate) and shall in no event continue beyond the Lease
Term, (ii) the Lessee shall remain primarily liable under this Lease and all
--
terms and conditions hereof and of the other Operative Documents shall be
complied with as though no such sublease was in existence, (iii) the Guaranty
---
shall remain in full force and effect, (iv) such sublease shall not subject the
--
Lessor or the Owner Participant to regulation by any Governmental Authority to
which the Lessor or the Owner Participant would not have been subject but for
such sublease and (v) no Specified Lease Event of Default shall be continuing at
-
the commencement of such sublease.
42
<PAGE>
Any sublessee under a sublease permitted hereunder may sub-sublease the Facility
and provide any easements or other rights permitted by Section 2.4 to another
Person or Persons under a sub-sublease that otherwise complies with the
provisions hereunder applicable to a sublease hereunder. The Lessee shall give
prompt written notice to the Lessor of any sublease or sub-sublease of the
Facility. The Lessor acknowledges that on the Closing Date the Lessee will
sublease the Facility to the Operator pursuant to the Initial Sublease.
Section 15. Lease Events of Default. The term "Lease Event of Default,"
----------------------- ----------------------
wherever used herein, shall mean any of the following events (whatever the
reason for such Lease Event of Default and whether it shall be voluntary or
involuntary, or come about or be effected by operation of law, or be pursuant to
or in compliance with any judgment, decree or order of any court or any
Governmental Rule or Governmental Action):
(a) the Lessee shall fail to pay Basic Rent, Stipulated Loss Value,
Termination Value, any purchase price payable pursuant to Section 6 or
Section 7 or Supplemental Rent payable under Section 3.8 in respect of
Premium, if any, payable by the Lessee, in each case within ten (10)
Business Days after the date the same becomes due and payable;
(b) the Lessee shall fail to pay Supplemental Rent or make any other
payment (other than (i) Basic Rent, Stipulated Loss Value, Termination
-
Value, any purchase price payable pursuant to Section 6 or Section 7 or
Supplemental Rent payable under Section 3.8 in respect of Premium, if any,
payable by the Lessee; (ii) any Excepted Payment (unless the Lessor elects
--
to have such failure to make such Excepted Payment constitute a Lease Event
of Default) or (iii) any payment under Section 2.4) required to be made by
---
the Lessee under this Lease or under any other Operative Document for more
than fifteen (15) Business Days after the Lessee has received written
notice from the Lessor or the Indenture Trustee stating that such payment
is due;
(c) the Lessee shall fail in any material respect to perform or observe
any other material covenant or agreement to be performed or observed by it
under this Lease or any other Operative Document (other than any covenant
or agreement to make any payment referred to
43
<PAGE>
in Section 15(a) or (b)) and such failure shall continue for a period of
thirty (30) days after receipt by the Lessee of a written notice from the
Lessor or the Indenture Trustee specifying such failure and requiring it to
be remedied; provided, however, that the continuation of any such failure
-------- -------
for such period of thirty (30) days or such longer period (not to exceed
365 days) after receipt of such notice shall not constitute a Lease Event
of Default so long as (i) such failure is curable or correctable and (ii)
- --
the Lessee is diligently pursuing the cure or correction of such failure;
(d) the Guarantor shall fail in any material respect to perform or
observe any covenant or agreement to be performed or observed by it under
the Guaranty and such failure shall continue for a period of thirty (30)
days after receipt by the Guarantor of a written notice from the Lessor or
the Indenture Trustee specifying such failure and requiring it to be
remedied; provided, however, that the continuation of any such failure for
-------- -------
such period of thirty (30) days or such longer period (not to exceed 365
days) after receipt of such notice shall not constitute a Lease Event of
Default so long as (i) such failure is curable or correctable and (ii) the
- --
Guarantor is diligently pursuing the cure or correction of such failure;
(e) any material representation or warranty made by the Lessee under the
Operative Documents (other than the Tax Indemnity Agreement) shall prove to
have been inaccurate in any material respect when made, unless such
inaccuracy shall not be material to the recipient at the time when the
notice referred to below shall have been received by the Lessee or any
material adverse impact thereof shall have been cured or corrected within
thirty (30) days after receipt by the Lessee of a written notice thereof
from the Lessor or the Indenture Trustee; provided, however, that the
-------- -------
continuation of any such inaccuracy for such period of thirty (30) days or
such longer period (not to exceed 180 days) after receipt of such notice
shall not constitute a Lease Event of Default so long as (i) any material
-
adverse impact of such inaccuracy is curable or correctable and (ii) the
--
Lessee is diligently pursuing the cure or correction of such material
adverse impact;
(f) any material representation or warranty made by the Guarantor under
the Guaranty shall prove to have
44
<PAGE>
been inaccurate in any material respect when made, unless such inaccuracy
shall not be material to the recipient at the time when the notice referred
to below shall have been received by the Guarantor or any material adverse
impact thereof shall have been cured or corrected within thirty (30) days
after receipt by the Guarantor of a written notice thereof from the Lessor
or the Indenture Trustee; provided, however, that the continuation of any
-------- -------
such inaccuracy for such period of thirty (30) days or such longer period
(not to exceed 180 days) after receipt of such notice shall not constitute
a Lease Event of Default so long as (i) any material adverse impact of such
-
inaccuracy is curable or correctable and (ii) the Guarantor is diligently
--
pursuing the cure or correction of such material adverse impact;
(g) the Lessee or the Guarantor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself for its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or
to the appointment or taking possession by any such official or agency in
an involuntary case or other proceeding commenced against it, or shall make
a general assignment for the benefit of creditors, or shall take any
corporate action to authorize any of the foregoing, or an involuntary case
or other proceeding shall be commenced against the Lessee or the Guarantor
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official or agency of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) days;
(h) the Guaranty shall cease to be in full force and effect or to be the
valid, binding and enforceable agreement of the Guarantor or the Guarantor
shall repudiate its material obligations thereunder; or
45
<PAGE>
(i) the Lessee shall fail to maintain (or cause to be maintained) the
insurance coverage required by Section 13.1(a);
provided, however, that notwithstanding anything to the contrary contained in
- -------- -------
this Section 15, any failure of the Lessee to perform or observe any covenant or
agreement specified in Section 15(c) shall not constitute a Lease Event of
Default if such failure is caused solely by reason of any event that constitutes
an Event of Loss to the Facility Assets (or any event which with lapse of time
would constitute such an Event of Loss) or that is described in Section
6.1(e)(iii) so long as the Lessee is continuing to comply with all the
applicable terms of Section 12 or Section 6.1(e)(iii), as the case may be.
Section 16. Remedies.
--------
16.1. In General. Upon the occurrence of any Lease Event of Default and
----------
so long as the same shall be continuing, the Lessor, at its option, may declare
this Lease to be in default by written notice to such effect given to the Lessee
(provided that this Lease shall be deemed to have been declared in default
without the necessity of such written notice upon the occurrence of any Event
of Default described in paragraph (g) of Section 15), and at any time
thereafter, provided such Lease Event of Default shall be continuing, the Lessor
may, to the extent permitted by applicable Governmental Rules, exercise one or
more of the following remedies, as the Lessor in its sole discretion shall
elect:
(a) the Lessor, by notice to the Lessee, may rescind, cancel or terminate
this Lease;
(b) whether or not this Lease has been terminated, the Lessor may
terminate the Lessee's right to possession and demand that the Lessee, and
upon the written demand of the Lessor, the Lessee shall, surrender the
Facility Assets and return possession of the Facility promptly to the
Lessor in the manner and condition required by, and otherwise in accordance
with the provisions of, this Lease as if the Facility Assets were being
returned at the end of the Lease Term and the Lessor shall not be liable
for the reimbursement of the Lessee for any costs and expenses incurred by
the Lessee in connection therewith;
46
<PAGE>
(c) the Lessor may (whether or not the Lessor has taken possession
thereof) sell all or any portion of the Facility Assets at public or
private sale, as the Lessor may determine, free and clear of any rights of
the Lessee with respect thereto (except pursuant to Section 10.9 of the
Participation Agreement) and without any duty to account to the Lessee
with respect to such sale or any proceeds with respect thereto (except to
the extent required by paragraph (e) or (f) of this Section 16.1 if the
Lessor shall elect to exercise its rights thereunder), in which event if
the Lessee has returned possession of the Facility Assets pursuant to
Section 16.1(b) hereof the Lessee's obligation to pay Basic Rent with
respect to the interest sold accruing after the date of such sale shall be
terminated or proportionately reduced, as the case may be (except to the
extent that Basic Rent is to be included in computations under paragraph
(e) or (f) of this Section 16.1 if the Lessor shall elect to exercise its
rights thereunder);
(d) the Lessor may hold or lease to others all or a portion of the
Facility Assets, as the Lessor in its sole discretion may determine, free
and clear of any rights of the Lessee with respect thereto (except pursuant
to Section 10.9 of the Participation Agreement) and without any duty to
account to the Lessee with respect to such action or inaction or for any
proceeds with respect to such action or inaction, except that, if the
Lessee has returned possession of the Facility Assets pursuant to Section
16.1(b) hereof, the Lessee's obligation to pay Basic Rent after the Lessee
shall have been deprived of use of all or a portion of the Facility Assets
pursuant to this paragraph (d) shall be reduced by the net proceeds, if
any, received by the Lessor from leasing all or a portion of the Facility
Assets to any Person other than the Lessee for the same periods or any
portion thereof;
(e) whether or not the Lessor shall have exercised or thereafter at
any time shall exercise its rights under paragraph (a), (b), (c) or (d) of
this Section 16.1, the Lessor may demand, by written notice to the Lessee
specifying a payment date which shall be a Stipulated Loss Value
Determination Date not earlier than ten (10) Business Days after the date
of such notice, that the Lessee pay to the Lessor, and the Lessee shall pay
to the Lessor, on such specified payment date, as liquidated damages for
loss of a
47
<PAGE>
bargain and not as a penalty (in lieu of the Basic Rent accruing on or
after such specified payment date) and, in the case of the payment
described in clause (iii) below, as consideration for the transfer to the
Lessee of the Facility Assets, any unpaid Basic Rent due and owing on or
prior to such specified payment date (but excluding any Basic Rent payable
in advance on such payment date) and any unpaid Supplemental Rent (to
whomsoever payable) due and owing on or prior to the date of such payment
and any other Supplemental Rent as to which there is no dispute and which
is agreed to become due and owing within thirty (30) days of the date of
such payment, plus whichever of the following amounts the Lessor, in its
sole discretion, shall specify in such notice (together with interest (to
the extent permitted by applicable law) on such amount at the Overdue Rate
from such specified payment date to the date of actual payment):
(i) an amount equal to the excess, if any, of Stipulated Loss Value
for the Facility Assets as of such specified payment date over the
Fair Market Sales Value of the Facility Assets as of such specified
payment date (or the last day of the Basic Lease Term, if earlier);
provided, if the Lessee has failed to return the Facility Assets, the
--------
Fair Market Sales Value shall equal zero;
(ii) an amount equal to the excess of (1) the present value as
-
of such specified payment date of all installments of Basic Rent
payable on or after such specified payment date during the remaining
balance of the Basic Lease Term (or any Renewal Term then in effect),
discounted semi-annually at a rate per annum equal to the Debt Rate,
over (2) the present value as of such specified payment date of the
-
Fair Market Rental Value of the Facility Assets during the remaining
balance of the Basic Lease Term (or any Renewal Term then in
effect), discounted semi-annually at a rate per annum equal to the
Debt Rate; provided, if the Lessee has failed to return the Facility
--------
Assets, the Fair Market Rental Value shall equal zero;
(iii) an amount equal to the Stipulated Loss Value for the
Facility Assets determined as of such specified payment date, and, in
this event,
48
<PAGE>
upon full payment by the Lessee of all sums due hereunder, the Lessor
shall, without recourse, representation or warranty (other than the
absence of Owner Participant's Liens and Lessor's Liens) transfer the
Facility to the Lessee, "as is and where is, and with all faults,"
whereupon this Lease and the Lessee's obligations hereunder shall
terminate. The Lessor shall, at the Lessee's expense, (1) execute and
-
deliver to the Lessee a deed, bill of sale and assignment and such
other instruments, documents and opinions as the Lessee may reasonably
request to evidence the valid consummation of such transfer, (2) take
-
such actions under Section 6.03 of the Indenture as the Lessee may
reasonably request and (3) pursuant to an instrument reasonably
-
satisfactory to the Ground Lessor, the Lessor and the Lessee, the
Lessee shall assume all the obligations of the Lessor as "ground
lessee" under the Ground Lease accruing after such date of transfer
and the Lessor thenceforth shall be released from such obligations;
(iv) an amount equal to the excess, if any, of Stipulated Loss
Value for the Facility Assets, computed as of such specified payment
date, over the Fair Market Rental Value of the Facility Assets during
the remaining Basic Lease Term (or any Renewal Term then in effect),
after discounting such Fair Market Rental Value semi-annually to
present value as of such specified payment date at a rate per annum
equal to the Debt Rate; provided, if the Lessee has failed to return
--------
the Facility Assets, the Fair Market Rental Value shall equal zero;
(f) if the Lessor shall have sold all of the Facility Assets, as a whole
or by a series of sales of portions thereof pursuant to paragraph (c) of
this Section 16.1 or other right of sale, the Lessor, in lieu of exercising
its rights under paragraph (e) of this Section 16.1, may, if it shall so
elect, demand that the Lessee pay to the Lessor and the Lessee shall pay to
the Lessor on the date of such sale, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of Basic Rent accruing on or after
the next preceding Basic Rent Payment Date to the date of such sale), any
unpaid Basic Rent due and owing on or prior to such next preceding Basic
Rent Payment Date
49
<PAGE>
(but excluding any Basic Rent payable in advance on such Basic Rent Payment
Date and accruing with respect to any period from and including the date of
such sale) and any other Supplemental Rent due and owing on or prior to the
date of such sale and any other Supplemental Rent as to which there is no
dispute and which is agreed to become due and owing within thirty (30) days
of the date of such sale, plus the amount of any deficiency between
Stipulated Loss Value for the Facility Assets, computed as of such next
Basic Rent Payment Date, and the proceeds of such sale, together with
interest (to the extent permitted by applicable law) at the Overdue Rate on
the amount of such Rent, from the due date or dates thereof, and on the
amount of such deficiency from the date of such sale, until the date of
actual payment; or
(g) the Lessor may demand that the Lessee perform its obligations under
Section 10.9 of the Participation Agreement and under the Support
Agreements (and may seek specific performance thereof), and the Lessor may
exercise any other right or remedy that may be available to it under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof.
16.2. Continuing Obligations. No rescission or termination of this
----------------------
Lease, in whole or in part, or repossession of the Facility Assets or exercise
of any remedy under Section 16.1 shall, except as specifically provided herein,
relieve the Lessee of any of its liabilities and obligations hereunder. The
Lessee shall be liable (i) for all reasonable legal fees and other reasonable
-
costs and expenses incurred by the Lessor, the Owner Participant, the Loan
Participant or the Indenture Trustee by reason of the occurrence of any Lease
Event of Default or the exercise of the Lessor's remedies with respect thereto,
including all costs and expenses reasonably incurred in placing the Facility
Assets in the condition required by Section 8 and (ii) except as otherwise
--
provided herein, for any and all other accrued and unpaid Rent due hereunder
before, after or during the exercise of any of the foregoing remedies. At any
sale of the Facility Assets or any part thereof pursuant to Section 16.1, the
Lessor, the Owner Participant, the Loan Participant or the Indenture Trustee may
bid for and purchase such property.
50
<PAGE>
16.3. Remedies Cumulative. To the extent permitted by applicable law
-------------------
and except as provided herein, no remedy under Section 16.1 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
provided under Section 16.1 or otherwise available to the Lessor at law or in
equity. No express or implied waiver by the Lessor of any Lease Default or
Lease Event of Default shall in any way be, or be construed to be, a waiver of
any future or subsequent Lease Default or Lease Event of Default. The failure
or delay of the Lessor in exercising any rights granted it hereunder upon the
occurrence of any of the contingencies set forth herein shall not constitute a
waiver of any such right upon the continuation or recurrence of any such
contingencies or similar contingencies and any single or partial exercise of any
particular right by the Lessor shall not exhaust the same or constitute a waiver
of any other right provided herein.
Section 17. Notices. All communications, notices and consents
-------
provided for in this Lease shall be in writing and given in person or by courier
or by means of telecopy or other electronic transmission (with provision for
assurance of receipt in a manner typical with respect to communications of that
type), or mailed by registered or certified first class mail, return receipt
requested, addressed to the respective addresses set forth in Schedule 1 to the
Participation Agreement, or in each case at such other address as the Person
entitled thereto shall from time to time designate by notice in writing to the
Lessee and the Lessor. All such communications, notices and consents given in
such manner shall be deemed given when received by (or when proffered to, if
receipt is refused) the party to whom it is addressed.
Section 18. Other Rights.
------------
18.1. Lessor's Right to Perform. If the Lessee shall fail to make any
-------------------------
payment to be made by it hereunder or shall fail to perform or comply with any
of its other agreements contained herein or in any other Operative Document
relating to the Facility or this Lease, following written notice to the Lessee,
the Lessor may, but shall not be obligated to, cure any default under this
Lease that can be cured with the payment of money. The amount of such cure
payments and the amount of all reasonable costs and expenses (including, without
limitation, reasonable attorneys' and other professionals' fees and expenses)
incurred in connection with such cure payments, together with interest thereon
(to the extent permitted by applicable law) at the
51
<PAGE>
Overdue Rate, shall be deemed Supplemental Rent payable by the Lessee upon
demand.
18.2. Performance by Affiliates, Etc.; Rights. Any payment by the
---------------------------------------
Guarantor, any Affiliate of the Lessee, any sublessee or the Operator of any
amount payable by the Lessee under any Operative Document shall constitute, as
between the Lessee and the Lessor, payment of such amount by the Lessee for all
purposes of this Lease (including, without limitation, Section 15), and any
performance by the Guarantor, any Affiliate of the Lessee, any sublessee or the
Operator of any obligation required to be performed by the Lessee under any
Operative Document shall constitute, as between the Lessee and the Lessor,
performance by the Lessee of such obligation for all purposes of this Lease.
Except as otherwise expressly provided herein, any right granted to the Lessee
in this Lease shall grant the Lessee the right to exercise such right or permit
such right to be exercised by any assignee, sublessee or transferee of the
Lessee permitted hereunder or the Operator. The inclusion of specific
references to obligations or rights of any such assignee, sublessee or
transferee or the Operator in certain provisions of this Lease shall not in
any way prevent or diminish the application of the provisions of the sentences
immediately preceding with respect to obligations or rights in respect of which
specific reference to any such assignee, sublessee or transferee or the Operator
has not been made in this Lease.
Section 19. Miscellaneous.
-------------
19.1. Amendments in Writing. Neither this Lease nor any of the terms
---------------------
hereof may be amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which enforcement of such
change is sought.
19.2. Severability of Provisions. Any provision of this Lease which may
--------------------------
be determined by competent authority to be invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable any remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto hereby waive any provision of law which
renders any provision hereof invalid or unenforceable in any respect.
52
<PAGE>
19.3. Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY,
-------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
19.4. Headings. The division of this Lease into sections, the provision
--------
of a table of contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Lease.
19.5. Counterpart Execution. This Lease may be executed in any number
---------------------
of counterparts and by each of the parties hereto on separate counterparts, all
such counterparts together constituting but one and the same instrument, with
the counterpart containing the receipt therefor executed by the Indenture
Trustee on or immediately following the signature page thereof being deemed the
"original executed counterpart" and all other counterparts being deemed
duplicates. The Lessee and the Lessor shall cause to be recorded in the real
property records of Jefferson County, Texas a short-form of this Lease or a
Memorandum of Lease giving notice of this Lease and the purchase options herein
and such short-form of Lease or Memorandum of Lease shall not vary the terms of
this Lease and for all purposes the terms and conditions of this Lease shall
prevail over such short-form Lease or Memorandum of Lease.
19.6. Successors and Assigns. This Lease, including all the terms and
----------------------
provisions hereof, shall be binding upon the Lessor and the Lessee and their
respective successors and assigns and inure to the benefit of the Lessor and
the Lessee and their respective successors and permitted assigns.
19.7. Investment of Security Funds. Any amounts held by the Lessor as
----------------------------
security hereunder that would be payable to the Lessee upon satisfaction of any
applicable conditions shall be invested and reinvested by the Lessor (or, so
long as the Facility Assets shall be subject to the Lien of the Indenture, the
Indenture Trustee), from time to time in Permitted Investments at the written
direction of the Lessee. The Lessor shall have no liability for any loss
resulting from any investment required to be made other than by reason of its
willful misconduct or gross negligence. Any net income or gain realized as a
result of any such investment or reinvestment shall be applied by the Lessor at
the same time, on the same conditions and in the same manner
53
<PAGE>
as the amounts in respect of which such income or gain was realized are required
to be distributed in accordance with the provisions hereof, or of any other
Operative Document pursuant to which such amounts were required to be held. The
Lessee shall be responsible for any net loss realized as a result of any such
investment or reinvestment in accordance with the terms hereof and shall
reimburse the Lessor (or the Indenture Trustee, as the case may be) therefor on
demand. Any Permitted Investment may be sold or otherwise reduced to cash
(without regard to maturity) by the Lessor or the Indenture Trustee whenever
necessary to make any application as required by the terms of this Lease or of
any applicable Operative Document.
19.8. Immunities; Satisfaction of Undertakings; Successor Owner Trustee.
------------------------------------------------------------------
Except as provided in Section 9.2, all and each of the representations,
warranties, undertakings and agreements herein made on the part of the Lessor
are made and intended not as personal representations, warranties,
undertakings and agreements by or for the purpose or with the intention of
binding the Lessor personally but are made and intended for the purpose of
binding only the Trust Estate, and this Lease is executed and delivered by the
Lessor solely in the exercise of the powers expressly conferred upon it as
trustee under the Trust Agreement, and, notwithstanding anything in this Lease
to the contrary, no personal liability or responsibility is assumed hereunder
by, or at any time shall be enforceable against, the Lessor or any successor in
trust on account of any representation, warranty, undertaking or agreement
hereunder of the Lessor, either expressed or implied, all such personal
liability, if any, being expressly waived by the Lessee; provided, however,
-------- -------
that (a) the Lessee or any Person claiming by, through or under it, making claim
-
hereunder, may, subject to the terms and conditions hereof, look to the Trust
Estate for satisfaction of such liability or responsibility and (b) the Lessor
-
or its successor in trust, as applicable, shall be personally liable for its own
gross negligence and its failure to distribute funds in accordance with the
terms of the Operative Documents (including, without limitation, willful breach
of contract) with respect to any Owner Trustee Document or Operative Document to
which it is a party or willful misconduct and for the matters described in
clauses (i) through (v) of the last sentence of Section 7.1 of the Trust
Agreement. Subject to the terms and conditions hereof, each time a successor
Owner Trustee is appointed in accordance with the terms of the Trust Agreement,
such successor Owner Trustee shall, without further act, succeed to all the
rights, duties, immunities and obligations of the
54
<PAGE>
predecessor Owner Trustee hereunder and under the other Operative Documents and
shall be deemed to be the Lessor for all purposes hereof, all without in any way
altering the terms of this Lease or such other Operative Documents or the
obligations of the Lessee hereunder or thereunder. The Lessee upon receipt of
written notice of the appointment of a successor Owner Trustee in accordance
with the Operative Documents, promptly shall make such modifications and changes
to reflect such appointment as reasonably shall be requested by such successor
Owner Trustee in such insurance policies, schedules, certificates and other
instruments relating to the Facility or this Lease or the other Operative
Documents, all in form and substance reasonably satisfactory to such successor
Owner Trustee; provided, however, that the Lessee shall not be required to
--------
deliver any such policies, schedules, certificates or other instruments except
as expressly required by the Operative Documents to which it is a party. Such
appointment and designation of a successor Owner Trustee shall not exhaust the
right to appoint and designate further successor owner trustees pursuant to the
Trust Agreement, and such right may be exercised repeatedly as long as this
Lease shall be in effect.
19.9. Performance of Obligations to Indenture Trustee and Holders.
-----------------------------------------------------------
After the Facility Assets shall no longer be subject to the Lien of the
Indenture, the provisions of this Lease which require or permit any action by,
any consent, approval or authorization of, the furnishing of any document, paper
or information to or the performance of any other obligation to, the Indenture
Trustee or any Holder shall not be effective, and the Sections hereof containing
such provisions shall be read as though there were no such references to any
such requirements or permissions.
19.10. True Lease. This Lease is intended as and shall constitute an
----------
agreement of lease, and nothing herein shall be construed as conveying to the
Lessee any right, title or interest in or to the Facility Assets other than as
lessee hereunder, it being expressly understood by the parties hereto that the
foregoing does not constitute a covenant, representation or warranty of the
Lessee.
19.11. Survival of Agreements. The representations, warranties,
----------------------
covenants and indemnities of the parties provided for in the Operative
Documents, and the parties' obligations under any and all thereof, shall survive
the execution and delivery of this Lease, the Investment by the Owner
Participant and the purchase of the Secured Notes by
55
<PAGE>
the Loan Participant and any disposition of any interest of the Owner
Participant or the Lessor in the Facility Assets and shall be and continue in
effect notwithstanding any investigation made by any of such parties and the
fact that compliance with any of the other terms, provisions or conditions of
any of the Operative Documents shall have been waived.
19.12. Rule Against Perpetuities. The parties hereto do not intend
------- -------------------------
any interest created by this Lease to be a perpetuity or to be subject to
invalidation under any applicable perpetuities rule; however, if the rule is to
be applied, then the perpetuities period shall be twenty-one (21) years after
the last to die of the currently living great-grandchildren and/or grandchildren
and/or children of former United States President George H.W. Bush.
19.13. No Merger. There shall be no merger of the leasehold interests,
---------
estates or rights granted to the Lessee under this Lease with any interests,
estates or rights of the Lessor in the Facility, it being understood and agreed
that such leasehold interests, estates and rights of the Lessee shall be deemed
separate and distinct from the Lessor's interests, estates and rights in the
Facility, notwithstanding that any such interests, estates or rights shall at
any time be held by or vested in the same Person.
19.14. Usury. No provision of this Lease or any other instrument
-----
relating to this Lease shall require the payment or permit the collection of
interest in excess of the maximum nonusurious rate of interest per annum which
may be contracted for, charged, taken, received or reserved by the Lessor or any
other Person under applicable United States Federal or state law (whichever is
higher) now or hereafter enforced with respect to the Lease (the "Maximum
-------
Rate"). If any excess interest in such respect is so provided for, or shall be
adjudicated to be so provided for, the provisions of this Section 19.14 shall
govern, and neither the Lessee nor its successors or assigns shall be obligated
to pay the amount of such interest to the extent it is in excess of the Maximum
Rate, and if any excess interest has theretofore been paid, the excess amount
shall, at the option of the Lessor, be (i) applied against the next installment
-
or installments of Basic Rent or (ii) refunded to the Lessee.
--
19.15. No Joint Venture. Any intention to create a joint venture or
----------------
partnership relation between the Lessor and the Lessee is hereby expressly
disclaimed.
56
<PAGE>
IN WITNESS WHEREOF, the parties hereto have each caused this Lease to be
duly executed as of the date first above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By:
----------------------------------
Name:
Title:
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By:
----------------------------------
Name:
Title:
57
<PAGE>
AS SET FORTH IN SECTION 14.1 OF THIS LEASE, CERTAIN OF THE RIGHT, TITLE AND
INTEREST OF THE LESSOR IN AND TO THIS LEASE HAVE BEEN ASSIGNED TO AND ARE
SUBJECT TO A SECURITY INTEREST IN FAVOR OF STATE STREET BANK AND TRUST COMPANY,
AS INDENTURE TRUSTEE, UNDER THE TRUST INDENTURE, DEED OF TRUST, ASSIGNMENT OF
LEASE AND SECURITY AGREEMENT, DATED AS OF THE CLOSING DATE, BETWEEN THE LESSOR
AND THE INDENTURE TRUSTEE, AS SUCH INDENTURE MAY BE AMENDED, MODIFIED OR
SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE PROVISIONS THEREOF. THIS
LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT
THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OF POSSESSION OF ANY
EXECUTED COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL
BE IDENTIFIED AS THE COUNTERPART THAT CONTAINS THE RECEIPT THEREFOR EXECUTED BY
THE INDENTURE TRUSTEE ON OR IMMEDIATELY FOLLOWING THE SIGNATURE PAGE THEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL EXECUTED COUNTERPART.
58
<PAGE>
Schedule 1 to the Facility
Assets Lease Agreement
BASIC RENT ACCRUAL
------------------
Column A Column B Column C
Arrears Rent Advance Rent Total Rent
(As a Percentage (As a Percentage (As a Percentage
Payment Date of Lessor's Cost) of Lessor's Cost) of Lessor's Cost)
- ---------------------------------------------------------------------------
59
<PAGE>
Schedule 2 to the Facility
Assets Lease Agreement
STIPULATED LOSS VALUE SCHEDULE/1/
------------------------------
Date [monthly] Percentage of
Lessor's Cost
-------------
- --------------------
/1/. NOTE: If the event giving rise to an obligation to pay any Stipulated
---
Loss Value occurs and the actual date of the loss of tax benefits
resulting from such event shall be earlier or later than the date
assumed in calculating the Federal income tax consequences
reflected in the applicable Stipulated Loss Value, such
Stipulated Loss Value shall be appropriately adjusted upwards or
downwards to reflect the actual timing of the loss of such tax
benefits, but otherwise based on the same original assumptions.
60
<PAGE>
Schedule 3 to the Facility
Assets Lease Agreement
TERMINATION VALUE PERCENTAGES
-----------------------------
Percentage of
Date [monthly] Lessor's Cost
-------------
61
<PAGE>
Schedule 4 to the Facility
Assets Lease Agreement
EBO DATES, EBO PERCENTAGES AND INSTALLMENT SCHEDULES/2/
----------------------------------------------------
Initial EBO Date: July 2, 2002
Initial EBO Percentage: 98.10114400%
Second EBO Date: July 2, 2008
Second EBO Percentage: 74.64000000%
Fixed Price Purchase Amount: The product of 20% and Lessor's Cost
- -----------------------
/2./ If the Lessee elects to pay either the Initial EBO Purchase Price or the
Second EBO Purchase Price in installments pursuant to Section 6.2(f) of the
Lease or Section 16.1 of the Participation Agreement, the installments
shall be in the amounts and payable on the dates set forth below (the first
installment of which shall be reduced, in the case of an election by the
Lessee to purchase the Beneficial Interest pursuant to Section 16.1 of the
Participation Agreement, as contemplated in clause (ii) of such Section
16.1):
Initial EBO Installment
Initial EBO Percentage (expressed as a
Installment Dates percentage of Lessor's Cost)
- ----------------- ---------------------------
July 2, 2002 58.93375104%
Sept. 15, 2002 19.58369648%
Dec. 15, 2002 19.58369648%
Second EBO Installment
Second EBO Percentage (expressed as a
Installment Dates percentage of Lessor's Cost)
- ----------------- ----------------------------
July 2, 2008 43.52431748%
Sept. 15, 2008 15.55784126%
Dec. 15, 2008 15.55784126%
62
<PAGE>
Exhibit A to the
Facility Assets Lease Agreement
DESCRIPTION OF FACILITY ASSETS
------------------------------
The Facility Assets consist of the following pipes, tanks, machinery
and equipment located on the tracts of land and in the building described in
Annex A hereto, and which together constitute a paraxylene production facility:
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STAGE 1 CRYSTALLIZER NO.1 SCRAPER Stainless steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.2 SCRAPER Stainless steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.3 SCRAPER Stainless steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER SCRAPER Stainless steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER SCRAPER Stainless steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REBOILER Carbon steel Kinetics Technology International Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR CHARGE HEATER 2.25 Chromium Kinetics Technology International Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REBOILER Carbon steel Kinetics Technology International Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER Carbon steel Kinetics Technology International Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REBOILER Carbon steel Kinetics Technology International Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
PROCESS FLARE STACK Carbon steel John Zinc Company - A Division of Koch Engineering Company, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BRIDGE CRANE Carbon steel Philadelphia Tramrail Crane & Hoist Service Company, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CHAIN HOIST FOR COOLING TOWER Various Materials Yale
(T-9601)
- ------------------------------------------------------------------------------------------------------------------------------------
TOULUENE OVERHEAD ACCUMULATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER Carbon steel Tex Fab Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FEED TREATER Carbon steel Beaird Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2A FEED TREATER Carbon steel Beaird Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2B FEED TREATER Carbon steel Beaird Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE COMBINED FEED DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR 1.25 Chromium -0.5 Molybdenum Beaird Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
HIGH PRESSURE SEPARATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
MAKE-UP HYDROGEN KNOCKOUT DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SUCTION KO DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER OVERHEAD ACCUMULATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD ACCUMULATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD ACCUMULATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE OVERHEAD ACCUMULATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER TOWER Carbon steel Tex Fab Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL TOWER Carbon steel Tex Fab Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE TOWER Carbon steel Allied Industries Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE TOWER Carbon steel Tex Fab Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
VENT GAS SEPARATOR Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.1 304 Stainless Steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.2 304 Stainless Steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.3 304 Stainless Steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER 304 Stainless Steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER 304 Stainless Steel Brighton Custom Fabricating Division - Trinity Industries, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.1 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STAGE 1 CRYSTALLIZER NO.1 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.2 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.2 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.3 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.3 BOIL Killed Carbon Steel Modern Welding Company of Texas, Inc.
OFF DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER BOIL OFF DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER BOIL OFF DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER BOIL OFF DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER BOIL OFF DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FILTRATE DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 FILTRATE DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 FILTRATE DRUM Killed Carbon Steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
ECONOMIZER DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PROPYLENE RECEIVER DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
HOT FLUSH DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
SUCTION DRUM COMP STAGE 1 Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
SUCTION DRUM COMP STAGE 2 Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
SUCTION DRUM COMP STAGE 3 Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Stainless steel Elliott Company
LUBE OIL RUNDOWN DRUM
- ------------------------------------------------------------------------------------------------------------------------------------
FLARE KNOCKOUT DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FUEL GAS MIX DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STEAM CONDENSATE FLASH DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER TRAYS Stainless steel Glitch, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER TOWER TRAYS Stainless steel Glitch, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL TOWER TRAYS Stainless steel Glitch, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE TOWER TRAYS Stainless steel Glitch, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE TOWER TRAYS Stainless steel Glitch, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE DRAG COOLER Carbon steel Brown Fin Tube
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDE DRAW COOLER Carbon steel GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
HEAVY REFORMATE COOLER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 EFFLUENT EXCHANGER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FEED HEATER Carbon steel Metalforms, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FEED TREATER DRAIN COOLER Carbon steel Brown Fin Tube
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOLUENE TOWER FEED/BOTTOMS Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
COLD RX FEED/EFFLUENT EXCHANGER Carbon steel Hughes-Anderson Heat Exchangers, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
HOT RX FEED/EFFLUENT EXCHANGER 1.25 Chromium - 0.5 Molybdenum Hughes-Anderson Heat Exchangers, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/DETOL OVERHEAD Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/DETOL OVERHEAD Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/DETOL OVERHEAD Carbon steel Ohmstede, Inc.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
RX EFFLUENT COOLER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
RX EFFLUENT COOLER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE/REFRIGERATION COMPRESSOR Carbon steel Elliott Company
LUBE OIL COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE/REFRIGERATION COMPRESSOR Carbon steel Elliott Company
LUBE OIL COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE/REFRIGERATION COMPRESSOR Various Materials Elliott Company
LUBE OIL RESERVOIR HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER OVERHEAD CONDENSER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER OVERHEAD CONDENSER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/BOTTOMS EXCHANGER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/BOTTOMS EXCHANGER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER FEED/BOTTOMS EXCHANGER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REBOILER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REBOILER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PRODUCT COOLER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE DRAG COOLER Carbon steel Brown Fin Tube
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE OVERHEAD CONDENSER Carbon steel / Aluminum GEA-Rainey Corp
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES COOLER Carbon steel / Aluminum GEA-Rainey Corp
- ------------------------------------------------------------------------------------------------------------------------------------
MAKEUP WATER KNOCKOUT DRUM COOLER Carbon steel Brown Fin Tube
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER FEED CHILLER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PROPYLENE CONDENSER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT HEATER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT HEATER Carbon steel Ohmstede, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
HOT FLUSH HEATER Carbon steel Brown Fin Tube
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL Various Materials Bird Machine Co.
EXCHANGER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL COOLER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL COOLER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL COOLER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE SEAL COOLER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
COOLER
- ------------------------------------------------------------------------------------------------------------------------------------
SCREEN BOWL CENTR. LUBE OIL Various Materials Bird Machine Co.
RESERVOIR HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 LUBE OIL Various Materials Bird Machine Co.
IMMERSION HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 LUBE OIL Various Materials Bird Machine Co.
IMMERSION HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 LUBE OIL Various Materials Bird Machine Co.
IMMERSION HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE LUBE OIL Various Materials Bird Machine Co.
IMMERSION HEATER
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER OFF GAS KNOCKOUT DRUM Carbon steel Modern Welding Company of Texas, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING TOWER FAN Various Materials Marley Cooling Tower
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING TOWER FAN Various Materials Marley Cooling Tower
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE BOTTOMS PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE BOTTOMS PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDEDRAW PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDEDRAW PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE COMBINED FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE COMBINED FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR Various Materials Elliott Company
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE BOTTOMS PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE BOTTOMS PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REBOILER PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REFLUX PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
VENT SEPARATOR HYDROCARBON PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
VENT SEPARATOR HYDROCARBON PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STAGE 1 RECIRCULATION PUMP NO.1 Carbon steel / Stainless steel Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 RECIRCULATION PUMP NO.2 Carbon steel / Stainless steel Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 RECIRCULATION PUMP NO.3 Carbon steel / Stainless steel Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.1 Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.2 Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.3 Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 RECIRCULATION PUMP Carbon steel / Stainless steel Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 RECIRCULATION PUMP Carbon steel / Stainless steel Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 FILTRATE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PROPYLENE COMPRESSOR Carbon steel / Stainless steel Elliott Company
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CENTRIFUGE FEED PUMP SHELF SPARE Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER RECIRCULATION PUMP Carbon steel / Stainless steel Lawrence Pumps, Inc.
SHELF SPARE
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
SUPPLY PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
RETURN POMP
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL PUMP Carbon steel / Stainless steel Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL PUMP Carbon steel / Stainless steel Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL PUMP Carbon steel / Stainless steel Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE SEAL OIL PUMP Carbon steel / Stainless steel Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE HYDR-LUBE OIL Carbon steel / Stainless steel Bird Machine Co.
PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASED TOLUENE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASED TOLUENE PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING WATER CIRCULATING PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING WATER CIRCULATING PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING WATER CIRCULATING PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PRODUCT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PRODUCT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
RFFORMATE FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PRODUCT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PRODUCT PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CRYSTALLIZER FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FLARE KNOCKOUT DRUM PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FLARE KNOCKOUT DRUM PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
ISBL OILY WATER SEWER SUMP PUMP Carbon steel / Stainless steel Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
ISBL OILY WATER SEWER SUMP PUMP Carbon steel / Stainless steel Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
UDEX UNIT FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
UDEX UNIT FEED PUMP Carbon steel / Stainless steel BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSTIC METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSTIC METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
DISPERSANT METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
DISPERSANT METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
PHOSPHATE METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
PHOSPHATE METER PUMP Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
REFINERY TANK FARM OILY WATER Various Materials Ingersoll Dresser Pump Co.
SEWER SUMP PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
REFINERY TANK FARM OILY WATER Various Materials Ingersoll Dresser Pump Co.
SEWER SUMP PUMP
- ------------------------------------------------------------------------------------------------------------------------------------
WHARF SLOP OIL PUMP Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
WHARF SLOP OIL PUMP Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
DECANT WATER PUMP Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
SKIMMED OIL PUMP Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP Carbon steel Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP Carbon steel Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
SWITCHGEAR SHELTER NO.17 Various Materials Powell Electrical Manufacturing Company
- ------------------------------------------------------------------------------------------------------------------------------------
SATELLITE INSTRUMENT SHELTER Various Materials No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
SHELTER FOR ANALYZER Various Materials ASEA Brown Boveri
INSTRUMENTATION
- ------------------------------------------------------------------------------------------------------------------------------------
CONTINUOUS EMISSIONS MONITORING Various Materials No Specific Manufacturer
SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR PROCESS GAS Various Materials Elliott Company
PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR PROCESS GAS Various Materials Elliott Company
PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR PROCESS Various Materials Elliott Company
GAS PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR PROCESS Various Materials Elliott Company
GAS PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SEAL GAS Various Materials Elliott Company
PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SEAL GAS Various Materials Elliott Company
PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR SEAL GAS Various Materials Elliott Company
PRIMARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR SEAL
GAS PRIMARY FILTER Various Materials Elliott Company
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR PROCESS GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR PROCESS GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR PROCESS Various Materials Elliott Company
GAS SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR PROCESS Various Materials Elliott Company
GAS SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SEAL GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SEAL GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR SEAL GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION COMPRESSOR SEAL GAS Various Materials Elliott Company
SECONDARY FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE NO. 1 Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STAGE 1 CENTRIFUGE NO. 2 Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE NO. 3 Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL Various Materials Bird Machine Co.
RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE SUCTION FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE SEAL OIL FILTER Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
SUCTION FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
SUCTION FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
SUCTION FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE HYDR-LUBE OIL Various Materials Bird Machine Co.
SUCTION FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 HYDR-LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 HYDR-LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 HYDR-LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 HYDR-LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 HYDR LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 HYDR-LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE 1 HYDR LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE 1 HYDR LUBE Various Materials Bird Machine Co.
OIL FILTER
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 SEAL OIL Various Materials Bird Machine Co.
RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 SEAL OIL Various Materials Bird Machine Co.
RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 SEAL OIL Various Materials Bird Machine Co.
RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE 1 SEAL OIL Various Materials Bird Machine Co.
RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 HYDR-LUBE
OIL RESERVOIR Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 HYDR-LUBE Various Materials Bird Machine Co.
OIL RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 HYDR-LUBE Various Materials Bird Machine Co.
OIL RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE 2 HYDR-LUBE Various Materials Bird Machine Co.
OIL RESERVOIR
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE UNIT OILY WATER SEWER Carbon steel Fabrication Unlimited Corp.
SUMP LIFT STATION
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING TOWER CHLORINATOR Various Materials Datum Company
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE BOTTOMS PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE BOTTOMS PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDEDRAW PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDEDRAW PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOLUENE SIDE DRAW COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE SIDE DRAW COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
HEAVY REFORMATE COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
HEAVY REFORMATE COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE COMBINED FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
TOLUENE COMBINED FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL PUMP MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL PUMP MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
REACTOR EFFLUENT AIR COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STABILIZER REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE BOTTOMS PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE BOTTOMS PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REBOILER PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE REFLUX PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
VENT SEPARATOR PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
VENT SEPARATOR PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
DETOL OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
XYLENE OVERHEAD CONDENSER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES COOLER MOTOR Various Materials GEA-Rainey Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 RECIRCULATION PUMP NO.1 Various Materials Lawrence Pumps, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 RECIRCULATION PUMP NO.2 Various Materials Lawrence Pumps, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 RECIRCULATION PUMP NO.3 Various Materials Lawrence Pumps, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.1 Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.2 Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE FEED PUMP NO.3 Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 MELT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 RECIRCULATION PUMP MOTOR Various Materials Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 RECIRCULATION PUMP MOTOR Various Materials Lawrence Pumps, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 FILTRATE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2/3 MELT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
MIXED XYLENES PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.1 GEAR Various Materials Vendor-supplied package
DRIVE MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.2 GEAR Various Materials Vendor-supplied package
DRIVE MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO.3 GEAR Various Materials Vendor-supplied package
DRIVE MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER GEAR DRIVE Various Materials Vendor-supplied package
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER GEAR DRIVE Various Materials Vendor-supplied package
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 1 MOTOR Various Materials Reliance Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 MOTOR Various Materials Reliance Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 MOTOR Various Materials Reliance Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE MOTOR Various Materials Reliance Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE MOTOR Various Materials Reliance Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL PUMP Various Materials Bird Machine Co.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE I SEAL OIL Various Materials Bird Machine Co.
PUMP MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 2 SEAL OIL Various Materials Bird Machine Co.
PUMP MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE 3 SEAL OIL Various Materials Bird Machine Co.
PUMP MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE SEAL OIL PUMP Various Materials Bird Machine Co.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASED TOLUENE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASED TOLUENE PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING WATER CIRCULATION PUMP Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COOLING WATER CIRCULATION PUMP Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING WATER CIRCULATION PUMP Various Materials BW-IP International, Inc.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PRODUCT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PRODUCT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PRODUCT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PRODUCT PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FLARE KNOCKOUT DRUM PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FLARE KNOCKOUT DRUM PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
ISBL OILY WATER SEWER SUMP PUMP Various Materials Ingersoll Dresser Pump Co.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
ISBL OILY WATER SEWER SUMP PUMP Various Materials Ingersoll Dresser Pump Co.
MOTOR
- ------------------------------------------------------------------------------------------------------------------------------------
UDEX UNIT FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
UDEX UNIT FEED PUMP MOTOR Various Materials BW-IP International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSTIC METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSTIC METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
DISPERSANT METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
DISPERSANT METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
PHOSPHATE METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
PHOSPHATE METER PUMP MOTOR Various Materials Calgon Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
BRIDGE MOTOR-BRIDGE CRANE Various Materials Eurodrive
- ------------------------------------------------------------------------------------------------------------------------------------
BRIDGE MOTOR-BRIDGE CRANE Various Materials Eurodrive
- ------------------------------------------------------------------------------------------------------------------------------------
HOIST MOTOR-BRIDGE CRANE Various Materials Eurodrive
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP MOTOR Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
REFORMATE FEED PUMP MOTOR Various Materials Ingersoll Dresser Pump Co.
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING TOWER FAN MOTOR Various Materials Marley Cooling Tower
- ------------------------------------------------------------------------------------------------------------------------------------
COOLING TOWER FAN MOTOR Various Materials Marley Cooling Tower
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE/REFRIGERATION COMPRESSOR Various Materials Elliott Company
GEAR BOX
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO. 1 GEAR Various Materials Vendor-supplied package
DRIVE
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO. 2 GEAR Various Materials Vendor-supplied package
DRIVE
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CRYSTALLIZER NO. 3 GEAR Various Materials Vendor-supplied package
DRIVE
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CRYSTALLIZER GEAR DRIVE Various Materials Vendor-supplied package
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CRYSTALLIZER GEAR DRIVE Various Materials Vendor-supplied package
- ------------------------------------------------------------------------------------------------------------------------------------
BRIDGE SPEED REDUCER Various Materials Eurodrive
- ------------------------------------------------------------------------------------------------------------------------------------
HOIST SPEED REDUCER Various Materials Yale
- ------------------------------------------------------------------------------------------------------------------------------------
RECYCLE COMPRESSOR SEAL BUFFER Various Materials Elliott Company
GAS SKID
- ------------------------------------------------------------------------------------------------------------------------------------
REFRIGERATION/RECYCLE COMPRESSOR Various Materials Elliott Company
LUBE OIL SKID UNIT
- ------------------------------------------------------------------------------------------------------------------------------------
PROPYLENE COMPRESSOR SEAL BUFFER Various Materials Elliott Company
GAS SKID
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE LUBE OIL SKID Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 3 CENTRIFUGE NITROGEN SEAL Various Materials Bird Machine Co.
SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL SKID Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL SKID Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 1 CENTRIFUGE SEAL OIL SKID Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
STAGE 2 CENTRIFUGE SEAL OIL SKID Various Materials Bird Machine Co.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION MATERIAL MANUFACTURER
- ---------------------------------- ------------------------------ ----------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COOLING TOWER Various Materials Marley Cooling Tower
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PROVER TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
BENZENE PROVER TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
CRYSTALLIZER FEED TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PRODUCT TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PROVER TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
PARAXYLENE PROVER TANK Carbon steel No Specific Manufacturer
- ------------------------------------------------------------------------------------------------------------------------------------
SUPPORT EQUIPMENT REQUIRED FOR Various Materials No Specific Manufacturer
THE OPERATION OF THE PARAXYLENE
PRODUCTION FACILITY COMPRISING
PROCESS PIPING, POWER
DISTRIBUTION PANELS, MOTOR
CONTROL CENTERS, ELECTRONIC
CONTROLS AND INSTRUMENTATION
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 4.5
================================================================================
GROUND LEASE
between
MOBIL OIL CORPORATION,
as Ground Lessor,
and
WILMINGTON TRUST COMPANY
not in its individual capacity,
but solely as Owner Trustee,
as Ground Lessee
Dated as of May 28, 1997
===============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Definitions.............................. 2
1.1. Certain Definitions...................... 2
1.2. Other Definitions, Exhibits etc.......... 4
Section 2. Lease of Land and Grant of Easements..... 5
Section 3. Facility Assets.......................... 7
3.1. Reservation of Title..................... 7
3.2. Separation of Title...................... 8
Section 4. Term of Ground Lease..................... 8
4.1. Ground Lease Term........................ 8
4.2. [Intentionally Omitted].................. 8
4.3. Ground Lessor's Bankruptcy............... 8
Section 5. Rent..................................... 9
5.1. Ground Lease Primary Rent................ 9
5.2. Additional Rent.......................... 9
5.3. Late Payment............................. 10
Section 6. Use of Site.............................. 10
6.1. Use...................................... 10
6.2. Alterations.............................. 11
6.3. Maintenance of Site...................... 11
6.4. Damage to Refinery....................... 11
Section 7. Compliance with Governmental Requirements 12
Section 8. Liens, etc............................... 12
Section 9. The Facility Assets Lease................ 13
9.1. Ground Lessor to Look to Lessee for
Performance.............................. 13
9.2. Rights of the Lessee..................... 13
Section 10. Loss..................................... 14
10.1. Event of Loss............................ 14
10.2. Other Damage to Site..................... 14
10.3. Allocation of Awards Upon Event of Loss.. 15
Section 11. Indemnification; Insurance............... 16
11.1. INDEMNIFICATION.......................... 16
11.2. Insurance................................ 17
i
<PAGE>
Section 12. Termination; Surrender of Site;
Dismantlement............................ 18
12.1. Ground Lessee's Right to Terminate Ground
Lease.................................... 18
12.2. Surrender of Site; Dismantlement of
Facility Assets by Ground Lessee......... 18
12.3. Dismantlement of the Facility Assets by
Lessee................................... 19
Section 13. Ground Lease Impositions................. 20
13.1. Payment of Ground Lease Impositions...... 20
13.2. Allocation of Ground Lease Impositions... 21
13.3. Direct Payment of Ground Lease
Impositions.............................. 21
Section 14. Transfers by the Ground Lessee........... 22
14.1. Subletting and Assigning................. 22
14.2. Leasehold Mortgages; Rights of Leasehold
Mortgagees............................... 22
14.3. Assignment by Leasehold Mortgagees, etc.. 25
14.4. New Ground Lease......................... 25
14.5. Personal Liability of Leasehold
Mortgagee, etc........................... 26
Section 15. Ground Lease Events of Default; Ground
Lease Termination........................ 26
Section 16. Permitted Contests....................... 28
Section 17. Notices, etc............................. 28
17.1. Notices to the Leasehold Mortgagees...... 28
17.2. Addresses for Notices.................... 28
17.3. No Merger of Title....................... 29
Section 18. Utilities................................ 29
Section 19. Condition and Use of Site; Quiet
Enjoyment................................ 30
Section 20. Representations and Warranties........... 30
20.1. Representations and Warranties of the
Ground Lessor............................ 30
20.2. Representations and Warranties of the
Ground Lessee............................ 32
ii
<PAGE>
Section 21. Amendment, Modification, Acceptance of
Surrender, etc........................... 32
Section 22. Sale, Mortgage, Assignment, etc., by
Ground Lessor............................ 32
Section 23. Miscellaneous............................ 32
23.1. Memorandum of Ground Lease............... 32
23.2. Estoppel Certificates.................... 32
23.3. Governing Law............................ 33
23.4. Severability............................. 33
23.5. Table of Contents and Headings........... 34
23.6. Successors............................... 34
23.7. Further Assurances....................... 34
23.8. No Recourse.............................. 34
23.9. Entire and Complete Agreement............ 35
23.10. Counterparts............................. 35
23.11. Rule Against Perpetuities................ 35
23.12. Usury.................................... 35
Appendix A Definitions
EXHIBITS
Exhibit A The Land
Exhibit B The Refinery Tract
iii
<PAGE>
GROUND LEASE
------------
THIS GROUND LEASE, dated as of May 28, 1997, between MOBIL OIL
CORPORATION, a New York corporation, as lessor (together with its successors and
permitted assigns, the "Ground Lessor") and WILMINGTON TRUST COMPANY, a Delaware
-------------
corporation, not in its individual capacity, but solely as Owner Trustee under
the Trust Agreement (together with its successors and permitted assigns, the
"Owner Trustee" or the "Ground Lessee").
- -------------- -------------
RECITALS:
A. Pursuant to the Conveyancing Instrument (capitalized terms used
herein shall have the meanings set forth in Section 1), the Ground Lessor shall,
concurrently with the execution hereof, sell to the Owner Trustee, and the Owner
Trustee shall purchase, the Facility Assets.
B. Mobil Chemical Finance (Texas) Inc., a Delaware corporation and an
Affiliate of the Ground Lessor (together with its successors and permitted
assigns under the Facility Assets Lease, the "Lessee") and the Owner Trustee
------
have agreed, concurrently with the execution hereof, to enter into the Facility
Assets Lease Agreement, dated the date hereof, relating to the lease of the
Facility Assets by the Owner Trustee to the Lessee (the "Facility Assets
---------------
Lease").
C. Pursuant to this Ground Lease, the Ground Lessor desires to lease
the Land and grant and convey certain easements to the Ground Lessee, and the
Ground Lessee desires to lease the Land and receive the grant and conveyance of
such easements from the Ground Lessor.
D. Pursuant to the Facility Assets Lease, the Owner Trustee shall
sublease the Site to the Lessee.
E. Pursuant to the Indenture, the Ground Lessee intends to,
immediately following the execution and delivery of this Ground Lease, mortgage
and grant a security interest in the Facility to the Indenture Trustee.
Accordingly, in consideration of the premises, and other good and
valuable consideration, the receipt and suf-
<PAGE>
ficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Definitions.
-----------
1.1. Certain Definitions. Unless the context shall otherwise
-------------------
require, the following terms have, for the purposes of this Ground Lease, the
respective meanings set forth below:
"Additional Rent" shall have the meaning set forth in Section 5.2.
---------------
"Easements" shall mean, (a) for the period commencing on the Closing
--------- -
Date and ending on the date that is the later of (i) the Basic Lease Term Expiry
-
Date or (ii) the scheduled expiration date of any Renewal Term under the
--
Facility Assets Lease, the easements described in Section 2(b) and, (b) for any
-
other period, if pursuant to the Support Agreements there are provided any
easements, access or other rights that are substantially similar to the
easements described in Section 2(b), any such easements, access or other rights.
"Facility Assets Awards" shall mean all awards or other payments
----------------------
received at any time by the Ground Lessor or the Ground Lessee from any
Governmental Authority or other Person with respect to any loss, condemnation,
confiscation, theft or seizure of, or requisition of title or use of, or damage
to the Facility Assets or any part thereof; provided that in no event shall any
--------
awards or other payments in respect of the Site, any payments owed by the Ground
Lessor to the Ground Lessee or any payments owed by the Ground Lessee to the
Ground Lessor constitute Facility Assets Awards hereunder.
"Facility Assets Lease" shall have the meaning set forth in the
---------------------
Recitals.
"Fair Market Rental Value of the Site" shall mean the fair market
------------------------------------
rental value that would be obtained in an arm's-length transaction between an
informed and willing lessor and an informed and willing lessee, in either case
under no compulsion to rent and neither of which is related to the Ground Lessor
or the Ground Lessee, for the lease of the Land and the grant of the non-
exclusive rights under the Easements for the time period in question, assuming
the continued operation of the Facility Assets on the Site in the manner in
which the Facility Assets were operated at the
2
<PAGE>
end of the Basic Lease Term or prior Renewal Term, as the case may be, but
without regard to the value of the Facility Assets.
"Final Ground Lease Period" shall mean, unless this Ground Lease is at
-------------------------
any time terminated earlier as provided herein, the period that shall begin on
the day after the Basic Lease Term Expiry Date, and shall end on the thirtieth
anniversary of the Closing Date.
"Ground Lease Event of Default" shall have the meaning set forth in
----------------------------
Section 15.
"Ground Lease Impositions" shall have the meaning set forth in
-----------------------
Section 13.1.
"Ground Lease Term" shall have the meaning set forth in Section 4.1.
-----------------
"Ground Lease Transferee" shall have the meaning set forth in
-----------------------
Section 14.2(c).
"Ground Lessee" shall have the meaning set forth in the Preamble.
-------------
"Ground Lessor" shall have the meaning set forth in the Preamble.
-------------
"Land" shall mean the land and building described in Exhibit A
----
attached hereto, consisting of the main tract described in Section 1 of Exhibit
A (the "Main Tract"), the tank farm tract described in Section 2 of Exhibit A
----------
(the "Tank Farm Tract") and the building described in Section 3 of Exhibit A
---------------
(the "Operator Shelter").
----------------
"Leasehold Mortgage" shall have the meaning set forth in Section
------------------
14.2(a).
"Leasehold Mortgagee" shall have the meaning set forth in Section
-------------------
14.2(a).
"Maximum Rate" shall have the meaning set forth in Section 23.12.
------------
"Memorandum of Ground Lease" shall have the meaning set forth in
--------------------------
Section 23.1.
"New Ground Lessee" shall have the meaning set forth in Section 14.4.
-----------------
3
<PAGE>
"Owner Trustee" shall have the meaning set forth in the Preamble.
-------------
"Post-Term Fair Market Sales Value" for all or part of the
----------------------------------
Facility Assets shall mean the cash price that would be obtained in an arm's-
length sale between an informed and willing buyer (under no compulsion to
purchase) and an informed and willing seller (under no compulsion to sell) of
the property in question determined on an "as-is" basis and without regard to
the presence of the Facility Assets within the Refinery, it being understood
that for purposes hereof the Facility Assets are to be valued solely on a stand-
alone basis.
"Primary Rent" shall have the meaning given in Section 5.1.
------------
"Site" shall mean, collectively, the Land and the Easements.
----
"Site Awards" shall mean all awards or other payments received at any
-----------
time by the Ground Lessor or the Ground Lessee from any Governmental Authority
or other Person with respect to any loss, condemnation, confiscation, theft or
seizure of, or requisition of title or use of, or damage to the Land, the
Easements or the land underlying or relating to the Easements or any part
thereof; provided that in no event shall any awards or other payments in respect
--------
of the Facility Assets, any payments owed by the Ground Lessor to the Ground
Lessee or any payments owed by the Ground Lessee to the Ground Lessor constitute
Site Awards hereunder.
1.2. Other Definitions, Exhibits etc. Unless the context shall
-------------------------------
otherwise require, capitalized terms used herein, and not otherwise defined
herein, shall have the respective meanings assigned to them in Appendix A
hereto; provided that, notwithstanding the definition of Appraisal Procedure in
--------
such Appendix A, in connection with any Appraisal Procedure undertaken pursuant
to this Ground Lease, (a) the Appraisal Procedure shall be commenced by written
-
notification from the Ground Lessor to the Ground Lessee or from the Ground
Lessee to the Ground Lessor and (b) the fees and expenses of the appraisers
-
appointed shall be borne equally by the Ground Lessor and the Ground Lessee. All
Exhibits, Appendices and Schedules attached hereto are incorporated herein and
made a part hereof.
4
<PAGE>
Section 2. Lease of Land and Grant of Easements. (a) Upon and
------------------------------------
subject to the terms and conditions of this Ground Lease, the Ground Lessor
hereby leases to the Ground Lessee, and the Ground Lessee hereby leases from the
Ground Lessor, for the Ground Lease Term, the Land, subject to the Ground
Lessor's rights retained and reserved in Section 2(c) and (d) hereof.
(b) Upon and subject to the terms and conditions of this Ground
Lease, the Ground Lessor hereby grants and conveys to the Ground Lessee, for the
period commencing on the Closing Date and ending on the date that is the later
of (i) the Basic Lease Term Expiry Date or (ii) the scheduled expiration date of
- --
any Renewal Term under the Facility Assets Lease, the following non-exclusive
easements, subject to the Ground Lessor's rights retained and reserved in
Section 2(c) and (d) hereof:
(i) easement to use all roadways from time to time located within the
tract of land described in Exhibit B attached hereto (the "Refinery Tract")
--------------
for pedestrian and vehicular ingress and egress between and among the Main
Tract, the Tank Farm Tract, the Ground Lessor's wharf located on and
adjacent to the Refinery Tract, the Designated Parking Areas, as
hereinafter defined, and the Ground Lessor's central control building
located on the Refinery Tract, to the extent necessary for the operation of
the Facility Assets in the manner contemplated by the Facility Assets
Lease;
(ii) easement to use areas located within the Refinery Tract from
time to time designated by the Ground Lessor for parking of vehicles for
employees working at the Facility and contractors providing services to the
Facility (the "Designated Parking Areas");
------------------------
(iii) easement to use, operate, maintain, repair, and replace all
existing pipes, pipelines, pipe-racks, electric, gas, telecommunications
and other utility lines, water and sewer lines and similar facilities,
cables, transmission and conduit devices, pumps and motors, and to
construct, use, operate, maintain, repair and replace additional pipes,
pipelines, pipe-racks, electric, gas, telecommunications and other utility
lines, water and sewer lines and similar facilities, cables, transmission
and conduit devices, pumps and motors, that are necessary for the operation
5
<PAGE>
of the Facility Assets in the manner contemplated by the Facility Assets
Lease;
(iv) easement to use the area in the Ground Lessor's existing central
control building located on the Refinery Tract presently occupied by the
computer equipment and control panels that constitute a portion of the
Facility Assets, provided that only employees of the Ground Lessor,
independent contractors retained by the Ground Lessor or other Persons
authorized in advance by the Ground Lessor may have access to the Ground
Lessor's existing central control building; and
(v) easement to use the Ground Lessor's existing wharf, or any
replacement wharf constructed by the Ground Lessor, for the gauging,
docking, berthing, loading and unloading of barges, for the access of
customs inspection officials, for the loading and unloading of equipment
and feedstock used in the operation of the Facility Assets, and to ship the
product produced by the Facility Assets, in the manner contemplated by the
Facility Assets Lease.
(c) During any portion of the Final Ground Lease Period during which
the Facility Assets Lease is no longer in effect, the right to use the Easements
shall be subject to any charges and terms of usage to be agreed upon by the
parties pursuant to Section 10.9 of the Participation Agreement. Nothing herein
shall limit the right of the Ground Lessor, and the Ground Lessor hereby
specifically retains and reserves the right, to use on a non-exclusive basis,
and grant to other Persons non-exclusive rights to use, the Site or any portion
thereof for any purpose provided that any such use of the Site shall not violate
Section 19(a) hereof or otherwise in any material respect adversely affect the
use, operation or possession of the Facility Assets in the manner contemplated
by the Facility Assets Lease or after the expiration or earlier termination of
the Facility Assets Lease, the independent use, operation or possession of the
Facility Assets by the Ground Lessee for the production of paraxylene and
benzene or any other aromatic chemical for the production of which the Facility
Assets are designed or adaptable, by qualified personnel, in accordance with
good business practice.
(d) At the option of the Ground Lessor, to be exercised by giving
notice to the Ground Lessee, at any time and from time to time during the Ground
Lease Term, the Ground Lessor may, and the Ground Lessor hereby specifically
6
<PAGE>
retains and reserves the right to, cause (i) any of the Easements not described
-
by metes and bounds or on a recorded plat to be specifically located and defined
in a metes and bounds description or on a recorded plat; (ii) any Easement that
--
has theretofore been specifically located and defined to be relocated and
redefined in a metes and bounds description or on a recorded plat; (iii) any
---
roadways, pipes, pipelines, pipe-racks, electric, gas, telecommunications and
other utility lines, water and sewer lines and similar facilities, cables,
transmissions and conduit devices, pumps, wharf and tanks to be relocated and
(iv) the computer equipment and control panels that constitute a portion of the
- ---
Facility Assets to be relocated from the Ground Lessor's central control
building to substitute space of comparable utility located on the Refinery
Tract, provided that any such specific location or relocation shall not violate
Section 19(a) hereof or otherwise in any material respect adversely affect the
use, operation or possession of the Facility Assets in the manner contemplated
by the Facility Assets Lease or after the expiration or earlier termination of
the Facility Assets Lease, the independent use, operation or possession of the
Facility Assets by the Ground Lessee for the production of paraxylene and
benzene or any other aromatic chemical for the production of which the Facility
Assets are designed or adaptable, by qualified personnel, in accordance with
good business practice. The Ground Lessor shall bear all of the costs and
expenses, including, without limitation, reasonable surveyors', engineers' and
attorneys' fees and expenses, and construction and moving costs, associated with
the location or relocation or redefinition of such Easements or other
facilities. Promptly upon receipt of a written request from the Ground Lessor,
the Ground Lessee shall execute such documents as may be reasonably required to
confirm such easement and effect such location or relocation or redefinition.
Section 3. Facility Assets.
---------------
3.1. Reservation of Title. During the Ground Lease Term, the
--------------------
Facility Assets are and shall remain the property of the Ground Lessee no matter
how the same may be attached to the Land or the land underlying or relating to
any Easements, and the Ground Lessee may at any time or from time to time,
remove from the Land or sell or otherwise transfer title to all or any part of
the Facility Assets, at its own expense, without the consent of, or any
liability to, the Ground Lessor; provided that the Ground Lessee shall give the
--------
Ground Lessor at least sixty (60) days prior
7
<PAGE>
written notice of any such removal and the Ground Lessee shall repair any damage
to the Refinery or the Site resulting from any such removal, and provided
--------
further that the Ground Lessee shall take no action hereunder pursuant to this
- -------
Section 3.1 which conflicts with or is inconsistent with its obligations or its
ability to perform its obligations hereunder or under any of the other Operative
Documents, or with the rights of the Ground Lessor, the Lessee or the Indenture
Trustee under the Ground Lease, the Facility Assets Lease or any of the other
Operative Documents.
3.2. Separation of Title. It is the express intention of the parties
-------------------
that the separation of title to the Site from title to the Facility Assets is to
remain in effect throughout the Ground Lease Term. To the maximum extent
permitted by law, the parties hereto stipulate and agree that the Facility
Assets and all Modifications to the Facility Assets and every portion thereof
are severed, and shall be and remain severed, to the maximum extent permitted by
law, from any real estate underneath the Facility Assets, even if physically
attached thereto. To the maximum extent permitted by law, the parties hereto
agree that the Facility Assets and all Modifications to the Facility Assets and
every portion thereof, shall constitute personal property and shall not be or
become fixtures or otherwise part of the real estate underneath the Facility
Assets or of any other real property.
Section 4. Term of Ground Lease.
--------------------
4.1. Ground Lease Term. The term of this Ground Lease (the "Ground
----------------- ------
Lease Term") shall begin on the Closing Date and, unless sooner terminated as
- ----------
provided in this Ground Lease, shall end on the thirtieth anniversary of the
Closing Date.
4.2. [Intentionally Omitted].
4.3. Ground Lessor's Bankruptcy. It is expressly understood and
--------------------------
agreed that, for purposes of Section 365(h) of the Bankruptcy Code, 11 U.S.C.
(S) 365(h), (a) the Ground Lessee shall be deemed to be in possession of the
-
Site by virtue of the possessory interest therein granted to the Ground Lessee
under this Ground Lease whether or not all or any part of the Site has been
subleased by the Ground Lessee and (b) in the event of any rejection or
-
disaffirmance of this Ground Lease in any bankruptcy or similar proceeding
relating to the Ground Lessor, the Ground Lessee may remain
8
<PAGE>
in possession of the Site for the balance of the Ground Lease Term (assuming all
renewal options are exercised), at the option of the Ground Lessee.
Section 5. Rent.
----
5.1. Ground Lease Primary Rent. (a) Prior to the commencement of
-------------------------
the Final Ground Lease Period, the Ground Lessee shall pay annual installments
of rent (the "Primary Rent") of, for each one-year period, $327,500 or, for any
------------
shorter period, the pro-rated portion of such amount applicable to such shorter
period. Such Primary Rent shall be paid to the Ground Lessor in arrears on each
anniversary of the Closing Date during such period and shall be allocable to the
one-year period ending on such anniversary or, in the case of the payment on the
first anniversary of the Closing Date, to the period commencing on the Closing
Date and ending on such first anniversary.
(b) If the Facility Assets Lease is renewed pursuant to Section 5
thereof, the Ground Lessee shall pay to the Ground Lessor, in addition to the
payment for each period referred to in Section 5.1(c), Primary Rent equal to the
Fair Market Rental Value of the Site for each period corresponding to a Renewal
Term entered into pursuant to Section 5 of the Facility Assets Lease. Such
Primary Rent shall be paid to the Ground Lessor in arrears on each anniversary
of the Closing Date during each such Renewal Term and shall be allocable to the
one-year period ending on such anniversary. The Fair Market Rental Value of the
Site shall be determined by the Ground Lessor and confirmed by an independent
appraiser, at the expense of the Ground Lessor, as an acceptable valuation for
the Fair Market Rental Value of the Site.
(c) During the Final Ground Lease Period, the Ground Lessee shall pay
to the Ground Lessor Primary Rent equal to $12,000.00 per year. Such Primary
Rent shall be paid to the Ground Lessor in arrears on each anniversary of the
Closing Date during the Final Ground Lease Period and shall be allocable to the
one-year period ending on such anniversary. The Ground Lessee may, at its
option, prepay such Primary Rent by paying $7,028.88 to the Ground Lessor on the
Closing Date.
5.2. Additional Rent. The Ground Lessee shall also pay, from time to
---------------
time, as additional rent (the "Additional Rent"), all Ground Lease Impositions
---------------
and all other amounts, liabilities and obligations which the Ground
9
<PAGE>
Lessee herein assumes or agrees to pay with respect to the Site. The Ground
Lessor hereby irrevocably appoints, with full power of substitution, which
appointment is coupled with an interest, the Ground Lessee as the attorney-in-
fact of the Ground Lessor for the purpose of making all payments of Additional
Rent required to be made to Persons other than the Ground Lessor. If any such
Person shall refuse to accept such payment from the Ground Lessee, the Ground
Lessee shall pay such Additional Rent directly to the Ground Lessor, the Ground
Lessor shall forward such payment to the Person to whom it was due and assume,
as between the Ground Lessor and the Ground Lessee, all obligations therefor,
and such payment shall operate as a complete discharge of the Ground Lessee's
obligation to make such payment of Additional Rent.
5.3. Late Payment. All amounts payable to the Ground Lessor
------------
hereunder shall be payable at its address for notices as set forth in Section
17.2. If any Primary Rent or Additional Rent shall not be paid when due, the
Ground Lessee shall pay to the Ground Lessor (or, in the case of Additional
Rent, to the Ground Lessor for its own account or to the Person entitled thereto
as provided herein), as Additional Rent, interest (to the extent permitted by
applicable law) on such overdue amount from and including the due date thereof
to but excluding the date of payment thereof (unless payment is made after 12:00
noon, local time at the place of receipt, in which event such date of payment
shall be included) at the Overdue Rate, but not to exceed the Maximum Rate.
Section 6. Use of Site.
-----------
6.1. Use. During the Ground Lease Term, subject to the terms and
---
conditions of the Operative Documents and the Support Agreements, the Ground
Lessee may (i) enter upon, occupy and use the Land to acquire, construct,
-
design, install, own, maintain, use, test, operate, modify, alter, improve,
finance, lease and remove, directly or through third parties, the Facility
Assets in the manner contemplated by the Facility Assets Lease or after the
expiration or earlier termination of the Facility Assets Lease, in such manner
as to allow the independent use, operation or possession of the Facility Assets
by the Ground Lessee for the production of paraxylene and benzene or any other
aromatic chemical for the production of which the Facility Assets are designed
or adaptable, by qualified personnel, in accordance with good business practice,
and any use reasonably and directly related to the foregoing,
10
<PAGE>
and (ii) use the Easements in connection with the operation of the Facility
--
Assets in the manner contemplated by the Facility Assets Lease or after the
expiration or earlier termination of the Facility Assets Lease, in such manner
as to allow the independent use, operation or possession of the Facility Assets
by the Ground Lessee for the production of paraxylene and benzene or any other
aromatic chemical for the production of which the Facility Assets are designed
or adaptable, by qualified personnel, in accordance with good business practice.
6.2. Alterations. During the Ground Lease Term, subject to the terms
-----------
and conditions of the Operative Documents and the Support Agreements, the Ground
Lessee, in its discretion, may from time to time alter or improve, or cause to
be altered or improved, the Land or any part thereof in any manner it deems
necessary or desirable to carry on any activity permitted under Section 6.1,
including, without limitation, any alteration, demolition or removal of any
existing buildings, equipment, machinery or other structures or items of
personal property or fixtures and any grading or landscaping of the Land.
6.3. Maintenance of Site. In addition to its other obligations
-------------------
hereunder, the Ground Lessee will, at its expense, keep the Site in good order
and condition in light of the use to which the Facility Assets are to be put.
After the expiration or earlier termination of the Facility Assets Lease,
notwithstanding anything to the contrary contained herein, the Ground Lessee
shall ensure that the Facility at all times is used and operated, if at all, on
behalf of the Ground Lessee only by a Person permitted to operate the Facility
Assets under clause (d) of Section 10.9 of the Participation Agreement. The
Ground Lessor has no obligation to make or pay for any repairs, replacements,
restorations, improvements, alterations or additions whatsoever on or to the
Site or to the Facility Assets, except such as may be necessary to comply with
its express obligations hereunder.
6.4. Damage to Refinery. Notwithstanding anything to the contrary
------------------
contained in this Ground Lease, in connection with the acquisition,
construction, design, installation, ownership, maintenance, use, testing,
operation, modification, alteration, improvement or removal of, or any other
action or inaction with respect to, the Facility Assets or the use or possession
of the Land, the land underlying the Easements or the Easements, the Ground
Lessee shall (a) avoid any damage to or material
-
11
<PAGE>
interference with the use, possession and operation of the Refinery (including,
without limitation, pipes and other property that run through or are located on
the Site but are not part of the Facility Assets); (b) repair any damage to the
-
Site or the Refinery caused by any of its activities and (c) make all
-
commercially reasonable efforts to coordinate with the Ground Lessor regarding
the scheduling of the use of any roadways and other Easements within the
Refinery and otherwise so as to prevent any injuries to Persons or property or
material interference with the use, maintenance and operation of the Refinery.
Section 7. Compliance with Governmental Requirements. The Ground
-----------------------------------------
Lessee at its expense will comply in all material respects with all Governmental
Rules applicable to the Site or applicable to the Ground Lessee's interest in or
operations at the Site, and with all other Governmental Rules to the extent any
failure to comply with such other Governmental Rules would result in a Lien upon
the Ground Lessor's interest in the Site, the material danger of the loss or
impairment of the title to the Site or any portion of the Refinery or the
imposition or threatened imposition of any criminal or material civil penalties
on the Ground Lessor or any other Person entitled to access to or use of any
portion of the Site or the Refinery.
Section 8. Liens, etc. (a) Subject to Section 7, the Ground Lessee
----------
will not directly or indirectly create or permit to be created or to remain, and
will promptly discharge, any Lien on the Ground Lessor's interest in the Site or
any part thereof other than (i) statutory liens of contractors, subcontractors,
-
suppliers of goods, materials, equipment or services, or laborers or other like
liens, securing claims not more than sixty (60) days overdue and (ii) any Lien
--
affecting the Site created by the Ground Lessor or the Lessee or existing on the
date hereof; provided, however, that the Ground Lessee shall not be required to
-------- -------
discharge any Liens (other than Lessor's Liens or Owner Participant's Liens)
during any period that the Lessee is in default under the Facility Assets Lease.
For the avoidance of doubt, the Ground Lessee will not, directly or indirectly,
create or permit to be created or remain, and will promptly discharge, any Lien
on the Refinery arising through the actions or inactions of the Ground Lessee.
The obligations in this Section 8 shall survive the expiration or other
termination of this Ground Lease.
(b) The Ground Lessor will not directly or indirectly create or
permit to be created or to remain, and
12
<PAGE>
will promptly discharge, any Lien (other than any Permitted Lien) on the Ground
Lessee's interest in the Facility Assets or any part thereof.
Section 9. The Facility Assets Lease.
-------------------------
9.1. Ground Lessor to Look to Lessee for Performance. For so long as
-----------------------------------------------
(i) the Facility Assets Lease shall be in effect or (ii) the Lessee shall have
- --
possession of the Facility Assets, and notwithstanding anything to the contrary
in this Ground Lease, the Ground Lessor will look solely to the Lessee for the
payment, performance and discharge of the Ground Lessee's obligations and
liabilities hereunder (other than those set forth in Section 8 hereof), and the
Ground Lessee shall have no liability hereunder, no default or Ground Lease
Event of Default shall arise hereunder, and the rights of the Ground Lessee
hereunder shall not be affected, as a result of any failure of the Lessee to
pay, perform or discharge any such liabilities or obligations. No such payment,
performance or discharge by or on behalf of the Lessee shall be deemed an
acknowledgment by the Ground Lessor of the Lessee as the ground lessee
hereunder, or a merger of the Facility Assets Lease with this Ground Lease or a
merger of the estate of the sublessor under the Facility Assets Lease with the
estate of the Lessee thereunder. The Ground Lessee will not consent to any
amendment, modification or supplement of or to the Facility Assets Lease which
would limit the obligation of the Lessee set forth therein to pay, perform the
obligations and discharge the liabilities of the Ground Lessee hereunder without
the prior written consent of the Ground Lessor.
9.2. Rights of the Lessee. For so long as the Facility Assets Lease
--------------------
shall be in effect, if this Ground Lease has terminated or been rejected or
disaffirmed as described in the first sentence of Section 14.4 and if at the
time no Leasehold Mortgagee shall have timely exercised its right to require the
Ground Lessor to enter into a new ground lease under Section 14.4, the Ground
Lessor shall give the Lessee notice thereof, and at any time within thirty (30)
days after receipt of such notice, the Lessee may require the Ground Lessor to
enter into such a new lease with the Lessee in order to create between the
Ground Lessor and the Lessee the relationship of lessor and lessee with respect
to the Site, provided that any such new lease between the Ground Lessor and the
--------
Lessee shall contain all of the terms and conditions of this Ground Lease as
provided in Section 14.4. This Section 9.2 is entered into by the Ground Lessor
for the benefit of the Lessee, shall survive
13
<PAGE>
the termination, rejection or disaffirmance of this Ground Lease and may be
specifically enforced by the Lessee against the Ground Lessor.
Section 10. Loss.
----
10.1. Event of Loss. (a) During the term of the Facility Assets
-------------
Lease, if an Event of Loss shall occur which Event of Loss shall result in the
termination of the Facility Assets Lease, this Ground Lease shall terminate as
of the date of termination of the Facility Assets Lease, and, subject to
Sections 8 and 11.1, the Ground Lessee shall have no liability hereunder for any
Primary Rent or any Additional Rent which would otherwise accrue or be payable
hereunder after such date.
(b) After the expiration or earlier termination of the Facility
Assets Lease, this Ground Lease shall terminate as of the date of the occurrence
of an Event of Loss with respect to the Facility Assets or the Site (for all
purposes of this Section 10.1(b), (i) clause (c)(i) of the definition of Event
-
of Loss shall be deleted and clause (c)(ii) shall be replaced with the
following, "which extends beyond the date which is twelve (12) months prior to
the scheduled expiration of the Ground Lease Term" and (ii) any determination to
--
be made in the reasonable judgment of the Lessee which is referred to in the
definition of Event of Loss shall be made, after the expiration or earlier
termination of the Facility Assets Lease, in the reasonable judgment of the
Ground Lessee).
10.2. Other Damage to Site. Whether or not the Facility Assets Lease
--------------------
shall have expired or terminated, in the event of damage to, or loss,
condemnation or requisition of, the Facility Assets or the Site which does not
constitute an Event of Loss, this Ground Lease shall remain in full force and
effect with no adjustment to Primary Rent or Additional Rent. All Site Awards
accruing to the Ground Lessor or the Ground Lessee on account of such damage to,
or loss, condemnation or requisition of the Site not constituting an Event of
Loss shall be held by or paid over to the Ground Lessor and applied by or on
behalf of the Ground Lessor, first, to the restoration of the Site, to the
-----
extent the Ground Lessor deems such restoration feasible and necessary for the
operation of the Facility Assets for their intended purpose, and second, the
------
balance, if any, thereafter remaining shall be paid to or retained by the Ground
Lessor.
14
<PAGE>
10.3. Allocation of Awards Upon Event of Loss. (a) If an Event of
---------------------------------------
Loss under the Facility Assets Lease shall occur during any period when the
Facility Assets Lease shall be in effect, which Event of Loss results in
termination of this Ground Lease pursuant to Section 10.1(a), (i) all Site
-
Awards accruing to the Ground Lessor or the Ground Lessee on account of such
Event of Loss shall be retained by or paid over to the Ground Lessor and (ii)
--
all Facility Assets Awards shall be distributed pursuant to the Facility Assets
Lease.
(b) If an Event of Loss shall occur with respect to the Site or the
Facility Assets during any period when the Facility Assets Lease shall not be in
effect, which Event of Loss results in the termination of this Ground Lease
pursuant to Section 10.1(b), (i) all Site Awards accruing to the Ground Lessor
-
or the Ground Lessee on account of such Event of Loss shall be apportioned
between the Ground Lessor and the Ground Lessee in the same ratio as the ratio
of (1) the value of the Ground Lessor's remainder interest in the Site
-
(determined as at the end of the Ground Lease Term, as then in effect, and
discounted to present value at the Debt Rate), plus all Primary Rent (or, for
periods for which Primary Rent has not been determined, the Fair Market Rental
Value of the Site as determined by mutual agreement of the Ground Lessor and the
Ground Lessee, or, if they shall fail to agree upon the Fair Market Rental Value
of the Site within thirty (30) days after a request to do so by either party,
pursuant to the Appraisal Procedure) payable for the remainder of the Ground
Lease Term, discounted to present value at the same rate, to (2) the value of
-
the Ground Lessee's leasehold interest in the Site, in each case determined as
though no such Event of Loss had occurred, and (ii) all Facility Assets Awards
--
shall be retained by or paid over to the Ground Lessee.
(c) In any case in which this Section 10.3 requires that Site Awards
be apportioned between the Ground Lessor and the Ground Lessee, or in any case
where no separate Facility Assets Award or Site Award is made with respect to
the Facility Assets and the Site, or in any case involving any properties of the
Ground Lessor other than the Site where no separate Site Award is made with
respect to the Site and such other properties, such apportionment shall be as
determined by good faith negotiations by the Ground Lessor and the Ground
Lessee, consistent with the provisions of this Section 10. If the Ground Lessor
and the Ground Lessee shall fail to agree within thirty (30) days after a
15
<PAGE>
request to do so by either party, the apportionment shall be determined in
accordance with the Appraisal Procedure.
(d) The payment and application of Site Awards and Facility Assets
Awards set forth in Sections 10.2 and 10.3 shall apply notwithstanding the fact
that, in any Event of Loss, Site Awards and Facility Assets Awards may be
separately evaluated and paid to the Ground Lessor and the Ground Lessee.
(e) The Ground Lessor shall have the right to direct all proceedings
under this Section 10, provided that all material decisions affecting the rights
--------
of the Ground Lessee under this Section 10 shall be subject to the consent of
the Ground Lessee (which consent shall not be unreasonably withheld). Subject
to the foregoing, the Ground Lessor shall have the right to institute and
prosecute such proceedings as may be reasonably required to obtain an adequate
Site Award for damages to all or any portion of the Site resulting from any
Event of Loss, such proceedings to be brought in the name of the Ground Lessor
or the Ground Lessee, or in the names of both of them. The cost of such
proceedings shall be borne by the Ground Lessor.
Section 11. Indemnification; Insurance.
--------------------------
11.1. INDEMNIFICATION. DURING THE GROUND LEASE TERM AND THE PERIOD
---------------
FOR REMOVAL OR DISMANTLEMENT OF THE FACILITY ASSETS THEREAFTER AS DESCRIBED IN
SECTION 12.2 OR 12.3, THE GROUND LESSEE WILL INDEMNIFY, PROTECT, DEFEND AND HOLD
THE GROUND LESSOR HARMLESS FROM AND AGAINST ANY CLAIM (AS DEFINED IN APPENDIX A)
THAT MAY BE IMPOSED ON, ASSERTED AGAINST OR INCURRED BY THE GROUND LESSOR IN ANY
WAY RELATING TO OR ARISING OUT OF THE FACILITY OR THE SITE OR ANY PART THEREOF
OR ANY ACTIVITY BY THE GROUND LESSEE OR ANY SUBLESSEE, ASSIGNEE OR OTHER
TRANSFEREE THEREOF ON OR IN RESPECT OF ANY PART OF THE FACILITY OR THE SITE OR
THE CONDITION AND REPAIR OF ANY PART OF THE FACILITY OR THE SITE OR THE FAILURE
OF THE GROUND LESSEE TO COMPLY WITH ANY OF ITS OBLIGATIONS HEREUNDER, INCLUDING,
WITHOUT LIMITATION, BY REASON OF ANY INJURY TO PERSONS OR PROPERTY OR ANY
VIOLATIONS OF ANY GOVERNMENTAL RULES.
AFTER THE EXPIRATION OR EARLIER TERMINATION OF THE FACILITY ASSETS
LEASE, THE GROUND LESSOR WILL INDEMNIFY, PROTECT, DEFEND AND HOLD THE GROUND
LESSEE HARMLESS FROM AND AGAINST ANY CLAIM (AS DEFINED IN APPENDIX A) THAT MAY
BE IMPOSED ON, ASSERTED AGAINST OR INCURRED BY THE GROUND
16
<PAGE>
LESSEE IN ANY WAY RELATING TO THE REFINERY (BUT EXCLUDING THE SITE) OR ARISING
OUT OF ANY ACTIVITY BY THE GROUND LESSOR ON OR IN RESPECT OF THE REFINERY (BUT
EXCLUDING THE SITE) OR ANY ACTIVITY BY THE GROUND LESSOR ON THE SITE OR THE
FAILURE OF THE GROUND LESSOR TO COMPLY WITH ANY OF ITS OBLIGATIONS HEREUNDER,
INCLUDING, WITHOUT LIMITATION, BY REASON OF ANY INJURY TO PERSONS OR PROPERTY OR
ANY VIOLATIONS OF ANY GOVERNMENTAL RULES.
SUBJECT TO THE FOLLOWING SENTENCE, NOTHING IN THE PRECEDING TWO
SENTENCES SHALL MAKE EITHER OF THE GROUND LESSEE OR THE GROUND LESSOR
RESPONSIBLE FOR LOSS OR DAMAGE CAUSED BY THE NEGLIGENCE, GROSS NEGLIGENCE OR
WILFUL MISCONDUCT OF THE OTHER, OR THE OTHER'S AGENTS OR EMPLOYEES. THE
INDEMNIFICATION OBLIGATIONS OF THE GROUND LESSEE SHALL APPLY TO ANY CLAIM
SUFFERED BY THE GROUND LESSOR NOTWITHSTANDING THE IMPOSITION OF STRICT LIABILITY
ON THE GROUND LESSOR OR ANY NEGLIGENCE OR OTHER LIABILITY SOLELY ATTRIBUTABLE TO
THE GROUND LESSOR WITH RESPECT TO THE GROUND LESSOR'S (A) OWNERSHIP OF THE SITE,
-
STATUS AS "GROUND LESSOR" HEREUNDER OR ENTERING INTO THIS GROUND LEASE WITH THE
GROUND LESSEE; (B) STATUS AS A PROVIDER OF SERVICES OR UTILITIES UNDER THE
-
SUPPORT AGREEMENTS; (C) FAILURE TO MONITOR OR SUPERVISE THE GROUND LESSEE'S
-
ACTIVITIES IN AND AROUND THE SITE OR (D) FAILURE TO ENFORCE THE PROVISIONS OF
-
THIS GROUND LEASE. THE OBLIGATIONS IN THIS SECTION 11.1 SHALL SURVIVE THE
EXPIRATION OR OTHER TERMINATION OF THIS GROUND LEASE.
11.2. Insurance. Following the expiration or earlier termination of
---------
the Facility Assets Lease, the Ground Lessee will maintain or cause to be
maintained at all times at its expense (a) with respect to the Site, insurance
-
against loss or damage by fire, lightning and other risks from time to time
included under "all-risk" policies, to the extent such insurance is available
and (b) with respect to the Facility Assets and the Ground Lessee's use of the
-
Site, public liability, including personal injury and property damage and
comprehensive general liability insurance against claims, including, without
limitation, environmental claims arising out of or connected with the
possession, use, leasing, operation or condition of the Facility Assets or the
Site, to the extent such insurance is available, in each case in such amounts
and with such deductibles and in such forms customarily maintained by persons
engaged in the business then being operated at the Facility by the Ground
Lessee. Any deductibles and self-insured retentions in connection with such
insurance in excess of amounts customarily maintained by persons engaged in the
business
17
<PAGE>
then being operated at the Facility by the Ground Lessee shall be satisfactory
to the Ground Lessor. Any insurance required to be maintained by the Ground
Lessee pursuant to this Section 11.2 shall, in all other respects, comply with
the criteria contained in Section 13.1(b) of the Facility Assets Lease, with the
Ground Lessor to be named (I) as a loss payee in respect of the insurance
-
described in clause (a) of the first sentence of this Section 11.2 and (II) as
--
an insured or additional insured in respect of the liability insurance described
in clause (b) of the first sentence of this Section 11.2.
Section 12. Termination; Surrender of Site; Dismantlement.
---------------------------------------------
12.1. Ground Lessee's Right to Terminate Ground Lease. The Ground
-----------------------------------------------
Lessee may terminate this Ground Lease on at least ninety (90) days' prior
written notice to the Ground Lessor so long as the Facility Assets Lease shall
have expired or terminated on or prior to the date of termination of the Ground
Lease set forth in such notice. This Ground Lease shall terminate on the date
set forth in such notice, and, subject to Sections 8 and 11.1, the Ground Lessee
shall have no liability hereunder for any Primary Rent or other obligations
accruing hereunder after such date, except as provided in Sections 12.2(c) and
12.3(c).
12.2. Surrender of Site; Dismantlement of Facility Assets by Ground
-------------------------------------------------------------
Lessee. (a) Subject to Sections 12.2(b) and 12.2(c), upon the expiration or
- ------
earlier termination of this Ground Lease, the Ground Lessee shall surrender its
interest in the Site to the Ground Lessor.
(b) No later than (i) ninety (90) days prior to the expiration of the
-
Ground Lease Term or (ii) ten (10) days after (1) any notice of early
-- -
termination pursuant to Section 12.1, (2) the occurrence of an Event of Loss
-
after the expiration or earlier termination of the Facility Assets Lease
pursuant to Section 10.1(b) or (3) any demand by the Ground Lessor to the Ground
-
Lessee to surrender the Site following a Ground Lease Event of Default pursuant
to Section 15, the Ground Lessee shall deliver an irrevocable notice (the
"Election Notice") to the Ground Lessor and the Lessee of its election to either
- ----------------
(x) dismantle and remove the Facility Assets from the Land or the land
-
underlying the Easements at its own expense or (y) have the Lessee dismantle and
-
remove the Facility Assets from the Land or the land underlying the Easements
pursuant to Section 12.3. In the event that the Ground Lessee elects to
dismantle and
18
<PAGE>
remove the Facility Assets from the Land or the land underlying the Easements
pursuant to clause (x) above, the Ground Lessee shall dismantle and remove the
Facility Assets from the Land or the land underlying the Easements not later
than six (6) months from the date of the Election Notice, and in addition to the
Ground Lessee's obligations in Section 6.4, the Ground Lessee shall give the
Ground Lessor at least sixty (60) days prior written notice of the commencement
of any such dismantlement and removal, and the Ground Lessee shall repair any
damage to the Refinery or the Site resulting from any such dismantlement and
removal. If the Ground Lessee shall have failed to deliver the Election Notice
in the time periods listed above, the Ground Lessee shall be deemed to have
elected the option in 12.2(b)(y).
(c) Upon the expiration or earlier termination of this Ground Lease,
the Facility Assets may remain on the Land or the land underlying the Easements
during the period required for the Ground Lessee to dismantle and remove the
Facility Assets under Section 12.2(b); provided that during such period the
--------
Ground Lessee shall have the right to enter upon, occupy or use the Site or any
part thereof solely for the purpose of dismantling and removing the Facility
Assets pursuant to such Section 12.2(b), and during such period the Ground
Lessee shall be responsible for all utilities and other expenses in connection
with the dismantlement and removal of the Facility Assets and any Ground Lease
Impositions allocable to the Facility Assets. The provisions of this Section
12.2 shall survive the expiration or termination of this Ground Lease and the
Facility Assets Lease.
12.3. Dismantlement of the Facility Assets by Lessee. (a) Subject
----------------------------------------------
to the Lessee's purchase option described in Section 12.3(b), if the Ground
Lessee has elected or is deemed to have elected the option in Section
12.2(b)(y), the Lessee, at its own expense, shall be required to dismantle the
Facility Assets and deliver the components thereof, appropriately packaged or
crated, to the nearest public wharf not later than one year after the expiration
or earlier termination of this Ground Lease. The Lessee shall give the Ground
Lessor at least sixty (60) days prior written notice of the commencement of any
such dismantlement and removal, and the Lessee shall repair any damage to the
Refinery or the Site resulting from any such dismantlement and removal.
(b) In lieu of dismantling and removing the Facility Assets pursuant
to Section 12.3(a), the Lessee
19
<PAGE>
shall have the option to purchase the Facility Assets for a purchase price equal
to the greater of (x) the then Post-Term Fair Market Sales Value of the
-
dismantled Facility Assets, less an amount equal to the total cost of
dismantlement, removal, packaging and delivery as contemplated by Section
12.3(a) and (y) $1. Within thirty (30) days of the Ground Lessee's request for
-
dismantlement pursuant to Section 12.3(a), the Lessee and the Ground Lessee
shall commence negotiations to determine the Post-Term Fair Market Sales Value
of the Facility Assets. If the Lessee and the Ground Lessee are unable to agree
within thirty (30) days as to the Post-Term Fair Market Sales Value after a
request to do so by either party, the Post-Term Fair Market Sales Value shall be
determined by the Appraisal Procedure. The Lessee shall notify the Ground
Lessee and the Ground Lessor of its decision to exercise this purchase option no
later than six (6) months after the expiration or earlier termination of this
Ground Lease. Upon payment of the purchase price of the Facility Assets, the
Ground Lessee shall transfer all right, title and interest of the Ground Lessee
in and to the Facility Assets, as is and where is, to the Lessee or as the
Lessee may direct, free and clear of Lessor's Liens and Owner Participant's
Liens but otherwise without any representation or warranty.
(c) Upon the expiration or earlier termination of this Ground Lease,
the Facility Assets may remain on the Land or the land underlying the Easements
during the period required for the Lessee to perform its dismantlement
obligation under Section 12.3(a); provided that during such dismantlement period
--------
the Ground Lessee shall have no right to enter upon, occupy or use the Site or
any part thereof, and provided further that during such period the Lessee shall
-------- -------
have the right to enter upon, occupy or use the Site or any part thereof solely
for the purpose of dismantling and removing the Facility Assets pursuant to such
Section 12.3(a), and during such period the Lessee shall be responsible for all
utilities and other expenses in connection with the dismantlement and removal of
the Facility Assets and any Ground Lease Impositions allocable to the Facility
Assets. The provisions of this Section 12.3 shall survive the expiration or
termination of this Ground Lease and the Facility Assets Lease.
Section 13. Ground Lease Impositions.
------------------------
13.1. Payment of Ground Lease Impositions. Subject to Section 16, the
-----------------------------------
Ground Lessee shall pay or cause to be paid all taxes, assessments and all other
charges of
20
<PAGE>
any nature whatsoever levied by any Governmental Authority against the Site or
any part thereof or the Facility Assets or any part thereof at any time during
the Ground Lease Term (collectively, the "Ground Lease Impositions") before any
------------------------
fine, penalty, interest or cost which may be a Lien upon the Site or the
Facility Assets or any part of any thereof or a liability of the Ground Lessor
shall accrue. Any Ground Lease Impositions levied or assessed for a period
beginning before the Closing Date or ending after the Ground Lease Term shall be
prorated between the Ground Lessor and the Ground Lessee as of the applicable
date. In case of any special assessment levied or assessed during the Ground
Lease Term which is payable in installments, the Ground Lessee shall only be
obligated to pay those installments coming due during the Ground Lease Term.
13.2. Allocation of Ground Lease Impositions. In the absence of a
--------------------------------------
separate assessment of the Site and the Facility Assets and on other adjacent
properties, the Ground Lessee's allocable share of such Ground Lease Impositions
shall be equal to the amount of such Ground Lease Impositions multiplied by a
fraction the numerator of which is the sum of the Fair Market Sales Value of the
portion of the Facility Assets and the Site subject to such Ground Lease
Impositions and the denominator of which is the Fair Market Sales Value of the
total properties subject to such Ground Lease Impositions, subject to
appropriate adjustment if the basis for assessment of the Ground Lease
Impositions is not the value of the property which is subject thereto. In the
event the Ground Lessor and the Ground Lessee are unable to agree on the
respective fair market values referred to in the preceding sentence within
thirty (30) days after a request to do so by either party, such values shall be
determined by the Appraisal Procedure.
13.3. Direct Payment of Ground Lease Impositions. Unless otherwise
------------------------------------------
required by a Leasehold Mortgagee, the Ground Lessee shall pay Ground Lease
Impositions directly to the appropriate governmental authority and, upon written
request of the Ground Lessor, shall forward to the Ground Lessor receipts or
other appropriate evidence of such payment. If the Site is assessed in the
name of the Ground Lessor, the Ground Lessor shall deliver all bills and notices
relating to Ground Lease Impositions to the Ground Lessee and each Leasehold
Mortgagee promptly following their receipt by the Ground Lessor.
21
<PAGE>
Section 14. Transfers by the Ground Lessee.
------------------------------
14.1. Subletting and Assigning. (a) Subject to the terms and
------------------------
conditions of this Ground Lease and the other Operative Documents, the Ground
Lessee shall have the right to sublet, in whole or in part, or to assign, in
whole or in part, its interest hereunder without the consent of the Ground
Lessor, provided that (i) so long as the Facility Assets Lease is in effect, the
-------- -
Ground Lessee may only sublet or assign any interest hereunder (1) pursuant to
-
Section 2.4 of the Facility Assets Lease or (2) concurrently with the assignment
-
to a successor Owner Trustee of its interests in the Facility Assets pursuant
to, and to the extent permitted by, the Operative Documents, and (ii) after the
--
expiration or the earlier termination of the Facility Assets Lease, the Ground
Lessee may make an assignment of all of its interest under this Ground Lease and
in and to the Facility Assets to any Person permitted by the Operative Documents
only if (1) such Person assumes, in writing in form and substance satisfactory
-
to the Ground Lessor, all of the obligations and liabilities of the Ground
Lessee hereunder and liabilities thereunder and (2) except in the case of a
-
purchase of the Facility by an unaffiliated third party pursuant to Section
7.3(a)(ii) or Section 16 of the Facility Assets Lease or if the transfer meets
the requirements of Sections 13.2(a), (b), (e) and (i) of the Participation
Agreement, the Owner Participant shall guarantee in full, to the satisfaction of
the Ground Lessor, the obligations of the Ground Lessee (including any successor
or assign). Upon an assignment pursuant to Section 14.1(a)(ii), the Ground
Lessee will be released from all liability thereafter accruing under this Ground
Lease from and after the effective date of such assignment, and the assignee
shall have all the rights and obligations of the Ground Lessee hereunder.
(b) In the event the Ground Lessee purports to sublet or assign its
interest hereunder in a manner other than as expressed in Section 14.1(a), such
sublease or assignment shall be null and void and of no effect for any purposes
whatsoever as to the Ground Lessor.
14.2. Leasehold Mortgages; Rights of Leasehold Mortgagees. (a)
---------------------------------------------------
During the term of the Facility Assets Lease, the Ground Lessee may not encumber
its interest in the Site other than by granting the Lien of the Indenture. After
the expiration or earlier termination of the Facility Assets Lease, the Ground
Lessee may enter into one or more mortgages or deeds of trust encumbering the
Ground Lessee's
22
<PAGE>
interest in the Site which secures, among other things, the payment of
indebtedness of the Ground Lessee for money borrowed and the performance by
the Ground Lessee of related obligations, notice of which mortgage or deed of
trust (including the name and address of the holder thereof) has been given to
the Ground Lessor by the Ground Lessee or the mortgagee thereunder (each, a
"Leasehold Mortgage"). Any documentation relating to such Leasehold Mortgage
- -------------------
shall be reasonably acceptable to the Ground Lessor, and any filings or other
recordations relating to such Leasehold Mortgage shall be in form reasonably
satisfactory to the Ground Lessor and shall be made by the Ground Lessor or in a
manner reasonably satisfactory to the Ground Lessor. The Ground Lessor
acknowledges that the Indenture constitutes a "Leasehold Mortgage" for all
purposes hereof. The Indenture Trustee or any other holder of a Leasehold
Mortgage (a "Leasehold Mortgagee") may, but shall not be obligated to, make any
-------------------
payment or perform any act required hereunder to be made or performed by the
Ground Lessee with the same effect as if made or performed by the Ground Lessee,
provided that no entry by such Leasehold Mortgagee upon the Site for such
- --------
purpose shall constitute or be deemed to be an eviction of the Ground Lessee or
shall waive or release the Ground Lessee from any obligation or default
hereunder (except any obligation or default which shall have been fully and
irrevocably performed or corrected by such payment or performance by such
Leasehold Mortgagee). In no event shall the Ground Lessor's interest in the
Site be pledged as security for, or subordinated to, any mortgage or other
encumbrance without the prior written consent of the Ground Lessor.
(b) If a Ground Lease Event of Default shall occur, written notice to
that effect shall be sent by the Ground Lessor to each Leasehold Mortgagee, and
the Ground Lessor shall take no action to terminate this Ground Lease or to
interfere with the occupancy, use or enjoyment of the Site or the Facility
Assets, prior to the expiration of any period for the cure thereof provided in
this Section 14.2(b).
(i) If such Ground Lease Event of Default shall be a default in the
payment of any amounts hereunder (including, without limitation, any
Primary Rent or any Additional Rent), then such Leasehold Mortgagee shall
have twenty (20) days after the giving of the notice referred to in the
first sentence of this Section 14.2(b) to remedy such default.
23
<PAGE>
(ii) If such Ground Lease Event of Default is not a payment default
and such default can be remedied by such Leasehold Mortgagee without
obtaining possession of the Site, then such Leasehold Mortgagee shall have
sixty (60) days after the giving of the notice referred to in the first
sentence of this Section 14.2(b) to remedy such default.
(iii) If such Ground Lease Event of Default shall be a default which
can only be remedied by such Leasehold Mortgagee upon obtaining
possession of the Site and such Leasehold Mortgagee or its nominee shall
obtain such possession with reasonable diligence, through foreclosure,
appointment of a receiver or otherwise, then such Leasehold Mortgagee shall
have fifteen (15) days after obtaining such possession to remedy such
default.
Any default remedied or cured by a Leasehold Mortgagee in accordance
with this Section 14.2 shall be deemed cured for all purposes of this Ground
Lease.
If, during the pendency of any possession referred to in subparagraph
(iii) of this Section 14.2(b) prior to transfer of the Ground Lessee's interest
in the Site to such Leasehold Mortgagee, its nominee or any purchaser by fore-
closure or otherwise under the Leasehold Mortgage, such Leasehold Mortgagee
shall comply with the requirements of such subparagraph, shall pay or cause to
be paid to the Ground Lessor all Primary Rent accruing during such period, and
shall perform or cause to be performed all other obligations of the Ground
Lessee hereunder accruing during such period except those which cannot with the
exercise of reasonable diligence be performed by or on behalf of such Leasehold
Mortgagee, then the Ground Lessor shall have no right to terminate this Ground
Lease or to interfere with such possession during such pendency based on such
unperformed obligations.
(c) Subject to Section 14.3, if any Leasehold Mortgagee or its
nominee or any other Person (collectively, a "Ground Lease Transferee") shall
-----------------------
acquire all or substantially all of the Ground Lessee's interest in the Site and
the Facility Assets as a result of a default under any Leasehold Mortgage,
whether by foreclosure, power of sale, voluntary conveyance, or otherwise, and
if such Ground Lease Transferee shall have assumed in writing in form and
substance reasonably satisfactory to the Ground Lessor all obligations and
liabilities of the Ground Lessee under this
24
<PAGE>
Ground Lease, then (1) such Ground Lease Transferee shall be liable for the
-
performance or observance of agreements, obligations, covenants or conditions
under this Ground Lease, and all liabilities with respect thereto and (2) such
-
Ground Lease Transferee shall be entitled to all of the benefits available to
the Ground Lessee under this Ground Lease.
14.3. Assignment by Leasehold Mortgagees, etc. The sale, transfer or
---------------------------------------
assignment of all or any part of the Ground Lessee's interest in the Site to any
Ground Lease Transferee on foreclosure or other enforcement of the lien of any
Leasehold Mortgagee shall be of no force and effect unless (i) during the term
-
of the Facility Assets Lease, the sale, transfer or assignment of all or any
part of the Ground Lessee's interest in the Site to any Ground Lease Transferee
is consistent with the terms of the Operative Documents or (ii) after the
--
expiration or earlier termination of the Facility Assets Lease, the Ground Lease
Transferee shall meet the requirements of Sections 13.2(a), (b), (e) and (i) of
the Participation Agreement and has assumed, in a writing in form and substance
satisfactory to the Ground Lessor, all of the obligations and liabilities of the
Ground Lessee hereunder.
14.4. New Ground Lease. If this Ground Lease shall terminate as a
----------------
result of a default by the Ground Lessee which cannot be cured or remedied or
this Ground Lease shall be rejected or disaffirmed in any bankruptcy, insolvency
or reorganization proceeding affecting the Ground Lessee, then any Leasehold
Mortgagee or a Person designated by such Leasehold Mortgagee (in either case,
the "New Ground Lessee"), shall have the right, exercisable by notice to the
-----------------
Ground Lessor within sixty (60) days after the effective date of such
termination, rejection or disaffirmance, to enter into a new lease of the Site
with the Ground Lessor, the term of which shall begin on the date of the
termination, rejection or disaffirmance of this Ground Lease and shall continue
for the remainder of the originally scheduled Ground Lease Term. The new lease
shall otherwise contain the same terms and conditions as those set forth herein,
except for requirements which are no longer applicable or have already been
performed. The provisions of this Section 14.4 shall survive the termination,
rejection or disaffirmance of this Ground Lease and shall continue in full force
and effect thereafter to the same extent as if this Section 14.4 were a separate
and independent contract among the Ground Lessor, the Ground Lessee and each
Leasehold Mortgagee. From the date on which
25
<PAGE>
any Leasehold Mortgagee shall serve upon the Ground Lessor notice of the
exercise of its right to a new lease, such Leasehold Mortgagee may use and enjoy
the Site without hindrance by the Ground Lessor. If at any time there is more
than one Leasehold Mortgagee, the Leasehold Mortgagee that, in the reasonable
determination of the Ground Lessor, is most senior in lien priority shall, in
the absence of agreement to the contrary among all Leasehold Mortgagees, be the
only Leasehold Mortgagee entitled to the benefits of this Section 14.4.
14.5. Personal Liability of Leasehold Mortgagee, etc. No Leasehold
----------------------------------------------
Mortgagee shall become personally liable for the performance or observance of
any agreements, obligations and covenants or conditions to be performed or
observed by the Ground Lessee, or any liabilities with respect thereto, unless
and until such Leasehold Mortgagee becomes the owner of the Ground Lessee's
interest hereunder upon the exercise of any remedy provided for in any Leasehold
Mortgage or enters into a new Ground Lease with the Ground Lessor pursuant to
Section 14.4.
Section 15. Ground Lease Events of Default; Ground Lease Termination.
--------------------------------------------------------
Subject to Section 9.1, if any of the following events shall have occurred and
be continuing and the Ground Lessor shall have given written notice thereof to
the Ground Lessee and each Leasehold Mortgagee, then a "Ground Lease Event of
---------------------
Default" shall exist hereunder:
- -------
(a) a default by the Ground Lessee in the payment of any amounts when
and as due under this Ground Lease, which default shall remain uncured for
a period of ten (10) days from the date such payment is due;
(b) a default by the Ground Lessee in any material respect in the
performance of any of its obligations hereunder (other than as set forth in
Section 9.1 or 15(a)) and such default shall have continued unremedied for
more than thirty (30) days after the date of the notice of default,
provided, however, that the continuation of any such default for such
-------- -------
period of thirty (30) days or such longer period (not to exceed ninety (90)
days) after receipt of such notice shall not constitute a Ground Lease
Event of Default so long as (i) such default is curable or correctable and
-
(ii) the Ground Lessee is diligently pursuing the cure or correction of
--
such default; or
26
<PAGE>
(c) the Ground Lessee (or, if the Owner Participant or Termination
Owner is guaranteeing the obligations of the Owner Trustee, the Owner
Participant or Termination Owner, as the case may be) shall file, or
consent to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction or the Ground Lessee shall make an assignment for the benefit
of its creditors or the Ground Lessee shall consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers of itself
for substantially all its property, or be adjudicated insolvent or an order
for relief shall be entered against the Ground Lessee in any case or
proceeding for liquidation or reorganization or otherwise to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding up or liquidation of the Ground Lessee (or the Owner
Participant, as applicable) or any petition for any such relief shall be
filed against the Ground Lessee and shall not be dismissed within sixty
(60) days, provided, however, no such filing, consent, adjudication, order,
-------- -------
or other action described above in this Section 15(c) with respect to the
Owner Trustee shall constitute a Ground Lease Event of Default so long as
(i) the Owner Participant is diligently pursuing the replacement of the
--
Owner Trustee as permitted by the Operative Documents, (ii) no other Ground
--
Lessee default shall occur under this Ground Lease and (iii) the Ground
---
Lessor shall suffer no adverse effect in any material respect with respect
to or in any way relating to the reorganization of the Owner Trustee or the
replacement of the Owner Trustee.
At any time at which a Ground Lease Event of Default has occurred
and is continuing, but subject to Sections 14.2(b), 9.1 and 9.2, the Ground
Lessor may (i) give a termination notice to the Ground Lessee, whereupon this
-
Ground Lease shall terminate and all rights of the Ground Lessee under this
Ground Lease shall cease; (ii) (1) demand that the Ground Lessee, and the Ground
-- -
Lessee shall, return the Site promptly to the Ground Lessor as if the Site were
being returned at the end of the Ground Lease Term and (2) enter upon the Site
-
and take immediate possession of the Site (to the exclusion of the Ground
Lessee) or (iii) pursue such other remedies as may be
---
27
<PAGE>
available to the Ground Lessor. For the avoidance of doubt, nothing in this
Section 15 shall derogate from Section 9.1.
Section 16. Permitted Contests. The Ground Lessee, at its expense,
------------------
and, if legally required, in the name of the Ground Lessor, may contest (after
prior written notice to the Ground Lessor), by appropriate legal proceedings
conducted with due diligence, the amount or validity or application, in whole or
in part, of any Ground Lease Impositions or utility bill referred to in Section
18, provided that (a) neither the Site nor the Facility nor any part thereof or
-------- -
interest therein, nor any amounts payable to the Ground Lessor hereunder, would
be in danger of being sold, forfeited or lost by reason of the pendency of such
proceedings and (b) the Ground Lessor would not be in danger of any criminal
-
liability or, unless the Ground Lessee shall have furnished a bond or other
security therefor satisfactory to the Ground Lessor, any material civil
liability for failure to comply therewith during the pendency of such
proceedings. The Ground Lessor will reasonably cooperate with the Ground Lessee
in any such contest, at the Ground Lessee's expense unless the Ground Lessor
shall derive an independent benefit from any such contest which has been a
success, in which case the expenditure of the contest shall be allocated in
proportion to the respective benefits derived by the Ground Lessor and the
Ground Lessee, as agreed by the Ground Lessor and the Ground Lessee, or, in the
absence of agreement within thirty (30) days after the request of either party
for agreement on such allocation, as determined by the Appraisal Procedure.
Section 17. Notices, etc.
------------
17.1. Notices to the Leasehold Mortgagees. So long as any Leasehold
-----------------------------------
Mortgage of which the Ground Lessor has notice is in effect, no notice hereunder
to be given by the Ground Lessor shall be deemed valid or duly given unless a
copy of such notice is given in the manner contemplated by this Section 17 to
the Leasehold Mortgagee under each such Leasehold Mortgage.
17.2. Addresses for Notices. Except as otherwise provided in this
---------------------
Ground Lease, all notices, requests, demands and other communications under this
Ground Lease shall be in writing, shall be effective upon receipt thereof and
shall be delivered by hand, or mailed by registered or certified mail, postage
prepaid, return receipt requested or by facsimile transmission (with a copy
delivered by first class mail), (a) if to the Ground Lessee, to it at
-
28
<PAGE>
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration
(telephone: (302) 651-1000; telecopier: (302) 651-8882) with a copy to the
Owner Participant, at the address provided in or pursuant to the Participation
Agreement; (b) if to the Ground Lessor, to it at Mobil Oil Corporation, 3225
-
Gallows Road, Fairfax, Virginia 22037, Attention: Treasury (telephone: (703)
846-3000, telecopier: (703) 846-1407), with a copy to Mobil Corporation, at the
same address, Attention: Treasurer; (c) if to the Lessee, to it at Mobil
-
Chemical Finance (Texas) Inc., c/o Mobil Oil Corporation, 3225 Gallows Road,
Fairfax, Virginia 22037, Attention: Treasury (telephone: (703) 846-3000,
telecopier: (703) 846-1407), with a copy to Mobil Corporation, at the same
address, Attention: Treasurer and (d) if to any Leasehold Mortgagee, to it at
-
such address as such Leasehold Mortgagee shall have furnished to the Ground
Lessor in writing or to such other address as any such Person shall have
furnished by notice hereunder.
17.3. No Merger of Title. There shall be no merger of this Ground
------------------
Lease or the leasehold estate created by this Ground Lease with any other estate
in the Facility Assets or any part thereof by reason of the fact that the same
Person may acquire or own or hold, directly or indirectly, (a) this Ground Lease
-
or the leasehold estate created by this Ground Lease or any interest in this
Ground Lease or in any such leasehold estate and (b) any other estate in the
-
Facility Assets or any part thereof or any interest in such estate, and no such
merger shall occur unless and until all Persons, including each Leasehold
Mortgagee having any interest (including a security interest) in (i) this Ground
-
Lease or the leasehold estate by this Ground Lease and (ii) any other estate in
--
the Facility Assets or any part thereof, shall join in a written instrument
effecting such merger and shall duly record the same.
Section 18. Utilities. Subject to Sections 9.1 and 16, the Ground
---------
Lessee shall pay when due, as part of Additional Rent, all charges for gas,
electricity, water, sewer, telephone and all other utilities used or consumed by
the Facility Assets. The Ground Lessor shall send all such bills received by it
to the Ground Lessee, and the Ground Lessee shall pay all such bills or
reasonable proration thereof, whether received from the Ground Lessor or from a
utility, directly to the billing entity within thirty (30) days of receipt
thereof (subject to permitted contests under
29
<PAGE>
Section 16). All utility charges shall be prorated to the Closing Date and to
the date of expiration or earlier termination of the Ground Lease. Nothing
herein shall be construed as affecting the rights or obligations of any party
under any of the Support Agreements.
Section 19. Condition and Use of Site; Quiet Enjoyment. (a) Unless
------------------------------------------
and until this Ground Lease has expired or earlier terminated pursuant to the
express provisions hereof, the Ground Lessee shall have the peaceful and quiet
use and possession of the Site for the purposes contemplated hereunder, without
hindrance or disturbance by the Ground Lessor or any Person claiming by, through
or under the Ground Lessor, including without limitation any hindrance or
disturbance arising from or related to the operation by the Ground Lessor of the
Refinery or the use by the Ground Lessor of any of the Site.
(b) NEITHER THE GROUND LESSOR NOR THE GROUND LESSEE MAKES ANY
REPRESENTATION OR WARRANTY, WHETHER WRITTEN, ORAL OR IMPLIED, WITH RESPECT TO
THE SITE, THE FACILITY OR ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH
HEREIN, IN THE OTHER OPERATIVE DOCUMENTS OR IN ANY OFFICER'S CERTIFICATE OF THE
GROUND LESSOR OR THE GROUND LESSEE DELIVERED PURSUANT HERETO. AS BETWEEN THE
GROUND LESSOR AND THE GROUND LESSEE, EXECUTION BY THE GROUND LESSEE OF THIS
GROUND LEASE SHALL BE CONCLUSIVE PROOF OF THE GROUND LESSEE'S ACCEPTANCE OF THE
SITE FOR ALL PURPOSES HEREOF AND OF THE COMMENCEMENT OF THIS GROUND LEASE WITH
RESPECT THERETO AND THAT THE SITE IS SATISFACTORY TO THE GROUND LESSEE IN ALL
RESPECTS. THE GROUND LESSEE ACKNOWLEDGES THAT THE GROUND LESSOR LEASES AND THE
GROUND LESSEE TAKES THE SITE, THE FACILITY AND EACH PART THEREOF AS IS AND WHERE
IS, AND THE GROUND LESSOR SHALL NOT BE DEEMED TO HAVE MADE, AND THE GROUND
LESSOR DISCLAIMS, ANY REPRESENTATION OR WARRANTY OTHER THAN THOSE REFERRED TO IN
THE SECOND PRECEDING SENTENCE, EITHER EXPRESS OR IMPLIED, AS TO THE SITE OR
THE FACILITY, INCLUDING, WITHOUT LIMITATION, THE FITNESS THEREOF FOR ANY
PARTICULAR PURPOSE, TITLE THERETO OR TO ANY PART THEREOF OR THE PRESENCE OR
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. THE
DISCLAIMER OF REPRESENTATIONS AND WARRANTIES IN THIS SECTION 19(B) SHALL SURVIVE
THE EXPIRATION OR OTHER TERMINATION OF THIS GROUND LEASE.
Section 20. Representations and Warranties.
------------------------------
20.1. Representations and Warranties of the Ground Lessor. The
---------------------------------------------------
Ground Lessor represents and warrants to
30
<PAGE>
the Ground Lessee that the following statements are true and correct as of the
date hereof and as of the Closing Date.
(a) The Ground Lessor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and
has all requisite corporate power and authority to enter into and carry out
the terms of this Ground Lease.
(b) The execution, delivery and performance by the Ground Lessor of
this Ground Lease have been duly authorized by all necessary corporate
action on the part of the Ground Lessor and do not require any stockholder
approval, or approval or consent of any trustee or holders of any
indebtedness or other obligations of the Ground Lessor, except such
approvals or consents that, if not obtained or granted, would not have a
material adverse effect on the transactions contemplated by this Ground
Lease.
(c) No consent, approval or authorization of, or declaration or
filing with, any Governmental Authority on the part of the Ground Lessor is
required as a condition to the valid execution, delivery or performance of
this Ground Lease by the Ground Lessor, except as contemplated by the
Operative Documents, the filing of the Memorandum of Ground Lease pursuant
to Section 23.1 and such consents, approvals or authorizations or
declarations or filings that, if not obtained or granted, would not have a
material adverse effect on the transactions contemplated by this Ground
Lease.
(d) The execution, delivery and performance by the Ground Lessor of
this Ground Lease do not (i) violate or result in a breach of its charter
-
documents or by-laws; (ii) contravene any Governmental Rule or Governmental
--
Action applicable to it, which, in case of such performance, noncompliance
with which would materially adversely affect the ability of the Ground
Lessor to perform its obligations hereunder or (iii) contravene any
---
provision of, or constitute a default under, any indenture, mortgage,
contract or other agreement or instrument to which the Ground Lessor is a
party or by which it or its properties may be bound, except such
contraventions or defaults that shall not materially adversely affect the
ability of the Ground Lessor to perform its obligations hereunder.
31
<PAGE>
(e) This Ground Lease has been duly executed and delivered by the
duly authorized officers of the Ground Lessor, and, assuming the due
authorization, execution and delivery thereof by the Ground Lessee,
constitutes the valid and legally binding obligation of the Ground Lessor.
20.2. Representations and Warranties of the Ground Lessee. The
---------------------------------------------------
Ground Lessee, for the benefit of the Ground Lessor, repeats its representations
and warranties as set forth in Section 8 of the Participation Agreement, as
applicable, with respect to the Ground Lease as of the date hereof and as of the
Closing Date.
Section 21. Amendment, Modification, Acceptance of Surrender, etc.
-----------------------------------------------------
No amendment, modification or supplement of this Ground Lease shall be valid or
effective unless it is in writing and signed by each of parties hereto, and, to
the extent it materially adversely affects the rights of any Leasehold Mortgagee
hereunder, has been consented to in writing by the Ground Lessor and such
Leasehold Mortgagee.
Section 22. Sale, Mortgage, Assignment, etc., by Ground Lessor.
--------------------------------------------------
Nothing herein shall limit the right of the Ground Lessor, and the Ground Lessor
hereby specifically retains and reserves the right to sell, transfer, mortgage,
pledge and encumber the Ground Lessor's interest in the Site, provided that any
--------
such sale, transfer, mortgage, pledge or other encumbrance shall be subject to
this Ground Lease and to any new lease executed and delivered pursuant to
Section 9.2 or 14.4.
Section 23. Miscellaneous.
-------------
23.1. Memorandum of Ground Lease. The Ground Lessor and the Ground
--------------------------
Lessee shall cause to be recorded in the real property records of Jefferson
County, Texas a memorandum of this Ground Lease (the "Memorandum of Ground
--------------------
Lease") giving notice of this Ground Lease. The Memorandum of Ground Lease
shall not vary the terms of this Ground Lease and for all purposes the terms and
conditions of this Ground Lease shall prevail over the Memorandum of Ground
Lease.
23.2. Estoppel Certificates. (a) The Ground Lessor will execute,
---------------------
acknowledge and deliver promptly upon request, an officer's certificate
certifying, (i) provided that the Ground Lessee is not in default of any of its
-
obligations under this Ground Lease or any other Operative
32
<PAGE>
Document and no Ground Lease Event of Default has occurred and is continuing,
that this Ground Lease is unmodified and in full force and effect (or, if there
have been modifications, that the Ground Lease is in full force and effect, as
modified, and stating the date of each instrument so modifying the Ground
Lease); (ii) the dates, if any, to which the Primary Rent and, to its knowledge,
--
Additional Rent have been paid and (iii) whether any default exists hereunder
---
known to it and, if any such default exists, specifying the nature and period of
existence thereof and what action it is taking or proposes to take with respect
thereto, and whether notice thereof has been given to the Ground Lessee. Any
such certificate may be relied upon by any Leasehold Mortgagee or any
prospective purchaser or transferee of the Ground Lessee's interest under this
Ground Lease or any part thereof.
(b) The Ground Lessee will execute, acknowledge and deliver promptly
upon request, an officer's certificate certifying, (i) provided that the Ground
-
Lessor is not in default of any of its obligations under this Ground Lease, that
this Ground Lease is unmodified and in full force and effect (or, if there have
been modifications, that this Ground Lease is in full force and effect, as
modified, and stating the date of each instrument so modifying this Ground
Lease) and (ii) whether any default exists hereunder known to it and, if any
--
such default exists, specifying the nature and period of existence thereof and
what action it is taking or proposes to take with respect thereto, and whether
notice thereof has been given to the Ground Lessor. Any such certificate may be
relied upon by any prospective purchaser or transferee of any interest of the
Ground Lessor in the Site or any part thereof.
23.3. Governing Law. This Ground Lease shall be governed by and
-------------
construed in accordance with the laws of the State of Texas.
23.4. Severability. If any provision of this Ground Lease shall for
------------
any reason be determined to be invalid, illegal, unenforceable or prohibited in
any respect, the remainder of this Ground Lease and any other application of
such term shall not be affected thereby, and the parties hereto shall negotiate
in good faith and agree as to such replacement or such other appropriate actions
as shall, to the maximum extent practicable in light of such determination,
implement and give effect to the intentions of the parties as reflected herein.
33
<PAGE>
23.5. Table of Contents and Headings. The table of contents and the
------------------------------
headings of the various Sections of this Ground Lease are inserted for reference
only and shall not modify, amend, change or affect the express terms and
provisions of this Ground Lease.
23.6. Successors. This Ground Lease shall be binding upon and inure
----------
to the benefit of the parties hereto and their respective successors and
permitted assigns and, to the extent set forth herein, the Lessee and its
respective successors and permitted assigns.
23.7. Further Assurances. Each party shall execute, acknowledge and
------------------
deliver such documents and other instruments and perform such acts as may be
reasonably required by the other party in order to give full effect to this
Ground Lease or to facilitate the recording of the Memorandum of Ground Lease as
contemplated by Section 23.1.
23.8. No Recourse. (a) No recourse for the payment by the Ground
-----------
Lessee or the Ground Lessor of any amounts due pursuant to this Ground Lease or
for the performance or non-performance by the Ground Lessee or the Ground
Lessor of any of its obligations hereunder shall be had against any incorporator
or against any past, present or future stockholder, director or officer, as
such, of such party or any Affiliate of such party, whether such recourse be
sought by virtue of any constitutional provision, statute or rule of law, or by
the enforcement of any assessment or penalty, or by any legal or equitable
proceeding, including, without limitation, any claim as a third party
beneficiary of any contract or agreement between such party and such Affiliate
or otherwise.
(b) So long as the Ground Lessee is the Owner Trustee, the Ground
Lessor agrees for itself and for its successors and assigns that, as against the
Ground Lessee, it will look solely to the assets, income and proceeds of the
Trust Estate and not to the Owner Trustee in its individual capacity for the
payment of any amounts payable or the performance of any obligations by the
Ground Lessee hereunder, and agrees and confirms that the Ground Lessee is not
in any way personally liable for any such amounts or on account of any covenant
or agreement hereunder, but nothing hereunder shall limit the liability of the
Owner Trustee, in its individual capacity or otherwise, for any liability it may
have under the express terms of any other Operative Document.
34
<PAGE>
23.9. Entire and Complete Agreement. This Ground Lease constitutes
-----------------------------
the entire and complete agreement of the parties with respect to the lease by
the Ground Lessor to the Ground Lessee of the Site, and supersedes all prior or
contemporaneous understandings, arrangements, commitments and representations
with respect to such lease, all of which, whether oral or written, are merged
herein.
23.10. Counterparts. This Ground Lease may be executed in any number
------------
of counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
23.11. Rule Against Perpetuities. The parties hereto do not
-------------------------
intend any interest created by this Ground Lease to be a perpetuity or to be
subject to invalidation under any applicable perpetuities rule; however, if the
rule is to be applied, then the perpetuities period shall be twenty-one (21)
years after the last to die of the currently living great-grandchildren and/or
grandchildren and/or children of former United States President George H. W.
Bush.
23.12. Usury. No provision of this Ground Lease or any other
-----
instrument relating to this Ground Lease shall require the payment or permit the
collection of interest in excess of the maximum nonusurious rate of interest per
annum which may be contracted for, charged, taken, received or reserved by the
Ground Lessor or any other Person under applicable United States Federal or
state law (whichever is higher) now or hereafter enforced with respect to this
Ground Lease (the "Maximum Rate"). If any excess interest in such respect is so
------------
provided for, or shall be adjudicated to be so provided for, the provisions of
this Section 23.12 shall govern, and neither the Ground Lessee nor its
successors or assigns shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate, and if any excess interest has
been paid, the excess amount shall, at the option of the Ground Lessor, either
be (i) applied against the next installment of Primary Rent or (ii) refunded to
- --
the Ground Lessee.
35
<PAGE>
IN WITNESS WHEREOF, the parties hereto have each caused this Ground
Lease to be duly executed as of the date first above written.
MOBIL OIL CORPORATION
By:
-------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement
By:
-------------------------------------------
Name:
Title:
The Lessee hereby joins in
this Ground Lease for the
sole purpose of evidencing
its agreement to perform the
obligations stated in this
Ground Lease to be obligations
of the "Lessee":
MOBIL CHEMICAL FINANCE
(TEXAS) INC.
By:
-----------------------------------
Title:
36
<PAGE>
EXHIBIT 4.6
===============================================================================
TRUST AGREEMENT
between
FLEET NATIONAL BANK,
Owner Participant
and
WILMINGTON TRUST COMPANY,
Owner Trustee
Dated as of May 19, 1997
================================================================================
Certain Paraxylene Production Facility
Assets Located in Beaumont, Texas
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Definitions................................ 1
Section 2. Authority to Execute and Perform Various
Documents.................................. 1
Section 3. Declaration of Trust....................... 2
3.1 Appointment of Owner Trustee............... 2
3.2 Declaration of Trust by Owner Trustee...... 2
Section 4. Payments................................... 2
4.1 Payments from Trust Estate Only............ 2
4.2 Method of Payment.......................... 3
Section 5. Distributions.............................. 3
5.1 Payments to Indenture Trustee.............. 3
5.2 Payments to Owner Trustee.................. 4
5.3 Excepted Payments.......................... 4
5.4 Certain Distributions to Owner Participant. 4
5.5 Certain Distributions to Lessee............ 4
Section 6. Certain Duties of Owner Trustee............ 5
6.1 Notice of Certain Events................... 5
6.2 Action Upon Instructions................... 5
6.3 Indemnification............................ 6
6.4 No Duties Except as Specified.............. 6
6.5 No Action Except Under Specified Documents
or Instructions............................ 7
6.6 Tax Returns; Records....................... 7
6.7 Absence of Certain Duties.................. 8
6.8 Place of Administration.................... 8
Section 7. The Owner Trustee.......................... 8
7.1 Acceptance of Trust and Duties............. 8
7.2 Furnishing of Documents.................... 9
7.3 No Representations or Warranties as to the
Facility Assets or Documents............... 9
7.4 No Segregation of Moneys; No Interest...... 10
7.5 Reliance................................... 10
7.6 Not Act in Individual Capacity............. 11
Section 8. Indemnification; Compensation.............. 11
8.1 Indemnification of Trust Company........... 11
8.2 Compensation and Expenses.................. 13
<PAGE>
Page
----
Section 9. Termination of Trust Agreement............. 13
9.1 Termination of Trust Agreement............. 13
9.2 Termination at Option of Owner Participant. 14
9.3 Distribution of Trust Estate Upon
Termination................................ 14
Section 10. Successor Owner Trustee, Additional and
Separate Owner Trustees.................... 15
10.1 Resignation and Successors................. 15
10.2 Additional and Separate Trustees........... 17
Section 11. Supplements and Amendments................. 20
11.1 Supplements and Amendments................. 20
11.2 Limitation on Amendments................... 20
11.3 Discretion as to Execution of Documents.... 20
Section 12. Miscellaneous.............................. 21
12.1 No Legal Title to Trust Estate in the
Owner Participant.......................... 21
12.2 Sale of the Facility Assets by Owner
Trustee Is Binding......................... 21
12.3 Notices.................................... 21
12.4 Severability of Provisions................. 21
12.5 Separate Counterparts...................... 22
12.6 Successors and Assigns..................... 22
12.7 Transfer of Owner Participant's Interest... 22
12.8 Headings; Table of Contents................ 23
12.9 GOVERNING LAW.............................. 23
12.10 Performance by Owner Participant........... 23
12.11 The Owner Trustee Documents................ 23
12.12 Performance of Obligations to Indenture
Trustee.................................... 23
12.13 Trust Agreement for Benefit of Parties
Only....................................... 23
12.14 Limitation on Owner Participant's
Liability.................................. 24
<PAGE>
TRUST AGREEMENT
---------------
THIS TRUST AGREEMENT, dated as of May, 19, 1997, is between FLEET
NATIONAL BANK, a national banking association, as Owner Participant (the
"Owner Participant"), and WILMINGTON TRUST COMPANY, a Delaware banking corpora-
- ------------------
tion, in its individual capacity (the "Trust Company") and as Owner Trustee (the
"Owner Trustee"). In consideration of the mutual agreements herein contained,
-------------
the agreements contained in the other Operative Documents and the acceptance
by the Trust Company of the trust hereby created, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions. For the purposes hereof, terms used herein and
-----------
not otherwise defined shall have the respective meanings assigned to them in
Appendix A to the Participation Agreement, dated as of May 28, 1997, among
the Owner Trustee, the Owner Participant, Mobil Chemical Finance (Texas) Inc.
(the "Lessee") and State Street Bank and Trust Company, as Indenture Trustee,
------
Pass Through Trustee and Loan Participant (the "Participation Agreement").
-----------------------
Unless otherwise indicated, references in this Trust Agreement to Sections,
subsections, paragraphs and Appendices are to Sections, subsections, paragraphs
and Appendices of this Trust Agreement.
Section 2. Authority to Execute and Perform Various Documents. The
--------------------------------------------------
Owner Participant hereby authorizes and directs the Owner Trustee and the Owner
Trustee agrees for the benefit of the Owner Participant (i) on the date hereof,
-
to execute and deliver the Participation Agreement; (ii) on the Closing Date,
--
upon receipt of the authorization and direction by the Owner Participant
pursuant to Section 2.10 of the Participation Agreement, to execute and deliver
the Operative Documents contemplated to be executed and delivered by the Owner
Trustee on the Closing Date and take the other actions contemplated to be taken
by the Owner Trustee on the Closing Date in the Operative Documents; (iii) to
---
execute and deliver any other agreement, instrument or certificate contemplated
by the Operative Documents (collectively, with the Operative Documents, the
"Owner Trustee Documents"); (iv) subject to the terms of this Trust Agreement
- ------------------------ --
and of the other Operative Documents to which the Owner Trustee is a party, to
take whatever action shall be required to be taken by the Owner Trustee by the
terms of, and exercise its rights (upon instructions received from the Owner
Participant) and perform its duties under, each of the
<PAGE>
documents, agreements, instruments and certificates referred to in clauses (i),
(ii) and (iii) of this Section 2 as set forth in such documents, agreements,
instruments and certificates and (v) subject to the terms of this Trust
-
Agreement and the other Operative Documents to which it is a party, to take such
other action in connection with the foregoing as the Owner Participant may from
time to time direct in written instructions to the Owner Trustee.
Section 3. Declaration of Trust.
--------------------
3.1 Appointment of Owner Trustee. The Owner Participant hereby
----------------------------
appoints and constitutes the Trust Company as the Owner Trustee hereunder to
act as trustee of the Trust Estate for the purposes and in accordance with the
terms set forth herein.
3.2 Declaration of Trust by Owner Trustee. The Trust Company
-------------------------------------
hereby declares that it will hold as Owner Trustee all estate, right, title and
interest of the Owner Trustee in and to the Facility and the Owner Trustee Docu-
ments, including without limitation, all amounts of Rent, insurance proceeds,
sales proceeds, rental proceeds, and requisition, indemnity or other payments of
any kind to which the Owner Trustee is entitled pursuant to the terms of the
Owner Trustee Documents, but specifically excluding Excepted Payments
(collectively, the "Trust Estate"), upon the trust set forth herein and for the
------------
use and benefit of the Owner Participant as sole beneficiary, subject, however,
to the provisions of and the Lien created by the Indenture.
Section 4. Payments.
--------
4.1 Payments from Trust Estate Only. All payments to be made by
-------------------------------
the Owner Trustee under this Trust Agreement shall be made only from the assets
of or income and proceeds from the Trust Estate and only to the extent that the
Owner Trustee shall have received income or proceeds from the Trust Estate to
make such payments in accordance with the terms hereof, except as specifically
provided herein. The Owner Participant agrees that it will look solely to the
assets of or the income and proceeds from the Trust Estate to the extent
available for payment as herein provided and that, except as expressly provided
herein or in any other Owner Trustee Document, the Trust Company shall not be
liable for any amounts payable under this Trust Agreement and shall not be
subject to any liability under this Trust Agreement.
2
<PAGE>
4.2 Method of Payment. (a) All amounts payable to the Owner
-----------------
Participant, to the Indenture Trustee, or to the Lessee pursuant to this Trust
Agreement shall be paid by the Owner Trustee, (i) if to the Owner Participant,
-
by transferring such amount in immediately available funds to such account at
such financial institution as the Owner Participant from time to time may direct
or (ii) if to the Indenture Trustee, in the manner specified in the Indenture or
--
(iii) if to the Lessee, by transferring such amount in immediately available
---
funds to such account at such financial institution as the Lessee from time to
time may direct.
(b) Notwithstanding the foregoing, the Owner Trustee will pay, if so
requested by the Owner Participant in writing, any or all amounts payable by the
Owner Trustee hereunder to the Owner Participant either (i) by crediting such
-
amount or amounts to an account or accounts maintained by the Owner Participant
with the Trust Company in immediately available funds; (ii) by payment at the
--
address for payment specified in Schedule 1 to the Participation Agreement in
immediately available funds or (iii) by mailing an official bank check or checks
---
in such amount or amounts payable to the Owner Participant at such address as
the Owner Participant shall have designated in writing to the Owner Trustee.
(c) The Owner Trustee will pay all amounts payable to the Owner
Participant by the Owner Trustee hereunder on the day received (or on the next
succeeding Business Day if the funds to be so distributed shall not have been
received by the Owner Trustee prior to 12:00 p.m., New York City time, and the
Owner Trustee shall not have been reasonably able to distribute such funds to
the Owner Participant on the day received).
Section 5. Distributions.
-------------
5.1 Payments to Indenture Trustee. Until the Lien of the
-----------------------------
Indenture shall have been discharged pursuant to the terms thereof, all Basic
Rent, Supplemental Rent or other payments of any kind (other than Excepted
Payments) payable to the Owner Trustee (other than from the Indenture Trustee)
and included in the Trust Estate shall be payable directly to the Indenture
Trustee for distribution in accordance with the provisions of the Indenture,
and if any such amount or payment is received by the Owner Trustee, such amount
or payment upon receipt thereof shall be paid over to the Indenture Trustee
without deduction, set-off or adjust-
3
<PAGE>
ment of any kind for distribution in accordance with the provisions of the
Indenture; provided, however, that any payments received by the Owner Trustee
------------------
from (i) the Lessee with respect to the Owner Trustee's fees and disbursements,
-
or (ii) the Owner Participant pursuant to Section 8, shall not be paid over to
--
the Indenture Trustee but shall be retained by the Owner Trustee and applied
toward the purpose for which such payments were made.
5.2 Payments to Owner Trustee. Any payment of the type referred
-------------------------
to in Section 5.1 received by the Owner Trustee after the Indenture shall have
been discharged pursuant to the terms thereof, any payment received from the
Indenture Trustee other than as specified in Section 5.3 and any other amount
received as part of the Trust Estate and for the application or distribution of
which no provision is made herein shall, subject to Section 5.5, be distributed
forthwith upon receipt by the Owner Trustee in the following order of priority:
first, so much of such payment as shall be required to reimburse the Owner
- -----
Trustee for any expenses not otherwise reimbursed as to which the Owner Trustee
is entitled to be so reimbursed pursuant to the provisions hereof shall be
retained by the Owner Trustee; second, so much of the remainder for which
------
provision as to the application thereof is contained in any of the Operative
Documents or any of the other Owner Trustee Documents shall be applied and
distributed in accordance with the terms of such Operative Document or such
other Owner Trustee Document, as the case may be and third, the balance, if any,
-----
shall be paid to the Owner Participant.
5.3 Excepted Payments. Any Excepted Payment received by the Owner
-----------------
Trustee shall be paid by the Owner Trustee to the Person to whom such Excepted
Payment is payable pursuant to the terms of the Operative Documents.
5.4 Certain Distributions to Owner Participant. All amounts from
-------------------------------------------
time to time distributable by the Indenture Trustee to the Owner Participant
pursuant to the terms of the Indenture shall, if paid to the Owner Trustee, be
distributed by the Owner Trustee to or at the direction of the Owner
Participant.
5.5 Certain Distributions to Lessee. After the Indenture shall
-------------------------------
have been discharged pursuant to the terms thereof, any payment of the type
referred to in Section 5.1 received by the Owner Trustee with respect to the
Facility, if required by the terms of the Lease, shall be distributed to the
Lessee, or shall be held and invested and
4
<PAGE>
distributed by the Owner Trustee pursuant to Section 19.7 of the Lease, as the
case may be.
Section 6. Certain Duties of Owner Trustee.
-------------------------------
6.1 Notice of Certain Events. In the event that the Owner Trustee
------------------------
shall have Actual Knowledge of any Lease Event of Default, any Indenture Event
of Default or any Event of Loss, the Owner Trustee shall give prompt telephonic
notice thereof (promptly confirmed in writing) to the Owner Participant, the
Lessee and the Indenture Trustee, unless (in the case of notice to the Indenture
Trustee or the Lessee) such Lease Event of Default, Indenture Event of Default
or Event of Loss, as the case may be, has been remedied before the giving of
such notice and the Owner Trustee has Actual Knowledge that such Lease Event of
Default, Indenture Event of Default or Event of Loss has been so remedied.
Subject to the terms of Section 6.3, the Owner Trustee shall, after the
occurrence of any such event, take or refrain from taking such action with
respect thereto, not inconsistent with the provisions of the Operative
Documents, as the Owner Trustee shall be instructed in writing by the Owner
Participant. If the Owner Trustee shall not have received instructions as above
provided within twenty (20) days after such notice of such event to the Owner
Participant, the Owner Trustee may, until it shall have received such
instructions and subject to the provisions of the Operative Documents, take such
action or refrain from taking such action (but shall be under no duty to take or
refrain from taking any action) with respect to such Lease Event of Default,
Indenture Event of Default or Event of Loss, as it shall deem advisable in the
best interests of the Owner Participant.
6.2 Action Upon Instructions. (a) Subject to the terms of
------------------------
Sections 6.1 and 6.3, upon the written instructions at any time and from time
to time of the Owner Participant, the Owner Trustee shall take or refrain from
taking such action or actions, which actions shall not be inconsistent with
the provisions of any of the Operative Documents or the Owner Trustee Documents,
as may be specified in such instructions. In the event that the Owner Trustee
is unsure of the application of any provision of this Trust Agreement or any
other Owner Trustee Document, the Owner Trustee may request and rely upon
instructions of the Owner Participant.
(b) Notwithstanding anything to the contrary set forth in Section 2, the
Owner Trustee shall not, without instructions from the Owner Participant, (x)
-
exercise any
5
<PAGE>
right to retain the Facility Assets under Section 7 of the Lease, (y) terminate
-
the Lease except pursuant to the last sentence of Section 6.1 or (z) consent to
-
or approve any action or document as being satisfactory to the Owner Trustee, or
waive any condition or the performance of any obligation in favor of the Owner
Trustee or the Trust Estate, or release the Lessee from any obligation under
the Operative Documents.
6.3 Indemnification. The Owner Trustee shall not be required to
---------------
take or refrain from taking any action under Section 6.1 or 6.2 (other than the
actions specified in the first sentence of Section 6.1) unless the Owner Trustee
shall have been indemnified by the Owner Participant, in manner and form
reasonably satisfactory to the Owner Trustee, against any liability, fee, cost
or expense (including without limitation reasonable attorneys' fees) which may
be incurred or charged in connection therewith, other than any such liability,
fee, cost or expense which results from the willful misconduct (including
without limitation willful breach of contract) or gross negligence of the Owner
Trustee, or the failure of the Owner Trustee to use ordinary care in the receipt
and disbursement of funds, and, if the Owner Participant shall have directed the
Owner Trustee to take or refrain from taking any action under any Operative
Document, the Owner Participant agrees to furnish such indemnity (subject to the
foregoing limitation) as shall be reasonably satisfactory to the Owner Trustee,
and in addition, to the extent not otherwise paid pursuant to the terms of any
other Operative Document or Owner Trustee Document, to pay the reasonable
compensation of the Owner Trustee for the services performed or to be performed
by it pursuant to such direction as set forth in Section 8.2. The Owner Trustee
shall not be required to take any action under any Operative Document or any
Owner Trustee Document if the Owner Trustee reasonably shall determine, or shall
have been advised by counsel, that such action is likely to result in
unindemnified personal liability to the Owner Trustee or is contrary to the
terms hereof or of any documents contemplated hereby to which the Owner
Trustee is a party, or otherwise contrary to law, and the Owner Trustee in such
case shall deliver promptly to the Owner Participant written notice of the basis
of its refusal to act.
6.4 No Duties Except as Specified. The Owner Trustee shall not
-----------------------------
have any power, right, authority, duty or obligation to manage, control, use,
make any payment in respect of, register, record, insure, inspect, sell, dispose
of or otherwise deal with the Facility, any of the Facility
6
<PAGE>
Assets or any other part of the Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any Owner Trustee Document
or any of the other Operative Documents, except as expressly provided by the
terms of this Trust Agreement, the other Operative Documents or the Owner
Trustee Documents or in written instructions from the Owner Participant received
pursuant to Section 6.1 or 6.2, and no implied duties or obligations shall be
read into this Trust Agreement against the Owner Trustee. Notwithstanding and
without limiting the foregoing, the Trust Company agrees that it will, in its
individual capacity and at its own expense, without any right to indemnification
hereunder, promptly take all action necessary to discharge and satisfy in full
any Lessor's Lien attributable to it in its individual capacity on any part of
the Trust Estate and will claim no indemnity therefor hereunder or under the
Participation Agreement or under any other Operative Document.
6.5 No Action Except Under Specified Documents or Instructions.
----------------------------------------------------------
The Owner Trustee shall not have any right, power or authority to, and the Owner
Trustee agrees that it will not, manage, control, use, sell, dispose of or
otherwise deal with the Facility, any of the Facility Assets or any other part
of the Trust Estate except as (i) expressly required by the terms of any Owner
-
Trustee Document or (ii) expressly directed or authorized in written
--
instructions from the Owner Participant pursuant to Section 6.1 or 6.2, but
subject always to the provisions of, and the Lien created by, the Indenture and
the rights of the Lessee under the Lease and the other Operative Documents.
6.6 Tax Returns; Records. The Owner Trustee shall be responsible
--------------------
for the maintaining of all appropriate books and records relating to the receipt
and disbursement of all money which it may receive or be entitled to hereunder
or under any agreement contemplated hereby. The Owner Trustee agrees, at the
request and expense of the Owner Participant, to file an application with the
Internal Revenue Service for a taxpayer identification number with respect
to the trust created hereby and to prepare or cause to be prepared and to sign
and/or file all tax returns with respect to the transactions contemplated hereby
or any agreement referred to herein; provided, however, that the Owner Trustee
-------- -------
shall send a copy of the contemplated return to the Owner Participant not more
than sixty (60) nor less than thirty (30) days prior to the due date of the
return. The Owner Participant, upon request, will furnish the Owner Trustee with
all such information as may be reasonably
7
<PAGE>
required from the Owner Participant in connection with the preparation of such
tax returns. The Owner Trustee shall keep copies of all returns delivered to or
filed by it.
6.7 Absence of Certain Duties. Except in accordance with written
-------------------------
instructions furnished pursuant to Sections 6.1 and 6.2, and without limiting
the generality of Section 6.4, the Owner Trustee shall not have any duty (i) to
-
file, record or deposit any Operative Document or Owner Trustee Document,
including without limitation this Trust Agreement, or any other document, or to
maintain any such filing, recording or deposit, or to refile, re-record or re-
deposit any such document; (ii) to obtain insurance with respect to the Facility
--
or to effect or maintain any such insurance, other than to receive and forward
to the Owner Participant any notices, policies, certificates or binders
furnished to the Owner Trustee by the Lessee or its insurance brokers; (iii) to
---
maintain or mark the Facility or any of the Facility Assets; (iv) to pay or
--
discharge any tax, assessment or other governmental charge, or any Lien or
encumbrance of any kind, owing with respect to or assessed or levied against any
part of the Trust Estate, except as provided in Section 6.4 or 7.1 hereof; (v)
-
to confirm, verify, investigate or inquire into the failure to receive any
reports or financial statements of the Lessee or the Guarantor; (vi) to inspect
--
the Facility at any time, or to ascertain or inquire as to the performance or
observance of any of the covenants of the Lessee or any other Person under any
Operative Document or Owner Trustee Document with respect to the Facility or
any other part of the Trust Estate or (vii) to manage, control, use, sell,
---
dispose of or otherwise deal with the Facility or any other part of the Trust
Estate, or any part thereof, except as provided in clauses (i) and (ii) of
Section 6.5.
6.8 Place of Administration. The principal place of
-----------------------
administration of the trust created hereby shall be in Wilmington, Delaware.
Section 7. The Owner Trustee.
-----------------
7.1 Acceptance of Trust and Duties. The Owner Trustee accepts the
------------------------------
trust hereby created and agrees to perform the same on the terms of this Trust
Agreement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Trust Estate pursuant to the terms of
this Trust Agreement. The Trust Company shall not be answerable or accountable
under any circumstances except, and in the case of such exceptions shall not
8
<PAGE>
be entitled to indemnity hereunder or under any other Operative Document, (i)
-
for its own willful misconduct (including without limitation willful breach of
contract) or gross negligence; (ii) in the case of the inaccuracy of any of its
--
representations or warranties contained in Section 7.3 hereof or in Section 8 of
the Participation Agreement or in any written certificate delivered pursuant to
any Operative Document given expressly in its individual capacity and not in its
capacity as a trustee hereunder; (iii) as arising from its failure to perform
---
obligations expressly undertaken by it in the last sentence of Section 6.4
hereof or expressly undertaken by it in Section 11.2 of the Participation
Agreement; (iv) for any Tax based on or measured by any fees, commissions or
--
compensation received by it for acting as Owner Trustee in connection with any
of the transactions contemplated by the Operative Documents or (v) for its
-
failure to use ordinary care in the receipt and disbursement of funds.
7.2 Furnishing of Documents. The Owner Trustee will furnish to
-----------------------
the Owner Participant, promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, opinions, certificates, financial
statements and any other instruments furnished to the Owner Trustee under any
Operative Document or any Owner Trustee Document, unless the Owner Trustee shall
have determined that the same already has been actually received by the Owner
Participant.
7.3 No Representations or Warranties as to the Facility Assets or
-------------------------------------------------------------
Documents. (a) NEITHER THE TRUST COMPANY NOR THE OWNER TRUSTEE MAKES ANY
- ---------
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR
CONDITION OF THE FACILITY ASSETS OR ANY PART THEREOF, THE MERCHANTABILITY
THEREOF OR THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE FACILITY
ASSETS OR ANY PART THEREOF, THE QUALITY OF THE MATERIALS OR WORKMANSHIP THEREOF
OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, except that the Trust
Company hereby represents and warrants that (i) on the Closing Date, the Owner
-
Trustee shall have received whatever right, title and/or interest in or to the
Facility as was conveyed to the Owner Trustee by Mobil Oil Corporation and (ii)
--
the Facility shall be free and clear of Lessor's Liens attributable to Trust
Company, and (b) neither the Trust Company nor the Owner Trustee makes any
representation or warranty as to the validity or enforceability of any Operative
Document, or as to the correctness of any statement therein, except to the
9
<PAGE>
extent that any such representation, warranty or statement is expressly made in
an Operative Document or in any written certificate delivered pursuant thereto
by the Owner Trustee or the Trust Company and except that the Trust Company
hereby represents and warrants that this Trust Agreement has been duly executed
and delivered by the Trust Company and each of the Owner Trustee Documents has
been or will be executed and delivered by officers of the Trust Company or by
the Owner Trustee who are or will be duly authorized to execute and deliver
documents on its behalf.
7.4 No Segregation of Moneys; No Interest. Except as otherwise
-------------------------------------
provided herein, in any other Operative Document or in written instructions from
the Owner Participant, moneys received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law, and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
7.5 Reliance. The Owner Trustee shall not incur any liability to
--------
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by the Owner Trustee in good faith to be genuine and
reasonably believed by the Owner Trustee in good faith to be signed by the
proper party or parties. Any request, direction, order or demand of the Owner
Participant or the Lessee mentioned herein or in any other Operative
Document to which the Owner Trustee is a party shall be sufficiently evidenced
by an Officer's Certificate of the Owner Participant or the Lessee, as the case
may be. The Owner Trustee may accept in good faith a certified copy of a
resolution of the Board of Directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter
the manner of ascertainment of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on an Officer's Certificate of
the relevant party as to such fact or matter, and such Officer's Certificate
shall constitute full protection to the Owner Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon. In the
administration of the trust hereunder, each of the Trust Company and the Owner
Trustee may execute any of the trusts or powers hereof and perform its powers
and duties hereunder directly or through agents or attorneys and may consult
with counsel, accountants and other skilled Persons to be selected and
employed
10
<PAGE>
by it, and neither the Trust Company nor the Owner Trustee shall be liable for
anything done, suffered or omitted: (i) by such agents or attorneys appointed
-
by it in good faith, or (ii) in good faith by it in accordance with the advice
--
or opinion of any such counsel, accountants or other skilled Persons so long as
such advice or opinion pertains to such matters as the Owner Trustee may
reasonably presume to be within the scope of such Person's expertise.
7.6 Not Act in Individual Capacity. Except as provided in this
------------------------------
Trust Agreement, in accepting the trust hereby created the Owner Trustee agrees
to act solely as trustee hereunder and not in its individual capacity, and all
Persons having any claim against the Owner Trustee by reason of the transactions
contemplated by the Operative Documents or the Owner Trustee Documents shall
look only to the Trust Estate (or a part thereof, as the case may be) for
payment or satisfaction thereof, except as specifically provided in this Trust
Agreement or such Operative Document and except to the extent the Owner Trustee
otherwise shall agree in any Owner Trustee Document.
Section 8. Indemnification; Compensation.
-----------------------------
8.1 Indemnification of Trust Company. The Owner Participant
--------------------------------
agrees to assume liability for, and to indemnify and hold harmless the Trust
Company against and from any and all liabilities, obligations, damages, taxes
(excluding any taxes, fees or other charges payable by the Trust Company or
measured by any compensation received by the Owner Trustee for its services
hereunder), claims, actions, suits, out-of-pocket costs, expenses and disburse-
ments of any kind and nature whatsoever, including without limitation the
reasonable fees and expenses of counsel but excluding internal costs and
expenses such as salaries and overhead (collectively, "Trust Expenses") which
--------------
may be imposed on, incurred by or asserted at any time against the Trust Company
(whether or not also indemnified by any other Person; provided, however, that to
-------- -------
the extent the Trust Company shall have actually received any payment in the
nature of an indemnity payment from any such other Person relating to a claim
hereunder, the Trust Company shall not be entitled to the amount of any such
payment pursuant to this Section 8.1 (notwithstanding that the Trust Company may
have returned any such amount to the paying party)) in any way relating to or
arising out of (i) the administration of the Trust Estate or the action or
-
inaction of the Trust Company hereunder or under the other Operative Documents;
(ii) the Facility or any part thereof; (iii) the Operative
-- ---
11
<PAGE>
Documents or any of them, the issuance of the Secured Notes or the making of any
investment in the Facility, payments made pursuant to any thereof or the
enforcement by the Trust Company of any of its rights under the Operative
Documents, or any other transaction contemplated by the Operative Documents or
(iv) the manufacture, financing, construction, purchase, ownership, acquisition,
- ---
acceptance, rejection, delivery, nondelivery, possession, transportation, lease,
sublease, mortgaging, granting of a security interest in, preparation,
installation, condition, transfer of title, rental, use, operation, storage,
maintenance, modification, alteration, repair, assembly, sale, return,
abandonment or other application or disposition of all or any part of the
Facility Assets or any interest therein or in the Facility, including without
limitation (A) claims or penalties arising from any violation of law or
-
liability in tort (strict or otherwise); (B) loss of or damage to any property
-
or the environment or death or injury to any Person; (C) latent or other
-
defects, whether or not discoverable and (D) any claim for patent, trademark or
-
copyright infringement, except only that the Owner Participant shall not be
required to indemnify the Trust Company for Trust Expenses arising or resulting
from any of the matters (1) described in clauses (i) through (v) of the last
-
sentence of Section 7.1 or (2) for which the Lessee would not have been required
-
to indemnify the Trust Company pursuant to Section 12.1 or 12.2 of the
Participation Agreement (disregarding for this purpose (x) clauses (1), (3),
-
(5), (7), (9), (10) (to the extent such Indenture Event of Default is
attributable to the Owner Participant) and (11) of the proviso to Section
12.1(a) of the Participation Agreement and (y) Sections 12.2(b)(2), 12.2(b)(5),
-
12.2(b)(10), 12.2(b)(11), 12.2(b)(15) (to the extent that any such Lien is
attributable to the Owner Participant) and 12.2(b)(17) (to the extent imposed
upon the Trust Company) of the Participation Agreement). The indemnities
contained in this Section 8.1 shall survive the termination of this Trust
Agreement. To secure the foregoing indemnities, the Owner Trustee shall be
entitled to apply any amount otherwise distributable to the Owner Participant
pursuant to Section 5.2 against any such indemnity which has not been paid when
due. The indemnities contained in this Section 8.1 extend to the Trust Company
only and shall not be construed as indemnities of the Trust Estate. The Trust
Company agrees that, before asserting any right to indemnification under this
Trust Agreement, in its individual capacity, or in its capacity as Owner
Trustee, it shall first demand and pursue by appropriate means, for a reasonable
period of time, its corresponding right to indemnifica-
12
<PAGE>
tion, if any, pursuant to Section 12 of the Participation Agreement.
8.2 Compensation and Expenses. The Owner Trustee agrees that it
-------------------------
shall have no right against the Owner Participant or the Trust Estate for any
fee as compensation for its services or for its expenses, to the extent the
Lessee or the Lessor has paid such amounts pursuant to Section 2.9 or 12.1(f) of
the Participation Agreement. Subject to the preceding sentence, the Owner
Participant shall pay, or reimburse the Owner Trustee for, all reasonable
expenses of the Owner Trustee, together with reasonable compensation for its
services hereunder as provided herein, unless and to the extent that the Owner
Trustee otherwise receives payment or reimbursement pursuant to any Operative
Document, whether or not the transactions contemplated hereby are consummated.
Section 9. Termination of Trust Agreement.
------------------------------
9.1 Termination of Trust Agreement. Subject to the terms of the
------------------------------
Participation Agreement, the Lease, the Indenture and Sections 5 and 8.1, this
Trust Agreement and the trust created hereby shall terminate and the Trust
Estate shall be distributed to the Owner Participant, and this Trust Agreement
shall be of no further force or effect, upon the earlier of (i) the sale or
-
other final disposition by the Owner Trustee of all property constituting part
of the Trust Estate and the final distribution by the Owner Trustee of all
moneys or other property or proceeds constituting part of the Trust Estate in
accordance with the terms of Section 5 and (ii) 110 years less one day after the
--
earlier execution of this Trust Agreement by either the Trust Company or the
Owner Participant, but if any rights, privileges or options hereunder shall be
or become valid under applicable law for a period subsequent to such time (or,
without limiting the generality of the foregoing, if legislation shall become
effective providing for the validity or permitting the effective grant of such
rights, privileges and options for a period in gross exceeding the period for
which such rights, privileges and options are hereinabove stated to extend and
be valid), then such rights, privileges or options shall not terminate as afore-
said but shall extend to and continue in effect, but only if such nontermination
and extension shall then be valid under applicable law, until such time as the
same shall cease to be valid under applicable law.
13
<PAGE>
9.2 Termination at Option of Owner Participant. The provisions of
------------------------------------------
Section 9.1 notwithstanding, but subject to Section 11.2, this Trust Agreement
and the trust created hereby shall terminate and the Trust Estate shall be
distributed to the Owner Participant, and this Trust Agreement shall be of no
further force and effect, upon the election of the Owner Participant by notice
to the Owner Trustee to revoke the trust created hereby; provided that, in
--------
addition to the giving of such notice, the Owner Participant, with the
cooperation of the Owner Trustee, shall execute and deliver such written
agreements and instruments and take such actions as shall be necessary in order
to cause the succession of the Owner Participant to all the rights, title,
interests, duties and liabilities of the Owner Trustee under the Operative
Documents (including without limitation the obligations of the Owner Trustee in
Section 5 herein and other than obligations attributable to any gross negligence
or willful misconduct of the Trust Company or any breach by the Owner Trustee of
its obligations under the Operative Documents); provided, however, that,
-------- -------
except in connection with the exercise of remedies by the Owner Trustee pursuant
to Section 16.1 of the Lease, no such termination shall occur without the
express written consent of the Lessee, and, prior to any such termination, the
Lien of the Indenture on the Indenture Estate shall have been released, and full
payment of the principal of or, premium (if any) and interest on the Secured
Notes shall have been made or the Indenture Trustee shall have consented to such
termination. In addition, the Owner Participant may not withdraw any part of
the Trust Estate subject to the Lien of the Indenture prior to the discharge of
such Lien with respect to such part of the Trust Estate without the express
written consent of the Indenture Trustee. The written agreements and
instruments referred to in the first proviso to the first sentence of this
Section 9.2 shall be reasonably satisfactory in form and substance to the Owner
Trustee and shall release the Owner Trustee from all further obligations of the
Owner Trustee hereunder and under the agreements and other instruments mentioned
in the first sentence of this Section 9.2.
9.3 Distribution of Trust Estate Upon Termination. Upon any
---------------------------------------------
termination of the trust created hereby pursuant to Section 9.1 or 9.2, the
Owner Trustee shall transfer title to the Trust Estate (and assign all its
right, title and interest in, to and under each Operative Document) to the Owner
Participant or its designee. No later than the effective date of termination of
the trust created hereby the Owner Trustee or its designee shall
14
<PAGE>
execute and deliver to the Owner Participant a special warranty deed, bill of
sale and assignment and other written instrument or instruments prepared by the
Owner Participant in form and substance reasonably satisfactory to the Owner
Trustee evidencing the transfer of title to the Trust Estate to the Owner
Participant and, no later than the effective date of such termination, the Owner
Participant shall execute and deliver to the Owner Trustee a written
instrument in form and substance reasonably satisfactory to the Owner Trustee
evidencing discharge of the Owner Trustee from its obligations hereunder and
under the other Operative Documents to which the Owner Trustee is a party
except those theretofore accrued and its obligations to release Lessor's Liens.
Section 10. Successor Owner Trustee, Additional and Separate Owner
------------------------------------------------------
Trustees.
--------
10.1 Resignation and Successors. (a) The Owner Trustee may resign
--------------------------
at any time without cause by giving at least thirty (30) days' prior written
notice to the Owner Participant, with a copy to the Indenture Trustee and the
Lessee, such resignation to be effective on the acceptance of appointment by a
successor to the Owner Trustee under paragraph (b) of this Section 10.1. In
addition, the Owner Participant at any time may remove the Owner Trustee without
cause by an instrument in writing delivered to the Owner Trustee, the Indenture
Trustee and the Lessee, such removal to be effective upon the acceptance of
appointment by a successor to the Owner Trustee under paragraph (b) of this
Section 10.1. In case of the resignation or removal of the Owner Trustee, the
Owner Participant may appoint a successor to the Owner Trustee by an instrument
in writing, signed by the Owner Participant. If a successor to the Owner
Trustee shall not have been appointed within thirty (30) days after the giving
of written notice of such resignation or the delivery of the written instrument
with respect to such removal, the Owner Trustee, the Owner Participant, the
Indenture Trustee or the Lessee may apply to any court of competent jurisdiction
to appoint a successor to the Owner Trustee reasonably acceptable to the Owner
Participant and the Lessee to act until such time, if any, as a successor shall
have been appointed as above provided in this Section 10.1. Any successor so
appointed by such court shall immediately and without further act be
superseded by any successor to the Owner Trustee appointed as above provided
in this Section 10.1.
15
<PAGE>
(b) Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee an instrument accepting such
appointment and shall give the Owner Participant, the Indenture Trustee and
Lessee written notice of such acceptance. Upon the execution and delivery of
such instrument, such successor Owner Trustee, without further act (provided
that any required Governmental Actions have been obtained), shall become vested
with all the estates, properties, rights, powers, duties and trusts of the
predecessor Owner Trustee in the trust hereunder with like effect as if
originally named an Owner Trustee herein; provided, however, that upon the
-------- -------
written request of such successor Owner Trustee, such predecessor Owner
Trustee shall execute and deliver an instrument transferring to such successor
Owner Trustee, upon the trust herein expressed, all estates, properties, rights,
powers, duties and trusts of such predecessor trustee as the Owner Trustee
hereunder, and such predecessor trustee shall duly assign, transfer, deliver and
pay over to such successor Owner Trustee all moneys or other property then held
by such predecessor trustee as the Owner Trustee upon the trust herein
expressed, together with all the books and records maintained by such
predecessor trustee with respect to such trust pursuant to Section 6.6. Upon
the appointment of any successor Owner Trustee hereunder, the predecessor
trustee, pursuant to written instructions of the Owner Participant, will execute
all documents and take all reasonable action within its control in order to
cause such title held in the Trust Estate by such predecessor trustee to be
transferred to the successor Owner Trustee.
(c) Any successor to the Owner Trustee, however appointed, shall be a
bank or trust company incorporated and doing business within the United States
of America and having a combined capital and surplus of at least $50,000,000,
reasonably acceptable to the Owner Participant and the Lessee, and regularly
engaged in or having expertise in leveraged leasing, if there be such an
institution willing, able and legally qualified to perform the duties of the
Owner Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Owner Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Owner Trustee may be transferred, shall be, subject to
compliance with the terms
16
<PAGE>
of paragraph (c) of this Section 10.1, the Owner Trustee under this Trust
Agreement without further act.
10.2 Additional and Separate Trustees. (a) If the Owner Trustee
--------------------------------
or the Owner Participant shall conclude that it is necessary or prudent in order
to conform to the law of any jurisdiction in which all or any part of the Trust
Estate shall be situated, or to make or defend any claim or bring or defend any
suit with respect to the Trust Estate, the Secured Notes or any Operative
Document, or pursuant to advice of counsel satisfactory to it, or if the Owner
Trustee shall have been directed to do so by the Owner Participant, the Owner
Trustee shall appoint another Person to act as additional or separate trustee
for all or any part of the Trust Estate with such property, title, right, power
or duty as the Owner Trustee and the Owner Participant may determine. In case
any such additional trustee or separate trustee shall resign or be removed, all
the assets, property, rights, powers or duties of such additional trustee or
separate trustee, as the case may be, so far as permitted by any applicable law,
shall vest in and be exercised by a new successor to such additional trustee,
appointed in the manner otherwise provided in this Trust Agreement.
(b) In the event that either the Owner Participant or the Owner Trustee
shall determine to appoint another Person as additional or separate trustee,
the Owner Trustee and the Owner Participant shall execute and deliver an
agreement supplemental hereto, and all other instruments and agreements
necessary or proper to constitute another bank or trust company, or one or more
Persons approved by the Owner Trustee and the Owner Participant, either to act
as an additional trustee or trustees of all or any part of the Trust Estate,
jointly with the Owner Trustee, or to act as separate trustee or trustees of all
or any part of the Trust Estate, in any such case with such powers as may be
provided in such agreement supplemental hereto, and to vest in such bank, trust
company or Person as such additional trustee or separate trustee, as the case
may be, any property, title, right, or power deemed necessary or proper by the
Owner Trustee or the Owner Participant, subject to the remaining provisions of
this Section 10.2. In the event the Owner Participant shall not have joined in
the execution of such agreement supplemental hereto within fifteen (15) days
after the receipt of a written request from the Owner Trustee so to do without
providing a reasonable basis for such failure to join, the Owner Trustee may act
under the foregoing provisions of this Section 10.2 without the con-
17
<PAGE>
currence of the Owner Participant, and the Owner Participant hereby appoints the
Owner Trustee its agent and attorney-in-fact to act for the Owner Participant
under the foregoing provisions of this Section 10.2 in the event of the occur.
rence of such contingency. The Owner Trustee may execute, deliver and perform
any deed, conveyance, assignment or other instrument in writing as may be
required by an additional trustee or separate trustee for more fully and cer-
tainly vesting in and confirming to such Person any property, title, right or
power which, by the terms of such agreement supplemental hereto, are expressed
to be conveyed or conferred to or upon such additional trustee or separate
trustee, and the Owner Participant shall, upon the Owner Trustee's request, join
therein and execute, acknowledge and deliver the same, and the Owner Participant
hereby appoints the Owner Trustee its agent and attorney-in-fact to execute,
acknowledge and deliver any such deed, conveyance, assignment or other
instrument in the event that such Owner Participant shall not itself execute
and deliver the same within fifteen (15) days after receipt by it of such
request so to do.
(c) Every additional trustee and separate trustee hereunder shall, to the
extent permitted by law, be appointed to act and the Owner Trustee shall act,
subject to the following provisions and conditions:
(i) to the extent permitted by applicable law, all powers, duties,
obligations and rights conferred or imposed upon the Owner Trustee in
respect of the receipt, custody, management, investment and payment of
moneys, shall be exercised solely by the Owner Trustee;
(ii) all other rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee or
trustees and separate trustee or trustees jointly, except to the extent
that, under any law of the jurisdiction in which any particular act or acts
are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties, and obligations (including the holding of title to the
Trust Estate in any such jurisdiction) shall be exercised and performed by
such additional trustee or trustees or separate trustee or trustees;
18
<PAGE>
(iii) no power hereby given to, or with respect to which it is hereby
provided may be exercised by, any such additional trustee or separate
trustee shall be exercised hereunder by such additional trustee or separate
trustee except jointly with, or with the consent of, the Owner Trustee and
(iv) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder.
(d) If at any time the Owner Trustee and the Owner Participant shall deem
it no longer necessary or prudent in order to conform to any applicable law or
shall be advised by its counsel that it is no longer necessary or prudent in the
interest of the Owner Trustee and the Owner Participant to maintain the
appointment of such additional or separate trustee as provided herein, the Owner
Trustee and the Owner Participant shall execute and deliver any agreement
supplemental hereto and all other instruments and agreements necessary or proper
to remove any such additional or separate trustee. In the event that the Owner
Participant shall not have joined in the execution of such agreement
supplemental hereto, instruments and agreements, the Owner Trustee may act on
behalf of the Owner Participant to the same extent provided above in this
Section 10.2.
(e) Any additional trustee or separate trustee may at any time by an
instrument in writing constitute the Owner Trustee; its agent or attorney-in-
fact with full power and authority, to the extent which may be authorized by
applicable law, to do all acts and things and exercise all discretion which it
is authorized or permitted to do or exercise, for and in its behalf and in its
name. In case any such additional trustee or separate trustee shall die, become
incapable of acting, resign or be removed, all the assets, property, rights,
powers, trusts, duties and obligations of such additional trustee or separate
trustee, as the case may be, so far as permitted by law, shall vest in and be
exercised by the Owner Trustee without necessity of any act by any party and
without the appointment of a new successor to such additional or separate
trustee, unless and until a successor is appointed in the manner provided in
this Section 10.2.
(f) Each additional or separate trustee appointed pursuant to this
Section 10.2 shall be subject to, and shall have the benefit of, Sections 6.1
through 6.7 and Sections 7.1, 8.1 and 11.2 insofar as they apply to the
19
<PAGE>
Owner Trustee. No additional separate trustee shall be appointed pursuant to
this Section 10.2 without the consent of the Lessee, such consent not to be
unreasonably withheld. No appointing of, or action by, any additional trustee
will relieve the Owner Trustee of any of its or his obligations hereunder or
under any other Operative Document.
Section 11. Supplements and Amendments.
--------------------------
11.1 Supplements and Amendments. Subject to the terms of the
--------------------------
Operative Documents at any time and from time to time, upon the written request
of the Owner Participant, (i) the Owner Trustee, together with the Owner
-
Participant, shall execute a supplement to this Trust Agreement for the purpose
of adding provisions to, or changing or eliminating provisions of, this Trust
Agreement as specified in such request, and (ii) the Owner Trustee shall,
--
subject to compliance with the applicable provisions of Article IX of the
Indenture, enter into such written amendment of or supplement to any other
Operative Document to which the Owner Trustee is a party as the Indenture
Trustee and the Lessee may agree to and as may be specified in such request, or
execute and deliver such written waiver or modification of or consent under the
terms of any such Operative Document as the Lessee and, unless the Lien of the
Indenture has been discharged, the Indenture Trustee may agree to and as may be
specified in such request.
11.2 Limitation on Amendments. The provisions of Section 11.1
------------------------
notwithstanding, but subject to Sections 11.1(g) and 17.6(b) of the
Participation Agreement, (i) this Trust Agreement may not be revoked or
-
terminated by the Owner Participant and (ii) the Owner Participant shall not
--
request the Trust Company to execute any amendment which would result in the
trust created hereunder being terminated or which would materially adversely
affect the Indenture Estate, in either case prior to the release of the Lien of
the Indenture on the Indenture Estate or prior to the payment in full of the
principal of, premium (if any) and interest on the Secured Notes unless the
Indenture Trustee shall have consented to any such revocation, termination or
amendment.
11.3 Discretion as to Execution of Documents. If in the reasonable
---------------------------------------
opinion of the Owner Trustee any document required to be executed pursuant to
the terms of Section 11.1 (i) adversely affects any right, duty, immunity, or
-
indemnity in favor of the Owner Trustee hereunder or under any other Operative
Document to which the Owner
20
<PAGE>
Trustee is a party or (ii) would cause or result in any conflict with or any
--
breach of any term, condition or provision of, or default under, its charter
documents or by-laws or any document contemplated hereby to which it is a party,
the Owner Trustee may in its discretion decline to execute such document.
Section 12. Miscellaneous.
-------------
12.1 No Legal Title to Trust Estate in the Owner Participant. The
-------------------------------------------------------
Owner Participant shall not have legal title to any part of the Trust Estate.
No transfer, by operation of law or otherwise, of any right, title and interest
of the Owner Participant in and to the Trust Estate or hereunder shall operate
to terminate this Trust Agreement or the trust created hereby or entitle any
successor or transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Estate.
12.2 Sale of the Facility Assets by Owner Trustee Is Binding. Any
-------------------------------------------------------
sale, transfer or other conveyance of any part of the Facility or other property
included in the Trust Estate or any part thereof by the Owner Trustee made
pursuant to the terms of this Trust Agreement or any other Operative Document
shall bind the Owner Participant and shall be effective to transfer or convey
all right, title and interest of the Owner Trustee and the Owner Participant
in and to the Facility or other property included in the Trust Estate or part
thereof, as the case may be. No purchaser or other grantee shall be required to
inquire as to the authorization, necessity, expediency or regularity of such
sale or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Owner Trustee.
12.3 Notices. Unless otherwise expressly specified or permitted by
-------
the terms hereof, all notices hereunder shall be given as provided in Section
17.3 of the Participation Agreement.
12.4 Severability of Provisions. Any provision of this Trust
--------------------------
Agreement which may be determined by competent authority to be invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable any remaining terms and provisions hereof, and any
such invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties
shall negotiate in good faith to replace such provision with
21
<PAGE>
an appropriate legal provision. To the extent permitted by applicable law, the
parties hereto hereby waive any provision thereof that renders any term or
provision hereof invalid or unenforceable in any respect.
12.5 Separate Counterparts. This Trust Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
12.6 Successors and Assigns. This Trust Agreement, including the
----------------------
terms and provisions hereof, shall be binding upon the Owner Participant, the
Trust Company or the Owner Trustee, whichever is applicable pursuant to the
terms hereof, and their respective successors and assigns, and inure to the
benefit of the Owner Participant, the Trust Company or the Owner Trustee,
whichever is applicable pursuant to the terms hereof, and their respective
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by the Owner
Participant shall bind the successors and assigns of the Owner Participant.
12.7 Transfer of Owner Participant's Interest. (a) All provisions
----------------------------------------
of Section 13 of the Participation Agreement shall (with the same force and
effect as if set forth in full, mutatis mutandis, in this Section 12.7) be
----------------
applicable to any assignment, conveyance or other transfer by any Owner
Participant of any of its right, title or interest in and to the Trust Estate or
this Trust Agreement or any other Operative Document.
(b) In the event that at any time there shall be more than one Owner
Participant pursuant to the provisions of Section 13 of the Participation
Agreement, then in each such case, as used herein, the term "Owner Participant"
shall be deemed to refer to each such Owner Participant, except that any
reference to consents, approvals or waivers of the "Owner Participant" as used
herein shall require the consent, approval or waiver of each such Owner
Participant. At any time that there shall be required to be made hereunder any
distribution, disbursement, assignment or other transfer of monies or any other
item whatsoever, then such distribution, disbursement, assignment or other
transfer shall be made pro rata to each Owner Participant existing at such time
in accordance with their respective interests hereunder. If there shall be more
than one Owner Participant, no Owner Participant shall be liable for performance
22
<PAGE>
by any other Owner Participant of such other Owner Participant's obligations
under the Operative Documents or in respect of actions taken by any other Owner
Participant except as otherwise expressly so set forth.
12.8 Headings; Table of Contents. The division of this Trust
---------------------------
Agreement into sections, the provision of a table of contents and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation hereof.
12.9 GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
12.10 Performance by Owner Participant. Any obligation of the Trust
--------------------------------
Company or the Owner Trustee hereunder or under any other Operative Document
or other document contemplated hereby may be performed by the Owner Participant
and any such performance shall not be construed as a revocation of the
trust created hereby.
12.11 The Owner Trustee Documents. If any provision in this Trust
---------------------------
Agreement shall conflict with or otherwise be inconsistent with the terms of any
Owner Trustee Document, the terms of the Owner Trustee Document shall control.
12.12 Performance of Obligations to Indenture Trustee. After the
--------------------------------------- -------
Indenture shall have been discharged pursuant to the terms thereof, the
provisions of this Trust Agreement which require or permit any action by, any
consent, approval or authorization of, the furnishing of any document, paper
or information to, or the performance of any other obligation to, the Indenture
Trustee shall not be effective, and the Sections hereof containing such provi-
sions shall be read as though there were no such references to any such
requirements or permissions.
12.13 Trust Agreement for Benefit of Parties Only. Unless otherwise
-------------------------------------------
expressly provided herein, nothing herein shall be construed to give any Person
other than the Owner Trustee and the Owner Participant any legal or equitable
right, remedy or claim under or in respect of this Trust Agreement, and this
Trust Agreement shall be held to be for the sole and exclusive benefit of the
Owner Trustee and the Owner Participant, provided, however that it is intended
-------- -------
that (i) the Indenture Trustee be a third party
-
23
<PAGE>
beneficiary with respect to Sections 4.2(a)(ii), 5.1, 6.1, 9.2, 11.2 and 12.13
hereof and (ii) the Lessee be a third party beneficiary with respect to Sections
--
4.2(a)(iii), 5.5, 6.1, 9.2, 10.1(c), 11.2, 12.2 and 12.13 hereof.
12.14 Limitation on Owner Participant's Liability. Except as
-------------------------------------------
expressly set forth herein, the Owner Participant shall not have any liability
for the performance of this Trust Agreement.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have each caused this Trust
Agreement to be duly executed as of the date first above written.
WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly provided herein,
but as Owner Trustee
By:
----------------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By: ----------------------------------------------
Name:
Title:
25
<PAGE>
EXHIBIT 4.7
================================================================================
PARTICIPATION AGREEMENT
among
MOBIL CHEMICAL FINANCE (TEXAS) INC.,
Lessee
FLEET NATIONAL BANK,
Owner Participant
WILMINGTON TRUST COMPANY,
Owner Trustee
STATE STREET BANK AND TRUST COMPANY,
Pass Through Trustee and Loan Participant
and
STATE STREET BANK AND TRUST COMPANY,
Indenture Trustee
Dated as of May 28, 1997
================================================================================
Certain Paraxylene Production Facility
Assets Located in Beaumont, Texas
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
<S> <C> <C>
Page
RECITALS............................................................. 1
Section 1. Definitions; Interpretation............................. 3
Section 2. Commitments of Participants; Closing;
2.1. Funding; Transaction Expenses.......................... 3
2.1. Commitment of Owner Participant......................... 3
2.2. Commitments of Pass Through Trustee; Secured
Notes.................................................. 4
2.3. Expiration of Commitments............................... 4
2.4. Notice of Closing Date.................................. 4
2.5. Time and Place of Closing............................... 5
2.6. Delivery of Funds....................................... 5
2.7. Application of Funds by Owner Trustee................... 5
2.8. Actions on Closing Date................................. 6
2.9. Transaction Expenses.................................... 6
2.10. Authorization to Owner Trustee.......................... 8
2.11. Registration Statement.................................. 8
2.12. Recomputation of Basic Rent, Stipulated
Loss Value, Termination Value and EBO
Percentages............................................ 8
Section 3. Conditions to Closing by Lessee.......................... 11
3.1. Closing Documents........................................ 11
3.2. Legality, Etc............................................ 12
3.3. Event of Loss............................................ 12
3.4. Consents and Approvals................................... 12
3.5. Opinions................................................. 13
3.6. Litigation............................................... 14
3.7. Appraisal................................................ 14
3.8. Equity Offering.......................................... 14
3.9. Payment of Lessor's Cost................................. 14
3.10. Sale of Pass Through Certificates........................ 14
3.11. No Uneconomic Change; Other Changes...................... 14
3.12. Officer's Certificates................................... 15
3.13. Resolutions, Etc......................................... 16
3.14. Completion Certificate................................... 17
Section 4. Conditions to Closing by Participants.................... 17
4.1. Notice of Closing........................................ 18
4.2. Closing Documents........................................ 18
4.3. Legality, Etc............................................ 19
4.4. Event of Loss............................................ 19
4.5. Appraisal................................................ 19
4.6. Insurance................................................ 19
i
<PAGE>
4.7. Opinions................................................. 19
4.8. Taxes.................................................... 20
4.9. Officer's Certificates................................... 20
4.10. Resolutions, Etc......................................... 22
4.11. Litigation............................................... 24
4.12. Equity Offering.......................................... 24
4.13. Investment and Loans..................................... 24
4.14. Consents and Approvals................................... 24
4.15. Title; Filings and Recordings............................ 25
4.16. Sale of Pass Through Certificates........................ 26
4.17. No Default Under Lease................................... 26
4.18. No Material Adverse Change............................... 26
4.19. Completion Certificate................................... 26
4.20. Condition of the Facility................................ 26
4.21. Nothing Further Certificate.............................. 26
Section 5. Representations and Warranties of the
Lessee.................................................. 27
5.1. Due Organization........................................ 27
5.2. Authorization............................................ 27
5.3. Execution; Enforceability................................ 27
5.4. No Violation............................................. 28
5.5. Consents and Approvals................................... 28
5.6. Securities Act........................................... 29
5.7. Title; Filings and Recordings............................ 30
5.8. Chief Place of Business.................................. 30
5.9. Litigation............................................... 30
5.10. No Default............................................... 31
5.11. Event of Loss............................................ 31
5.12. Environmental Matters.................................... 31
5.13. Description of Facility Assets........................... 31
5.14. Disclosure Representation................................ 31
5.15. Investment Company Act................................... 32
5.16. No Brokers' Fees......................................... 32
5.17. Holding Company.......................................... 32
5.18. DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES.............................................. 32
Section 6. Representations and Warranties of Owner
Participant............................................. 33
6.1. Due Organization......................................... 33
6.2. Authorization; Execution; Enforceability................. 33
6.3. No Violation............................................. 34
6.4. Owner Participant's Liens................................ 34
6.5. Acquisition for Investment............................... 34
6.6. Securities Act........................................... 34
6.7. ERISA.................................................... 35
6.8. Investment Company Act................................... 35
6.9. Litigation............................................... 35
6.10. No Default............................................... 35
ii
<PAGE>
6.11. Net Worth................................................ 35
6.12. No Brokers' Fees......................................... 35
Section 7. Representations and Warranties of Pass Through
Trustee................................................. 36
7.1. Due Organization......................................... 36
7.2. Authorization; Execution; Enforceability................. 36
7.3. No Violation............................................. 37
7.4. Litigation............................................... 37
7.5. Pass Through Trustee's Liens............................. 38
7.6. Securities Act........................................... 38
7.7. No Taxes Payable......................................... 38
Section 8. Representations and Warranties of the Trust
Company and the Owner Trustee........................... 39
8.1. Due Organization......................................... 39
8.2. Authorization; Execution; Enforceability................. 39
8.3. No Violation............................................. 40
8.4. No Default............................................... 41
8.5. Litigation............................................... 42
8.6. Lessor's Liens........................................... 42
8.7. Securities Act........................................... 42
8.8. Chief Place of Business.................................. 43
8.9. No Taxes Payable......................................... 43
8.10. Title.................................................... 43
Section 9. Representations and Warranties of the
Indenture Trustee....................................... 43
9.1. Due Organization......................................... 43
9.2. Authorization; Execution; Enforceability................. 44
9.3. No Violation............................................. 45
9.4. Litigation............................................... 45
9.5. Indenture Trustee's Liens................................ 45
9.6. No Taxes Payable......................................... 45
Section 10. Lessee Covenants......................................... 46
10.1. Officer's Certificate.................................... 46
10.2. Requested Information.................................... 46
10.3. Maintenance of Corporate Existence, Etc.................. 46
10.4. Merger, Consolidation, Sale, Etc......................... 47
10.5. Change in Name or Chief Place of Business................ 49
10.6. Further Assurances....................................... 49
10.7. Inspection............................................... 49
10.8. Limitation on Acquisition of Pass Through
Certificates............................................ 51
10.9. Support Agreements....................................... 51
10.10. Certain Agreements Relating to the Ground Lease.......... 54
iii
<PAGE>
Section 11. Other Covenants and Agreements........................... 54
11.1. Agreements of Owner Participant.......................... 54
11.2. Agreements of the Trust Company and the
Owner Trustee........................................... 58
11.3. Agreements of Pass Through Trustee and Loan
Participant............................................. 60
11.4. Agreements of Indenture Trustee.......................... 62
11.5. Confidentiality.......................................... 63
11.6. Assumption of Secured Notes.............................. 65
11.7. Certain Agreements Relating to the Lease................. 65
Section 12. Indemnification.......................................... 65
12.1. General Indemnification.................................. 65
12.2. General Tax Indemnification.............................. 73
12.3. No Guarantee............................................. 83
Section 13. Transfer of Owner Participant's Interest................. 83
13.1. Restrictions on Transfer................................. 83
13.2. Permitted Transfers...................................... 84
13.3. Effect of Transfer....................................... 86
Section 14. Financing for Modifications.............................. 87
Section 15. Refunding of Secured Notes............................... 89
15.1. Refunding of Secured Notes............................... 89
15.2. Notice................................................... 93
Section 16. Beneficial Interest Purchase Option...................... 92
16.1. Option to Purchase....................................... 92
16.2. Notice of Election; Manner of Purchase;
Transfer After Purchase................................. 92
Section 17. Miscellaneous............................................ 94
17.1. Survival................................................. 94
17.2. Binding Effect........................................... 94
17.3. Notices.................................................. 94
17.4. Counterpart Execution.................................... 95
17.5. GOVERNING LAW............................................ 95
17.6. Amendments, Supplements, Etc............................. 95
17.7. Headings; Table of Contents.............................. 95
17.8. Severability of Provisions............................... 95
17.9. Entire Agreement......................................... 96
17.10. Limitation of Liability of Owner Trustee, Indenture
Trustee and Pass Through Trustee........................ 96
17.11. Jurisdiction; Service of Process......................... 99
17.12. Instructions............................................. 99
17.13. Rule Against Perpetuities................................ 100
iv
<PAGE>
Appendix A Definitions
SCHEDULES
Schedule 1 Addresses for Notices and Payments
Schedule 2 Pricing Assumptions
Schedule 3 Filings and Recordings
Schedule 4 Lessee's Net Present Value Cost Percentage
EXHIBITS
Exhibit A Form of Conveyancing Instrument
Exhibit B Form of Lease
Exhibit C Form of Indenture
Exhibit D Form of Ground Lease
Exhibit E Form of Owner Participant Transfer Document
Exhibit F Form of Assignment of Warranties
v
<PAGE>
PARTICIPATION AGREEMENT
-----------------------
THIS PARTICIPATION AGREEMENT, dated as of May 28, 1997, is among
MOBIL CHEMICAL FINANCE (TEXAS) INC., a Delaware corporation, FLEET NATIONAL
BANK, a national banking association, STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity except to the extent
expressly set forth herein but solely as Pass Through Trustee under the Pass
Through Trust Documents and as Loan Participant, WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not in its individual capacity as Trust Company
except to the extent expressly set forth herein but solely as Owner Trustee
under the Trust Agreement, and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity except to the extent
expressly set forth herein but solely as Indenture Trustee under the Indenture.
RECITALS:
A. Mobil Oil Corporation, a New York corporation, as of the date
hereof, owns the right, title and interest in and to the Facility Assets.
B. Subject to the terms and conditions set forth herein, on the
Closing Date (1) Mobil Oil Corporation shall sell all of its right, title and
-
interest in and to the Facility Assets to the Owner Trustee pursuant to
Conveyancing Instrument, substantially in the Form of Exhibit A hereto; (2)
-
the Owner Trustee shall purchase all of Mobil Oil Corporation's right, title and
interest in and to the Facility Assets pursuant to the Conveyancing Instrument
and, simultaneously with such purchase, shall lease the Facility Assets to the
Lessee pursuant to the Lease and (3) the Lessee shall lease the Facility Assets
-
from the Owner Trustee pursuant to the Lease and sublease the Facility Assets to
the Operator pursuant to the Initial Sublease.
C. Subject to the terms and conditions herein, on the Closing Date,
the Owner Trustee and the Lessee shall execute and deliver a certain Facility
Assets Lease Agreement, to be dated as of the Closing Date, substantially in the
form of Exhibit B hereto (such Facility Assets Lease Agreement, as the same is
further defined in Appendix A, being referred to herein as the "Lease"),
-----
pursuant to which Lease, subject to the terms and conditions set forth therein
and herein, the Owner Trustee agrees to lease to the Lessee, and the Lessee
agrees to lease from the Owner Trustee, the
<PAGE>
Facility Assets on the Closing Date and sublease the Site to the Lessee.
D. Concurrently with the execution and delivery of this Participation
Agreement, the Owner Participant and the Owner Trustee have entered into the
Trust Agreement, pursuant to which Trust Agreement the Owner Trustee has agreed,
among other things, to hold the Trust Estate for the benefit of the Owner
Participant on the terms specified therein, subject, however, to the Lien
created under the Indenture.
E. Subject to the terms and conditions herein, on the Closing Date,
the Owner Trustee and the Indenture Trustee shall execute and deliver a
certain Indenture, Deed of Trust, Assignment of Lease and Security Agreement, to
be dated as of the Closing Date, substantially in the form of Exhibit C hereto
(such Indenture, as the same is further defined in Appendix A, being referred to
herein as the "Indenture"), pursuant to which Indenture the Owner Trustee, for
---------
the benefit of the Loan Participant, has agreed, among other things, to mortgage
and pledge unto the Indenture Trustee, all of the Owner Trustee's right, title
and interest in and to the Indenture Estate.
F. Subject to the terms and conditions herein, on the Closing Date,
the Ground Lessor and the Owner Trustee, as Ground Lessee, shall enter into the
Ground Lease, substantially in the form of Exhibit D hereto (such Ground Lease,
as the same is further defined in Appendix A, being referred to herein as the
"Ground Lease"), pursuant to which Ground Lease the Ground Lessor shall lease
- -------------
the Site to the Ground Lessee.
G. Subject to the terms and conditions herein, on the Closing Date,
the Lessee and the Owner Participant shall execute and deliver to each other a
certain Tax Indemnity Agreement, to be dated as of the Closing Date (such Tax
Indemnity Agreement, as the same is further defined in Appendix A, being
referred to herein as the "Tax Indemnity Agreement"), pursuant to which Tax
-----------------------
Indemnity Agreement the Lessee has agreed to provide, in addition to the
indemnities provided to the Indemnitees pursuant to Section 12 hereof, certain
indemnities to the Owner Participant.
2
<PAGE>
H. The Pass Through Trustee, the Guarantor, the Lessee and certain
other Persons have executed the Pass Through Trust Agreement and, subject to the
terms and conditions herein, the Pass Through Trustee, the Guarantor and the
Lessee shall execute and deliver, on or prior to the Closing Date, Pass Through
Trust Supplements relating to the Pass Through Certificates.
I. Concurrently with the execution and delivery of this Participation
Agreement, the Guarantor has entered into the Guaranty whereby the Guarantor
will guarantee the Lessee's obligations hereunder and under the other Operative
Documents to which the Lessee is or will be a party.
J. Subject to the terms and conditions herein, the Owner Participant
desires to participate in the payment of Lessor's Cost on the Closing Date by
providing its Investment to the Owner Trustee, and the Pass Through Trustee, as
Loan Participant, desires to participate in the payment of Lessor's Cost on the
Closing Date by purchasing the Secured Notes from the Owner Trustee in such
amounts as shall be set forth on Exhibit B-2 to the Indenture.
Accordingly, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Definitions; Interpretation. For the purposes hereof,
---------------------------
capitalized terms used herein (including those used in the preamble and the
foregoing recitals) and not otherwise defined herein shall have the meanings
assigned to them in Appendix A. References in this Participation Agreement to
Sections, subsections, paragraphs, Schedules, Appendices and Exhibits are to
Sections, subsections and paragraphs in, and Schedules, Appendices and
Exhibits to, this Participation Agreement unless otherwise indicated.
Section 2. Commitments of Participants; Closing;
-------------------------------------
Funding; Transaction Expenses.
- -----------------------------
2.1. Commitment of Owner Participant. Subject to the terms and
-------------------------------
conditions of this Participation Agreement, the Owner Participant agrees to
participate on the Closing Date in the payment of Lessor's Cost by making an
equity investment (the "Investment") in the beneficial ownership of the Facility
----------
Assets in an amount equal to the product of (i) Lessor's Cost and (ii) the
- --
Equity Percentage, and shall, on
3
<PAGE>
the Closing Date, take and cause the Owner Trustee to take the respective
actions specified in Sections 2.7 and 2.8 to be taken by the Owner Participant
and the Owner Trustee.
2.2. Commitments of Pass Through Trustee; Secured Notes. Subject to
--------------------------------------------------
the terms and conditions of this Participation Agreement, the Pass Through
Trustee, as Loan Participant, agrees to participate on the Closing Date in the
payment of Lessor's Cost by purchasing from the Owner Trustee the Secured Notes
specified to be purchased by it on Exhibit B-2 to the Indenture at a purchase
price equal to 100% of the aggregate original principal amount of the Secured
Notes, and shall, on the Closing Date, take and cause the Indenture Trustee to
take the respective actions specified in Section 2.8 to be taken by the Pass
Through Trustee, as Loan Participant, and the Indenture Trustee. The Secured
Notes shall be issued to the Pass Through Trustee, as Loan Participant, under,
and in accordance with, the terms of the Indenture.
2.3. Expiration of Commitments. Unless the Owner Participant shall
-------------------------
agree to a later date, the Owner Participant's commitment to make the
Investment on the Closing Date pursuant to Section 2.1 shall expire if the
Closing Date shall not have occurred before midnight on May 30, 1997. Unless
the Pass Through Trustee, as Loan Participant, shall agree to a later date, the
Pass Through Trustee's commitment, as Loan Participant, to purchase the Secured
Notes pursuant to Section 2.2 shall expire if the Closing Date shall not have
occurred before midnight on July 28, 1997.
2.4. Notice of Closing Date. On or before the second Business Day
----------------------
prior to the Closing Date, the Lessee shall deliver to each Participant written
notice of the Closing Date, which notice shall contain (a) the date of the
-
Closing Date, (b) the amount of Lessor's Cost, (c) the amount of the Investment
- -
and (d) the principal amount of the Secured Notes to be purchased by the Pass
-
Through Trustee, as Loan Participant, on the Closing Date; provided, however,
-------- -------
that the funding of the Investment or the funding of the purchase price for the
Secured Notes to be purchased by the Pass Through Trustee, as Loan Participant,
on the Closing Date, as the case may be, and the taking of the other actions
contemplated to be taken hereby, in each case on the Closing Date, shall be
deemed a waiver of the requirement of notice of the Closing Date set forth in
this Section 2.4.
4
<PAGE>
2.5. Time and Place of Closing. The closing on the Closing Date (the
-------------------------
"Closing") shall commence at 10:00 a.m., New York City time, at the offices of
Debevoise & Plimpton, New York, New York, or at such other location in New York
City and time as the Lessee may specify in the notice of closing for the Closing
Date delivered pursuant to Section 2.4.
2.6. Delivery of Funds. Subject to the terms and conditions of this
-----------------
Agreement, at or before 10:00 a.m., New York City time, on the Closing Date, the
Owner Participant shall deliver to the Owner Trustee by wire transfer of
immediately available funds an amount equal to the Investment to be made by
the Owner Participant on the Closing Date, and the Pass Through Trustee, as Loan
Participant, shall deliver to the Owner Trustee by wire transfer of immediately
available funds an amount equal to the purchase price of the Secured Notes to be
purchased by the Pass Through Trustee, as Loan Participant, on the Closing Date,
in each case to the account of the Owner Trustee specified in Schedule 1 or to
such other account as shall be specified in writing by the Owner Trustee to the
Owner Participant and the Pass Through Trustee, as Loan Participant, at least
one Business Day prior to the Closing Date, which amounts shall be held by the
Owner Trustee in trust, solely on behalf of the Participant delivering or
transferring such amount (and not as part of the Trust Estate), until such
Participant shall have instructed the Owner Trustee that such amount is
available to be applied by the Owner Trustee pursuant to Section 2.7. No
Participant shall be obligated to deliver such instruction if the conditions to
its participation set forth in Section 4 have not been met to its satisfaction
or waived by it.
2.7. Application of Funds by Owner Trustee. On the Closing Date,
-------------------------------------
upon receipt by the Owner Trustee of (a) the amount of the Investment to be made
-
by the Owner Participant on the Closing Date; (b) the purchase price of the
-
Secured Notes to be paid by the Pass Through Trustee, as Loan Participant, on
the Closing Date and (c) the instruction pursuant to Section 2.6 that each of
-
such amounts is available to be applied by the Owner Trustee pursuant to this
Section 2.7, the Owner Trustee shall pay to Mobil Oil Corporation, by wire
transfer of immediately available funds to the account of Mobil Oil Corporation
specified in Schedule 1, an amount equal to Lessor's Cost.
5
<PAGE>
2.8. Actions on Closing Date. Subject to satisfaction of the
-----------------------
applicable conditions precedent set forth in Sections 3 and 4, on the Closing
Date:
(a) the Owner Participant shall make the Investment required
to be made by it on the Closing Date;
(b) the Pass Through Trustee, as Loan Participant, shall pay
to the Owner Trustee the purchase price for the Secured Notes required to be
purchased by it on the Closing Date, the Owner Trustee shall execute and deliver
to the Indenture Trustee the Secured Notes and the Indenture Trustee shall
authenticate and register the Secured Notes and shall deliver the Secured Notes
to the Pass Through Trustee, as Loan Participant;
(c) the Owner Trustee shall purchase from Mobil Oil Corporation
and Mobil Oil Corporation shall sell to the Owner Trustee all of Mobil Oil
Corporation's right, title and interest in and to the Facility Assets, and,
subject to the terms of Section 9.3 of the Lease, Mobil Oil Corporation shall
assign to the Owner Trustee its right in and to any manufacturer's, contractor's
or vendor's warranties applicable to the Facility Assets or any part thereof
(except to the extent such warranties may not be assigned or otherwise
transferred, and subject to any limitations of liability therein) for a purchase
price equal to Lessor's Cost, pursuant to the Conveyancing Instrument and the
Assignment;
(d) simultaneously with the transfer of title to the Facility
Assets, the Ground Lessor shall lease the Site to the Ground Lessee;
(e) simultaneously with the transfer of title to the Facility
Assets to the Owner Trustee, the Owner Trustee shall lease to the Lessee, and
the Lessee shall lease from the Owner Trustee, the Facility Assets pursuant to
the Lease and the Owner Trustee shall sublease the Site to the Lessee, and the
Lessee shall sublease the Site from the Owner Trustee, pursuant to the Lease;
and
(f) the Lessee shall sublease the Facility Assets and sub-
sublease the Site to the Operator pursuant to the Initial Sublease.
2.9. Transaction Expenses. (a) If the transactions contemplated by
--------------------
this Participation Agreement are consummated, the Owner Trustee shall as soon as
practicable
6
<PAGE>
after the Closing Date pay, or reimburse the Lessee for, all Transaction
Expenses (subject to paragraph (b) of this Section 2.9), and the Owner
Participant will provide to the Owner Trustee funds therefor and instructions
with respect to the payment thereof; provided that the underwriting commissions
--------
of Goldman, Sachs & Co., as underwriter of the Pass Through Certificates (the
"Pass Through Underwriter"), shall be paid by the Owner Trustee in immediately
- -------------------------
available funds on the Closing Date. If the transactions contemplated by this
Participation Agreement to be consummated on the Closing Date are not
consummated for any reason whatsoever, the Lessee shall pay the reasonable out-
of-pocket expenses of the Appraiser, the Owner Participant, the Owner Trustee,
the Indenture Trustee, the Pass Through Trustee and their respective counsel
listed in Section 4.7; provided, however, that the Lessee shall not be obligated
-------- -------
to pay more than the amounts set forth in a letter addressed to the Lessee with
respect to the fees of Thelen, Marrin, Johnson & Bridges LLP, special counsel to
the Owner Participant, Edwards & Angell, local counsel to the Owner Participant
and/or Jackson Walker LLP, special Texas counsel to the Owner Participant;
provided, further, that if the transactions contemplated hereby shall not be
- -------- -------
consummated by reason of a breach by the Owner Participant of any of its
obligations hereunder or under any other Operative Document, or if the Owner
Participant shall have failed to negotiate in good faith to consummate any of
the transactions contemplated hereby or by any of the other Operative Documents
consistent with the terms hereof and thereof, the Lessee shall not be obligated
to pay any fees and expenses of the Owner Participant, including, without
limitation, its counsel's fees and expenses.
(b) If the actual amount of Transaction Expenses exceeds the
estimated amount thereof set forth in Schedule 2, the Owner Participant shall
promptly pay when due, or reimburse the Owner Trustee for, such excess
Transaction Expenses pursuant to paragraph (a) of this Section 2.9, except to
the extent the Lessee elects, in its sole discretion, to pay such excess
amount or any portion thereof.
(c) Each of the Transaction Expenses shall be evidenced by
appropriate bills, invoices or other substantiation as the Lessee may
reasonably request. Estimates of such bills, invoices and any substantiation
relating to any Transaction Expense shall be submitted to the Lessee for its
review no later than ten (10) Business Days prior to the Closing Date, and such
bills, invoices and substantiation shall be submitted to the Lessee for its
final approval no
7
<PAGE>
later than thirty (30) days after the Closing Date. Each Transaction Expense
shall, prior to payment thereof, be subject to the approval of the Lessee, which
approval shall not be unreasonably withheld.
2.10. Authorization to Owner Trustee. The Owner Participant agrees
------------------------------
that on the Closing Date the receipt by the Owner Trustee of an instruction from
each Participant pursuant to Section 2.6 making the amount delivered by each
such Participant to the Owner Trustee available for application pursuant to
Section 2.7 shall constitute, without further act, authorization and direction
by each such Participant to the Owner Trustee to take the actions contemplated
to be taken by the Owner Trustee on the Closing Date in the Operative
Documents, including, without limitation, the execution and delivery of all
other documents and instruments contemplated to be executed and delivered by the
Owner Trustee on or prior to the Closing Date in the Operative Documents.
2.11. Registration Statement. Each of the Owner Participant, the
----------------------
Owner Trustee, the Indenture Trustee and the Pass Through Trustee, as Loan
Participant, acknowledges that the Lessee and the Guarantor intend to file with
the SEC a prospectus supplement to the prospectus contained in the Registration
Statement with respect to the Pass Through Certificates to be issued in
connection with the transactions contemplated hereby. If, in connection with
the review by the SEC of such prospectus supplement or any amendments to the
Registration Statement with respect thereto, any modifications or additions are
required to be made in the Operative Documents or any Pass Through Trust
Document, each of the parties named above in this Section 2.11 agrees to, at the
Lessee's expense, negotiate in good faith with respect to, and to enter into
amendments, supplements or modifications to the Operative Documents or the Pass
Through Trust Documents, as the case may be, reflecting such modifications or
additions; provided that no party hereto shall be required to agree to any such
--------
modification or addition that adversely affects the rights of, or increases the
obligations of, such party under any of the Operative Documents or any Pass
Through Trust Documents.
2.12. Recomputation of Basic Rent, Stipulated Loss Value, Termination
---------------------------------------------------------------
Value and EBO Percentages.
- --------------------------
2.12.1. Adjustments to Basic Rent Percentages, Stipulated Loss Value
------------------------------------------------------------
Percentages, Termination Value Percentages and EBO Percentages. Subject to
- --------------------------------------------------------------
the following
8
<PAGE>
provisions of this Section 2.12, the Basic Rent Percentages, Stipulated Loss
Value Percentages, Termination Value Percentages and EBO Percentages set forth
in Schedule 2 shall be appropriately increased or decreased by such amounts and
in such a manner as shall preserve the Owner Participant's Net Economic Return
in the event that:
(i) prior to the Closing: (A) any of the Non-tax Pricing Assumptions
-
set forth in Schedule 2 shall have become incorrect and (B) after having
-
received a written notice prior to the closing from the Owner Participant
of such incorrectness and the proposed adjustment to Basic Rent (and other
adjustments hereunder) resulting therefrom, the Lessee shall have waived
its right under Section 3 of this Participation Agreement to decline to
proceed with the transactions contemplated hereby or
(ii) prior to the Closing: (A) there shall have occurred a Pre-
-
Closing Change in Tax Law and (B) after having received a written notice
-
prior to the closing from the Owner Participant of such Pre-Closing Change
in Tax Law and the proposed adjustment to Basic Rent (and other adjustments
hereunder) resulting therefrom, the Lessee shall have waived its right
under Section 3 of this Participation Agreement to decline to proceed with
the transactions contemplated hereby.
2.12.2. Limitations on Adjustments. (a) Any adjustment made to
--------------------------
Basic Rent Percentages, Stipulated Loss Value Percentages, Termination Value
Percentages and EBO Percentages pursuant to Section 2.12.1 shall be made in such
a manner as to (i) comply in all respects with the provisions of Section 3.5 of
-
the Lease, (ii) to the extent consistent with the foregoing provisions of
--
Section 2.12.1 (including preserving the Owner Participant's Net Economic
Return), minimize (to the greatest extent possible) the Lessee's Net Present
Value Cost and (iii) comply with the requirements of Section 4.2(a) of the Lease
---
regarding the requirements of Sections 4.02(5) and 4.07(1) and (2) of Revenue
Procedure 75-28, 1975-1 C.B. 752, and Section 467 of the Code and the Treasury
Regulations thereunder and the 90/110 test described therein, to the extent,
absent any change in such requirements, that Basic Rent prior to such adjustment
satisfied such requirements.
(b) In making any adjustment pursuant to Section 2.12.1, each of
the Non-tax and Tax Pricing Assumptions set forth in Schedule 2 and the other
assumptions and
9
<PAGE>
methods of calculation employed in the calculation of the Basic Rent
Percentages, Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages, as reflected in Schedule 2 (as such pricing assumptions
shall have been modified as a result of the event giving rise to the adjustment
under this Section 2.12 or previous adjustments under this Section 2.12) shall
be used consistently in such adjustment subject to the constraints
specifically provided in this Section 2.12.
(c) In making any adjustment required pursuant to this Section 2.12,
no adjustment shall be made to reflect the application of Section 168(d)(3) or
861 of the Code or the Treasury Regulations thereunder.
(d) No adjustment shall be made to an EBO Percentage unless such
adjustment is made in compliance with Section 4.2(d) of the Lease.
2.12.3. Timing of Adjustments. All adjustments to be made pursuant
---------------------
to this Section 2.12 shall be made before the first Basic Rent Payment Date and
in any event as soon as practicable after the event giving rise to the
adjustment; provided that no adjustment shall be final, if subject to
--------
verification pursuant to Section 2.12.4, until such verification is completed.
2.12.4. Confirmation of Adjustments. (a) The Owner Participant
---------------------------
shall promptly provide to the Lessee, the Lessor and the Indenture Trustee
notice of any adjustment under this Section 2.12, together with an Officer's
Certificate of the Owner Participant, which Officer's Certificate shall set
forth the amount of and the reason for any such adjustment, specify in
reasonable detail (but without disclosure of confidential information) the basis
of the calculation of such adjustment (which basis shall be consistent with the
provisions of this Section 2.12) and confirm that such adjustment was made in
accordance with the provisions of this Section 2.12.
(b) The Lessee may request that any such adjustment and confirmation
be verified by a nationally recognized, independent public accounting firm that
regularly audits the financial statements of, or is selected by, the Owner
Participant and reasonably acceptable to the Lessee. In performing such
verification, such accounting firm shall be given access by the Owner
Participant to the assumptions, methods, computations, programs and files
utilized by the Owner Participant in calculating such
10
<PAGE>
proposed adjustment and employed in the calculation of the Basic Rent
Percentages, Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages, subject to the execution of such confidentiality agreements
as the Owner Participant shall reasonably request (which agreements shall
prohibit disclosure of the Owner Participant's assumptions, methodology,
programs or files to any third party, including the Lessee). Under no
circumstances shall such independent public accounting firm or any other Person
be entitled to review the tax returns of the Owner Participant. Any revised
adjustment resulting from such verification shall become effective on the
Closing Date.
(c) Any such verification by an accounting firm pursuant to Section
2.12.4(b) shall be at the expense of the Lessee unless the net present value
(using the Debt Rate) of Basic Rent, or the amount of any EBO Purchase Price,
Termination Value or Stipulated Loss Value, as determined by the Owner
Participant, exceeds by more than ten (10) basis points the net present value of
Basic Rent, or the amount of such EBO Purchase Price, Termination Value or
Stipulated Loss Value, as determined by such accounting firm.
Section 3. Conditions to Closing by Lessee. The obligation of the
-------------------------------
Lessee pursuant to Section 2 to (a) cause Mobil Oil Corporation to transfer its
-
right, title and interest in and to the Facility Assets to the Owner Trustee
and (b) lease the Facility Assets from the Owner Trustee and take the other
-
actions contemplated by Section 2 to be taken by it on the Closing Date is
subject only to the fulfillment on the Closing Date to the satisfaction of or
waiver by the Lessee of each of the following conditions precedent, except that
the obligations of the Lessee shall not be subject to the Lessee's or Mobil Oil
Corporation's own performance or, if the Lessee shall have the power to cause
another Person to perform, the Lessee's failure to cause such performance:
3.1. Closing Documents. Each of the following documents shall have
-----------------
been duly authorized, executed and delivered by the respective parties thereto
(other than the Lessee, Mobil Oil Corporation or the Guarantor):
(a) this Participation Agreement;
(b) the Lease;
(c) the Memorandum of Lease;
11
<PAGE>
(d) (i) the Conveyancing Instrument and (ii) the Assignment;
-
(e) the Indenture;
(f) the Tax Indemnity Agreement;
(g) the Secured Notes;
(h) the Trust Agreement;
(i) the Ground Lease;
(j) the Pass Through Trust Documents; and
(k) the Underwriting Agreement;
and each such document shall be in full force and effect on the Closing Date and
no event or condition shall have occurred that, with or without the lapse of
time or the giving of notice or both, would give the Lessee, the Guarantor or
the Ground Lessor as the case may be, the right to terminate such document, and
an executed counterpart of each of the same shall have been delivered to the
Lessee (except that each original Secured Note shall be delivered only to the
Pass Through Trustee).
3.2. Legality, Etc. No change shall have occurred after April 1,
-------------
1997 in Governmental Rules that, in the reasonable opinion of the Lessee, would
make it illegal or unduly burdensome for the Lessee, the Guarantor, Mobil Oil
Corporation, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee
or any other Participant to participate in any of the transactions contemplated
by the Operative Documents to be consummated on the Closing Date.
3.3. Event of Loss. There shall not have occurred an Event of Loss
-------------
to the Facility Assets or any event described in clause (c) of the definition of
Event of Loss that with the passage of time would be an Event of Loss.
3.4. Consents and Approvals. All Governmental Actions that are
----------------------
required to be taken, given, obtained, filed or recorded, as the case may be, on
or prior to the Closing Date, by, from or with any Governmental Authority, and
all other consents, filings or approvals that are required to have been taken,
given, obtained, filed or recorded, as the case may be, on or prior to the
Closing
12
<PAGE>
Date by, from or with any Person, (a) in connection with the transactions
-
contemplated by the Operative Documents and the Pass Through Trust Documents, or
to authorize the execution, delivery and performance by the Lessee, and/or the
Guarantor, as the case may be, of the Pass Through Trust Documents, the
Underwriting Agreement and the Operative Documents to which it is a party, other
than those that may be required under the securities laws or blue sky laws of
any state in connection with the offering or sale of the Pass Through
Certificates or those constituting filings, recordings or other actions of the
types referred to in Section 4.15 or (b) in order that the Facility Assets may
-
be operated as of the Closing Date for the purposes intended by the Lessee
(including, without limitation, all Environmental Permits and all approvals,
certificates, permits, authorizations, licenses or other actions relating to the
operation and maintenance of the Facility Assets), shall have been duly taken,
given, obtained, filed or recorded, as the case may be, shall be in full force
and effect on the Closing Date, shall not be subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and shall be
adequate to authorize the consummation of the transactions contemplated by the
Pass Through Trust Documents, the Underwriting Agreement and the Operative
Documents and the performance by each of the Lessee and the Guarantor of its
obligations under such thereof to which it is a party, except (i) such as may be
-
required to be taken, obtained, given, accomplished or renewed from time to time
after the Closing Date in connection with the maintenance or operation of the
Facility Assets or (ii) such as are otherwise required in connection with the
--
transactions contemplated by the Pass Through Trust Documents, the Underwriting
Agreement and the Operative Documents which have been applied for but which
cannot be obtained, or which are not normally applied for or taken, given or
obtained, prior to the Closing Date, and which in the normal course would, in
the Lessee's reasonable determination, likely be granted or obtained or (iii)
---
any Governmental Actions or other consents, filings or approvals referred to in
this Section 3.4 that, if not obtained, granted or taken by the Closing Date,
would not materially adversely affect the ability of (x) the Lessee to perform
-
its obligations under this Agreement, any other Operative Document to which it
is a party or any Pass Through Trust Document or (y) the Guarantor to perform
-
its obligations under the Guaranty.
3.5. Opinions. A signed original of each opinion referred to in
--------
Section 4.7 (other than in Sections 4.7(a), 4.7(b) and 4.7(h)) (each such
opinion substantially in the
13
<PAGE>
form and addressed as previously agreed) shall have been addressed and delivered
to the Lessee. The Lessee shall have received an opinion from Debevoise &
Plimpton in form and substance satisfactory to the Lessee as to such tax matters
related to the transactions contemplated hereby as the Lessee may reasonably
request.
3.6. Litigation. There shall be no actions, suits or proceedings
----------
before any Governmental Authority pending or, to the knowledge of the Lessee,
threatened against the Lessee, the Guarantor, the Owner Participant, the Pass
Through Trustee, the Owner Trustee or the Indenture Trustee or the properties of
any of such Persons, nor shall any order, judgment or decree have been issued by
a Governmental Authority to set aside, restrain, enjoin or prevent the
consummation of this Participation Agreement, any other Operative Document, any
Pass Through Trust Document, the Underwriting Agreement or the transactions
contemplated hereby or thereby.
3.7. Appraisal. The Lessee shall have received a copy of the Final
---------
Appraisal, which Final Appraisal shall be in form and substance satisfactory to
the Lessee.
3.8. Equity Offering. The Lessee and the Guarantor shall have
---------------
received an executed copy of the letter referred to in Section 4.12, which
letter shall be dated the Closing Date.
3.9. Payment of Lessor's Cost. Mobil Oil Corporation shall have
------------------------
received payment of an amount equal to Lessor's Cost in accordance with Section
2.7.
3.10. Sale of Pass Through Certificates. The Pass Through
---------------------------------
Certificates shall have been issued pursuant to the Pass Through Trust Documents
and sold pursuant to the Underwriting Agreement, and the Underwriters shall have
transferred to the Pass Through Trustee in immediately available funds an amount
equal to the purchase price for the Pass Through Certificates sold pursuant to
each of the Pass Through Trust Supplements.
3.11. No Uneconomic Change; Other Changes. (a) No adjustment to
-----------------------------------
Basic Rent Percentages, Stipulated Loss Value Percentages, Termination Value
Percentages and/or EBO Percentages shall have been proposed or made pursuant to
Section 2.12 that, in the Lessee's reasonable judgment, causes or would cause
the transactions contemplated by this Participation Agreement or any of the
other Operative
14
<PAGE>
Documents to be rendered uneconomic for the Lessee or the Guarantor; provided
--------
that an adjustment or proposed adjustment that arises from one or more of the
events described in clause (i) of Section 2.12.1 may be determined by the Lessee
to be uneconomic only if such adjustment would result in an increase in Lessee's
Net Present Value Cost of more than ten (10) basis points.
(b) No change shall have occurred with respect to the operations or
ownership of any part of the Refinery, the Site or the Facility that in the
Lessee's reasonable judgment would give rise to an Obsolescence Termination
Election or a Special Termination Election pursuant to Section 7.1 of the Lease,
if such change had occurred after the Closing Date.
(c) No event described in Section 12 of the Lease shall have
occurred.
3.12. Officer's Certificates. On the Closing Date, the Lessee shall
----------------------
have received the following (and the statements therein shall be true):
(a) an Officer's Certificate of the Owner Participant, dated the
Closing Date, stating that (i) the representations and warranties of the Owner
-
Participant contained in Section 6 are true and accurate on and as of the
Closing Date as though made on and as of such date except to the extent that
such representations and warranties specifically relate solely to an earlier
date (in which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and (ii) each Operative Document to
--
which it is a party is or, to the extent previously executed and delivered,
remains in full force and effect with respect to it;
(b) an Officer's Certificate of each of the Trust Company and the
Owner Trustee, dated the Closing Date, stating that (i) the representations and
-
warranties of the Trust Company and the Owner Trustee contained in Section 8 are
true and accurate on and as of the Closing Date as though made on and as of such
date except to the extent that such representations and warranties specifically
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date) and
(ii) each Operative Document to which the Trust Company and the Owner Trustee is
--
a party is or, to the extent previously executed and
15
<PAGE>
delivered, remains in full force and effect with respect to it;
(c) an Officer's Certificate of the Indenture Trustee, dated the
Closing Date, stating that (i) the representations and warranties of the
-
Indenture Trustee contained in Section 9 are true and accurate on and as of the
Closing Date as though made on and as of such date except to the extent that
such representations and warranties specifically relate solely to an earlier
date (in which case such representations and warranties shall have been true
and accurate on and as of such earlier date) and (ii) each Operative Document to
--
which the Indenture Trustee is a party is or, to the extent previously executed
and delivered, remains in full force and effect with respect to it; and
(d) an Officer's Certificate of State Street Bank and Trust Company
(in its individual capacity and as Pass Trough Trustee, as applicable), dated
the Closing Date, stating that (i) the representations and warranties of State
-
Street Bank and Trust Company and the Pass Through Trustee contained in Section
7 are true and accurate on and as of the Closing Date as though made on and as
of such date except to the extent that such representations and warranties
specifically relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and (ii) each of the Participation Agreement and the Pass
--
Through Trust Documents is, or to the extent previously executed and delivered,
remains in full force and effect with respect to it.
3.13. Resolutions, Etc. The Lessee shall have received the
----------------
following, in each case in form and substance reasonably satisfactory to the
Lessee:
(a) a Secretary's or an Assistant Secretary's certificate of the
Owner Participant, dated the Closing Date, attaching and certifying as to (i)
-
resolutions of its Board of Directors duly authorizing the execution, delivery
and performance by the Owner Participant of each Operative Document to which it
is a party and the transactions contemplated thereby, certified to be in full
force and effect without modification as of the Closing Date; (ii) its charter
--
documents; (iii) its by-laws and (iv) the incumbency and signature of persons
--- --
authorized to execute and deliver such documents on behalf of the Owner
Participant;
16
<PAGE>
(b) a Secretary's or an Assistant Secretary's certificate of the
Trust Company and the Owner Trustee, dated the Closing Date, attaching and
certifying as to (i) resolutions of its Board of Directors duly authorizing the
-
execution, delivery and performance by the Trust Company and the Owner Trustee
of each Operative Document to which it is a party and the transactions
contemplated thereby, certified to be in full force and effect without
modification as of the Closing Date; (ii) its charter documents; (iii) its by-
-- ---
laws and (iv) the incumbency and signature of persons authorized to execute and
--
deliver such documents on behalf of the Trust Company and the Owner Trustee;
(c) a Secretary's or an Assistant Secretary's certificate of the
Indenture Trustee, dated the Closing Date, attaching and certifying as to (i)
-
resolutions of its Board of Directors or an appropriate committee thereof duly
authorizing the execution, delivery and performance by the Indenture Trustee of
each Operative Document to which it is a party and the transactions contemplated
thereby, certified to be in full force and effect without modification as of the
Closing Date; (ii) its charter documents; (iii) its by-laws and (iv) the
-- --- --
incumbency and signature of persons authorized to execute and deliver such
documents on behalf of the Indenture Trustee; and
(d) a Secretary's or an Assistant Secretary's certificate of State
Street Bank and Trust Company, dated the Closing Date, attaching and certifying
as to (i) resolutions of its Board of Directors or an appropriate committee
-
thereof duly authorizing the execution, delivery and performance by the Pass
Through Trustee of the Pass Through Trust Documents and this Participation
Agreement and the transactions contemplated thereby and hereby, certified to be
in full force and effect without modification as of the Closing Date; (ii) its
--
charter documents; (iii) its by-laws and (iv) the incumbency and signature of
--- --
persons authorized to execute and deliver such documents on behalf of the Pass
Through Trustee.
3.14. Completion Certificate. The Lessee shall have received a
----------------------
mechanical completeness certificate from the applicable contractor with respect
to the Facility Assets as a whole.
Section 4. Conditions to Closing by Participants. The obligations of
-------------------------------------
the Owner Participant and the Pass Through Trustee pursuant to Section 2 to
participate in the payment of Lessor's Cost and to take the other actions
17
<PAGE>
contemplated by Section 2 to be taken by them on the Closing Date are subject
only to the fulfillment on the Closing Date to the satisfaction of or waiver by
such Participant of each of the following conditions precedent (other than (i)
-
in the case of the Owner Participant, Sections 4.5(b), 4.7(d), 4.9(b) and
4.10(b), and (ii) in the case of the Pass Through Trustee, Sections 4.5, 4.7(g)
--
and (h), 4.8, 4.9(e) and 4.10(e)), except that the obligations of such
Participant shall not be subject to such Participant's own performance or, if
such Participant shall have the power to cause another Person to perform, such
Participant's failure to cause such performance:
4.1. Notice of Closing. Such Participant shall have received the
-----------------
notice of closing for such Closing Date required to be delivered pursuant to
Section 2.4.
4.2. Closing Documents. Each of the following documents shall have
-----------------
been duly authorized, executed and delivered by the respective parties thereto:
(a) this Participation Agreement;
(b) the Lease;
(c) the Memorandum of Lease;
(d) (i) the Conveyancing Instrument and (ii) the Assignment;
- --
(e) the Indenture;
(f) the Tax Indemnity Agreement;
(g) the Secured Notes;
(h) the Trust Agreement;
(i) the Guaranty; and
(j) the Ground Lease;
and each such document and the Pass Through Trust Documents shall be in full
force and effect on the Closing Date, and no event or condition shall have
occurred that, with or without the lapse of time or the giving of notice, shall
give any other party thereto the right to terminate such document, and an
executed counterpart (or, in the case of the Pass Through Trust Documents, a
true, correct and
18
<PAGE>
complete copy) of each of the same shall have been delivered to such Participant
(except that the Tax Indemnity Agreement shall be delivered only to the parties
thereto and each original Secured Note shall be delivered only to the Pass
Through Trustee).
4.3. Legality, Etc. No change shall have occurred after April 1,
-------------
1997 in Governmental Rules that, in the reasonable opinion of such Participant,
would make it illegal or unduly burdensome for the Owner Trustee, the Lessee,
the Guarantor, the Indenture Trustee or any Participant to participate in any of
the transactions contemplated by the Operative Documents to be consummated on
the Closing Date.
4.4. Event of Loss. There shall not have occurred an Event of Loss
-------------
to the Facility Assets or any event described in clause (c) of the definition of
Event of Loss that with the passage of time would be an Event of Loss.
4.5. Appraisal. (a) The Owner Participant shall have received the
---------
Final Appraisal, which Final Appraisal shall be satisfactory in form and
substance to the Owner Participant.
(b) The Indenture Trustee shall have received a letter from the
Appraiser setting forth the conclusions of the Appraiser with respect to the
fair market value of the Facility Assets as of the Closing Date.
4.6. Insurance. Insurance complying with the provisions of Section
---------
13.1 of the Lease shall be in full force and effect, and the Owner Participant
and the Indenture Trustee shall have received a certificate of an independent
insurance broker or consultant (which broker or consultant may be the Lessee's
independent insurance broker or consultant), dated the Closing Date, setting
forth in reasonable detail the insurance obtained by or on behalf of the Lessee
in accordance with Section 13.1(a) of the Lease and as then in effect, stating
that such insurance is in full force and effect and that all premiums then due
thereon have been paid, or an Officer's Certificate of the Lessee, dated the
Closing Date, stating that such insurance complies with the provisions of
Section 13.1(a).
4.7. Opinions. Opinions dated the Closing Date of the following
--------
counsel, each such opinion substantially in
19
<PAGE>
the form and addressed as previously agreed, shall have been executed and
delivered by such counsel:
(a) Ralph N. Johanson, Jr., Esq., Managing Counsel, Corporate,
Finance and Securities to the Guarantor;
(b) Debevoise & Plimpton, special counsel to the Lessee and the
Guarantor;
(c) Vinson & Elkins, special Texas counsel to the Lessee and the
Guarantor;
(d) Thelen, Marrin, Johnson & Bridges LLP, special counsel to the
Owner Participant, together with the opinion of internal or other local counsel
to the Owner Participant;
(e) Morris, James, Hitchens & Williams, special counsel to the Trust
Company and the Owner Trustee;
(f) Bingham, Dana & Gould LLP, special counsel to the Indenture
Trustee;
(g) Bingham, Dana & Gould LLP, special counsel to the Pass Through
Trustee; and
(h) Thelen, Marrin, Johnson & Bridges LLP, special counsel to the
Owner Participant, in form and substance satisfactory to the Owner Participant
as to such tax matters related to the transactions contemplated hereby as the
Owner Participant may reasonably request.
4.8. Taxes. All Taxes, if any, payable on or prior to the Closing
-----
Date by the Lessee in connection with the recordation and filing of all
documents and instruments referred to in Section 4.15 shall have been paid in
full on or before the Closing Date by the Lessee.
4.9. Officer's Certificates. On the Closing Date, such Participant,
----------------------
the Owner Trustee and the Indenture Trustee shall have received the following
(and the statements therein shall be true):
(a) an Officer's Certificate of the Lessee, dated the Closing Date,
stating that (i) the representations and warranties of the Lessee contained in
-
Section 5 are true and accurate on and as of the Closing Date as though made on
and as of such date except to the extent that such representations and
warranties specifically relate solely to an earli-
20
<PAGE>
er date (in which case such representations and warranties shall have been true
and accurate on and as of such earlier date) and (ii) each Operative Document to
--
which it is a party and each Pass Through Trust Document is or, to the extent
previously executed and delivered, remains in full force and effect with respect
to it;
(b) an Officer's Certificate of the Owner Participant, dated the
Closing Date, stating that (i) the representations and warranties of the Owner
-
Participant contained in Section 6 are true and accurate on and as of the
Closing Date as though made on and as of such date except to the extent that
such representations and war ranties specifically relate solely to an earlier
date (in which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and (ii) each Operative Document to
--
which it is a party is or, to the extent previously executed and delivered,
remains in full force and effect with respect to it;
(c) an Officer's Certificate of each of the Trust Company and the
Owner Trustee, dated the Closing Date, stating that (i) the representations and
-
warranties of the Trust Company and the Owner Trustee contained in Section 8 are
true and accurate on and as of the Closing Date as though made on and as of such
date except to the extent that such representations and warranties specifically
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date) and
(ii) each Operative Document to which the Trust Company and the Owner Trustee is
--
a party is or, to the extent previously executed and delivered, remains in full
force and effect with respect to it;
(d) an Officer's Certificate of the Indenture Trustee, dated the
Closing Date, stating that (i) the representations and warranties of the
-
Indenture Trustee contained in Section 9 are true and accurate on and as of the
Closing Date as though made on and as of such date except to the extent that
such representations and warranties specifically relate solely to an earlier
date (in which case such representations and warranties shall have been true
and accurate on and as of such earlier date) and (ii) each Operative Document to
--
which the Indenture Trustee is a party is or, to the extent previously executed
and delivered, remains in full force and effect with respect to it;
21
<PAGE>
(e) an Officer's Certificate of State Street Bank and Trust Company
(in its individual capacity and as Pass Through Trustee, as applicable), dated
the Closing Date, stating that (i) the representations and warranties of State
-
Street Bank and Trust Company and the Pass Through Trustee contained in Section
7 are true and accurate on and as of the Closing Date as though made on and as
of such date except to the extent that such representations and warranties
specifically relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and (ii) each of the Participation Agreement and the Pass
--
Through Trust Documents is, or to the extent previously executed and delivered,
remains in full force and effect with respect to it; and
(f) an Officer's Certificate of the Guarantor, dated the Closing
Date, stating that (i) the representations and warranties of the Guarantor
-
contained in Section 1.1 of the Guaranty are true and accurate on and as of the
Closing Date as though made on and as of such date except to the extent that
such representations and warranties specifically relate solely to an earlier
date (in which case such representations and warranties shall have been true
and accurate on and as of such earlier date) and (ii) the Guaranty is in full
--
force and effect.
4.10. Resolutions, Etc. The Owner Participant, the Owner Trustee and
----------------
the Indenture Trustee shall have received the following, in each case in form
and substance reasonably satisfactory to such Person:
(a) a Secretary's or an Assistant Secretary's certificate of the
Lessee, dated the Closing Date, attaching and certifying as to (i) resolutions
-
of its Board of Directors duly authorizing the execution, delivery and
performance by the Lessee of each Operative Document to which it is a party
and the Pass Through Trust Documents and the transactions contemplated thereby,
certified to be in full force and effect without modification as of the Closing
Date; (ii) its charter documents; (iii) its by-laws and (iv) the incumbency and
-- --- --
signature of persons authorized to execute and deliver such documents on behalf
of the Lessee;
(b) a Secretary's or an Assistant Secretary's certificate of the
Owner Participant, dated the Closing Date, attaching and certifying as to (i)
-
resolutions of its Board of Directors duly authorizing the execution, delivery
and performance by the Owner Participant of each Operative
22
<PAGE>
Document to which it is a party and the transactions contemplated thereby,
certified to be in full force and effect without modification as of the Closing
Date; (ii) its charter documents; (iii) its by-laws and (iv) the incumbency and
-- --- --
signature of persons authorized to execute and deliver such documents on behalf
of the Owner Participant;
(c) a Secretary's or an Assistant Secretary's certificate of the
Trust Company and the Owner Trustee, dated the Closing Date, attaching and
certifying as to (i) resolutions of its Board of Directors duly authorizing the
-
execution, delivery and performance by the Trust Company and the Owner Trustee
of each Operative Document to which it is a party and the transactions
contemplated thereby, certified to be in full force and effect without
modification as of the Closing Date; (ii) its charter documents; (iii) its by-
-- ---
laws and (iv) the incumbency and signature of persons authorized to execute and
--
deliver such documents on behalf of the Trust Company and the Owner Trustee;
(d) a Secretary's or an Assistant Secretary's certificate of the
Indenture Trustee, dated the Closing Date, attaching and certifying as to (i)
-
resolutions of its Board of Directors or an appropriate committee thereof duly
authorizing the execution, delivery and performance by the Indenture Trustee of
each Operative Document to which it is a party and the transactions contemplated
thereby, certified to be in full force and effect without modification as of the
Closing Date; (ii) its charter documents; (iii) its by-laws and (iv) the
-- --- --
incumbency and signature of persons authorized to execute and deliver such
documents on behalf of the Indenture Trustee;
(e) a Secretary's or an Assistant Secretary's certificate of State
Street Bank and Trust Company, dated the Closing Date, attaching and certifying
as to (i) resolutions of its Board of Directors or an appropriate committee
-
thereof duly authorizing the execution, delivery and performance by the Pass
Through Trustee of the Pass Through Trust Agreement, the Pass Through Trust
Supplement and this Participation Agreement and the transactions contemplated
thereby and hereby, certified to be in full force and effect without
modification as of the Closing Date; (ii) its charter documents; (iii) its by-
-- ---
laws and (iv) the incumbency and signature of persons authorized to execute and
--
deliver such documents on behalf of the Pass Through Trustee; and
23
<PAGE>
(f) a Secretary's or an Assistant Secretary's certificate of the
Guarantor, dated the Closing Date, attaching and certifying as to (i)
-
resolutions of its Board of Directors duly authorizing the execution, delivery
and performance by the Guarantor of the Guaranty and its obligations
thereunder, certified to be in full force and effect without modification as of
the Closing Date; (ii) its charter documents; (iii) its by-laws and (iv) the
-- --- --
incumbency and signature of persons authorized to execute and deliver the
Guaranty on behalf of the Guarantor.
4.11. Litigation. There shall be no actions, suits or proceedings
----------
before any Governmental Authority pending or, to the knowledge of the Owner
Participant, the Pass Through Trustee, the Owner Trustee or the Indenture
Trustee, threatened against the Lessee, the Guarantor, the Owner Participant,
the Pass Through Trustee, the Owner Trustee or the Indenture Trustee or the
properties of any of such Persons, nor shall any order, judgment or decree have
been issued by any Governmental Authority, in each case to set aside, restrain,
enjoin or prevent the consummation of this Participation Agreement, any of the
other Operative Documents, the Pass Through Trust Documents or the transactions
contemplated hereby or thereby.
4.12. Equity Offering. The Owner Participant and the Indenture
---------------
Trustee shall have received a letter dated the Closing Date from Goldman, Sachs
& Co. with respect to the number of offerees of the beneficial interest in the
Trust Estate and the manner of offering thereof.
4.13. Investment and Loans. The Owner Participant shall have made
--------------------
available to the Owner Trustee the full amount of its Investment, and the Pass
Through Trustee shall have purchased the Secured Notes required to be purchased
by it on the Closing Date pursuant to Section 2.
4.14. Consents and Approvals. All Governmental Actions that are
----------------------
required to be taken, given, obtained, filed or recorded, as the case may be, on
or prior to the Closing Date by, from or with any Governmental Authority, and
all other consents, filings or approvals which are required to have been taken,
given, obtained, filed or recorded, as the case may be, on or prior to the
Closing Date by, from or with any other Person in each case, (a) in connection
-
with the transactions contemplated by the Operative Documents or the Pass
Through Trust Documents, or to authorize the execution, delivery and performance
by the Lessee, the Guarantor, the Owner Participant, the Owner
24
<PAGE>
Trustee, the Indenture Trustee or the Pass Through Trustee of each of the
Operative Documents or the Pass Through Trust Documents to which it is a party,
other than those that may be required under the securities laws or blue sky laws
of any state in connection with the offering or sale of the Pass Through
Certificates or those constituting filings, recordings or other actions of the
type referred to in Section 4.15 or (b) in order that the Facility Assets may be
-
operated as of the Closing Date for the purposes intended by the Lease
(including, without limitation, all Environmental Permits and all approvals,
certificates, permits, authorizations, licenses or other actions relating to the
operation and maintenance of the Facility Assets), shall have been duly taken,
given, obtained, filed or recorded, as the case may be, shall be in full force
and effect on the Closing Date, shall not be subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and shall be
adequate to authorize the consummation of the transactions contemplated by the
Pass Through Trust Documents and the Operative Documents and the performance by
each of the Lessee and the Guarantor of its obligations under such thereof to
which it is a party, except (i) such as may be required to be taken, obtained,
-
given, accomplished or renewed from time to time after the Closing Date in
connection with the maintenance or operation of the Facility or the Facility
Assets or (ii) such as are otherwise required in connection with the
--
transactions contemplated by the Pass Through Trust Documents and the Operative
Documents which have been applied for but which cannot be obtained, or which are
not normally applied for or taken, given or obtained, prior to the Closing Date,
and which in the normal course would, in the Lessee's reasonable determination,
likely be granted or obtained or (iii) such Governmental Actions or such other
---
consents, filings or approvals referred to in Section 4.14 that, if not
obtained, granted or taken by the Closing Date, would not materially adversely
affect the ability of (x) the Lessee to perform its obligations under this
-
Agreement, any other Operative Document to which it is a party or any Pass
Through Trust Document or (y) the Guarantor to perform its obligations under the
-
Guaranty.
4.15. Title; Filings and Recordings. On the Closing Date, (a) title
----------------------------- -
in and to the Facility Assets shall have been duly and effectively transferred
to the Owner Trustee pursuant to the Conveyancing Instrument, free and clear of
all Liens other than Permitted Liens described in clauses (b), (c), (d), (e),
(g) and (h) of the definition thereof; (b) all filings and recordings necessary
-
(i) to
-
25
<PAGE>
establish the Owner Trustee's right, title and interest in and to the Facility
Assets and leasehold interest in the Site and (ii) to perfect the Indenture
--
Trustee's security interest in the Indenture Estate created by the Indenture,
shall have been duly made or arrangements shall have been made for the due
filing or recording thereof on the Closing Date, subject to requirements for
filing continuation statements at appropriate intervals and subject to Permitted
Liens; (c) no other action shall be required to perfect such right, title and
-
interests (other than the taking of possession by the Indenture Trustee of the
original executed counterpart of the Lease) and (d) there are no sales taxes
-
arising or due in connection with the transfer of title to the Facility Assets
to the Lessor or the lease of the Site as contemplated by the Operative
Documents.
4.16. Sale of Pass Through Certificates. The Lessee and the
---------------------------------
Guarantor shall have entered into the Underwriting Agreement and the Pass
Through Trust Documents; the Pass Through Certificates shall have been issued
pursuant to the Pass Through Trust Documents and sold pursuant to the
Underwriting Agreement and the Underwriters shall have transferred to the Pass
Through Trustee in immediately available funds an amount equal to the purchase
price for the Pass Through Certificates.
4.17. No Default Under Lease. No Lease Default or Lease Event of
----------------------
Default shall have occurred and be continuing.
4.18. No Material Adverse Change. There shall have been no material
--------------------------
adverse change in the business, operations or consolidated financial condition
of the Guarantor since March 31, 1997.
4.19. Completion Certificate. The Owner Trustee shall have received
----------------------
a copy of the mechanical completeness certificate received by the Lessee from
the applicable contractor with respect to the Facility Assets as a whole.
4.20. Condition of the Facility. The Owner Participant, the Owner
-------------------------
Trustee and the Indenture Trustee shall have received a certificate as to the
condition of the Facility Assets substantially in the form previously agreed.
4.21. Nothing Further Certificate. The Owner Participant, the Owner
---------------------------
Trustee and the Indenture Trustee shall have received a copy of a "nothing
further certificate" from Stewart Title Company covering the Land.
26
<PAGE>
Section 5. Representations and Warranties of the Lessee. The Lessee
--------------------------------------------
represents and warrants to each of the other parties hereto that:
5.1. Due Organization. The Lessee is a corporation duly organized,
----------------
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to carry on its business as presently
conducted and as it is contemplated it will be conducted in connection with the
Facility, to own or hold under lease its properties and to execute and deliver
and perform its obligations under this Participation Agreement, each other
Operative Document to which it is a party and each Pass Through Trust Document,
and is duly qualified to do business in any jurisdiction where failure so to
qualify could reasonably be expected to materially adversely affect its ability
to conduct its business as it is presently conducted and as it is contemplated
to be conducted in connection with the Facility Assets, to own or hold under
lease its properties or to perform any of its obligations under this
Participation Agreement or any other Operative Document to which it is a party.
5.2. Authorization. The execution, delivery and performance by the
-------------
Lessee of this Participation Agreement, each other Operative Document to which
it is a party and each Pass Through Trust Document and of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Lessee and do not and will not require the
consent or approval of any shareholder of the Lessee or any trustee or holder of
any indebtedness or other obligation of the Lessee.
5.3. Execution; Enforceability. Each of this Participation Agreement
-------------------------
and the Pass Through Trust Agreement has been duly executed and delivered by the
Lessee and, assuming the due authorization, execution and delivery hereof and
thereof by the other parties hereto and thereto, constitutes, and each other
Operative Document to which the Lessee is a party and each Pass Through Trust
Supplement will, when executed and delivered by the Lessee, be duly executed and
delivered by the Lessee and thereupon will, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitute, a
legal, valid and binding obligation of the Lessee, enforceable against the
Lessee in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
liquidation, moratorium or similar laws affecting creditors'
27
<PAGE>
or lessors' rights generally and by the application of general principles of
equity and except, in the case of the Lease, as limited by applicable laws, that
may affect the remedies provided in the Lease, which laws, however, do not make
the remedies provided in the Lease inadequate for the practical realization of
the rights and remedies provided thereby and that, as more fully set forth in
the opinion of Vinson & Elkins delivered pursuant to Section 4.7(c), certain of
the remedies provided for in the Lease with regard to the Facility Assets may
not be enforceable in accordance with their terms under the laws of the State of
Texas.
5.4. No Violation. The execution and delivery by the Lessee of this
------------
Participation Agreement, each other Operative Document to which it is a party
and each Pass Through Trust Document do not and will not, and the performance by
the Lessee of its obligations under each thereof does not and will not, (a)
-
violate or result in a breach of its charter documents or by-laws; (b)
-
contravene any Governmental Rule or Governmental Action applicable to it, which,
in the case of such performance, noncompliance with which would materially
adversely affect the ability of the Lessee to perform its obligations under the
Operative Documents, provided that no representation or warranty is made with
--------
respect to ERISA; (c) contravene any provision of, or constitute a default
-
under, any indenture, mortgage, contract or other agreement or instrument to
which the Lessee is a party or by which it or any of its properties are bound or
(d) result in or require the creation or imposition of any Lien (other than
-
Permitted Liens) upon the Facility Assets.
5.5. Consents and Approvals. All Governmental Actions that are
----------------------
required to have been taken, given, obtained, filed or recorded, as the case
may be, by the Lessee on or prior to the Closing Date by, from or with any
Governmental Authority and all other consents, filings or approvals which are
required to have been taken, given, obtained, filed or recorded, as the case may
be, on or prior to the Closing Date by, from or with any other Person (a) in
-
connection with the transactions contemplated by the Operative Documents and
the Pass Through Trust Documents, or to authorize the execution, delivery and
performance by the Lessee and/or the Guarantor of the Guaranty, the other
Operative Documents to which either of them is a party and the Pass Through
Trust Documents, other than those that may be required under the securities
laws or blue sky laws of any state in connection with the offering or sale of
the Pass
28
<PAGE>
Through Certificates or those constituting filings, recordings or other actions
of the type referred to in Section 5.7, or (b) in order that the Facility Assets
-
may be operated as of the Closing Date for the purposes intended by the Lease
(including, without limitation, all Environmental Permits and all approvals,
certificates, permits, authorizations, licenses or other actions relating to the
operation and maintenance of the Facility Assets in accordance with the terms of
the Lease), shall have been duly taken, given, obtained, filed or recorded, as
the case may be, shall be in full force and effect on the Closing Date, shall
not be subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and shall be adequate to authorize the consummation by each of the
Lessee or the Guarantor of the transactions contemplated by the Pass Through
Trust Documents, the Underwriting Agreement and the Operative Documents to which
it is a party and the performance by each of the Lessee and the Guarantor of its
respective obligations under such thereof to which it is a party, except (i)
-
such as may be required to be taken, obtained, given, accomplished or renewed
from time to time after the Closing Date in connection with the maintenance or
operation of the Facility Assets, or (ii) such as are otherwise required in
--
connection with the transactions contemplated by the Pass Through Trust
Documents, the Underwriting Agreement and the Operative Documents which have
been applied for but which cannot be obtained, or which are not normally applied
for or taken, given or obtained, prior to the Closing Date, and which in the
normal course, in the Lessee's judgment, would be likely to be granted or
obtained or (iii) any Governmental Actions or other consents, filings and
---
approvals referred to in this Section 5.5 that, if not obtained, granted or
taken by the Closing Date, would not materially adversely affect the ability of
(x) the Lessee to perform its obligations under this Participation Agreement,
-
any other Operative Document to which it is a party or any Pass Through Trust
Document or (y) the Guarantor to perform its obligations under the Guaranty.
-
5.6. Securities Act. Neither the Lessee nor any Person authorized on
--------------
its behalf has directly or indirectly offered or sold any interest in the Trust
Estate, or in any similar security relating to the Facility Assets, to, or
solicited any offer to acquire any of the same from, any Person other than the
Owner Participant and the institutions referred to in the letter referred to in
Section 4.12 from Goldman Sachs & Co. and as contemplated herein or in the other
Operative Documents. Neither the Lessee nor any Person authorized on its behalf
has directly or indirectly
29
<PAGE>
offered or sold any Pass Through Certificates to, or solicited any offer to
acquire the same from, any Person other than in a manner required by the
Securities Act.
5.7. Title; Filings and Recordings. On the Closing Date, after
-----------------------------
giving effect to the transactions contemplated hereby (a) title in and to the
-
Facility Assets will be duly and effectively transferred to the Owner Trustee
pursuant to the Conveyancing Instrument free and clear of all Liens other than
Permitted Liens described in clauses (b), (c), (d), (e), (g) and (h) of the
definition thereof; (b) the filings and recordings listed in Schedule 3 will be
-
all the filings and recordings necessary (i) to establish the Owner Trustee's
-
right, title and interest in and to the Facility Assets and (ii) to perfect the
--
mortgage Lien on and the Indenture Trustee's security interest in the Indenture
Estate created by the Indenture, and all such filings and recordings will have
been duly made or arrangements shall have been made for the due filing or
recording thereof, subject to requirements for filing continuation statements at
appropriate intervals and (c) no other action will be required to perfect such
-
mortgage Lien and security interest (other than the taking of possession by the
Indenture Trustee of the original executed counterpart of the Lease and of any
cash proceeds or instruments included in the Indenture Estate).
5.8. Chief Place of Business. The chief place of business and chief
-----------------------
executive office of the Lessee is in Fairfax, Virginia, and the offices where it
keeps its records concerning the Facility and its accounts and contract rights
are in Fairfax, Virginia.
5.9. Litigation. There is no action, suit or proceeding before any
----------
Governmental Authority pending or, to the Actual Knowledge of the Lessee,
threatened against the Lessee or its properties that questions the validity of
any Operative Document or that, individually or in the aggregate, (A) is
-
reasonably likely materially and adversely to affect (x) the consummation of the
-
transactions under the Pass Through Trust Documents, this Participation
Agreement or any other Operative Document or any action taken or to be taken by
the Lessee pursuant to any Operative Document to which it is a party or (y) the
-
Lessee's or the Guarantor's ability to perform its obligations under any of the
Operative Documents to which it is a party or (B) would result in the creation
-
or imposition of any Lien (other than a Permitted Lien) upon the Facility
Assets.
30
<PAGE>
5.10. No Default. No Lease Default or Lease Event of Default has
----------
occurred and is continuing.
5.11. Event of Loss. No Event of Loss has occurred and, to the
-------------
Actual Knowledge of the Lessee, no event described in clause (c) of the
definition of Event of Loss has occurred with respect to the Facility Assets.
5.12. Environmental Matters. To the Actual Knowledge of the Lessee:
---------------------
(a) the Lessee or one or more Affiliates thereof has obtained all
Environmental Permits and is in compliance with all Environmental Laws and
Environmental Permits applicable to the Facility, except where such
failure would not in the aggregate materially and adversely affect the
Facility or the Lessee's, the Owner Trustee's, the Indenture Trustee's or
any Participant's interest therein or the financial condition of the
Guarantor;
(b) there have been no unreported Releases of Hazardous Materials
from the Facility which have been required to be reported to any
Governmental Authority pursuant to any applicable Environmental Laws,
except for Releases which would not in the aggregate materially and
adversely affect the Facility or the Lessee's, the Owner Trustee's, the
Indenture Trustee's or any Participant's interest therein or the financial
condition of the Guarantor; and
(c) neither the Lessee nor the Guarantor has received any written
notice that such Person is subject to any threatened, pending or
outstanding Claim relating to the Facility Assets with respect to any
Environmental Law or any Remedial Action, which would in the aggregate
materially and adversely affect the Facility, or the Lessee's, the Owner
Trustee's, the Indenture Trustee's or any Participant's interest therein or
the financial condition of the Guarantor.
5.13. Description of Facility Assets. On the Closing Date, the
------------------------------
description set forth in Schedule 1 to the Conveyancing Instrument is a true and
accurate description in all material respects of the Facility Assets.
5.14. Disclosure Representation. There is no fact, of which the
-------------------------
Lessee has obtained Actual Knowledge, that has not been disclosed in writing to
each of the
31
<PAGE>
Participants and that affects materially and adversely the ability of the Lessee
to perform its obligations under this Participation Agreement or the other
Operative Documents, and there is no fact known to the Guarantor that has not
been disclosed in writing to each of the Participants that materially and
adversely affects, or would reasonably be expected to materially and adversely
affect, the ability of the Guarantor to perform its obligations under the
Guaranty.
5.15. Investment Company Act. Neither the Guarantor nor the Lessee
----------------------
is an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
5.16. No Brokers' Fees. Neither the Lessee nor any Person acting on
----------------
its behalf has taken any actions the effect of which would be to cause the Owner
Trustee, the Indenture Trustee or any Participant to be liable for any brokers',
finders' or agents' fees or commissions or costs of any nature or kind claimed
by or on behalf of brokers, finders or agents in respect of the transactions
contemplated by this Agreement other than fees payable to Goldman, Sachs & Co.
(such fees being for the sole account of the Lessee).
5.17. Holding Company. The Lessee is not subject to regulation as a
---------------
"holding company," an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.18. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING
--------------------------------------------
ANYTHING CONTAINED HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT, THE LESSEE DOES
NOT MAKE NOR SHALL THE LESSEE BE DEEMED TO HAVE MADE, AND THE LESSEE HEREBY
DISCLAIMS, ANY REPRESENTATION OR WARRANTY OTHER THAN THOSE REFERRED TO IN THIS
SECTION, IN ANY OFFICER'S CERTIFICATE OF THE LESSEE OR EXPRESSLY MADE IN ANY
OTHER OPERATIVE DOCUMENT, EITHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR
CONDITION OF THE FACILITY OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR
THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, THE ABILITY OF THE FACILITY OR
ANY PART THEREOF TO PERFORM ANY FUNCTION, THE QUALITY OF THE MATERIALS OR
WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE; PROVIDED
THAT THE FOREGOING SHALL NOT EXCUSE THE PERFORMANCE BY THE LESSEE OF ITS
OBLIGATIONS SET FORTH IN THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE
DOCUMENT. THIS DISCLAIMER OF
32
<PAGE>
REPRESENTATION AND WARRANTIES SHALL SURVIVE ANY TERMINATION OR RESCISSION OF
THIS PARTICIPATION AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS.
Section 6. Representations and Warranties of Owner Participant. The
--------------------------------- -----------------
Owner Participant represents and warrants to each of the other parties hereto
that:
6.1. Due Organization. The Owner Participant is a national banking
----------------
association duly organized, validly existing and in good standing under the laws
of the United States and has the corporate power and authority to carry on its
business as presently conducted and to enter into and perform its obligations
under, and to execute and deliver, this Participation Agreement and each other
Operative Document to which it is a party and is duly qualified to do business
in any jurisdiction where failure to so qualify could reasonably be expected to
materially, adversely affect its ability to conduct its business as presently
conducted and as it is contemplated to be conducted in connection with the
Facility Assets or to perform any obligations under this Participation Agreement
or any other Operative Document to which it is a party.
6.2. Authorization; Execution; Enforceability. The execution,
----------------------------------------
delivery and performance by the Owner Participant of this Participation
Agreement and each other Operative Document to which it is a party and of the
transactions contemplated hereby and thereby have been duly authorized by the
Owner Participant and do not and will not require the consent or approval of any
shareholder of the Owner Participant. Each of this Participation Agreement and
the Trust Agreement has been duly executed and delivered by the Owner
Participant and, assuming the due authorization, execution and delivery hereof
and thereof by the other parties hereto and thereto, as the case may be,
constitutes, and each other Operative Document to which the Owner Participant
is a party will, when executed and delivered by the Owner Participant, be duly
executed and delivered by the Owner Participant and thereupon will, assuming the
due authorization, execution and delivery thereof by the other parties thereto,
constitute, a legal, valid and binding obligation of the Owner Participant,
enforceable against the Owner Participant in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or similar
laws affecting creditors' rights generally and by the application of general
equitable principles which may limit the avail-
33
<PAGE>
ability of certain remedies. Any direction given by the Owner Participant to the
Owner Trustee on the Closing Date pursuant to the Trust Agreement will have been
duly authorized.
6.3. No Violation. The execution and delivery by the Owner
------------
Participant of this Participation Agreement and each other Operative Document to
which it is a party do not and will not, and the performance by the Owner
Participant of its obligations under each thereof does not and will not, (i)
-
violate or result in a breach of its charter documents or by-laws; (ii)
--
contravene any provision of any Governmental Rule or Governmental Action
applicable to it or require any Governmental Action, provided that no
--------
representation or warranty is made with respect to ERISA (except as set forth in
Section 6.7) or (iii) contravene any provision of, or constitute a default or
---
require any consent under, any provision of any indenture, mortgage, contract or
other agreement or instrument to which the Owner Participant is a party or by
which it or any of its property is bound.
6.4. Owner Participant's Liens. There are no Owner Participant's
-------------------------
Liens on the Facility, the Trust Estate or the Indenture Estate or any part of
any thereof, and the execution, delivery and performance by the Owner
Participant of the Operative Documents to which it is a party will not subject
the Trust Estate, the Indenture Estate or the Facility or any part of any
thereof to any Owner Participant's Liens.
6.5. Acquisition for Investment. The Owner Participant is acquiring
--------------------------
its interest in the Trust Estate for its own account for investment and not with
a view to, or for sale in connection with, any distribution of any such interest
(it being understood that at all times the disposition of its property shall
remain within its control, subject to any restrictions on transfer herein or in
the Trust Agreement).
6.6. Securities Act. Neither the Owner Participant nor any Person
--------------
authorized by the Owner Participant has directly or indirectly offered or sold
any interest in the Trust Estate, or in any similar security relating to the
Facility Assets, or solicited any offer to acquire any of the same from any
Person, other than, in the case of the Secured Notes, the Loan Participant, and
neither the Owner Participant nor any Person authorized to act on its behalf has
directly or indirectly offered or sold any Pass Through Certificates to, or
solicited any offer to acquire the same
34
<PAGE>
from, any Person other than in a manner required by the Securities Act.
6.7. ERISA. The Owner Participant is not acquiring any part of its
-----
interest in the Trust Estate with any ERISA Plan Assets.
6.8. Investment Company Act. The Owner Participant is not an
----------------------
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
6.9. Litigation. There is no action, suit or proceeding pending or,
----------
to the Actual Knowledge of the Owner Participant, threatened against the Owner
Participant or its properties before any Governmental Authority, that questions
the validity of any Operative Document or that, individually or in the
aggregate, (A) is reasonably likely materially and adversely to affect (x) the
- -
consummation of the transactions under the Pass Through Trust Documents, this
Participation Agreement or any other Operative Document to which it is a party
or any action taken or to be taken by the Owner Participant pursuant to any
Operative Document or (y) the ability of the Owner Participant to perform its
-
obligations under this Participation Agreement or any other Operative Document
to which it is a party or (B) would result in the creation or imposition of any
-
Owner Participant's Liens.
6.10. No Default. No Indenture Default or Indenture Event of
----------
Default attributable to the Owner Participant has occurred and is continuing.
6.11. Net Worth. The Owner Participant on the date hereof is, and,
---------
as of the Closing Date will be, a national banking association with a tangible
net worth determined in accordance with GAAP (excluding intangible assets) of at
least $75,000,000.
6.12. No Brokers' Fees. Neither the Owner Participant nor any
----------------
Person acting on its behalf has taken any actions the effect of which would be
to cause the Lessee, the Owner Trustee or the Loan Participant to be liable for
any brokers', finders' or agents' fees or commissions or costs of any nature or
kind claimed by or on behalf of brokers, finders or agents in respect of the
transactions contemplated by this Agreement not included in Transaction
Expenses.
35
<PAGE>
Section 7. Representations and Warranties of Pass Through Trustee.
------------------------------------------------------
State Street Bank and Trust Company represents and warrants in its individual
capacity with respect to Sections 7.1, 7.2(a), 7.3, 7.4, 7.5(a), 7.6 and 7.7 and
not in its individual capacity, but solely in its capacity as Pass Through
Trustee under the Pass Through Trust Documents with respect to Sections 7.2(b)
and 7.5(b), to each of the other parties hereto that:
7.1. Due Organization. State Street Bank and Trust Company is a
----------------
Massachusetts trust company duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
corporate power and authority to enter into and perform its obligations under
this Participation Agreement and the Pass Through Trust Documents.
7.2. Authorization; Execution; Enforceability. (a) The execution,
----------------------------------------
delivery and performance of this Participation Agreement and the Pass Through
Trust Documents, and each of the transactions contemplated to be performed by
State Street Bank and Trust Company or the Pass Through Trustee hereby or
thereby, have been duly authorized by State Street Bank and Trust Company, in
its individual capacity. Each of this Participation Agreement and the Pass
Through Trust Agreement has been duly executed and delivered by State Street
Bank and Trust Company, in its individual capacity, and, assuming the due
authorization, execution and delivery hereof and thereof by the other parties
hereto and thereto, constitutes, and each Pass Through Trust Supplement will,
when executed and delivered by State Street Bank and Trust Company, in its
individual capacity and in its capacity as Pass Through Trustee, be duly
executed and delivered by State Street Bank and Trust Company, in its individual
capacity, and thereupon will, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitute a legal, valid and
binding obligation of State Street Bank and Trust Company, in its individual
capacity (to the extent it is a party hereto or thereto in such capacity),
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or similar laws affecting
creditors' rights generally and by the application of general equitable
principles which may limit the availability of certain remedies.
(b) The execution, delivery and performance of this Participation
Agreement and each Pass Through Trust
36
<PAGE>
Document and each Pass Through Certificate have been duly authorized by the Pass
Through Trustee. Each of this Participation Agreement and the Pass Through
Trust Agreement has been duly authorized, executed and delivered by the Pass
Through Trustee and, assuming the due authorization, execution and delivery
hereof and thereof by the other parties hereto and thereto, constitutes, each
Pass Through Trust Supplement and each Pass Through Certificate will, when
executed, authenticated and delivered by the Pass Through Trustee, be duly
executed, authenticated and delivered by the Pass Through Trustee and thereupon
will, assuming with respect to such Pass Through Trust Supplement the due
authorization, execution and delivery thereof by the other parties thereto,
constitute, a legal, valid and binding obligation of the Pass Through Trustee,
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or similar laws
affecting creditors' rights generally and the application of general equitable
principles which may limit the availability of certain remedies and the
Certificateholders will be entitled to the benefits of the applicable Pass
Through Trust Documents.
7.3. No Violation. The execution, delivery and performance by State
------------
Street Bank and Trust Company of this Participation Agreement and each Pass
Through Trust Document, the purchase by the Pass Through Trustee of the Secured
Notes pursuant to this Participation Agreement and the issuance of the Pass
Through Certificates pursuant to the Pass Through Trust Document, and the
performance of its obligations hereunder and thereunder, do not and will not
violate or result in a breach of its charter documents or by-laws and do not and
will not contravene any Governmental Rule of the United States of America or the
Commonwealth of Massachusetts, governing with respect to its banking or trust
powers and do not and will not contravene any provision of, or constitute a
default under, any indenture, mortgage, contract or other instrument to which
State Street Bank and Trust Company, in its individual capacity, is a party, or
by which it or any of its properties are bound, or require any Governmental
Action of the United States of America or the Commonwealth of Massachusetts
governing its banking or trust powers.
7.4. Litigation. There is no action, suit or proceeding pending
----------
before any Governmental Authority or, to the Actual Knowledge of State Street
Bank and Trust Company (in its individual capacity or as Pass Through Trustee),
37
<PAGE>
threatened against the Pass Through Trustee or State Street Bank and Trust
Company or its properties that questions the validity of any Operative Document
to which it is a party or that, individually or in the aggregate, (A) is
-
reasonably likely materially and adversely to affect (x) the consummation of the
-
transactions under the Pass Through Trust Documents, this Participation
Agreement or any other Operative Document or action taken or to be taken by the
Pass Through Trustee (in either such capacity) under any of the Operative
Documents to which it is a party or (y) the ability of the Pass Through Trustee
-
(in either such capacity) to perform its obligations under this Participation
Agreement or the Pass Through Trust Documents (in either such capacity) or (B)
-
would result in the creation or imposition of any Pass Through Trustee's Liens.
7.5. Pass Through Trustee's Liens. (a) There are no Pass Through
----------------------------
Trustee's Liens attributable to State Street Bank and Trust Company, in its
individual capacity, on the Pass Through Trust Property or on any part thereof.
(b) There are no Pass Through Trustee's Liens on the Pass Through
Trust Property or any part thereof.
7.6. Securities Act. State Street Bank and Trust Company has not,
--------------
nor has any Person authorized by State Street Bank and Trust Company, offered or
sold any interest in the Pass Through Certificates or any Secured Note, or in
any similar security relating to the Facility Assets, for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Owner Trustee,
and no responsible officer or responsible employee of State Street Bank and
Trust Company has knowledge of any such offer or solicitation, except as set
forth in the Operative Documents.
7.7. No Taxes Payable. Except for Taxes based upon the income of any
----------------
Person, there are no Taxes payable in the state in which the principal place of
business of the Pass Through Trustee is located in connection with the
execution, delivery, consummation or recordation of this Participation Agreement
and the other Operative Documents, upon or with respect to the Trust Estate or
the Indenture Estate, or in connection with the consummation of the transactions
contemplated hereby and by the other Operative Documents (including, without
limitation, the filing of financing statements with respect thereto or the sale
or transfer of the Facility Assets).
38
<PAGE>
Section 8. Representations and Warranties of the Trust Company and
-------------------------------------------------------
the Owner Trustee. The Trust Company represents and warrants in its individual
- -----------------
capacity with respect to Sections 8.1, 8.2(a) and clause (i) of the first
sentence of Section 8.2(b), 8.3(a), 8.4(a), 8.5, 8.6 (with respect to Lessor's
Liens attributable to it), 8.7 (as specified therein), 8.8, 8.9 and 8.10, and in
its capacity as Owner Trustee represents and warrants with respect to Sections
8.2(b), 8.3(b), 8.4(b), 8.5(b), 8.6 (with respect to Lessor's Liens attributable
to it) and 8.7 (as specified therein), to each of the other parties hereto that:
8.1. Due Organization. The Trust Company is a Delaware banking
----------------
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to enter
into and perform its obligations under the Trust Agreement, this Participation
Agreement and each other Operative Document to which it is a party and, assuming
due authorization, execution and delivery by the Owner Participant of the
Trust Agreement and upon due direction by the Owner Participant pursuant
thereto, will have the power and authority to enter into and perform its
obligations as Owner Trustee under the Trust Agreement, this Participation
Agreement and each other Operative Document to which the Owner Trustee is a
party.
8.2. Authorization; Execution; Enforceability. (a) The execution,
----------------------------------------
delivery and performance of this Participation Agreement, the Trust Agreement
and each other Operative Document to which the Trust Company is a party have
been duly authorized. Each of this Participation Agreement and the Trust
Agreement has been duly executed and delivered by the Trust Company and,
assuming the due authorization, execution and delivery hereof and thereof by the
other parties hereto or thereto, as the case may be, constitute, and each other
Operative Document to which the Trust Company is a party will, when executed and
delivered by the Trust Company, be duly executed and delivered by the Trust
Company and thereupon will, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitute, a legal, valid and
binding obligation of the Trust Company, to the extent entered into by the Trust
Company, enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or similar
laws affecting creditors' rights generally and by the
39
<PAGE>
application of general equitable remedies which may limit the availability of
certain remedies.
(b) This Participation Agreement and the Trust Agreement (assuming
due authorization, execution and delivery by the Owner Participant of the
Trust Agreement and upon due direction by the Owner Participant pursuant
thereto), (i) have been duly authorized, executed and delivered by one of the
-
Owner Trustee's officers who is duly authorized to execute and deliver such
Operative Document on behalf of the Owner Trustee and, (ii) assuming the due
--
authorization, execution and delivery hereof and thereof by the other parties
hereto and thereto, as the case may be, constitute, and each other Operative
Document to which the Owner Trustee is a party will, when executed and delivered
by the Owner Trustee, be duly executed and delivered by an officer of the Owner
Trustee who is duly authorized to execute and deliver such Operative Document on
behalf of the Owner Trustee and thereupon will, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitute, a
legal, valid and binding obligation of the Owner Trustee enforceable against the
Owner Trustee in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or similar laws
affecting creditors' rights generally and the application of general equitable
principles, which may limit the availability of certain remedies. Upon
execution of the Secured Notes by the Owner Trustee, authentication thereof by
the Indenture Trustee and delivery thereof against payment or the giving of
consideration therefor in accordance with the Indenture and this Agreement, the
Secured Notes will be legal, valid and binding obligations of the Owner Trustee
enforceable against the Owner Trustee in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, liquidation, moratorium or similar laws affecting
creditors' rights generally and the application of general equitable principles
which may limit the availability of certain remedies.
8.3. No Violation. (a) The execution and delivery by the Trust
------------
Company of the Trust Agreement and, to the extent it is a party hereto or
thereto in its individual capacity, this Participation Agreement and each other
Operative Document, do not or will not, and the performance by the Trust
Company of its obligations under each will not, violate or result in a breach of
the charter documents or
40
<PAGE>
by-laws of the Trust Company, do not and will not contravene any United States
Federal or Delaware Governmental Rule governing its banking or trust powers
relating to or affecting its capacity to act as contemplated by the Trust
Agreement or the other Operative Documents to which it is a party and do not and
will not contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument to which the Trust Company is
a party or by which it or any of its property is bound, or require any United
States Federal or Governmental Action relating to or affecting its capacity to
act as contemplated by the Trust Agreement or the other Operative Documents to
which it is a party.
(b) The execution and delivery by the Owner Trustee of each Operative
Document to which the Owner Trustee is a party do not and will not, and the
performance by the Owner Trustee of the Owner Trustee's obligations under each
will not, violate or result in a breach of the charter documents or by-laws of
the Trust Company, do not and will not contravene any United States Federal or
Delaware Governmental Rule regulating the Owner Trustee's banking or trust
powers relating to or affecting the Owner Trustee's capacity to act as
contemplated by the Trust Agreement or the Owner Trustee Documents and do not
and will not contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument to which the Trust Company or
the Owner Trustee is a party or by which the Trust Company or the Owner Trustee
or the Owner Trustee's property is bound or require any United States Federal or
Delaware Government Action relating to or affecting the Owner Trustee's capacity
to act as contemplated by the Trust Agreement or the Owner Trustee Documents.
8.4. No Default. (a) No Indenture Default or Indenture Event of
----------
Default attributable to the Trust Company has occurred and is continuing.
(b) No Indenture Default or Indenture Event of Default attributable
to the Owner Trustee has occurred and is continuing.
41
<PAGE>
8.5. Litigation. (a) There is no action, suit or proceeding pending
----------
or, to the Actual Knowledge of the Trust Company, threatened before any
Governmental Authority against the Trust Company that questions the validity of
any Operative Document to which the Trust Company or the Owner Trustee is a
party or that, individually or in the aggregate, (A) is reasonably likely
-
materially and adversely to affect (x) the consummation of the transactions
-
under the Pass Through Trust Documents, this Participation Agreement or any
other Operative Document or any action taken or to be taken by it pursuant to
any Operative Document or (y) the ability of the Trust Company to perform its
-
obligations under this Participation Agreement or any other Operative Document
to which it is a party or (B) would result in the creation or imposition of any
-
Lessor's Liens.
(b) There is no action, suit or proceeding pending or, to the Actual
Knowledge of the Owner Trustee, threatened before any Governmental Authority
against the Owner Trustee that questions the validity of any Operative Document
to which it is a party or that, individually or in the aggregate, is reasonably
likely materially and adversely to affect (x) the consummation of the
-
transactions under the Pass Through Trust Documents, this Participation
Agreement or any other Operative Document or any action taken or to be taken by
it pursuant to any Operative Document or (y) the ability of the Owner Trustee to
-
perform the Owner Trustee's obligations under this Participation Agreement or
any other Operative Document to which the Owner Trustee is a party.
8.6. Lessor's Liens. There are no Lessor's Liens attributable to the
--------------
Owner Trustee or the Trust Company, as the case may be, on the Facility, the
Trust Estate or the Indenture Estate or on any part of any thereof, and the
execution, delivery and performance by either of the Owner Trustee or the Trust
Company, as the case may be, of the Operative Documents to which it is a party
will not subject the Trust Estate, the Indenture Estate or the Facility or any
part of any thereof to any such Lessor's Liens.
8.7. Securities Act. None of the Trust Company, the Owner Trustee or
--------------
any Person authorized by the Trust Company or Owner Trustee to act on its behalf
has directly or indirectly offered or sold any interest in the Trust Estate or
the Secured Notes to, or in any similar security relating to the Facility
Assets, or solicited any offer to acquire any of the same from, any Person,
other than, in the case of the Secured Notes, the Loan Participant, and none of
the Trust Company, the Owner Trustee or any Person
42
<PAGE>
authorized by the Trust Company or the Owner Trustee to act on its behalf has
directly or indirectly offered or sold any Pass Through Certificates to, or
solicited any offer to acquire the same from, any Person other than in a manner
required by the Securities Act.
8.8. Chief Place of Business. The Trust Company's chief place of
-----------------------
business, chief executive office and office where the documents, accounts and
records relating to the transactions contemplated by this Agreement and each
other Operative Document are or will be kept are located in Wilmington,
Delaware.
8.9. No Taxes Payable. Except for Taxes based upon the income of any
----------------
Person, there are no Taxes payable in the state in which the principal place of
business of the Trust Company or of the Owner Trustee, as the case may be, is
located in connection with the execution, delivery, consummation or
recordation of this Participation Agreement and the other Operative Documents,
upon or with respect to the Trust Estate or the Indenture Estate, or in
connection with the consummation of the transactions contemplated hereby and by
the other Operative Documents (including, without limitation, the filing of
financing statements with respect thereto or the sale or transfer of the
Facility Assets or any right in favor of the Lessor created by the Ground Lease
solely because the Trust Company has its principal place of business in the
State of Delaware).
8.10. Title. On the Closing Date, the Owner Trustee shall have
-----
received whatever title in and to the Facility Assets as was conveyed to it by
Mobil Oil Corporation.
Section 9. Representations and Warranties of the Indenture Trustee.
-------------------------------------------------------
The Indenture Trustee represents and warrants, in its individual capacity with
respect to Sections 9.1, 9.2(a), 9.3, 9.4, 9.5(a) and 9.6, and in its capacity
as Indenture Trustee with respect to Sections 9.2(b) and 9.5(b), to each of the
other parties hereto that:
9.1. Due Organization. The Indenture Trustee is a Massachusetts
----------------
trust company duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the corporate power and
authority to enter into and perform its obligations under this Participation
Agreement and each other Operative Document to which it is a party.
43
<PAGE>
9.2. Authorization; Execution; Enforceability. (a) The execution,
----------------------------------------
delivery and performance by the Indenture Trustee of this Participation
Agreement and each other Operative Document to which the Indenture Trustee is a
party have been duly authorized by the Indenture Trustee. This Participation
Agreement has been duly executed and delivered by the Indenture Trustee and,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes, and each other Operative Document to which the
Indenture Trustee is a party, will when executed and delivered by the Indenture
Trustee, be duly executed and delivered by the Indenture Trustee and thereupon
will, assuming the due authorization, execution and delivery thereof by the
other parties thereto, constitute, a legal, valid and binding obligation of the
Indenture Trustee in its individual capacity (to the extent it is a party hereto
or thereto in such capacity), enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
similar laws affecting creditors' rights generally and the application of
general equitable principles which may limit the availability of certain
remedies. Assuming due authorization, execution and delivery thereof by the
Owner Trustee, each Secured Note issued on the Closing Date pursuant to the
terms of this Agreement and the Indenture on the Closing Date will have been
duly authenticated.
(b) This Participation Agreement has been duly executed and delivered
by the Indenture Trustee and, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes, and each other
Operative Document to which the Indenture Trustee is a party, will, when
executed and delivered by the Indenture Trustee, be duly executed and delivered
by the Indenture Trustee and thereupon will, assuming the due authorization,
execution and delivery thereof by the other parties thereto constitute legal,
valid and binding obligations of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or similar laws affecting
creditors' rights generally and the application of general equitable principles
which may limit the availability of certain remedies.
44
<PAGE>
9.3. No Violation. The execution and delivery by the Indenture
------------
Trustee of this Participation Agreement and each other Operative Document to
which it is a party do not and will not, and the performance by it of its
obligations under each will not, violate or result in a breach of its charter
documents or by-laws and do not and will not contravene any Governmental Rule of
the United States of America or the Commonwealth of Massachusetts governing with
respect to its banking or trust powers, and will not contravene any provision
of, or constitute a default under, any indenture, mortgage, contract or other
instrument to which the Indenture Trustee, in its individual capacity, is a
party, or by which it or any of its properties are bound, or require any
Governmental Action of the United States of America or the Commonwealth of
Massachusetts governing its banking or trust powers.
9.4. Litigation. There is no action, suit or proceeding pending
----------
before any Governmental Authority or, to the Actual Knowledge of the Indenture
Trustee (in its individual capacity or as Indenture Trustee), threatened against
the Indenture Trustee that questions the validity of any Operative Document to
which it is a party or that, individually or in the aggregate, (A) is reasonably
-
likely materially and adversely to affect (x) the consummation of the
-
transactions under the Pass Through Trust Documents, this Participation
Agreement or any other Operative Document or any action taken or to be taken by
it pursuant to any Operative Document or (y) the ability of the Indenture
-
Trustee (in either such capacity) to perform the Indenture Trustee's obligations
under this Participation Agreement or any other Operative Document to which the
Indenture Trustee is a party (in either such capacity) or (B) would result in
-
the creation or imposition of any Indenture Trustee's Liens.
9.5. Indenture Trustee's Liens. (a) There are no Indenture
-------------------------
Trustee's Liens attributable to State Street Bank and Trust Company, in its
individual capacity, on the Trust Estate, the Indenture Estate, the Facility or
on any part thereof.
(b) There are no Indenture Trustee's Liens on the Trust Estate, the
Indenture Estate or on any part thereof.
9.6. No Taxes Payable. Except for Taxes based upon the income of any
----------------
Person, there are no Taxes payable in the state in which the principal place of
business of the Indenture Trustee is located in connection with the execution,
delivery, consummation or recordation of this
45
<PAGE>
Participation Agreement and the other Operative Documents, upon or with respect
to the Trust Estate or the Indenture Estate, or in connection with the
consummation of the transactions contemplated hereby and by the other Operative
Documents (including, without limitation, the filing of financing statements
with respect thereto or the sale or transfer of the Facility Assets or any right
in favor of the Lessor created by the Ground Lease).
Section 10. Lessee Covenants. The Lessee covenants and agrees
----------------
that:
10.1. Officer's Certificate. The Lessee will deliver to the Owner
---------------------
Participant, the Owner Trustee and the Indenture Trustee on or before November 1
of each year during the Lease Term commencing in 1998, an Officer's Certificate
of the Lessee to the effect that the signer is familiar with or has reviewed the
relevant terms of the Lease and the other Operative Documents to which the
Lessee is a party and the signer does not have knowledge of the existence, as of
the date of such certificate, of any condition or event which constitutes a
Lease Default, Lease Event of Default, an Event of Loss or an event described in
clause (c) of the definition of Event of Loss that but for the passage of time
would constitute an Event of Loss, or if any such condition or event exists,
specifying the nature thereof, the period of existence thereof and what action
the Lessee has taken or proposes to take with respect thereto.
10.2. Requested Information. During the Lease Term, with reasonable
---------------------
promptness, the Lessee will deliver to the Owner Participant, the Owner Trustee
and the Indenture Trustee such data and information as to the Facility as from
time to time may be reasonably available to the Lessee without undue expense and
reasonably requested by any of such parties; provided, however, that, unless a
-------- -------
Specified Lease Event of Default shall have occurred and be continuing and the
Owner Trustee shall have commenced to exercise its rights under Section 16 of
the Lease, the Lessee shall not be required to deliver or otherwise to disclose
to the Owner Participant, the Owner Trustee or the Indenture Trustee any data or
information that the Lessee deems to be Confidential Information.
10.3. Maintenance of Corporate Existence, Etc. Subject to the
---------------------------------------
provisions of Section 10.4, the Lessee shall at all times maintain its corporate
existence and preserve and keep in full force and effect its rights and
franchises the loss of which, individually or in the aggregate, would
46
<PAGE>
have a material adverse effect on the Lessee's ability to comply with its
obligations under the Operative Documents to which it is a party.
10.4. Merger, Consolidation, Sale, Etc. So long as any of the
--------------------------------
Secured Notes remain Outstanding or any amounts with respect thereto due and
owing by the Lessee to the Loan Participant under any Operative Document remain
unpaid and so long as the Lease Term shall not have expired or been terminated,
the Lessee shall not consolidate with or merge with or into any other
corporation or sell, assign, convey, transfer, lease or otherwise dispose of all
or substantially all of its assets as an entirety to any Person, unless:
(i) except if the Lessee immediately following such consolidation or
merger is the surviving corporation, the corporation formed by such
consolidation or into which the Lessee is merged or the Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety shall be organized under the laws of
the United States of America, any State thereof or the District of Columbia
and execute and deliver to the Owner Trustee, the Owner Participant, the
Indenture Trustee and the Loan Participant an agreement containing the
assumption by such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of this
Participation Agreement, the Lease, the Indenture, the Tax Indemnity
Agreement and each other Operative Document to which the Lessee is a party
to be performed, complied with or observed by the Lessee;
(ii) on the date any such consolidation, merger, conveyance, transfer
or lease is effective, no Specified Lease Event of Default shall have
occurred and be continuing or would result from giving effect thereto;
(iii) except if the Lessee immediately following such consolidation
or merger is the surviving corporation, the Lessee shall have delivered to
each of the Owner Trustee, the Owner Participant and the Indenture
Trustee an Officer's Certificate of the Lessee or the successor corporation
or Person and an opinion of counsel to the Lessee (which may be the
Guarantor's internal counsel), each successor corporation (which may be its
internal counsel) or Person, each stating that such consolidation, merger,
conveyance, transfer
47
<PAGE>
or lease and the assumption agreement mentioned in clause (i) above comply
with this Section 10.4 and that all conditions precedent herein provided
for relating to such transaction have been satisfied (except that such
opinion need not cover the matters referred to in clause (ii) above and may
rely, as to factual matters, on an Officer's Certificate of the applicable
Person) and, in the case of such opinion, that (x) such assumption
-
agreement has been duly authorized, executed and delivered by such
successor corporation or Person and is enforceable against such successor
corporation or Person in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by general
principles of equity and (y) all filings or recordations necessary to
-
protect the interests of the Owner Trustee, the Indenture Trustee and the
Owner Participant in and to the Facility Assets have been made; and
(iv) after giving effect to any consolidation, merger, conveyance,
transfer or lease of all or substantially all of the assets of the Lessee
as an entirety in accordance with this Section 10.4, the Guaranty shall
remain in full force and effect and shall constitute a full and
unconditional guaranty by the Guarantor of the successor corporation's or
Person's obligations under the Operative Documents to which it is a party
to the same extent as the Lessee's obligations under such documents prior
to giving effect to any such consolidation, merger, conveyance, transfer or
lease of substantially all of the assets of the Lessee.
Upon any consolidation or merger, or any conveyance, transfer or lease of all
or substantially all of the assets of the Lessee as an entirety in accordance
with this Section 10.4, the successor corporation or Person formed by such
consolidation or into which the Lessee is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Lessee under this Participation Agreement
and the other Operative Documents to which the Lessee is a party with the same
effect as if such successor corporation or Person had been named as the Lessee
herein and therein. No such consolidation, merger, conveyance, transfer or
lease of all or substantially all of the assets of the Lessee as an entirety
shall have the effect of releasing the Lessee or
48
<PAGE>
any successor corporation or Person which shall theretofore have become such in
the manner prescribed in this Section 10.4 from its liability hereunder, under
any other Operative Document or under the Pass Through Trust Documents. Nothing
contained herein shall permit any lease, sublease or other arrangement with
respect to the Facility except in compliance with the applicable provisions of
the Lease.
10.5. Change in Name or Chief Place of Business. The Lessee shall
-----------------------------------------
give written notice to the Owner Trustee, the Owner Participant and the
Indenture Trustee promptly after any change in its name or chief place of
business or chief executive office.
10.6. Further Assurances. The Lessee, at its own cost and expense,
------------------
will cause to be promptly and duly taken, executed, acknowledged and delivered
all such further acts, documents and assurances as the Owner Trustee, the Owner
Participant, the Loan Participant or the Indenture Trustee reasonably may
request from time to time in order to carry out more effectively the intent and
purposes of this Participation Agreement, the other Operative Documents and
the transactions contemplated hereby and thereby. The Lessee, at its own cost
and expense, will cause the Indenture, the Ground Lease and the Lease, any
supplements or amendments thereto and restatements thereof and all financing
statements, fixture filings and other documents, to be recorded or filed at
such places and times and in such manner, and will take all such other actions
or cause such actions to be taken, as may be necessary or as may be reasonably
requested (x) by the Owner Trustee, the Owner Participant or the Indenture
-
Trustee in order to establish, preserve and protect the interest of the Owner
Trustee in and to the Facility Assets and (y) so long as any Secured Notes are
-
Outstanding, by the Indenture Trustee, the Loan Participant or (unless the
Indenture Trustee objects thereto) the Owner Trustee in order to establish,
preserve, protect and perfect the mortgage and security interest of the
Indenture Trustee in the Indenture Estate granted or intended to be created
under the Indenture and the Indenture Trustee's rights under this Participation
Agreement and the other Operative Documents, subject only in each case to
Permitted Liens.
10.7. Inspection. (a) The Lessee shall permit the Indenture
----------
Trustee, the Owner Participant and the Owner Trustee (and any authorized
representatives of any thereof), at such Person's risk, including, without
limitation, as to personal injury and death (other than due to the Lessee's
gross negligence or willful misconduct), and, unless a Lease
49
<PAGE>
Event of Default under Section 15(a), (c) (based upon a default under Section
11.1 or 11.3 of the Lease), (g) or (h) of the Lease is continuing, expense,
including, without limitation, the cost and expense for such Person's
transportation to and from the Facility, and under conditions reasonably
acceptable to the Lessee, to visit and inspect the Facility, and the Lessee will
make available the books and records of the Lessee related thereto, and make
copies and extracts therefrom, and have access to the officers of the Lessee and
the Operator (if the Operator is an Affiliate of the Lessee) and shall use
reasonable efforts to make available the public accountants of the Lessee, all
upon reasonable notice and at such reasonable times during normal business hours
and as may be reasonably requested; provided, however, that (A) unless there is
-------- ------- -
such an existing Lease Event of Default or the Return Arrangement Period has
commenced and is continuing, the Indenture Trustee, the Owner Participant and
the Owner Trustee may not make more than one such inspection in any calendar
year without the Lessee's prior written consent (and, unless an Indenture Event
of Default has occurred and is continuing, the Indenture Trustee may not make
such inspection without the consent and, if requested, participation of the
Owner Participant); (B) such inspection must be under the supervision of the
-
Lessee or its designee; (C) any Person making any inspection shall, if requested
-
by the Lessee, sign a waiver and release in form and substance satisfactory to
the Lessee releasing the Lessee from liability with respect to any risks
incurred in connection with any such inspection to the same extent as does the
Lessor under this Section 10.7 prior to conducting any such inspection; (D) any
-
such inspection shall be subject to the safety, security and workplace rules
applicable to the location where such inspection is conducted and to the
requirements of all Governmental Rules; and (E) no such inspection shall include
-
the review or inspection of any Confidential Information, provided that, solely
--------
during the continuance of such an existing Lease Event of Default or the Return
Arrangement Period, and subject to Section 11.5 hereof, such inspection may
include the review and inspection of the Return Confidential Information. All
information obtained in connection with any inspection shall be held
confidential by any Person making such inspection and each party hereto (other
than the Lessee) and shall not be furnished or disclosed by such Person except
as permitted pursuant to Section 11.5. During the Lease Term, notwithstanding
anything to the contrary in any Operative Document or any law applicable thereto
(including without limitation the Ground Lease and any law applicable thereto),
the Indenture
50
<PAGE>
Trustee, the Owner Trustee and the Owner Participant, to the maximum extent
permitted by applicable law, shall not have, and hereby waive, any right or
privilege of access to the Facility or the Site other than the rights provided
in this Section 10.7 or in connection with the exercise of remedies under
Section 16.1 of the Lease.
(b) No Person entitled to make any inspection or inquiry referred to
in this Section 10.7 shall have any duty to make such inspection or inquiry, or
shall incur any liability or obligation by reason of not making any such
inspection or inquiry. No inspection pursuant to this Section 10.7 shall
interfere with the use, operation or maintenance of the Facility Assets or any
part thereof, or the rights of any Person permitted under the Ground Lease, and
the Lessee shall not be required to undertake or incur any additional
liabilities in connection therewith.
10.8. Limitation on Acquisition of Pass Through Certificates. Unless
------------------------------------------------------
(i) the Lessee (or its designee) shall have purchased the Facility or (ii) the
- --
Lessee or its designee shall have purchased the Beneficial Interest, the Lessee
will not, and will not permit any of its Affiliates to, acquire directly or
through a nominee or agent by purchase or otherwise any interest in any Pass
Through Certificates (a) prior to the one-year anniversary of the Closing Date
-
or (b) if the aggregate principal amount of all Pass Through Certificates held
-
by or for the account of the Lessee immediately after such acquisition would
exceed 49% of the outstanding principal amount of Pass Through Certificates
immediately prior to such acquisition.
10.9. Support Agreements. During (1) the occurrence and continuance
------------------ -
of a Lease Event of Default or (2) a Return Arrangement Period, the Lessor may
-
give written notice to the Lessee that the Lessor wishes the Lessee to cause one
or more of the Lessee's Affiliates to enter into one or more Support Agreements
(as defined and described below) with the Termination Owner (as defined below)
(such written notice of request, a "Support Request"). If the Lessor shall have
---------------
made a Support Request, unless the Lessee shall have cured such Lease Event of
Default or shall have exercised a purchase or renewal option with respect to the
Facility or the Lessee or its designee shall have purchased the Beneficial
Interest, the Lessee will, not later than the Support Effective Date (as defined
below), cause one or more of its Affiliates to enter into one or more agreements
coterminous with the Ground Lease (each, a "Support Agreement") with the Lessor
-----------------
or such Person as the Lessor may
51
<PAGE>
designate as the owner of the Facility Assets (the "Termination Owner") pursuant
-----------------
to which Support Agreements, such Affiliate(s) shall (a) to the extent that the
-
Lessee or a Subsidiary of the Guarantor produces toluene, propylene or any other
product at the Refinery that is surplus to its own and its Affiliates'
requirements and is generally sold on a commercial basis by the Lessee or any
Subsidiary of the Guarantor to Persons who are not Affiliates of the Lessee or
any Subsidiary of the Guarantor, sell toluene, propylene and/or any such other
product to the Termination Owner at Fair Market Rates for use with the Facility
Assets at the Site; (b) supply the Termination Owner, at cost (including,
-
without limitation, pro rata overhead and similar costs), with utility and other
services necessary for the operation of the Facility Assets at the Site,
including steam, fuel, gas, electricity, cooling water, river water, potable
water, fire water, waste water treatment, plant air, instrument air, hydrogen,
nitrogen, high pressure waste gas system, low pressure waste gas system and
flare system (provided that, if a particular utility or service is required by
--------
applicable law to be provided directly to the Termination Owner by a public
utility, the Lessee or one of its Affiliates shall take such action as is
required to permit such public utility to be able to have access sufficient to
provide such utility or service directly to the Termination Owner at the Site);
(c) provide "start-up" technical support and training, at Fair Market Rates, for
-
up to twenty-five (25) employees or agents of the Termination Owner with respect
to the operation of the Facility Assets at the Site; (d) if and for so long as
-
an Affiliate of the Lessee continues to own and operate the Refinery or a
Significant Portion thereof, operate the Facility Assets on behalf of the
Termination Owner, for which operation and management services such Affiliates
shall receive compensation at Fair Market Rates; provided that in lieu of the
--------
foregoing, the Lessor shall have the option to designate such other Person, as
the Lessor may choose, to operate the Facility Assets on behalf of the
Termination Owner, such other Person to be subject to the Lessee's approval with
respect to such other Person's credit-worthiness, reliability, environmental
record, experience in operating similar facilities and other similar matters,
such approval not to be unreasonably withheld; (e) grant the Termination Owner
-
access rights over such areas within the Refinery, if any, not covered by the
Ground Lease as shall be necessary to operate the Facility Assets as the
Facility Assets shall have been operated immediately prior to termination,
including, to the extent necessary and not so covered, any necessary easements
and rights to use of the Wharf and parking facilities, if any, at fair market
52
<PAGE>
rates (reflecting the fair market value of the right to use the Site, as
enhanced by all such easements and other rights, including the Easements) and
subject, in each case, to proportionate cost sharing arrangements satisfactory
to the Guarantor and the provider of such rights with respect to use, upkeep and
maintenance of such portions of the Refinery (including the Wharf); (f) enter
-
into shared storage or other storage arrangements, or assist in arranging off-
site storage outside the Facility and the Refinery, at Fair Market Rates for
storage of toluene, benzene and paraxylene, subject to tank contamination
provisions satisfactory to the Guarantor; (g) license the MTPX Technology
-
(including, without limitation, (x) leases or other agreements for the use of
-
the catalyst or replacement catalyst and (y) any technology necessary to the
-
operation of the Facility as modified by the Modifications described in Section
11.5(a)(ii) or (b) of the Lease), at Fair Market Rates to the Termination Owner,
for use only with the Facility Assets at the Site, subject to confidentiality
and other agreements satisfactory to the Guarantor; and (h) such other support
-
and services as are reasonable and necessary for the use and operation of the
Facility Assets on the Site in the manner contemplated by the Lease for such
reasonable compensation as may be agreed. Each Support Agreement shall require
that the Termination Owner reimburse the Lessee and any of its Affiliates for
all costs and expenses paid by them in connection with the disposition of any
part of the Facility by such Termination Owner (other than in respect of a
disposition under Section 16.1 of the Lease or the Lessee's obligations set
forth in Section 12.3 of the Ground Lease). The Owner Trustee shall not
designate any Termination Owner, nor shall any Termination Owner convey any
rights in respect of the Facility Assets to any Person, unless such Termination
Owner or Person (x) shall have agreed to perform all obligations of the
-
Termination Owner under each Support Agreement and of the Ground Lessee under
the Ground Lease, and (y) shall have agreed, in a manner reasonably satisfactory
-
to the Guarantor, to reimburse the Lessee and any of its Affiliates as required
by the immediately preceding sentence of this Section 10.9; provided that any
--------
such transfer or assignment to a Termination Owner or other Person shall be
effective only if the conditions to transfer set forth in clauses (a), (b) and
(e) of Section 13.2 shall be satisfied. Upon expiration of the Lease, the Owner
Participant or, if the Owner Participant no longer has any right, title or
interest in the Trust Estate (or directly or indirectly in the Facility), the
Termination Owner shall fully and unconditionally guarantee the obligations of
the Lessor and
53
<PAGE>
such Termination Owner (in the case of the Owner Participant) or Person under
such Support Agreements and under the Ground Lease. The obligations of the
Lessee's Affiliates under the Support Agreements shall be fully and
unconditionally guaranteed by the Guarantor. The Lessee shall pay the
reasonable out-of-pocket costs and expenses incurred by the Lessor and the Owner
Participant in connection with the negotiation, execution and delivery of the
Support Agreements, including reasonable attorneys' fees and disbursements.
For purposes of the second sentence of this Section 10.9, "Support
-------
Effective Date" shall mean (i) in the case of a Support Agreement being entered
- -------------- -
into during the continuance of a Lease Event of Default, the date that is sixty
(60) days after the receipt by the Lessee of the Support Request or (ii) in the
--
case of a Support Agreement being entered into during a Return Arrangement
Period, the date that is the later of (A) 365 days prior to the date the
-
Facility Assets are to be returned to the Lessor pursuant to the Lease and (B)
-
ninety (90) days after the receipt by the Lessee of the Support Request.
10.10. Certain Agreements Relating to the Ground Lease. The
-----------------------------------------------
provisions of Section 12.3 of the Ground Lease are incorporated herein by
reference as if fully set forth herein.
Section 11. Other Covenants and Agreements.
------------------------------
11.1. Agreements of Owner Participant. The Owner Participant
-------------------------------
covenants and agrees that:
(a) Discharge of Liens. The Owner Participant will not create or
------------------
permit to exist at any time, and will, at its own cost and expense, promptly
take such action as may be necessary duly to discharge, or to cause to be
discharged, (i) all Owner Participant's Liens and (ii) all Lessor's Liens
- --
resulting from any act or failure to act by the Owner Trustee at the express
direction of, or with express authorization from, the Owner Participant on all
or any part of the Facility, the Site, the Trust Estate, the Indenture Estate or
title thereto or any interest therein; provided, however, that the Owner
-------- -------
Participant shall not be required to remove any such Owner Participant's Lien or
Lessor's Lien (other than any such Lien affirmatively imposed by the Owner
Participant) for so long as the same is being diligently contested in good faith
and by appropriate proceedings so long as such proceedings do not involve any
54
<PAGE>
material danger of (1) the sale, forfeiture or loss of any part of any of the
-
Facility, the Site, the Trust Estate or the Indenture Estate, or title thereto
or any interest therein, (2) the interference with the use or disposition of any
-
of the foregoing or any part thereof, or title thereto or any interest therein,
or (3) interference with the payment of Rent. The Owner Participant shall
-
indemnify, protect, defend, save and keep harmless the Lessee, the Loan
Participant, any Holder and the Indenture Trustee from and against any and all
Claims that may be imposed on, incurred by or asserted against such Person or
the Facility arising out of any such Owner Participant's Liens or any Lessor's
Liens described in clause (ii) of the first sentence of this Section 11.1.
(b) Prepayment. Unless the Lease shall have been declared in default
----------
pursuant to Section 16.1 thereof, the Owner Participant will not, and will not
cause or permit the Owner Trustee to, directly or indirectly prepay, defease,
redeem, refund, refinance or acquire any Secured Note, or give a notice of
redemption with respect thereto, without the prior written consent of the
Lessee, other than in the event of a redemption or purchase of Secured Notes by
the Owner Trustee or the Owner Participant pursuant to Section 3.06 of the
Indenture or as provided in Section 15. This Section 11.1(b) shall not be
deemed to permit prepayment of Secured Notes except as permitted by the
Indenture. If (i) the Lessee shall have irrevocably elected (A) to exercise a
- -
purchase option with respect to the Facility pursuant to the Lease or (B) to
-
terminate the Lease pursuant to Section 6 or 7 of the Lease, and the Lessee
shall not have elected to assume the Secured Notes pursuant to Section 11.6 or
(ii) an Event of Loss with respect to the Facility Assets shall have occurred,
- ---
then the Owner Participant agrees, upon request of the Lessee specifying the
relevant information, to instruct the Owner Trustee to give an irrevocable
notice of redemption pursuant to Section 3.10 of the Indenture with respect to
the Secured Notes to be redeemed in connection with such purchase, termination
or Event of Loss, which notice shall specify the date for and amount of such
redemption pursuant to, and shall be given in accordance with, the terms of the
Indenture. The date so specified by the Lessee shall govern any inconsistent
date set forth in the Operative Documents for performance by the Lessee of its
obligations in respect of such purchase, termination or Event of Loss.
(c) Cooperation with Lessee. The Owner Participant shall, to the
-----------------------
extent reasonably so requested by the
55
<PAGE>
Lessee, cooperate with the Lessee, at the Lessee's expense, to enable the Lessee
to perform the covenants contained in Section 10.6 and to make such filings and
recordings as may be reasonably requested by the Lessee to accomplish the
purposes of this Participation Agreement and the other Operative Documents,
including, without limitation, at any time and from time to time, promptly upon
the request of the Lessee, duly executing and delivering any and all such
further instruments and documents as the Lessee may reasonably request in order
to perform such covenants and to make such filings and recordings.
(d) Successor Owner Trustee. Unless the Lease shall have been
-----------------------
declared in default pursuant to Section 16.1 thereof, the Owner Participant
shall not appoint or cause or allow to be appointed a successor to any Owner
Trustee under the Trust Agreement without obtaining the prior written consent of
the Lessee, which consent shall not unreasonably be withheld. In addition, if
requested by the Lessee, the Owner Participant shall appoint a successor trustee
designated by the Lessee and acceptable to the Owner Participant to any Owner
Trustee under the Trust Agreement. The Owner Participant shall (at the Lessee's
expense) cause any such successor trustee, simultaneously with its assumption of
duties in such capacity, to take all actions as may be reasonably requested by
the Indenture Trustee, the Loan Participant or the Lessee (including, without
limitation, the filing of amendments to the Ground Lease and financing
statements) in order to establish, preserve, protect and perfect the right,
title and interest of such successor trustee in and to the Facility Assets and,
so long as any Secured Notes are Outstanding, the mortgage and security interest
of the Indenture Trustee in the Indenture Estate granted or intended to be
created under the Indenture and the Indenture Trustee's rights under this
Participation Agreement and the other Operative Documents, subject in each case
only to Permitted Liens.
(e) Performance of Obligations. The Owner Participant will perform
--------------------------
and comply with all obligations imposed on the Owner Participant pursuant to
the Operative Documents in accordance with the terms and conditions of each
thereof. In addition, the Owner Participant agrees to pay, or cause the Lessor
to pay, all fees and expenses that are for the account of the Lessor in
connection with an Appraisal Procedure.
(f) Instructions to Owner Trustee. The Owner Participant will not
-----------------------------
instruct or otherwise direct the Owner
56
<PAGE>
Trustee to take, or omit to take, any action in violation of the express
covenants and agreements of the Owner Trustee in any Operative Document. The
Owner Participant will not unreasonably withhold its consent to or authorization
of any consent requested of the Owner Trustee under the terms of any Operative
Document which by its express terms is not to be unreasonably withheld by the
Owner Trustee.
(g) Termination of Trust Agreement. The Owner Participant will not
------------------------------
terminate or revoke, or consent to the termination or revocation of, the Trust
Agreement or the trust created thereby, except in connection with the exercise
of remedies by the Lessor pursuant to Section 16.1 of the Lease following a
declaration by the Lessor pursuant to such Section 16.1 that the Lease is in
default, without the express written consent of the Lessee, and, prior to the
release of the Lien of the Indenture on the Indenture Estate, the Indenture
Trustee. The Owner Participant will not, prior to the release of the Lien of
the Indenture on the Indenture Estate, amend or modify the Trust Agreement in
any manner that would affect materially and adversely the Indenture Estate or
limit in any material manner the rights of the Indenture Trustee set forth
therein.
(h) Election to Retain Title. If the Owner Trustee shall elect to
------------------------
retain title to the Facility Assets pursuant to Section 7.4 of the Lease, the
Owner Participant will cause the Owner Trustee to perform its obligations under
Section 7.4 in accordance with the terms thereof.
(i) [Intentionally Omitted].
(j) Rebate of Amounts under Section 7.09 of the Indenture. The Owner
-----------------------------------------------------
Participant shall instruct the Owner Trustee to promptly pay over to the Lessee
any amounts described in Section 7.09 of the Indenture that are received by the
Owner Trustee.
(k) Ownership for Tax Purposes. The Owner Participant will take the
--------------------------
position that the Lessor is the owner of the Facility Assets for federal, state
and local income tax purposes (provided that treating the trust created by the
--------
Trust Agreement as a grantor trust or other pass-through entity shall not be
considered a position that is inconsistent with the Owner Trustee's ownership
of the Facility Assets) unless (i) the Owner Participant shall have received an
-
opinion of Thelen, Marrin, Johnson & Bridges LLP or other independent tax
counsel of recognized national standing selected by the Owner Participant and
reasonably acceptable
57
<PAGE>
to the Lessee concluding that, because of changes in applicable law since the
Closing Date, there is no reasonable possibility that such position would be
sustained if it were litigated or (ii) there is a Final Determination
--
inconsistent with such position.
11.2. Agreements of the Trust Company and the Owner Trustee. The
-----------------------------------------------------
Trust Company covenants and agrees, in its individual capacity, with respect to
Sections 11.2(a)(i) and 11.2(b), and the Owner Trustee covenants and agrees with
respect to Sections 11.2(a)(ii), 11.2(c), 11.2(d), 11.2(e), 11.2(f), 11.2(g),
11.2(h) and 11.2(i) that:
(a) Discharge of Liens. (i) The Trust Company will not create or
------------------
permit to exist at any time, and will, at its own cost and expense,
promptly take such action as may be necessary duly to discharge all
Lessor's Liens on all or any part of the Facility, the Site, the Trust
Estate, the Indenture Estate, or title thereto or any interest therein
attributable to itself. Except for the Owner Participant's obligation
pursuant to Section 11.1(a)(ii), the Trust Company shall indemnify,
protect, defend, save and keep harmless the Lessee, the Owner Participant,
the Loan Participant and the Indenture Trustee from and against any and all
Claims that may be imposed on, incurred by or asserted against such Person
arising out of or secured by any such Lessor's Lien.
(ii) The Owner Trustee will not create or permit to exist at any
time, and will, at its own cost and expense, promptly take such action as
may be necessary duly to discharge all Lessor's Liens on all or any part of
the Facility, the Site, the Trust Estate, the Indenture Estate, or title
thereto or any interest therein attributable to the Owner Trustee.
(b) Change of Chief Place of Business. The Trust Company shall give
---------------------------------
notice to the Lessee, the Owner Participant and the Indenture Trustee
promptly after any change in its chief place of business or chief executive
office, or the office where the records concerning the accounts, contract
rights or general intangibles relating to the transactions contemplated
hereby are kept.
(c) Cooperation with the Lessee. The Owner Trustee shall, to the
---------------------------
extent reasonably so requested by the Lessee, cooperate with the Lessee, at
the Lessee's
58
<PAGE>
expense, to enable the Lessee to perform the covenants contained in Section
10.6 and to make such filings and recordings as may be reasonably requested
by the Lessee to accomplish the purposes of this Participation Agreement
and the other Operative Documents, including, without limitation, at any
time and from time to time, upon the request of the Lessee promptly and
duly executing and delivering any and all such further instruments,
documents and financing statements (and continuation statements related
thereto) as the Lessee may request in order to perform such covenants and
to make such filings and recordings.
(d) Notice of Transfer of Assets. The Owner Trustee shall not
----------------------------
transfer any of the estates, properties, rights, powers, duties or trusts
of the Owner Trustee to any successor trustee or to any additional or
separate trustee under the Trust Agreement without giving prior written
notice of such transfer to the Owner Participant, the Lessee and the
Indenture Trustee in accordance with Section 10.1 of the Trust Agreement.
(e) Certain Transfers; Termination. Except as expressly permitted
------------------------------
hereby or by the terms of any other Operative Document, the Owner Trustee
will not transfer any of its right, title or interest in and to any portion
of the Facility to any Person without the express prior written consent of
the Lessee prior to the expiration or earlier termination of the Lease
pursuant to its terms, other than to a successor Owner Trustee appointed in
accordance with the provisions of Section 10 of the Trust Agreement, or
terminate the Trust Agreement or distribute all or any part of the Trust
Estate to any Person.
(f) Owner Trustee's Activities. The Owner Trustee will not incur any
--------------------------
indebtedness for money borrowed, or enter into any business or other
activity, except as expressly contemplated by the Operative Documents.
(g) Repayment of Amounts Received under Section 7.09 of the
-------------------------------------------------------
Indenture. The Owner Trustee shall, promptly upon receipt of any amounts
from the Indenture Trustee pursuant to Section 7.09 of the Indenture, pay
such monies to the Lessee.
59
<PAGE>
(h) Ownership for Tax Purposes. The Owner Trustee will not take any
--------------------------
position inconsistent with its ownership of the Facility Assets for United
States Federal, state or local income tax purposes (provided that treating
the trust created by the Trust Agreement as a grantor trust or other pass-
through entity shall not be considered a position that is inconsistent with
the Owner Trustee's ownership of the Facility Assets) unless (i) the Owner
-
Participant shall have received an opinion of Thelen, Marrin, Johnson &
Bridges LLP or other independent tax counsel of recognized national
standing selected by the Owner Participant and reasonably acceptable to the
Lessee concluding that, because of changes in applicable law since the
Closing Date, there is no reasonable possibility that such position would
be sustained if it were litigated or (ii) there is a Final Determination
--
inconsistent with such position.
(i) Assignment of Manufacturer's or Vendor's Warranties. In
---------------------------------------------------
connection with the purchase by the Lessee or any third party of the
Facility or any part thereof or the transfer of title to any Replaced
Component pursuant to Section 11.7(a) of the Lease, all of the Owner
Trustee's right, title and interest in and to any manufacturer's,
supplier's, dealer's, vendor's, contractor's, subcontractor's or
installer's warranties relating thereto (except to such extent as such
warranties may not be assigned or otherwise transferred) shall be deemed,
without further act, to be assigned to the Lessee or such third-party
purchaser simultaneously with such transfer of title. The Owner Trustee
shall execute any assignment agreements or other documentation, as the
Lessee or such third-party purchaser may reasonably request, to evidence
such assignment. The obligations set forth in this Section 11.2(i) shall
survive any termination or rescission of this Participation Agreement or
any other Operative Document.
11.3. Agreements of Pass Through Trustee and Loan Participant. Each
-------------------------------------------------------
of the Pass Through Trustee (in its individual capacity to the extent set forth
herein and otherwise as Pass Through Trustee) and the Loan Participant covenants
and agrees that:
(a) Transfer of Secured Notes. Any sale, transfer or assignment
-------------------------
(including, without limitation, a transfer pursuant to the exercise of remedies
with respect to any
60
<PAGE>
Secured Note) by the Pass Through Trustee or other Loan Participant, as the case
may be, of any Secured Note or of all or any part of its interest hereunder or
under the Indenture shall be on the express condition that the purchaser,
transferee or assignee, as the case may be, shall agree to be bound by the terms
and provisions applicable to the Pass Through Trustee or other Loan Participant,
as the case may be, contained in this Participation Agreement, the Secured Notes
and the Indenture. The acceptance by any Person of any Secured Note shall
constitute such Person's agreement to be bound by the terms and provisions of
this Participation Agreement and the Indenture. No Pass Through Trustee or
other Loan Participant, as the case may be, will make any such sale, transfer or
assignment to any Person unless such Person delivers to the Lessee, the Owner
Trustee, the Indenture Trustee and the Owner Participant (i) a written
-
representation and warranty by such Person and an opinion of counsel reasonably
satisfactory to the Lessee, the Owner Trustee and the Owner Participant to the
effect that such sale, transfer or assignment to, and the holding of any such
interest by, such Person (1) will not result in a "prohibited transaction" as
-
defined in Section 406 of ERISA or Section 4975 of the Code, or (2) are covered
-
by an exemption contained in ERISA or an administrative exemption adopted
thereunder and (ii) a written undertaking by such Person that is substantially
--
identical to the covenant made by the Pass Through Trustee or other Loan
Participant, as the case may be, in this Section 11.3(a) (including this clause
(ii)).
(b) Instructions to Indenture Trustee. No Pass Through Trustee or
---------------------------------
other Loan Participant, as the case may be, will instruct or otherwise direct
the Indenture Trustee to take, or omit to take, any action in violation of the
express covenants and agreements of the Indenture Trustee in any Operative
Document.
(c) Discharge of Loan Participant's Liens. To the extent that the
-------------------------------------
Loan Participant is not the Pass Through Trustee, the Loan Participant agrees
that it will not create or permit to exist at any time, and will, at its own
cost and expense, promptly take such action as may be necessary duly to
discharge all Loan Participant's Liens on all or any part of the Facility, the
Site, the Trust Estate, the Indenture Estate or title thereto or to any interest
therein and such Loan Participant covenants and agrees that it shall indemnify,
protect, defend, save and keep harmless the Lessee, the Owner Participant, the
Owner Trustee and the Indenture Trustee from and against any Claims imposed on,
61
<PAGE>
incurred by or asserted against such Person arising out of any Loan
Participant's Lien.
11.4. Agreements of Indenture Trustee. The Indenture Trustee, in its
-------------------------------
individual capacity to the extent set forth herein, and as Indenture Trustee,
covenants and agrees as follows:
(a) Discharge of Liens. The Indenture Trustee, in its individual
------------------
capacity, covenants and agrees that it will not create or permit to exist at any
time, and will, at its own cost and expense, promptly take such action as may be
necessary to discharge, all Indenture Trustee's Liens on all or any part of the
Facility, the Site, the Trust Estate or the Indenture Estate, or title thereto
or any interest therein. The Indenture Trustee, in its individual capacity,
covenants and agrees that it shall indemnify, protect, defend, save and keep
harmless the Lessee, the Owner Participant, the Loan Participant and the Owner
Trustee from and against any and all Claims imposed on, incurred by or asserted
against such Person arising out of any Indenture Trustee's Lien.
(b) Cooperation With the Lessee. The Indenture Trustee shall, to the
---------------------------
extent reasonably requested by the Lessee, cooperate with the Lessee, at the
Lessee's expense, to enable the Lessee to perform the covenants contained in
Section 10.6 and to make such filings and recordings as the may be reasonably
requested by the Lessee to accomplish the purposes of this Participation
Agreement and the other Operative Documents, including, without limitation, at
any time and from time to time, upon request of the Lessee promptly and duly
executing and delivering any and all such further instruments, documents and
financing statements (and continuation statements related thereto) as the Lessee
may request in order to perform such covenants and to make such filings and
recordings.
(c) Original Lease. Except to the extent otherwise required by the
--------------
Indenture and so long as it remains as the Indenture Trustee, the Indenture
Trustee agrees, in its individual capacity, that it will maintain possession of
the version of the Lease identified in a receipt therefor executed as the
original executed counterpart.
(d) Performance of Obligations. The Indenture Trustee will perform
--------------------------
and comply with the provisions of the Indenture which, upon satisfaction of any
applicable con-
62
<PAGE>
ditions set forth therein, require payment or the tendering of performance to
the Lessee.
11.5. Confidentiality. (a) Each of the Owner Participant, the Trust
---------------
Company, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee
agrees that all matters relating to this Participation Agreement, the other
Operative Documents, the Underwriting Agreement and any instruments and
certificates given in respect of any of the forgoing, the Facility and any and
all Confidential Information shall be kept strictly confidential, including,
without limitation, the substance of commercial terms, and any disclosure of
such matters shall be made only with the prior written consent of the Lessee.
The obligations set forth in this Section 11.5 shall survive any termination or
rescission of this Participation Agreement, the other Operative Documents and
the Pass Through Trust Documents, as the case may be. Nothing in this Section
11.5 or the Pass Through Trust Documents shall prevent, or require the consent
of the Lessee to, any disclosure:
(i) required by any court of competent jurisdiction;
(ii) as may be required by any Governmental Rule or Governmental
Authority;
(iii) by any party to its legal and other professional advisers, if
any, who require access to such Confidential Information in order to enable
such party to use such information for the purpose for which such
Confidential Information was disclosed to it by the Lessee or to any
potential assignee or transferee of the Owner Participant who satisfies the
requirements for a Transferee under Section 13.2, provided, however, that
-------- -------
such legal or other professional advisors or potential assignee or
transferee shall execute and deliver prior to any such disclosure a
confidentiality agreement in favor of the Lessee and the Guarantor in form
and substance satisfactory to the Lessee and the Guarantor, provided,
--------
further, that, in any event, such disclosing party shall be responsible (in
-------
its individual capacity, in the case of the Trust Company, the Indenture
Trustee or the Pass Through Trustee) for any breach of the terms of this
Participation Agreement or such confidentiality agreement by any such
advisor or potential assignee or transferee;
63
<PAGE>
(iv) of information which has otherwise become public information
through no breach of this Section 11.5 by the disclosing party or any legal
or other professional advisors of the disclosing party; or
(v) of information to be made public, as determined by the Lessee, in
connection with the Registration Statement or sale of Pass Through
Certificates;
provided, further, that, in the event that any party to this Participation
- -------- -------
Agreement (other than the Lessee) or any of its respective Affiliates,
employees, contractors or agents is requested or required to disclose any such
information by any applicable Governmental Authority acting pursuant to
applicable law or in connection with a proceeding, such party will give the
other parties to this Participation Agreement prompt notice of such request or
requirement so that any such other party, an Affiliate of such other party or a
disclosing party may seek an appropriate protective order. If an appropriate
protective order cannot be obtained and such party or such Person is, in the
opinion of its counsel, legally compelled to disclose such information, then,
notwithstanding anything to the contrary in this Participation Agreement, such
party or such Person may disclose that portion of information which its counsel
advises must be disclosed, provided, however, that such party shall give each
-------- -------
other party to this Participation Agreement and each disclosing party written
notice of the information to be disclosed as far in advance of its disclosure as
is practicable, and shall use its best efforts to obtain assurances that
confidential treatment will be accorded such information.
(b) If any party hereto shall be informed by the Lessee or its
designee, or shall otherwise have Actual Knowledge, that it has received any
Confidential Information, in addition to its obligations with respect thereto
set forth in Section 11.5(a), such party shall:
(i) treat in strict confidence all such Confidential Information
and shall not use such information for any purpose other than directly in
connection with the purpose for which such Confidential Information was
disclosed to it by the Lessee;
(ii) refrain from copying or otherwise reproducing any Confidential
Information without the express prior written consent of the Lessee; and
64
<PAGE>
(iii) at the request of the Lessee return or cause to be returned to
the Lessee all copies or other evidences of (a) all tangible Confidential
-
Information and (b) any written materials (including any contained on any
-
diskettes or otherwise retained in connection with a computer or other
electronic device) relating to such Confidential Information in its
possession.
11.6. Assumption of Secured Notes. Each of the Owner Participant,
---------------------------
the Owner Trustee, the Loan Participant and the Indenture Trustee agrees that
if, pursuant to Section 6.1(c) or (e) of the Lease, the Lessee elects to
purchase the Facility, the Lessee may elect to assume the obligations of the
Owner Trustee under the applicable Secured Notes and under the Indenture by
giving notice of such election at least thirty (30) days prior to the applicable
purchase date in accordance with and with the effect provided in Section 3.04 of
the Indenture. In the event that the Relevant Amendment becomes effective, this
Participation Agreement, the other Operative Documents to be amended by the
Relevant Amendment and the Pass Through Trust Documents to be amended by the
Relevant Amendment shall be deemed amended as provided in the Relevant
Amendment.
11.7. Certain Agreements Relating to the Lease. The parties hereto
----------------------------------------
agree that the rights of the Lessee under the Lease are prior and superior in
interest to any Lien of the Indenture and the Indenture is subordinate in all
respects to the rights of the Lessee under the Lease; provided that, so long as
--------
the Indenture shall remain in effect, the Lessee shall not amend or modify the
Lease except in a manner consistent with the provisions of the Indenture.
Section 12. Indemnification.
---------------
12.1. General Indemnification.
- --- -----------------------
(a) Indemnification. Subject to the exclusions set forth herein, the
---------------
Lessee agrees, whether or not any of the transactions contemplated hereby shall
be consummated, to assume liability for, and to indemnify, protect, defend and
hold harmless each Indemnitee and its Related Indemnitee Group, on an After-Tax
Basis, from and against any and all Claims that may be imposed on, incurred by
or asserted against any Indemnitee (whether because of an action or omission by
such Indemnitee or member of its Related Indemnitee Group or otherwise and
whether or not such Indemnitee or member of its Related Indemnitee Group shall
65
<PAGE>
also be indemnified as to any such Claim by any other Person), in any way
relating to or arising out of (i) the Facility or Refinery or any part thereof;
-
(ii) the Operative Documents or the Pass Through Trust Documents or the
--
transactions contemplated thereby or the issuance of the Secured Notes or the
Pass Through Certificates (including Claims arising under the Securities Act
with respect to any offering of any Pass Through Certificates) or the making of
any investment (including the Investment) in the Facility or payments made
pursuant to any thereof (including Claims arising with respect to ERISA),
including, without limitation, the negotiation, execution and delivery of
amendments to such Operative Documents or the Pass Through Trust Documents;
(iii) the manufacture, financing, refinancing, design, construction, purchase,
---
ownership, acquisition, acceptance, rejection, delivery, nondelivery,
possession, lease or sublease, mortgaging, granting of a security interest in,
preparation, installation, condition, transfer of title, rental, use, operation,
storage, maintenance, modification, alteration, repair, assembly, sale, return,
registration, abandonment or other application or disposition of all or any part
of the Facility Assets or any interest therein, including, without limitation,
(A) Claims or penalties arising from any violation of law or liability in tort
-
(strict or otherwise); (B) loss of or damage to any property or the environment
-
(including, without limitation, all Claims associated with remediation,
response, removal, corrective action, clean-up, Remedial Action, treatment,
compliance, restoration, abatement, encapsulation, containment, revegetation,
monitoring, sampling, investigation, assessment, financial assurance, natural
resource damages, the protection of wildlife and vegetation, the interference
with or contamination of any wetland or body of water (whether surface or
subsurface) or aquifer and any relevant mitigative action under any
Environmental Law and any Claims resulting from or relating to the existence or
presence of any Hazardous Material at, in, or under the Facility or any parts
thereof, or the Release, emission or discharge at or from the Facility of any
Hazardous Material into the environment (including air, water vapor, surface
water, ground water and land (whether surface or subsurface)) or death or
injury to any Person; (C) latent or other defects, whether or not discoverable
-
and (D) any claim for patent, trademark or copyright infringement; (iv) any
- --
breach of or failure to perform or observe or any other noncompliance with, any
covenant, condition or agreement or other obligation to be performed by the
Lessee or the Guarantor under any Operative Document, or the falsity of any
representation or warranty of the Lessee or the Guarantor in
66
<PAGE>
any of the Operative Documents or the Pass Through Trust Documents; (v) the
-
imposition of any Lien on the Facility Assets or (vi) any violation of any
--
Governmental Rule by the Lessee or the Guarantor or with respect to the Facility
Assets; provided, however, that the Lessee shall not be required to indemnify
-------- -------
any Indemnitee or any member of its Related Indemnitee Group under this Section
12.1(a) for (1) any Claim to the extent attributable to acts, events,
-
circumstances or conditions which arise or occur after the earlier of: (I) the
-
return of possession of the Facility Assets to the Lessor or its designee
pursuant to the terms of the Lease; (II) the purchase by the Lessee of the
--
Facility pursuant to the Lease; (III) the payment by the Lessee of all amounts
---
required to be paid under the Lease following an Event of Loss or (IV) the sale
--
of the Facility to a third party unaffiliated with the Lessee in the
circumstances contemplated by the Operative Documents, and which Claim did not
exist prior to or concurrent with such return, purchase, payment or sale; (2)
-
any Claim to the extent resulting from the willful misconduct or gross
negligence of such Indemnitee or any member of such Indemnitee's Related
Indemnitee Group; (3) any Transaction Expense; (4) any other Claim to the
- -
extent expressly provided under any of the Operative Documents or otherwise to
be paid or borne by an Indemnitee or member of a Related Indemnitee Group at its
own expense or for which such Indemnitee or member of its Related Indemnitee
Group is expressly not entitled to indemnity or reimbursement; (5) any Claim to
-
the extent resulting from the offer, sale, transfer or other disposition
(whether voluntary or involuntary) by such Indemnitee or member of such
Indemnitee's Related Indemnitee Group of all or part of its interest in the
Facility, the Secured Notes, the Pass Through Certificates, the Trust Estate or
Trust Agreement (or any similar security) or any other Operative Document, other
than any such offer, sale, transfer or disposition (i) resulting from a Lease
-
Event of Default which is continuing at and immediately following such offer,
sale, transfer or other disposition, (ii) in connection with an Event of Loss,
--
(iii) pursuant to an exercise of the Lessee's purchase options under Section 6
---
or Section 7 of the Lease or Section 16 of this Participation Agreement or (iv)
--
to a successor Owner Trustee in accordance with the provisions of the Operative
Documents; (6) any Claim resulting from a breach by any Indemnitee or any member
-
of such Indemnitee's Related Indemnitee Group of any of its representations,
warranties or covenants in any of the Operative Documents or in any Pass Through
Trust Document or any agreement related thereto or in any Officer's Certificate
delivered pursuant thereto or to the
67
<PAGE>
extent resulting from a violation of any Governmental Rule by any Indemnitee or
any member of its Related Indemnitee Group (other than any violation imputed to
an Indemnitee solely by reason of its interest in the Facility); (7) except as
-
provided in clause (13) below, any Claim relating to Taxes whether or not the
Lessee is obligated to indemnify for such Taxes under Section 12.2 or the Tax
Indemnity Agreement; (8) any Claim to the extent resulting from any business,
-
transaction or other activity in which such Indemnitee or any member of its
Related Indemnitee Group is engaged, other than the transactions contemplated by
the Operative Documents or the Pass Through Trust Documents, except to the
extent resulting from or relating to a Lease Event of Default; (9) any Claim to
-
the extent attributable to the authorization or giving or withholding by such
Indemnitee or any member of its Related Indemnitee Group of any future
amendments, supplements, waivers or consents with respect to any Operative
Document, any Pass Through Trust Document or any agreement relating thereto,
other than such as have been requested or consented to in writing by the Lessee,
or such that occur as a result of a Lease Event of Default that shall have
occurred and is continuing at the time of such amendment, supplement, waiver or
consent, or such as are expressly required by any Operative Document or any Pass
Through Trust Document or such as are required to comply with, and are in
compliance with, any Governmental Rule; (10) any Claim resulting from any
--
Indenture Event of Default that does not also constitute a Lease Event of
Default; (11) with respect to the Owner Trustee and the Trust Company and their
--
respective Related Indemnitee Groups, any Claim resulting from the indemnity
provided for under the Trust Agreement or any indemnification pursuant thereto,
except to the extent that the indemnitee under such indemnification is entitled
to indemnification from the Lessee pursuant to this Section 12.1; (12) any Claim
--
of the Pass Through Trustee to the extent that it is indemnified by the Lessee
pursuant to the Pass Through Trust Agreement or any other applicable Pass
Through Trust Document; (13) any Claims against such Indemnitee or any member of
--
its Related Indemnitee Group resulting from a violation of ERISA or Section
4975 of the Code to the extent resulting from (x) the acquisition by an Employer
-
Plan of Pass Through Certificates or Secured Notes or (y) actions by such
-
Indemnitee or any member of its Related Indemnitee Group, other than, in the
case of the Owner Participant, the making and holding of the Investment pursuant
to this Participation Agreement or the taking of any action at the request or
direction of the Lessee; (14) any Claim which is an ordinary and usual
--
operating or overhead expense of such Indemnitee or any member
68
<PAGE>
of a Related Indemnitee Group except expenses incurred to the extent caused by a
Lease Event of Default; (15) any Claim arising from or attributable to the
--
failure on the part of such Indemnitee or any member of a Related Indemnitee
Group to distribute, in accordance with and as contemplated by any Operative
Document, any amounts received and distributable by it thereunder; (16) any
--
Claim which constitutes a Permitted Lien or to the extent resulting from the
imposition of any Lien which such Indemnitee or any member of a Related
Indemnitee Group is required to lift and discharge pursuant to any Operative
Document or any agreement relating thereto (including for purposes of this
clause any Lien which such Indemnitee or any member of any Related Indemnitee
Group would be required to lift and discharge but for the proviso set forth in
Section 11.1(a)); or (17) the Claim of any Indemnitee or any member of its
--
Related Indemnitee Group resulting from, arising out of or in connection with,
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any written information supplied or made available by such
Indemnitee or any member of its Related Indemnitee Group specifically for
inclusion in the preparation of any prospectus or prospectus supplement, other
offering document or registration statement relating to the offer, sale or
disposition of any Secured Notes, the Pass Through Certificates or similar
interest or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
(it being agreed that, as of the date hereof, no such information has been
supplied or made available by the Owner Participant). The obligation to provide
indemnities in accordance with the terms of this Section 12.1 shall survive the
termination of the Lease.
(b) Insured Claims. In the case of any Claim indemnified by the
--------------
Lessee hereunder which is covered by a policy of insurance maintained by the
Lessee (or any Affiliate thereof), each Indemnitee and each member of any
Related Indemnitee Group agrees to cooperate with the insurers in the exercise
of their rights to investigate, defend or compromise such Claim as may be
required to retain the benefits of such insurance with respect to such Claim.
(c) Notices. If the Lessee shall obtain knowledge of any action,
-------
suit, proceeding or written notice of any Claim indemnified against under this
Section 12.1, the Lessee shall give prompt notice thereof to the appropriate
Indemnitee or Indemnitees, as the case may be, and if any Indemnitee shall
obtain any such knowledge, such Indemnitee
69
<PAGE>
shall give prompt notice thereof to the Lessee, provided that the failure of
--------
such Indemnitee to so notify the Lessee shall not affect the Lessee's
indemnification obligations under this Section 12.1 to such Indemnitee except to
the extent of any increase in the amount of such Claim resulting from such
failure or to the extent the Lessee is effectively precluded from contesting
such Claim as a result of such failure.
(d) Contests. Subject to the rights of insurers under policies of
--------
insurance maintained pursuant to Section 13 of the Lease, the Lessee shall have
the right, at its sole cost and expense, to investigate, and the right in its
sole discretion to defend, compromise or contest by appropriate proceedings, any
Claim for which indemnification is sought under this Section 12.1, and each
Indemnitee and each member of a Related Indemnitee Group shall cooperate, at the
Lessee's expense, with all reasonable requests of the Lessee in connection
therewith, provided that the Lessee shall not have the right without the consent
--------
of the Indemnitee to defend, contest or compromise any Claim with respect to
any Indemnitee or any member of its Related Indemnitee Group (i) if a Specified
-
Lease Event of Default shall have occurred and be continuing; (ii) if such
--
Person retains any economic interest in the transactions contemplated hereby
and such proceeding involves any material danger of the sale, forfeiture or loss
of the Facility or (iii) if such Claim involves a realistic possibility of
---
criminal sanctions or criminal liability to such Indemnitee or any member of its
Related Indemnitee Group, in which event such Indemnitee shall be entitled to
control and assume responsibility for the defense of such Claim at the expense
of the Lessee. The Lessee shall keep the Indemnitee which is the subject of any
such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnitee with all information with respect to such proceeding as
such Indemnitee shall reasonably request; provided that in the event an
--------
Indemnitee has assumed control of any such proceeding, it shall keep the Lessee
fully apprised of the status of such proceeding and shall provide the Lessee
with all information, including the receipt of all settlement offers, with
respect to such proceeding as the Lessee shall reasonably request and shall
consult in good faith with the Lessee regarding such defense, compromise or
contest. Where the Lessee or the insurers under a policy of insurance
maintained by the Lessee undertake the defense of an Indemnitee or any member of
its Related Indemnitee Group with respect to a Claim, no additional legal fees
or expenses of such Indemnitee or member of its
70
<PAGE>
Related Indemnitee Group in connection with the defense of such Claim shall be
indemnified hereunder unless such fees or expenses were incurred at the request
of the Lessee or such insurers; provided that if (i) in the written opinion of
-------- -
counsel to such Indemnitee a conflict of interest exists where it is advisable
for such Indemnitee or member of its Related Indemnitee Group to be represented
by separate counsel or (ii) such Indemnitee or any member of its Related
--
Indemnitee Group has been indicted or otherwise charged in a criminal complaint
or is the subject of a criminal investigation in connection with a Claim not
excluded by Section 12.1(a) and such Indemnitee or such member of a Related
Indemnitee Group informs the Lessee that such Indemnitee or such member of a
Related Indemnitee Group desires to be represented by separate counsel, the
reasonable fees and expenses of such separate counsel shall be borne by the
Lessee. Notwithstanding anything to the contrary contained herein, the Lessee
shall not, under any circumstances, be liable for the fees and expenses of more
than one counsel for all Indemnitees and members of Related Indemnitee Groups
except in the case specified in the proviso to the immediately preceding
sentence of this paragraph (d). Subject to the requirements of any policy of
insurance, an Indemnitee may participate at its own expense in any judicial
proceeding controlled by the Lessee pursuant to the preceding provisions and
such participation shall not constitute a waiver of the right to receive the
indemnification provided in this Section 12.1; provided that such party's
--------
participation does not, in the opinion of counsel appointed by the Lessee or its
insurers to conduct such proceedings, interfere with such control.
Notwithstanding anything to the contrary contained herein, during the
continuance of a Lease Event of Default, the Lessee shall not compromise any
Claim without the consent of each applicable Indemnitee unless such Claim is
simultaneously released or discharged, such consent not to be unreasonably
withheld.
(e) Subrogation. So long as no Specified Lease Event of Default
-----------
exists, to the extent that a Claim indemnified by the Lessee pursuant to this
Section 12.1 is paid in full by the Lessee and/or an insurer under a policy of
insurance maintained by the Lessee pursuant to the Lease, the Lessee and/or such
insurer, as the case may be, without any further action, shall be subrogated to
any and all rights and remedies which any Indemnitee or member of a Related
Indemnitee Group paid or on whose behalf such Claim was paid may have in respect
of the matters, transactions or events giving rise to such Claim against which
such indemnity was given (other than claims under any insurance
71
<PAGE>
policies maintained by such Indemnitee or any member of its Related Indemnitee
Group). Such Indemnitee agrees to cooperate with the Lessee and to execute such
further instruments or take such further action to permit the Lessee, at the
Lessee's expense, to pursue such claims, to the extent reasonably requested by
the Lessee.
(f) Refunds. Upon receipt by any Indemnitee or any member of its
-------
Related Indemnitee Group of a repayment or reimbursement of all or any part of
any Claim for which the Lessee shall have paid for such Indemnitee or member of
its Related Indemnitee Group or for which the Lessee shall have reimbursed any
Indemnitee or member of its Related Indemnitee Group pursuant to this Section
12.1, such Indemnitee shall pay to the Lessee, as promptly as practicable
after the receipt thereof, the amount of such repayment or reimbursement plus
any interest received by such Indemnitee or member of its Related Indemnitee
Group on such amount plus the amount of any tax savings realized (directly or
indirectly) by such Indemnitee or member of its Related Indemnitee Group as a
result of such payment made to the Lessee, but not in excess of the amount of
all prior payments made by the Lessee pursuant to this Section 12.1 with respect
to such Claim less the amount of all prior repayments or reimbursements paid by
such Indemnitee or any member of its Related Indemnitee Group with respect to
such Claim pursuant to this subsection (f).
(g) Payments; Verification. Any amount payable to any Indemnitee or
----------------------
any member of a Related Indemnitee Group pursuant to this Section 12.1 shall be
paid to such Indemnitee or member of a Related Indemnitee Group promptly upon
receipt of a written demand therefor from such Indemnitee, accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable and, if requested by the Lessee,
such determination shall be verified by a nationally recognized independent
accounting firm mutually acceptable to the Lessee and such Indemnitee or member
of a Related Indemnitee Group at the Lessee's expense, unless such accounting
firm determines that the amount payable by the Lessee is less than 95% of the
amount shown on such written statement, in which case such verification shall be
at such Indemnitee's expense.
(h) Trustee's Fees. The Lessee shall pay the reasonable ongoing fees
--------------
and expenses of the Owner Trustee and the Indenture Trustee (including fees and
expenses of their counsel) for acting as such to the extent not included
72
<PAGE>
in Transaction Expenses. The Lessee shall have the right to receive and review
any substantiation relating to such on-going expenses as the Lessee may
reasonably request.
12.2. General Tax Indemnification. (a) Payment of Taxes. In the
--------------------------- ----------------
event that the Lessee shall be required by applicable law to make any
withholding with respect to Taxes from any payment of Rent pursuant to the
Lease, (x) the Lessee shall pay such additional amounts so that after all such
-
required withholdings the Tax Indemnitee receives an amount equal to the Rent it
would have received had such withholding not been required, (y) the Lessee shall
-
make such withholding and (z) the Lessee shall pay the full amount withheld to
-
the relevant taxing authority in accordance with applicable law. If, for any
reason, the Lessee is required to make any payment to a taxing authority or to
any Tax Indemnitee as a result of the application of the preceding sentence or
otherwise that relates to or is a result of any Tax imposed on or with respect
to any Tax Indemnitee which Tax (in whole or in part) is not the responsibility
of the Lessee under the terms of this Section 12.2, then the Tax Indemnitee in
respect of whom such Tax is an excluded Tax hereunder shall, within thirty (30)
days after receipt of notice of payment of the Tax and appropriate payment
documentation with respect thereto, pay to the Lessee an amount which equals the
amount paid by the Lessee with respect to or as a result of such Tax that is not
the responsibility of the Lessee (including any expenses or other charges borne
by the Lessee) increased by (but subject to the proviso in Section 12.2(f)) the
amount of net tax savings to such Tax Indemnitee attributable to the making of
such payment to the Lessee after taking into account any income recognized by
the Tax Indemnitee attributable to the payment of the Tax by the Lessee. Each
Tax Indemnitee also agrees (subject to the proviso in Section 12.2(f)) to
reimburse the Lessee for any amounts withheld for which such Tax Indemnitee
obtains a credit or refund, within thirty (30) days after receipt of such credit
or refund.
Except as provided in Section 12.2(b), the Lessee agrees to pay, and
to indemnify, protect, defend, save and keep harmless each Tax Indemnitee, on an
After-Tax Basis, whether or not any or all of the transactions contemplated
hereby are consummated in whole or in part, from and against any and all Taxes
upon or with respect to (i) the Facility Assets, the Refinery or any portion
-
thereof or interest therein; (ii) the acquisition, purchase, sale, financing,
--
leasing, subleasing, sub-subleasing and sub-sub-subleasing,
73
<PAGE>
ownership, maintenance, repair, redelivery, alteration, insuring, control, use,
operation, manufacture, assembly, delivery, possession, repossession, location,
storage, importation, exportation, refinancing, refunding, transfer of title,
registration, reregistration, transfer of registration, return or other
disposition of all or any part of the Facility Assets or the Refinery or any
interest therein; (iii) the rental payments (including, without limitation, all
---
Basic Rent and Supplemental Rent), receipts or earnings arising from the
Facility Assets or any portion thereof or interest therein, or payable pursuant
to the Lease, or any other payment or right to receive payment pursuant to the
Operative Documents (including, without limitation, any payment of principal,
interest, discount or premium on or with respect to the Secured Notes); (iv) any
--
Modification or replacement, removal, substitution or repair of a Component or
Replacement Component; (v) the Operative Documents and any other documents
-
contemplated thereby and amendments and supplements thereto, or the issuance,
refunding or refinancing of the Secured Notes or the Pass Through Certificates
or any other document executed and delivered in connection with the consummation
of the transactions contemplated by the Operative Documents or the interest of
any Tax Indemnitee in any of the foregoing, or the execution, amendment,
issuance or delivery of any of the foregoing; (vi) the Indenture Estate or Trust
--
Estate or the property, or the income or other proceeds received with respect to
the property, held by the Indenture Trustee under the Indenture or the Owner
Trustee under the Trust Agreement or (vii) otherwise arising out of, with
---
respect to, or in connection with the transactions contemplated by the Operative
Documents.
(b) Exclusions from General Tax Indemnity. The provisions of Section
-------------------------------------
12.2(a) shall not apply to, and the Lessee shall have no liability to a Tax
Indemnitee under Section 12.2(a) with respect to:
(1) Taxes (other than sales, use, rental, property or ad valorem
-- -------
Taxes) imposed on, based on or measured by, net or gross income, receipts,
capital, net worth, excess profits or conduct of business which are imposed
by any federal, state, local, foreign or international government or taxing
authority, including any franchise or privilege Taxes, minimum Taxes,
value-added Taxes which are imposed in lieu of income taxes and any Taxes
on or measured by any items of tax preference;
74
<PAGE>
(2) Taxes, including, without limitation, sales and transfer
Taxes, that result from any voluntary or involuntary transfer (i) by a
-
Tax Indemnitee of any interest in the Facility, the Trust Estate, the
Secured Notes or the Pass Through Trust Estate or any portion of any of the
foregoing, or any interest arising under any of the Operative Documents,
provided, however, that this Section 12.2(b)(2) shall not apply to any
-------- -------
transfer that (A) relates to the exercise of remedies in connection with a
-
Lease Event of Default that has occurred and is continuing; (B) results
-
from an Event of Loss; (C) results from the replacement, removal or
-
substitution of all or any part of the Facility; (D) results from the
-
exercise of a purchase option by the Lessee pursuant to Section 6.1(a) or
(c) of the Lease (or a purchase of the Beneficial Interest pursuant to
Section 16.1 hereof in lieu of a purchase under Section 6.1(a) or 6.1(c) of
the Lease), (E) results from the exercise by the Lessee of a purchase
-
option pursuant to Section 6.1(e) or 7.3(a)(i) of the Lease (or a purchase
of the Beneficial Interest pursuant to Section 16.1 hereof in lieu of a
purchase under Section 6.1(e) or 7.3(a)(i) of the Lease), provided that the
--------
amount, if any, otherwise payable by the Lessee by reason of this clause
(E) shall be reduced (but not below zero) by the excess, if any, of the
purchase price payable to the Lessor pursuant to such Section 6.1(e) or
7.3(a)(i) (or to the Owner Participant under Section 16.1, as the case may
be) over the Termination Value (or, with respect to a purchase of the
Beneficial Interest, the Termination Value less the amount specified in
Section 16.1(ii)) applicable on the date of purchase, or (F) results from a
-
sale of the Facility Assets pursuant to Section 7.3(a)(ii) of the Lease,
provided that (x) this clause (F) shall not apply to Taxes that were taken
-------- -
into account in determining net sales proceeds pursuant to clause (i)(B) of
such Section 7.3(a)(ii) and (y) the amount, if any, otherwise payable by
-
the Lessee by reason of this clause (F) shall be reduced (but not below
zero) by the excess, if any, of the net proceeds determined under clause
(i)(B) of such Section 7.3(a)(ii) over the amount specified in clause
(i)(A) of such Section 7.3(a)(ii), or (ii) of any interest in a Tax
--
Indemnitee;
(3) Taxes imposed by any jurisdiction that would not have been
imposed on a Tax Indemnitee but for its activities in such jurisdiction
unrelated to the
75
<PAGE>
transactions contemplated by the Operative Documents or the Pass Through
Trust Documents;
(4) Taxes that result from (A) the willful misconduct or gross
-
negligence of such Tax Indemnitee; (B) the breach or inaccuracy by such Tax
-
Indemnitee of any of its representations, warranties, covenants or
obligations under the Operative Documents; (C) the failure of such Tax
-
Indemnitee to file tax returns properly and on a timely basis or to claim a
deduction or credit to which it is entitled or (D) the failure of such Tax
-
Indemnitee to comply with certification, reporting or other similar
requirements of the jurisdiction imposing such Tax unless such failure is
due to the failure of the Lessee to perform its obligations under Section
12.2(c) or unless such Tax Indemnitee reasonably determines that it is not
eligible to properly comply with any such requirement;
(5) Taxes which are attributable to any period or circumstance
occurring after the later of expiration or earlier termination of the Lease
or the payment of the last installment of the EBO Purchase Price, except to
the extent attributable to (A) a failure of the Lessee to fully discharge
-
its obligations under the Lease; (B) Taxes imposed on or with respect to
-
any payments that are due after the expiration or earlier termination of
the Lease and which are attributable to a period or circumstance occurring
prior to such expiration or earlier termination or (C) Taxes that relate to
-
events, matters or circumstances occurring prior to such expiration or
earlier termination;
(6) Taxes which are based on or measured by fees or compensation
received by the Owner Trustee for acting as Owner Trustee under the Trust
Agreement, the Indenture Trustee for acting as Indenture Trustee under the
Indenture or the Pass Through Trustee for acting as Pass Through Trustee
under the applicable Pass Through Trust Document;
(7) Taxes to the extent such Taxes would not have been imposed
on a Tax Indemnitee if such Tax Indemnitee were a United States person for
United States Federal income tax purposes;
(8) any Tax for so long as it is being contested in accordance
with the provisions of Section
76
<PAGE>
12.2(e), except to the extent a payment is required pursuant to Section
12.2(e);
(9) Taxes as to which any Tax Indemnitee fails to comply with
its contest obligations under Section 12.2(e) in any material respect, but
only to the extent such failure materially impairs the Lessee's contest
rights with respect to the Taxes that are the subject of the contest and is
not due to any act or failure to act by the Lessee; provided, however, that
-------- -------
this Section 12.2(b)(9) shall not constitute a waiver by the Lessee of its
rights, if any, to assert and sue upon any claims it may have against the
Tax Indemnitee by reason of such Tax Indemnitee's failure to comply with
its obligations under Section 12.2(e) of this Participation Agreement;
(10) Taxes imposed as a result of the trust described in the
Trust Agreement or any Pass Through Trust not being treated as a grantor
trust or other conduit entity for United States Federal, state or local tax
purposes;
(11) any Taxes, to the extent of the excess of such Taxes over
the amount of Taxes that would have been imposed and indemnified against
(other than the calculation of gross-up amounts required to make any
payment on an After-Tax Basis) had there not been a transfer (i) by any Tax
-
Indemnitee after the Closing Date of any interest in the Facility, the
Trust Estate, any Secured Note or any Pass Through Certificate or any
portion of any of the foregoing or any interest arising under any Operative
Document; provided, however, that this exclusion shall not apply to any
-------- -------
transfer that occurs in connection with the exercise of remedies pursuant
to the Lease in connection with a Lease Event of Default which has occurred
and is continuing or that results from an Event of Loss or (ii) of any
--
interest in a Tax Indemnitee;
(12) Taxes which have been included in Lessor's Cost and paid to
the appropriate taxing authorities;
(13) [Intentionally Omitted];
(14) any Taxes imposed as a result of, or in connection with,
any "prohibited transaction," within the meaning of Section 4975 of the
Code, Section 406 or
77
<PAGE>
ERISA, any successor provisions or any comparable laws of any governmental
authority;
(15) Taxes imposed on the Owner Trustee or the Owner Participant
resulting from a Lessor's Lien or an Owner Participant's Lien;
(16) Taxes resulting from an amendment to an Operative Document
which is not consented to by the Lessee in writing; or
(17) any Tax in the nature of an intangible tax or similar tax
upon or with respect to the value of the interest of the Owner Participant
in the Trust Estate or the value of any interest in the Indenture Estate,
the Secured Notes or any Pass Through Trust.
Notwithstanding anything contained in any Operative Document to the
contrary, the Lessee agrees to indemnify and hold harmless the Owner Participant
and the Owner Trustee against any and all withholding Taxes (including any
interest and penalties imposed on such Persons for any failure to timely
withhold such Taxes) imposed on or with respect to any amounts paid to the Loan
Participant, as an indemnified Tax for purposes of this Section 12.2, unless
such withholding is due to (i) the Owner Participant or the Owner Trustee not
-
being a United States person for United States Federal income tax purposes, (ii)
--
a failure of the Owner Participant or the Owner Trustee to comply with any
provision of the Operative Documents (including a failure described in Section
12.2(b)(4)) unless such failure is the result of a failure of the Lessee to
perform its obligations under Section 12.2(c), (iii) the breach or inaccuracy of
---
any representations, warranties, covenants or obligations by the Owner
Participant or Owner Trustee under the Operative Documents or (iv) the gross
--
negligence or willful misconduct of the Owner Participant or the Owner Trustee.
If a Tax (including any related interest, fines, penalties or addition to Tax)
results from a failure of any Tax Indemnitee to comply with its obligations
under the Operative Documents and the Lessee is required to indemnify another
Tax Indemnitee against the imposition of such Tax, then the Tax Indemnitee whose
failure resulted in the imposition of such Tax shall, within thirty (30) days
after receipt of notice of payment of the Tax and appropriate payment
documentation with respect thereto, pay to the Lessee an amount which equals the
amount paid by the Lessee with respect to or as a result of such Tax (including
any expenses or other charges borne by the
78
<PAGE>
Lessee) increased by (but subject to the proviso in Section 12.2(f)) the amount
of tax savings to such Tax Indemnitee attributable to the making of such payment
to the Lessee.
The provisions of this Section 12.2(b) shall not apply to any Taxes
imposed in respect of the receipt or accrual of any indemnity payment made by
the Lessee pursuant to this Section 12.2.
(c) Reports. If any report, return, certification or statement is
-------
required to be filed with respect to any Tax that is subject to indemnification
by the Lessee under this Section 12.2, the Lessee shall timely prepare and file
the same (except for (i) any report, return or statement relating to any Taxes
-
described in Section 12.2(b)(1) or (ii) any other report, return, certification
--
or statement which the Tax Indemnitee has notified the Lessee that the Tax
Indemnitee intends to prepare and file); provided that upon the Lessee's written
--------
request such Tax Indemnitee shall have furnished the Lessee, at the Lessee's
expense, with such information reasonably necessary to prepare and file such
returns as in within such Tax Indemnitee's control. The Lessee shall either file
such report, return, certification or statement (so as to show the ownership of
the Facility Assets in the Owner Trustee) and send a copy of such report,
return, certification or statement to the Owner Participant and the Owner
Trustee, or, where not so permitted to file, shall notify the Owner Participant
and the Owner Trustee of such requirement within a reasonable period of time
prior to the due date for filing (without regard to any applicable extensions)
and prepare and deliver such report, return, certification or statement to the
Owner Participant and the Owner Trustee. In addition, within a reasonable time
prior to the time such report, return, certification or statement is to be filed
the Lessee shall, to the extent permitted by law, cause all billings of such
Taxes to be made to each Tax Indemnitee in care of the Lessee, make payment
thereof and furnish written evidence of such payment. The Lessee shall furnish
promptly upon written request such data, records and documents as any Tax
Indemnitee may reasonably require of the Lessee to enable such Tax Indemnitee to
comply with requirements of any taxing jurisdiction arising out of such Tax
Indemnitee's participation in the transactions contemplated by this
Participation Agreement, including, without limitation, requirements relating to
Taxes described in Section 12.2(b)(1).
79
<PAGE>
(d) Payments. Any Tax indemnified hereunder shall be paid directly
--------
when due to the applicable taxing authority if direct payment is permitted, or
shall be reimbursed to a Tax Indemnitee on demand if paid by such Tax
Indemnitee in accordance herewith. Except as otherwise provided in this Section
12.2, all amounts payable to a Tax Indemnitee hereunder shall be paid promptly
in immediately available funds, but in no event later than the later of (i) ten
-
(10) days after the date of such demand or (ii) ten (10) days before the date
--
the Tax to which such amount payable hereunder relates is due or is to be paid
and any such demand shall be accompanied by a written statement (which written
statement shall, at the Lessee's request, be verified by a nationally recognized
independent accounting firm mutually acceptable to the Lessee and the Tax
Indemnitee, such verification to be at the Lessee's expense unless such
accountants determine that the amount payable by the Lessee is less than 95% of
the amount shown on such written statement, in which event the cost of such
verification will be paid by the Tax Indemnitee) describing in reasonable detail
the Tax and the computation of the amount payable. In the case of a Tax subject
to indemnification under this Section 12.2 which is properly subject to a
contest in accordance with Section 12.2(e), the Lessee (i) shall be obligated to
-
make any advances with respect to such Tax whenever required under Section
12.2(e) and (ii) shall pay such Tax (in the amount finally determined to be
--
owing in such contest) prior to the latest time permitted by the relevant taxing
authority for timely payment after a Final Determination.
(e) Contests; Refunds. (i) In the event a taxing jurisdiction makes
-----------------
a claim with respect to any Tax for which the Lessee may be liable under this
Section 12.2 (a "Tax Claim"), the Lessee may cause the applicable Tax Indemnitee
---------
to contest such Tax Claim (and any judicial decision with respect thereto) as
set forth herein. In the event any Tax Indemnitee receives notice of a Tax
Claim or potential Tax Claim which may be indemnified under this Section 12.2,
such Tax Indemnitee shall promptly notify the Lessee thereof in writing. If
requested by the Lessee in writing within thirty (30) days of receipt of such
notice (or, if sooner, on or before the last date upon which the contest of such
Tax can be initiated, provided that the Tax Indemnitee's notice to the Lessee
discloses such date), such Tax Indemnitee shall, upon receipt of an indemnity
satisfactory to it whereby the Lessee shall have agreed to pay to such Tax
Indemnitee all reasonable costs, expenses, legal and accountants' fees and
disbursements incurred by
80
<PAGE>
such Tax Indemnitee in connection with contesting such Tax Claim, and at the
expense of the Lessee, contest the imposition of any Tax Claim by (1) resisting
-
payment thereof, if such Tax Indemnitee in its reasonable discretion shall
determine such course of action to be appropriate; (2) not paying the same
-
except under protest, if protest is necessary and proper or (3) if payment shall
-
be made, using reasonable efforts to obtain a refund thereof in appropriate
administrative and judicial proceedings, or both. If such contest shall involve
payment of the Tax Claim, the Lessee shall have advanced to such Tax Indemnitee
the amount of such payment plus interest, penalties and additions to tax with
respect thereto on an interest-free basis, and shall have agreed to indemnify
the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences
resulting from such advance. In no event shall any Tax Indemnitee be required
or the Lessee be permitted to contest any Taxes for which the Lessee is
obligated to indemnify pursuant to this Section 12.2 unless: (i) such Tax
-
Indemnitee shall have received the opinion of tax counsel selected by the Lessee
(which may be an employee of the Lessee or an Affiliate) furnished at the
Lessee's sole expense to the effect that a reasonable basis consistent with ABA
Opinion 85-352 exists for contesting such claim (and provided that no appeal
shall be required to the United States Supreme Court); (ii) no Specified Lease
--
Event of Default shall have occurred and be continuing (unless the Lessee shall
have provided security reasonably satisfactory to such Tax Indemnitee securing
the Lessee's performance of its obligations under this Section 12.2) and (iii)
---
such Tax Indemnitee shall have determined that the action to be taken will not
result in any risk of imposition of criminal penalties or any substantial danger
of sale, forfeiture or loss of the Facility Assets or any portion thereof or any
interest therein. If requested by the Lessee and if permitted by applicable
law, the Lessee may contest, at its own expense, the imposition of any Tax
Claim. In any contest controlled by the Tax Indemnitee, such Tax Indemnitee
will consult in good faith with the Lessee and its counsel and submit to the
Lessee and its counsel for review and comment, and consider in good faith any
and all suggestions made with respect to, any item to be submitted to a taxing
authority or a court in connection with the contest and permit the Lessee to
participate in a reasonable manner in the conduct of the contest. Upon the
written request of the affected Tax Indemnitee, the Lessee will advise such Tax
Indemnitee of the status of any contest being conducted by the Lessee pursuant
to this Section 12.2(e).
81
<PAGE>
A Tax Indemnitee shall not make, accept or enter into a settlement or
other compromise with respect to any Taxes indemnified pursuant to this Section
12.2 (which proceeding the Tax Indemnitee is required to continue), or forego or
terminate any such proceeding with respect to Taxes indemnified pursuant to this
Section 12.2, without the prior written consent of the Lessee. Notwithstanding
the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a
settlement or compromise of any such Tax that the Tax Indemnitee is required to
contest or otherwise terminates any such contest without the prior written
consent of the Lessee, such Tax Indemnitee shall be deemed to have waived its
right to any indemnity payment by the Lessee that would otherwise be payable by
the Lessee pursuant to this Section 12.2 in respect of such Tax Claim, and
such Tax Indemnitee shall promptly pay to the Lessee any amounts previously paid
or advanced by the Lessee pursuant to this Agreement with respect to such Tax
Claim (other than amounts advanced with respect to costs and expenses of the
contest).
(ii) Upon receipt by any Tax Indemnitee of a repayment or refund of
all or any part of any Tax which the Lessee shall have paid for, or advanced to,
such Tax Indemnitee or for which the Lessee shall have reimbursed such Tax
Indemnitee pursuant to this Section 12.2, such Tax Indemnitee shall pay to the
Lessee, as promptly as practicable after the receipt thereof, the amount of
such repayment or refund plus any interest received by, or credited to, such
Tax Indemnitee on such amounts net of Taxes thereon plus the amount of any net
tax savings actually realized by such Tax Indemnitee as a result of the payment
made to the Lessee; provided, however, that: if there is a subsequent loss of
-------- -------
any such tax savings or refund realized by the Tax Indemnitee, such loss shall
be treated as a Tax for which the Lessee must indemnify such Tax Indemnitee
pursuant to this Section 12.2. The amount payable to the Lessee in respect of
tax benefits or refunds shall, at the Lessee's request, be subject to
verification by independent accountants selected by the Tax Indemnitee and
reasonably satisfactory to the Lessee, at the Lessee's expense unless such
accountants determine that the amount payable to the Lessee is at least 5% more
than the amount so computed by the Tax Indemnitee, in which event the cost of
such verification will be paid by the Tax Indemnitee.
(f) Tax Savings. If, by reason of any payment made to or for the
-----------
account of a Tax Indemnitee by the Lessee pursuant to this Section 12.2 or the
circumstances giving
82
<PAGE>
rise thereto, such Tax Indemnitee at any time realizes a reduction in any Taxes
for which the Lessee is not required to indemnify such Tax Indemnitee pursuant
to this Section 12.2 and which was not taken into account previously in
computing such payment by the Lessee to or for the account of such Tax
Indemnitee, then such Tax Indemnitee shall promptly pay to the Lessee an amount
equal to such actual reduction in Taxes plus the amount of any additional
reduction in Taxes realized by such Tax Indemnitee or any related Tax Indemnitee
as a result of any payment made by such Tax Indemnitee pursuant to this
sentence; provided, however, that if there is a subsequent loss of any such tax
-------- -------
savings or refund realized by the Tax Indemnitee, such loss shall be treated as
a Tax for which the Lessee must indemnify such Tax Indemnitee pursuant to this
Section 12.2. Each Tax Indemnitee shall in good faith use diligence in filing
its tax returns and in dealing with the relevant taxing authorities to seek and
claim any tax benefit that would result in any such reduction in Taxes or any
refund of any Taxes payable or indemnifiable by the Lessee hereunder.
(g) Definition of Owner Participant. For purposes of this Section
-------------------------------
12.2, the term "Owner Participant" and the term Tax Indemnitee as applied to the
Owner Participant shall include any member of an affiliated group, within the
meaning of Section 1504 of the Code (or any successor provision thereof), or
comparable state or local law provisions of which the Owner Participant is, or
may become, a member, if consolidated, joint or combined returns are filed for
such affiliated group for Federal, state or local income tax purposes. The
Owner Participant undertakes on behalf of such other members of its affiliated
group to perform or cause to be performed all obligations of such affiliated
group hereunder.
12.3. No Guarantee. Nothing in Section 12.1 or 12.2 shall be
------------
construed as a guaranty by the Lessee of any residual value in or useful life of
the Facility Assets or as a guaranty of the Secured Notes or the Pass Through
Certificates.
Section 13. Transfer of Owner Participant's Interest.
------------------------------- --------
13.1. Restrictions on Transfer. Without the prior written consent
------------------------
of, so long as the Lease shall be in effect, the Lessee, and, so long as the
Lien of the Indenture shall be in effect, the Indenture Trustee, the Owner
Participant shall not, directly or indirectly, assign,
83
<PAGE>
convey or otherwise transfer (whether, except in the case of Fleet National Bank
or any of its successors, by merger, consolidation or other similar transaction)
any of its right, title or interest in and to the Trust Estate, this
Participation Agreement, the Trust Agreement or any other Operative Document,
except in accordance with the terms and conditions of this Section 13.
13.2. Permitted Transfers. So long as the Lease is in effect, the
-------------------
Owner Participant may transfer all or part of its right, title and interest in
and to the Trust Estate (whether or not the same shall then have been pledged or
mortgaged under the Indenture, but subject to the Lien of the Indenture if then
in effect) and in and to this Participation Agreement and the other Operative
Documents to any Person (a "Transferee") only in compliance with and upon
----------
satisfaction of each and all of the following conditions:
(a) the Transferee shall be a financial institution, leasing
company or other institutional investor organized under the laws of the United
States or any State thereof and shall have a combined capital and surplus (in
the case of any banking institution) or a tangible net worth determined in
accordance with GAAP and excluding all intangible assets (in the case of any
other transferee or assignee) immediately prior to and following such transfer
of at least $75,000,000 (or the obligations of the Transferee shall be
guaranteed by an entity whose net worth at the time is at least $75,000,000
pursuant to a guarantee in form and substance reasonably satisfactory to the
Lessee and the Indenture Trustee or, if the Transferee is an Affiliate of the
Owner Participant, the Owner Participant shall remain liable under the Operative
Documents pursuant to an agreement in form and substance reasonably
satisfactory to the Lessee and the Indenture Trustee);
(b) no such transfer shall violate or shall result in a violation of
any provision of, or create a relationship which would be in violation of, any
applicable Governmental Rules, including, without limitation, applicable
securities laws or ERISA, any agreement to which the Owner Participant or the
Transferee is a party or by which it or any of its property is bound or any
Governmental Actions or result in a "prohibited transaction" under ERISA;
(c) the Lessee, the Owner Trustee and the Indenture Trustee shall
each have received a written agreement (substantially in the form of Exhibit E)
of the Transferee confirming that it has the requisite power and
84
<PAGE>
authority to enter into and to carry out the transactions contemplated hereby
and in each Operative Document to which the Owner Participant is or is to be a
party and that it shall be deemed a party to each of such Operative Documents
and shall agree to be bound by all the terms of, and to undertake all the
obligations of the transferor to be performed on or after the date of such
transfer contained in, each of such Operative Documents, and whereby such Trans
feree shall make representations and warranties reasonably requested by the
Lessee, the Owner Trustee and the Indenture Trustee not exceeding the scope of
the representations and warranties contained in Section 6; provided that with
--------
respect to the first sentence of Section 6.7 such Transferee delivers to the
Lessee, the Owner Trustee and the Indenture Trustee a written representation and
warranty (or an opinion of counsel reasonably satisfactory to the Lessee, the
Owner Trustee and the Indenture Trustee) that (1) such Transferee is not
-
acquiring any part of such interests with ERISA Plan Assets or (2) the transfer
-
to and ownership of such interest by such Transferee is and will continue to be
covered by Prohibited Transaction Class Exemption 95-60, 91-38 or 90-1;
(d) the transferring Owner Participant shall have provided thirty
(30) days' (ten (10) Business Days' in the case of a transfer to an Affiliate)
prior written notice of such transfer to the Owner Trustee, the Indenture
Trustee and the Lessee, which notice shall specify (i) such information and be
-
accompanied by evidence as shall be reasonably necessary to establish compliance
with this Section 13 and Section 12.7 of the Trust Agreement including, without
limitation, drafts of certificates, opinions and agreements required hereunder
or thereunder, and (ii) the name and address (for the purpose of giving notice
--
as contemplated by the Operative Documents) of the Transferee;
(e) the transferring Owner Participant shall pay or cause to be paid
all reasonable fees, out-of-pocket expenses, disbursements and costs (including,
without limitation, legal and other professional fees and expenses) incurred
by the Owner Trustee, the Holders, the Indenture Trustee, the Lessee or the
Guarantor in connection with any transfer pursuant to this Section 13;
85
<PAGE>
(f) the transferring Owner Participant or the Transferee shall have
delivered to the Owner Trustee and the Lessee and, if the Lien of the Indenture
shall then be in effect, the Indenture Trustee, an opinion of counsel in form
and substance reasonably satisfactory to each of them, as to the due
authorization, execution, delivery and enforceability of the agreement or
agreements referred to in clause (c), provided that no such opinion shall be
--------
required in the case of a transfer from Fleet National Bank to any of its
Affiliates (or from any such Affiliate to Fleet National Bank or any other such
Affiliate);
(g) [Intentionally Omitted];
(h) after giving effect to such transfer there shall be no more than
two Owner Participants;
(i) neither the Transferee nor any of its assets shall be the subject
of any bankruptcy, insolvency or other similar proceedings;
(j) unless the Lease has been declared in default pursuant to Section
16.1 and a Specified Lease Event of Default is continuing, the Transferee shall
not be any Person that is directly or through an Affiliate principally or as one
of its important activities engaged in the oil and gas or petrochemical business
or the production, refinement, development, distribution or sale of petroleum
products, by-products or derivatives (including, without limitation, paraxylene
and benzene) other than passive investment in such an entity; and
(k) no Indenture Default or Indenture Event of Default shall occur as
a result of such transfer.
13.3. Effect of Transfer. From and after any transfer effected by
------------------
the Owner Participant in accordance with this Section 13, the Owner Participant
making such transfer shall be released, to the extent of the obligations assumed
by the Transferee, from its liability hereunder and under the other Operative
Documents to which it is or is to be a party in respect of obligations to be
performed on or after the date of such transfer. Upon any transfer by the Owner
Participant in accordance with this Section 13, the Transferee shall be deemed
an "Owner Participant" for all purposes of the Operative Documents and each
reference herein to the Owner Participant making such transfer shall thereafter
be deemed a reference to such Transferee for all purposes, except as provided in
the preceding sentence.
86
<PAGE>
Section 14. Financing for Modifications. The Lessee shall give the
---------------------------
Owner Trustee, the Owner Participant and the Indenture Trustee any required
notice of a Modification (whether proposed, under construction or already in
service) to the Facility Assets for which it seeks financing from the Owner
Trustee pursuant to Section 11.6(b) of the Lease. Upon receipt of such notice,
the Owner Participant shall negotiate with the Lessee in good faith to
participate in the financing by the Lessor of the cost of such Modification
through an additional equity investment by the Owner Participant and the
issuance of Additional Notes under the Indenture, on terms and conditions
mutually acceptable to the Owner Participant and the Lessee; provided that the
--------
Owner Participant shall have no obligation to make such an equity investment.
If mutually acceptable terms and conditions for any such financing shall not
have been agreed to by the Owner Participant and the Lessee within forty-five
(45) days following receipt by the Owner Participant of the notice from the
Lessee referred to in the first sentence of this Section 14, the Owner
Participant agrees upon request of the Lessee to effect the financing of such
portion of such cost as the Lessee shall designate through the issuance and sale
by the Owner Trustee of Additional Notes, in accordance with and subject to the
conditions set forth in Section 2.08 of the Indenture (including, without
limitation, the condition that such Additional Notes may not rank senior in any
respect to the Initial Secured Notes, but may be subordinate to the Initial
Secured Notes or other Secured Notes issued under the Indenture), and subject to
the following conditions:
(a) after giving effect to the issuance of the Additional Notes, the
aggregate principal amount outstanding of all Secured Notes shall not exceed 85%
of the total Fair Market Sales Value of the Facility Assets at such time after
giving effect to such Modifications;
(b) such Additional Notes shall have a final maturity date not later
than the expiration of the Basic Lease Term or, if the Lessee shall have
irrevocably exercised an option to renew the Lease, the applicable Renewal Term;
(c) no Lease Event of Default or Indenture Event of Default shall
have occurred and be continuing as of the date of the issuance of the applicable
Additional Notes;
(d) the Owner Participant shall receive an opinion from tax counsel
that no unindemnified adverse tax
87
<PAGE>
consequences (taking into account any increased tax indemnity the Lessee may
offer to provide) shall result from such financing (for this purpose, in the
absence of a change in the Code or the Treasury Regulations, or a judicial
decision with respect thereto, after the Closing Date, the issuance of
Additional Notes shall not be treated as creating any adverse tax consequences
(i) under Section 168(d)(3) or 861 of the Code or the Treasury Regulations
-
thereunder or (ii) if, after giving effect to the issuance of such Additional
--
Notes, the Outstanding principal amount of all Secured Notes issued under the
Indenture does not exceed 85% of the sum of Lessor's Cost plus the cost of all
Modifications financed by the Owner Participant pursuant to this Section 14,
including those being financed by the issuance of such Additional Notes); and
(e) the aggregate amount of the Owner Participant's unadjusted
federal income tax bases in all Fourth-Quarter Modifications for which
financings are effected in any calendar year pursuant to this Section 14 shall
not, without the Owner Participant's prior written consent, exceed the sum of
the Owner Participant's unadjusted federal income tax bases in (i) the Self-
-
Sheltered Modifications financed in such calendar year pursuant to this Section
14 and (ii) the Notified Modifications financed in such calendar year pursuant
--
to this Section 14.
For purposes of clause (e) of the preceding sentence: "Fourth-Quarter
--------------
Modification" shall mean, with respect to any calendar year, any Modification
- ------------
with respect to which a financing has been or is to be effected during the last
three (3) months of such calendar year pursuant to this Section 14; "Notified
--------
Modifications" shall mean, for any calendar year, one or more Fourth-Quarter
- -------------
Modifications as to which (x) the aggregate amount of the Owner Participant's
-
unadjusted federal income tax bases does not exceed $30,000,000 and (y) the
-
Lessee shall have given notice to the Owner Participant prior to July 1 of such
calendar year that it may elect to utilize financing pursuant to this Section
14; and "Self-Sheltered Modifications" shall mean, for any calendar year, one or
----------------------------
more Fourth-Quarter Modifications (other than Modifications treated as
Notified Modifications) as to which the aggregate amount of the Owner
Participant's unadjusted federal income tax bases does not exceed 40% of the
Owner Participant's unadjusted federal income tax bases in all Modifications
(other than Modifications treated as Notified Modifications) financed pursuant
to this Section 14 in such calendar year.
88
<PAGE>
In connection with any Supplemental Financing, the Basic Rent
Percentages, Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages shall be adjusted in accordance with Section 4 of the Lease.
No Additional Notes may be issued other than at the request of the Lessee.
Section 15. Refunding of Secured Notes.
--------------------------
15.1. Refunding of Secured Notes. Upon compliance with the terms
--------------------------
and conditions of this Section 15, including, without limitation, the
satisfaction of the conditions set forth in Section 15.2 and, in the case of a
refunding or refinancing of less than all series of Secured Notes Outstanding,
in Section 3.05(b) of the Indenture, the Lessee shall have the right on not more
than three (3) occasions to cause the Owner Trustee and the Indenture Trustee
to, and the Owner Trustee and the Indenture Trustee shall, take such steps as
may be necessary to refund or refinance all or all of any series of the Secured
Notes then Outstanding (the "Refunded Secured Notes") through the issuance and
----------------------
sale in the public or private market of secured notes or, in the case of a
refunding or refinancing of less than all series of Secured Notes Outstanding,
one or more additional series of Secured Notes (in either such case, the
"Refunding Secured Notes"), in an aggregate principal amount which shall be
- ------------------------
equal to the unpaid principal amount of the Refunded Secured Notes, plus any
accrued and unpaid interest on the Refunded Secured Notes not paid by the Lessee
as contemplated in clause (e) of this Section 15.1, plus the amount of any
costs to be paid from the proceeds of such Refunding Secured Notes as permitted
by subsection (a) of this Section 15.1, provided that the proceeds of such
--------
issuance and sale shall be applied to the extent necessary to prepay or redeem
the principal amount of such Refunded Secured Notes and such refunding or
refinancing shall be subject to the following conditions:
(a) the reasonable costs and expenses of any such refunding or
refinancing (including, without limitation, any premium payable with
respect to the Refunded Secured Notes) shall be paid by the Lessee (or, if
the Owner Participant shall agree, the Owner Participant) or, at the
Lessee's option, subject to clause (b) below, be financed with the proceeds
of Refunding Secured Notes;
89
<PAGE>
(b) the aggregate principal amount of the Refunding Secured Notes
shall not exceed by more than 5% the then Outstanding principal amount of
the Refunded Secured Notes;
(c) if within twenty (20) days after the request by the Lessee to
effect the refunding or refinancing, the Owner Participant provides the
Lessee with a written opinion of independent tax counsel, selected by the
Owner Participant and satisfactory to the Lessee, identifying any
unindemnified and adverse tax consequences to the Owner Participant
resulting from the refinancing or refunding, the Lessee shall have agreed
to indemnify the Owner Participant against such adverse tax consequences in
a manner and in form and scope reasonably satisfactory to the Owner
Participant; provided, however, that, in the absence of a change in the
-------- -------
Code or the Treasury Regulations (other than with respect to the
alternative minimum tax) that is enacted or adopted after the Closing Date
that affects the Tax Pricing Assumptions set forth in Schedule 2, none of
the following shall be treated as causing an adverse tax consequence under
Section 861 of the Code or with respect to the status of the Lease as a
"true lease" for federal income tax purposes: (i) any refinancing or
-
refunding that complies with the provisions of this Section 15.1 and has a
term and average life not more than six (6) months longer than the term and
average life of the Refunded Secured Notes; (ii) a rental adjustment
--
reflecting such refunding or refinancing and/or (iii) the Lessee's right to
---
cause such a refinancing or refunding and related adjustment;
(d) the appropriate parties will enter into a note purchase or other
financing agreement providing for the issuance and sale by the Owner
Trustee or such other party as may be appropriate on the date specified in
such agreement (for the purposes of this Section 15.1, the "Refunding
---------
Date") of Refunding Secured Notes the proceeds of which shall be used to
repay, as contemplated by this Section 15, all of the Outstanding Refunded
Secured Notes on the Refunding Date;
(e) if the Refunding Date is a date during the Basic Lease Term that
is not a Basic Rent Payment Date, the Lessee and the Owner Trustee will
amend the Lease such that the Lessee shall on the Refunding Date prepay
that portion of the next succeeding installment of Basic Rent to the extent
necessary to pay the aggregate
90
<PAGE>
interest accrued on the Refunded Secured Notes not payable with the
proceeds of the Refunding Secured Notes;
(f) the identity of the Owner Participant shall not be disclosed in
offering materials used in any such refunding or refinancing pursuant to a
public offering;
(g) the Owner Trustee will enter into an agreement to provide for
the issuance and securing thereunder of the Refunding Secured Notes in like
manner as the Refunded Secured Notes and/or will enter into such amendments
and supplements to the Indenture as may be necessary to effect a refunding
or refinancing under this Section 15.1, which agreements, amendments and/or
supplements shall be reasonably satisfactory in form, scope and substance
to the Owner Participant and which, taken as a whole, shall not be less
favorable to the Owner Participant or the Owner Trustee than the terms and
conditions of the Refunded Secured Notes;
(h) the parties hereto shall execute and deliver such amendments to
the Operative Documents and such additional documents, certificates and
opinions as shall be reasonably requested by, and reasonably acceptable to,
the Lessee, the Owner Trustee, the Owner Participant and the Indenture
Trustee, including, but not limited to, such documents, financing
statements and opinions as are reasonably necessary to confirm that the
refunding or refinancing of all Secured Notes of the series as to which the
refunding or refinancing is occurring is being carried out; and
(i) the Refunding Secured Notes may not rank senior (but may rank
junior) in any respect to other Secured Notes Outstanding under the
Indenture and will be denominated in U.S. Dollars and have a maturity not
exceeding the Basic Lease Term or, if the Lessee shall have exercised an
option to renew the Lease, the applicable Renewal Term.
In connection with any such refunding or refinancing, the Basic Rent
Percentages, Stipulated Loss Value Percentages, Termination Value Percentages
and EBO Percentages shall be adjusted in accordance with Section 4 of the Lease.
The Secured Notes may not be refunded or refinanced other than at the request of
the Lessee.
91
<PAGE>
15.2. Notice. The Lessee shall give the other parties to this
------
Participation Agreement at least thirty (30) days' prior written notice of any
desired refunding or refinancing pursuant to Section 15.1, which notice shall
set forth to the extent practicable the proposed terms and conditions of such
refunding or refinancing, including the desired date therefor. The Lessee, the
Owner Trustee, the Owner Participant and, as necessary, the Indenture Trustee
and the Loan Participant, shall consult thereafter on the good faith negotiation
of such terms and conditions to the end that, subject to the terms and
conditions of this Section 15, the final terms and conditions of such refunding
shall be agreed to among the parties thereto in due course thereafter. The
Lessee will provide notice promptly to such Persons in the event that it
determines not to proceed with such proposed refunding or refinancing pursuant
to Section 15.1.
Section 16. Beneficial Interest Purchase Option.
-----------------------------------
16.1. Option to Purchase. In the event and at the time that the
------------------
Lessee has the right to purchase the Facility pursuant to Section 6.1 or
7.3(a)(i) of the Lease, the Lessee, in lieu of exercising such right, may elect
to purchase or cause a designee of the Lessee to purchase the right, title and
interest of the Owner Participant in and to the Trust Estate (the "Beneficial
----------
Interest") at a purchase price equal to the excess of (i) the applicable
- -------- -
purchase price payable under Section 6.1 or 7.3(a)(i), as the case may be (and
payable, in the case of the EBO Purchase Price, in installments at the same
times and subject to the same conditions that the EBO Purchase Price may be paid
in installments under Section 6.2(f) of the Lease), over (ii) the Outstanding
--
principal and accrued interest on the Secured Notes as of the applicable
purchase date (after giving effect to the payment of all amounts required to be
paid by the Lessee pursuant to Section 16.2(b)) (the "Beneficial Interest
--------------------
Purchase Price"). It is intended among the parties hereto that the purchase of
- --------------
the Beneficial Interest by the Lessee or any Affiliate thereof shall not effect
a merger of the Lessee's interest, as lessee, in the Lease and the beneficial
interest in the Trust Estate to be purchased by the Lessee or any such
Affiliate.
16.2. Notice of Election; Manner of Purchase; Transfer After
--------------------------------------- --------------
Purchase. (a) In order to exercise the right to purchase the Beneficial
Interest pursuant to Section 16.1, the Lessee shall notify the Owner
Participant irrevocably in writing no later than thirty (30) days prior
92
<PAGE>
to the applicable purchase date under Section 6.1 of the Lease or applicable
Termination Date under Section 7.3(a) of the Lease that it desires to purchase,
or cause such designee to purchase, the Beneficial Interest, in which case the
purchase of the Facility pursuant to Section 6.1 or 7.3 of the Lease shall not
occur.
(b) On the date of purchase, upon receipt by the Owner Participant of
the Beneficial Interest Purchase Price, and an amount equal to that portion of
all Basic Rent due on or prior to such date of purchase that would be
distributable to the Owner Participant under the Indenture (but excluding any
Basic Rent payable in advance on such date of purchase) and all Supplemental
Rent due by the Lessee to or distributable to the Owner Participant to and
including such date of purchase (without giving effect to any applicable grace
periods), the Owner Participant shall transfer the Beneficial Interest free and
clear of all Liens to the Lessee or its designee pursuant to an instrument of
conveyance in form and substance reasonably satisfactory to the Lessee or its
designee, and shall provide to the Lessee or such designee such other
instruments, documents and opinions as the Lessee may reasonably request to
evidence the valid consummation of such transfer.
(c) Each of the Participants, the Owner Trustee and the Indenture
Trustee, at the cost and expense of the Lessee, will cause to be promptly and
duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as the Lessee reasonably may request in order to carry
out the intent and purposes of this Section 16 and the transactions contemplated
hereby.
(d) As a condition to exercise of the right to purchase the
Beneficial Interest pursuant to Section 16.1 (unless the Lessee shall assume the
obligations of the Owner Trustee pursuant to the next sentence), on the date of
purchase, the Lessee shall have provided to the Indenture Trustee an opinion of
counsel for the Lessee or its designee (which may, in each case, be internal
counsel), dated the date of purchase, which, subject to usual or customary
exceptions, shall be to the effect that, upon consummation of such purchase,
this Participation Agreement and the Trust Agreement constitute the legal, valid
and binding obligations of the Lessee or such designee, enforceable against the
Lessee or such designee, in accordance with their respective terms except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
93
<PAGE>
generally and by general principles of equity. In the event the Lessee or such
designee is unable to provide such opinion, concurrently with the purchase of
the Beneficial Interest, (i) the Lessee or such designee may assume the
-
obligations of the Owner Trustee under the Secured Notes and under the Indenture
in accordance with and with the effect provided in Section 3.04 of the Indenture
and Section 11.6 hereof, and upon such assumption the Lessee or such designee
shall have the right to terminate the Trust Agreement or (ii) the Lessee may
--
revoke its purchase, election or other notice under the Lease, in which event
the Lease shall continue as set forth therein.
Section 17. Miscellaneous.
-------------
17.1. Survival. All agreements, representations, warranties and
--------
indemnities contained in this Participation Agreement and the other Operative
Documents and in any agreement, document or certificate delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive and
continue in effect following the execution and delivery of this Participation
Agreement and the other Operative Documents and the participation by the Owner
Participant and the Loan Participant in the payment of Lessor's Cost
contemplated hereby and by the other Operative Documents and the termination or
expiration of the Lease.
17.2. Binding Effect. All agreements, representations, warranties
--------------
and indemnities in this Participation Agreement and the other Operative
Documents and in any agreement, document or certificate delivered pursuant
hereto or thereto or in connection herewith or therewith shall bind the Person
making the same and its successors and assigns, and shall inure to the benefit
of, the Guarantor, each Person for whom made and their respective successors and
permitted assigns.
17.3. Notices. All communications, notices and consents provided for
-------
in this Participation Agreement shall be in writing and shall be given in person
or by courier or by means of telecopy or other wire transmission (with request
for assurance of receipt in a manner typical with respect to communications of
that type), or mailed by registered or certified first class mail, return
receipt requested, or overnight courier, addressed as set forth in Schedule 1 or
at such other address as any such Person may from time to time designate by
notice duly given in accordance with the provisions of this Section 17.3 to the
other parties hereto. All such communications, notices and
94
<PAGE>
consents given in such manner shall be deemed given when received in accordance
with this Section 17.3 (or when proffered to a Person if receipt is refused).
17.4. Counterpart Execution. This Participation Agreement may be
---------------------
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
17.5. GOVERNING LAW. THIS PARTICIPATION AGREEMENT HAS BEEN DELIVERED
-------------
IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
17.6. Amendments, Supplements, Etc. (a) Neither this Participation
----------------------------
Agreement nor any of the terms hereof may be amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the party
against which enforcement of such change is sought.
(b) Prior to the Lease Termination Date, neither the Trust Agreement
nor the Indenture may be amended, waived, supplemented or modified to permit any
action contrary to, or disturb the Lessee's rights under, the Lease, or
otherwise adversely affect the Lessee's rights, or increase the Lessee's
obligations or liabilities, under any Operative Document without the consent of
the Lessee.
17.7. Headings; Table of Contents. The division of this
---------------------------
Participation Agreement into Sections, subsections and paragraphs, the provision
of a table of contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof.
17.8. Severability of Provisions. Any provision of this
--------------------------
Participation Agreement which may be determined by competent authority to be
invalid or unenforceable in such jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable any remaining terms and provisions
hereof, and any such invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
juris-
95
<PAGE>
diction. The parties shall negotiate in good faith to replace such provision
with an appropriate legal provision. To the extent permitted by applicable law,
the parties hereto hereby waive any provision thereof that renders
any term or provision hereof invalid or unenforceable in any respect.
17.9 Entire Agreement. This Participation Agreement (including the
----------------
schedules and exhibits hereto), the other Operative Documents and the Pass
Through Trust Documents, and all certificates, instruments and other documents
relating thereto delivered and to be delivered from time to time pursuant to the
Operative Documents, supersede any and all representations, warranties and
agreements (other than any Operative Document) prior to the date of this
Participation Agreement, written or oral, between or among any of the parties
hereto relating to the transactions contemplated hereby and thereby.
17.10 Limitation of Liability of Owner Trustee, Indenture Trustee
-----------------------------------------------------------
and Pass Through Trustee. (a) It is expressly understood and agreed by and
- ------------------------ -
among all of the parties hereto that, except as otherwise expressly provided
herein or in any other Operative Document (other than the Trust Agreement), (i)
-
this Participation Agreement is executed and delivered by the Owner Trustee not
in its individual capacity but solely as trustee under the Trust Agreement in
the exercise of the power and authority conferred and vested in it as Owner
Trustee; (ii) certain of the representations, undertakings and agreements made
--
herein by the Owner Trustee are not personal representations, undertakings and
agreements, but are binding only on the Trust Estate and the Owner Trustee, as
trustee; (iii) except as set forth in the proviso to this sentence, nothing
---
herein contained shall be construed as creating any liability of the Trust
Company or any incorporator or any past, present or future subscriber to the
capital stock of, or stockholder, officer or director of the Trust Company to
perform any covenant, whether express or implied, contained herein, all such
liability, if any, being expressly waived by each of the other parties hereto
and by any Person claiming by, through or under any such party; and (iv) so far
--
as the Owner Trustee is concerned, each of the other parties hereto and any
Person claiming by, through or under any such party shall (other than with
respect to Claims arising from the willful misconduct or gross negligence of the
Owner Trustee or the failure of the Owner Trustee to distribute funds in
accordance with the terms of the Operative Documents) look solely to the Trust
Estate and the
96
<PAGE>
Indenture Estate for the performance of an obligation under any of the
instruments referred to herein; provided, however, that notwithstanding anything
-------- -------
in this Section 17.10 to the contrary, the Trust Company shall be liable (A) in
-
its individual capacity and as Owner Trustee to the Owner Participant as
expressly set forth in the Trust Agreement; (B) in its individual capacity, in
-
respect of its representations, warranties and agreements made in its individual
capacity as expressly set forth herein (including, without limitation, Sections
8 and 11) or in any other Operative Document to which it is a party or in any
Officer's Certificate of the Trust Company, delivered pursuant hereto and (C) in
-
its individual capacity for the consequences of its gross negligence and willful
misconduct and its failure to distribute funds in accordance with the terms of
the Operative Documents (including, without limitation, willful breach of
contract) with respect to any Owner Trustee Document or Operative Document to
which it is a party and for the matters described in clauses (i) through (v) of
the last sentence of Section 7.1 of the Trust Agreement.
(b) It is expressly understood and agreed by and among all of the
parties hereto that, except as otherwise expressly provided herein or in any
other Operative Document (including, without limitation, subsection (c) of this
Section 17.10), (i) this Participation Agreement is executed and delivered by
-
State Street Bank and Trust Company, not in its individual capacity but solely
as trustee under the Indenture, in the exercise of the power and authority
conferred and vested in it as Indenture Trustee; (ii) certain of the
--
representations, undertakings and agreements made herein by the Indenture
Trustee are not personal representations, undertakings and agreements, but are
binding only on the Indenture Trustee, as trustee; (iii) except as set forth in
---
the proviso to this sentence, nothing herein contained shall be construed as
creating any liability of State Street Bank and Trust Company or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director of, State Street Bank and Trust Company to
perform any covenant, whether express or implied, contained herein, all such
liability, if any, being expressly waived by each of the other parties hereto
and by any Person claiming by, through or under any such party; and (iv) so far
--
as the Indenture Trustee is concerned, each of the other parties hereto and any
Person claiming by, through or under any such party shall (other than with
respect to Claims arising from the willful misconduct or gross negligence of the
Indenture
97
<PAGE>
Trustee and for failure of the Indenture Trustee to distribute funds in
accordance with the terms of the Operative Documents) look solely to the
Indenture Trustee, as trustee, for the performance of any obligation under any
of the instruments referred to herein; provided, however, that notwithstanding
-------- -------
anything in this Section 17.10 to the contrary, State Street Bank and Trust
Company shall be liable (A) in its individual capacity, in respect of its
-
representations, warranties and agreements made in its individual capacity as
expressly set forth herein (including, without limitation, in Sections 9 and 11)
or in any other Operative Document to which it is a party or in any Officer's
Certificate of State Street Bank and Trust Company, made in its individual
capacity delivered pursuant hereto and (B) in its individual capacity for the
-
consequences of its gross negligence or willful misconduct and for its failure
to use ordinary care to disburse funds in accordance with any Operative Document
to which it is a party.
(c) It is expressly understood and agreed by and among all of the
parties hereto that, except as otherwise expressly provided herein (including,
without limitation, subsection (b) of this Section 17.10), or in the Pass
Through Trust Documents, (i) this Participation Agreement is executed and
-
delivered by State Street Bank and Trust Company, not in its individual capacity
but solely as trustee under the Pass Through Trust Document, in the exercise of
the power and authority conferred and vested in it as the Pass Through Trustee,
(ii) certain of the representations, undertakings and agreements made herein by
--
the Pass Through Trustee are not personal representations, undertakings and
agreements, but are binding only on the Pass Through Trustee, as trustee, (iii)
---
except as set forth in the proviso to this sentence, nothing herein contained
shall be construed as creating any liability of State Street Bank and Trust
Company, or any incorporator or any past, present or future subscriber to the
capital stock of, or stockholder, officer or director of, State Street Bank and
Trust Company, to perform any covenant, whether express or implied, contained
herein, all such liability, if any, being expressly waived by each of the other
parties hereto and by any Person claiming by, through or under any such party;
and (iv) so far as the Pass Through Trustee is concerned, each of the other
--
parties hereto and any Person claiming by, through or under any such party shall
(other than with respect to Claims arising from the willful misconduct or
negligence of the Pass Through Trustee and for its failure to distribute funds
in accordance with the terms of the Pass
98
<PAGE>
Through Trust Documents) look solely to the Pass Through Trustee, as trustee,
for the performance of any obligation under any of the instruments referred to
herein; provided, however, that notwithstanding anything in this Section 17.10
-------- -------
to the contrary, State Street Bank and Trust Company shall be liable (A) in its
-
individual capacity, in respect of the representations, warranties and
agreements of the Pass Through Trustee made in its individual capacity as
expressly set forth herein (including, without limitation, in Sections 7 and 11)
or in any Officer's Certificate made in its individual capacity and delivered
pursuant hereto, (B) in its individual capacity to the Guarantor and the Lessee,
-
in respect of the representations, warranties and agreements in the Pass Through
Trust Documents or in any Officer's Certificate made in its individual capacity
and delivered pursuant thereto and (C) in its individual capacity for the
-
consequences of its own negligence or willful misconduct and for its failure to
use ordinary care to disburse funds in accordance with the Pass Through Trust
Documents.
17.11. Jurisdiction; Service of Process. Any legal action or
--------------------------------
proceeding with respect to this Participation Agreement or any other Operative
Document to which any party hereto is a signatory or against any such party or
against the Indenture Estate or Trust Estate may be brought, at the option of
any such party, in any of the courts in the State of New York or the Federal
courts of the United States of America located in the City of New York, and each
party hereto hereby unconditionally accepts the nonexclusive jurisdiction of the
aforesaid courts. To the extent permitted by applicable law, each party hereto
irrevocably waives any objection it may now or hereafter have to the laying of
venue of any such action or proceeding in any of the aforesaid courts and any
claim it may now or hereafter have that any such action or proceeding has been
brought in an inconvenient forum. To the extent permitted by applicable law,
each party hereto further irrevocably consents to the service of process out of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail to such party's address for
notices specified herein. Nothing herein shall affect the right to serve
process in any other manner permitted by law.
17.12. Instructions. By their respective execution and delivery of
------------
this Participation Agreement, each of the Owner Participant and the Pass Through
Trustee hereby instructs the Owner Trustee and the Indenture Trustee to execute
and deliver this Participation Agreement.
99
<PAGE>
17.13. Rule Against Perpetuities. The parties hereto do not intend
-------------------------
any interest created by this Participation Agreement or any Operative Document
to be a perpetuity or to be subject to invalidation under any applicable
perpetuities rule; however, if the rule is to be applied, then the perpetuities
-------
period shall be twenty-one (21) years after the last to die of the currently
living great-grandchildren and/or grandchildren and/or children of former United
States President George H.W. Bush.
100
<PAGE>
IN WITNESS WHEREOF, the parties hereto have each caused this
Participation Agreement to be duly executed as of the date first above written.
MOBIL CHEMICAL FINANCE (TEXAS) INC.
By:_____________________________________
Name:
Title:
FLEET NATIONAL BANK
By:_____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its individual
capacity, except as provided herein, but solely as
Owner Trustee
By:_____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, not in its
individual ca pacity, except as provided herein, but
solely as Indenture Trustee
By:_____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity, except as provided herein, but
solely as Pass Through Trustee
By:_____________________________________
Name:
Title:
101
<PAGE>
Schedule 1 to the
Participation Agreement
ADDRESSES FOR NOTICES AND PAYMENTS
----------------------------------
LESSEE
Address: Mobil Chemical Finance (Texas) Inc.
c/o Mobil Oil Corporation
3225 Gallows Road
Fairfax, Virginia 22037-0001
Attention: Treasury
Telephone: (703) 846-3000
Telecopier: (703) 846-1407
with a copy to:
Mobil Corporation
3225 Gallows Road
Fairfax, Virginia 22037-0001
Attention: Treasurer
Payments: Citibank, New York for Credit to Mobil Corporation
Account No. 3901-9788 for attention of Mary Lou Potenza
Citibank ABA 021000089
OWNER PARTICIPANT
Address: Fleet National Bank c/o Fleet Capital Corporation
Attn: General Counsel for Fleet Capital Corporation
50 Kennedy Plaza, 5th Floor
Providence, RI 02903-2305
Payments: Fleet Bank
ABA#:011500010
Acct. Name: Fleet Capital Leasing
Acct. #015-5527767
Attn: 1997 Leveraged ease-Mobil
OWNER TRUSTEE
Address: Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-0001
Attention: Corporate Trust
Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
Payments: Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust
Administration/Charlotte Peglia
REF: Mobil/Acct. No. 41725-0
Phone:(302) 651-1000
Fax:(302) 651-8882
102
<PAGE>
PASS THROUGH TRUSTEE
Address: US MAIL:
State Street Bank and Trust Company
PO Box 778; Fourth Floor
Corporate Trust Department
Boston, Massachusetts 02102
Attention: Ruth A. Smith
Telephone: (617) 664-5340
Telecopier: (617) 664-5371
COURIER OR OVERNIGHT MAIL:
State Street Bank and Trust Company
2 International Place, Fourth Floor
Corporate Trust Department
Boston, Massachusetts 02110
Attention: Ruth A. Smith
Payments: State Street Bank and Trust Company
Boston, Massachusetts
ABA #011-0000-28
A/C #9900-314-7
Ref: Mobil Corporation Pass
Through Trust 1997A
Attention: Christy O'Connor
INDENTURE TRUSTEE
Address: US MAIL:
State Street Bank and Trust Company
PO Box 778; Fourth Floor
Corporate Trust Department
Boston, Massachusetts 02102
Attention: Ruth A. Smith
Telephone: (617) 664-5340
Telecopier: (617) 664-5371
COURIER OR OVERNIGHT MAIL:
State Street Bank and Trust Company
2 International Place, Fourth Floor
Corporate Trust Department
Boston, Massachusetts 02110
Attention: Ruth A. Smith
Payments: State Street Bank and Trust Company
Boston, Massachusetts
ABA #011-0000-28
A/C #9900-314-7
Ref: Mobil Corporation Pass
Through Trust 1997A
Attention: Christy O'Connor
103
<PAGE>
Schedule 2 to the
Participation Agreement
PRICING ASSUMPTIONS
</TABLE>
<TABLE>
<CAPTION>
Non-tax Pricing Assumptions
- ---------------------------
<S> <C>
Closing Date: May 28, 1997
Basic Lease Term: Twenty years
Transaction Expenses Paid
by the Owner Participant: $1,311,000
Debt Rate: 7.29%
Initial EBO Date: July 2, 2002
Lessor's Cost: $138,000,000
Second EBO Date: July 2, 2008
Debt Percentage: 69.0804378
</TABLE>
Tax Pricing Assumptions
- -----------------------
The tax assumptions set forth in Section 2 of the Tax
Indemnity Agreement.
104
<PAGE>
Schedule 3 to the
Participation Agreement
FILINGS AND RECORDINGS
----------------------
1. Memorandum of Ground Lease filed in the real property records of Jefferson
County, Texas.
2. Conveyancing Instrument filed in the real property records of Jefferson
County, Texas.
3. Memorandum of Lease filed in the real property records of Jefferson County,
Texas.
4. Indenture filed in the real property records of Jefferson County, Texas.
5. Precautionary UCC-1 Financing Statements with regard to Lease filed with:
5.1. Secretary of State of Texas;
5.2. State Corporation Commission of Virginia;
5.3. County Clerk's Office of Fairfax County, Virginia; and
5.4. Real property records of Jefferson County, Texas.
6. UCC-1 Financing Statement with regard to Indenture filed with:
6.1. Secretary of State of Texas;
6.2. Secretary of State of Delaware; and
6.3. Real property records of Jefferson County, Texas.
105
<PAGE>
EXHIBIT 4.8
GUARANTY
--------
MOBIL CORPORATION
THIS GUARANTY, dated as of May 28, 1997 (together with any
amendments or supplements hereto, this "Guaranty"), by and among MOBIL
--------
CORPORATION, a Delaware corporation (together with any successor permitted by
Section 4.1 hereof, the "Guarantor"), and WILMINGTON TRUST COMPANY, both in
---------
its individual capacity and as Owner Trustee, the Indenture Trustee, both in its
individual capacity and as Indenture Trustee, the Pass Through Trustee, in its
individual capacity and as Pass Through Trustee under the Pass Through Trust
Documents and as Loan Participant, the Certificateholders from time to time, and
the Owner Participant referred to in the Participation Agreement described below
(collectively, together with each other Indemnitee and their successors and
permitted assigns, the "Beneficiaries" and, individually, a "Beneficiary").
------------- -----------
W I T N E S S E T H:
- - - - - - - - - -
A. Mobil Chemical Finance (Texas) Inc., a Delaware corporation, and
wholly-owned subsidiary of the Guarantor (together with its successors and
permitted assigns as further defined in Appendix A to the Participation
Agreement, the "Lessee"), is entering into that certain Participation Agreement
------
dated as of May 28, 1997 (the "Participation Agreement"), among the Lessee,
------------- ---------
Fleet National Bank, as Owner Participant, Wilmington Trust Company, not in its
individual capacity except to the extent expressly set forth therein but solely
as Owner Trustee, State Street Bank and Trust Company not in its individual
capacity except to the extent expressly set forth therein but solely as
Indenture Trustee and State Street Bank and Trust Company acting not in its
individual capacity except as expressly provided therein, but solely as Pass
Through Trustee and as Loan Participant.
B. It is a condition precedent to the obligations of the
Beneficiaries to consummate the transactions contemplated by the Participation
Agreement that the Guarantor execute and deliver this Guaranty.
Accordingly, in consideration of the premises and of other good and
valuable consideration, the Guarantor does hereby covenant and agree with the
Beneficiaries from and after the execution and delivery of the Participation
Agree-
<PAGE>
ment as follows (capitalized terms used herein (including those used in
the foregoing preamble and recitals) and not otherwise defined herein having the
meanings ascribed to them in Appendix A to the Participation Agreement):
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
Section 1.1. Representations and Warranties of Guarantor. The
-------------------------------------------
Guarantor hereby represents and warrants that:
(1) The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has the
corporate power and authority to carry on its business as presently
conducted, to own or hold under lease its properties and to enter into and
perform its obligations under this Guaranty, and is duly qualified to do
business in each jurisdiction in which it has operations or a principal
office and where failure to so qualify could reasonably be expected to
materially adversely affect its consolidated financial condition, business
or operations, or its ability to perform any of its obligations under this
Guaranty.
(2) The execution, delivery and performance by the Guarantor of this
Guaranty and the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Guarantor.
(3) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with the terms
hereof, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation, moratorium or similar
laws affecting creditors' or lessors' rights generally and by the
application of general equitable principles which may limit the
availability of certain remedies.
(4) The execution and delivery by the Guarantor of this Guaranty do
not and will not, and the performance by the Guarantor of its obligations
hereunder does not and will not, (i) violate or be inconsistent with its
-
charter documents or by-laws; (ii) contravene
--
2
<PAGE>
any Governmental Rule or Governmental Action applicable to it (except that
no representation or warranty is made herein with respect to the Securities
Act, the Trust Indenture Act and the securities or Blue Sky laws of the
various states); (iii) contravene any provision of, or constitute a default
---
under, any indenture, mortgage, contract or other instrument to which the
Guarantor is a party or by which it or any of its properties are bound or
(iv) result in or require the creation or imposition of any Lien (other
---
than Permitted Liens) upon any of its properties or assets.
(5) No Governmental Action and no consent of any other Person
(including, without limitation, any stockholder or creditor of the
Guarantor) is required in connection with the execution, delivery or
performance of this Guaranty, except such as are required under the
Securities Act, the Trust Indenture Act and the securities or Blue Sky
laws of the various states.
(6) The consolidated financial statements of the Guarantor set forth
in its Annual Report on Form 10-K for the year ended December 31, 1996 and
the consolidated financial statements of the Guarantor set forth in its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 fairly
present the consolidated financial position of the Guarantor and its
Subsidiaries as at the date thereof and the consolidated results of
operations and changes in financial position of the Guarantor and its
Subsidiaries for each of the periods covered thereby (subject, in the case
of any unaudited interim financial statements, to changes resulting from
normal year-end adjustments) in conformity with GAAP applied on a
consistent basis (except as disclosed in the notes thereto). Since March
31, 1997, there has been no material adverse change in such consolidated
financial position of the Guarantor and its Subsidiaries, taken as a whole.
(7) Except as disclosed in the Guarantor's Annual Report on Form 10-K
for the year ended December 31, 1996, the Guarantor's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 or the Guarantor's current
reports on Form 8-K, there is no action, suit, investigation or proceeding
pending or, to the Actual Knowledge of the Guarantor threatened in writing
against the Guarantor or its properties before any Governmental Authority
which, individually or in the aggregate (so far as the Guarantor now can
reasonably
3
<PAGE>
foresee), is reasonably likely materially and adversely to affect the
consummation of the transactions under this Guaranty or the ability of the
Guarantor to perform its obligations hereunder or its business or
financial condition.
(8) The Guarantor owns, directly or indirectly, 100% of the equity
interest in the Lessee.
(9) The representations and warranties of the Lessee in Section 5 of
the Participation Agreement are true and correct.
ARTICLE II
GUARANTEE OF OBLIGATIONS
Section 2.1. Guarantee of Obligations. (a) The Guarantor hereby
------------------------
guarantees to each of the Beneficiaries, as primary obligor and not as surety,
the full and prompt payment by the Lessee, when due, whether at the stated
payment date thereof, by acceleration or otherwise, of, and the faithful
performance of and compliance with, all payment obligations of the Lessee under
the Participation Agreement, the Lease and the other Operative Documents owed to
the Beneficiaries strictly in accordance with the terms thereof, however
created, arising or evidenced, whether direct or indirect, primary or secondary,
absolute or contingent, joint or several, and whether now or hereafter existing
or due or to become due and the full, faithful and timely performance of, and
compliance with, all other obligations of the Lessee owed to the Beneficiaries
thereunder strictly in accordance with the terms thereof, however created,
arising or evidenced, whether direct or indirect, primary or secondary, absolute
or contingent, joint or several, and whether now or hereafter existing or due or
to become due (such payment and other obligations, the "Obligations"). Such
-----------
guarantee is an absolute, unconditional, irrevocable, present and continuing
guarantee of payment and performance and not of collectability.
(b) If for any reason any Obligation to be performed or observed by
the Lessee (whether affirmative or negative in character) shall not be observed
or performed or paid strictly in accordance with the terms thereof, the
Guarantor shall, no later than fifteen (15) Business Days following the
Guarantor's receipt of written notice by the relevant Beneficiary of such non-
observance, non-performance or non-payment, and no earlier than five (5)
Business Days
4
<PAGE>
following the Guarantor's receipt of such a notice in the case of non-payment of
Basic Rent, perform or observe or cause to be performed or observed each such
Obligation or shall pay the amount of each such unpaid Obligation at the place
and to the Person or entity entitled thereto pursuant to the relevant Operative
Documents, as the case may be, regardless of whether or not any Beneficiary or
anyone on behalf of any of them shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to enforce any rights
against the Lessee or any other Person or entity to compel any such performance
or observance or to collect all or any part of such amount pursuant to the
provisions of the relevant Operative Documents, as the case may be, or at law or
in equity, or otherwise, and regardless of any other condition or contingency;
provided that notwithstanding the foregoing no notice shall be required if the
Guarantor is subject to any bankruptcy or similar proceeding. Nothing in this
Guaranty shall be construed to be a guarantee of payment of the Secured Notes.
Section 2.2. Nature of Guarantee. The obligations, covenants,
-------------------
agreements and duties of the Guarantor hereunder shall remain in full force and
effect and enforceable until the Obligations are finally, indefeasibly and
unconditionally paid and performed in full in accordance with the terms of the
Operative Documents and, to the maximum extent permitted by law, shall in no
way be affected or impaired by reason of the happening from time to time of any
other event, including, without limitation, the following, whether or not any
such event shall have occurred without notice to or the consent of the
Guarantor:
(a) the waiver, compromise, settlement, termination or other release
of the performance or observance by the Guarantor or the Lessee of any or
all of their respective agreements, covenants, terms or conditions
contained in this Guaranty (other than Section 2.1 hereof), the
Participation Agreement, the Lease or the other Operative Documents;
(b) any failure, omission, delay or lack on the part of the
Beneficiaries to enforce, assert or exercise any right, power or remedy
conferred on the Beneficiaries in the Participation Agreement, the Lease,
the other Operative Documents or this Guaranty in accordance with its terms
or the inability of the Beneficiaries to enforce any provision of the
Participation Agreement, the Lease, the other Operative
5
<PAGE>
Documents or this Guaranty for any reason, or any other act or omission on
the part of the Beneficiaries;
(c) the transfer, assignment or mortgaging, or the purported transfer,
assignment or mortgaging, of all or any part of the interest of the Lessee
in the Facility or the invalidity, unenforceability or termination for
any reason whatsoever of the Participation Agreement, the Lease or any
other Operative Document or any term, condition, provision of any thereof
or any remedy thereunder or any defect in the title of the Facility or any
part thereof or any loss of possession, use or operational control of the
Facility or any part thereof by the Lessee;
(d) the modification or amendment (whether material or otherwise) of
any obligation, covenant or agreement set forth in the Participation
Agreement, the Lease or any other Operative Document;
(e) the voluntary or involuntary liquidation, dissolution, sale of all
or substantially all of the assets, marshalling of assets and liabilities,
receivership, conservatorship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceedings affecting the Lessee or any
of its assets or any allegation or contest of the validity of the Guaranty,
the Participation Agreement, the Lease or any other Operative Document in
any such proceeding;
(f) the surrender or impairment of any security for the performance or
observance of any of the Obligations;
(g) any failure of the Guarantor or the Lessee or any other Person to
perform and observe any agreement or covenant, or to discharge any duty or
obligation, arising out of or connected with this Guaranty, the
Participation Agreement, the Lease or any other Operative Document or the
occurrence or pendency of any Lease Default or Lease Event of Default or
any proceedings or actions as a result of, or attendant upon, such Lease
Default or Lease Event of Default;
(h) the inability of the Guarantor, the Beneficiaries or the Lessee
or any other Person to enforce any provision of this Guaranty, the
Participation
6
<PAGE>
Agreement, the Lease or any other Operative Document for any reason;
(i) the failure to give notice to the Guarantor or the Lessee of the
occurrence of an event of default under the terms and provisions of the
Participation Agreement, the Lease or the other Operative Documents;
(j) the disposition by the Guarantor of any or all of its interest in
any capital stock of the Lessee or any change, restructuring or termination
of the corporate structure, ownership or existence of the Lessee;
(k) any set-off, counterclaim, reduction, or diminution of any
Obligation, or any defense of any kind or nature whatsoever (other than
performance), which the Guarantor or the Lessee may have or assert against
the Beneficiaries; or
(l) any other circumstance (other than performance) that might
otherwise constitute a legal or equitable defense or discharge of the
Guarantor under this Guaranty or of a guarantor or surety with respect to
any Obligation.
Section 2.3. Waivers by Guarantor. The Guarantor waives notice of
--------------------
the acceptance of and reliance on this Guaranty by the Beneficiaries, and the
Guarantor also waives presentment, demand for payment, protest and notice of
nonpayment or dishonor and all other notices and demands whatsoever, except that
the Guarantor does not waive the notices provided for in Section 2.1(b) hereof.
The Guarantor waives any and all right to assert any set-off, counterclaim,
reduction, or diminution of any Obligation, or any defense of any kind or nature
whatsoever (other than performance), which the Guarantor or the Lessee may
have or assert against the Beneficiaries. The Guarantor further waives any
right it may have to (a) require the Beneficiaries to proceed against the
-
Lessee, (b) require the Beneficiaries to proceed against or exhaust any security
-
granted by the Lessee or the Owner Trustee or (c) require the Beneficiaries to
-
pursue any other remedy within the power of the Beneficiaries, and the Guarantor
agrees that all of its obligations under this Guaranty are independent of the
Obligations and that a separate action may be brought against the Guarantor
whether or not an action is commenced against the Lessee under the Operative
Documents.
7
<PAGE>
Section 2.4. Subrogation of Guarantor; Subordination.
---------------------------------------
Notwithstanding any payment or payments made by the Guarantor, the Guarantor
shall not be subrogated to any rights of the Beneficiaries against the Lessee
until all of the Obligations then due shall have been finally, indefeasibly
and unconditionally paid and performed in full. Any claim of the Guarantor
against the Lessee arising from payments made by the Guarantor by reason of this
Guaranty shall be in all respects subordinated to the final, indefeasible,
unconditional, full and complete payment or discharge of all of the Obligations
guaranteed hereby, and no payment by the Guarantor shall give rise to any claim
of the Guarantor against the Beneficiaries.
Section 2.5. Reinstatement. This Guaranty shall continue to be
-------------
effective, or be automatically reinstated, as the case may be, if at any time
payment, or any part thereof, made by or on behalf of the Lessee or the
Guarantor of any of the Obligations is rescinded or must otherwise be restored
or returned by any Beneficiary for any reason whatsoever, whether upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Lessee or Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, either of the
Lessee or the Guarantor or the Operator or any substantial part of its property,
or otherwise, all as though such payments had not been made.
Section 2.6. Place and Manner of Payments. All payments to be made
----------------------------
by the Guarantor under this Guaranty to a Beneficiary shall be paid to such
Beneficiary at the address provided for in Schedule 1 of the Participation
Agreement or, if no address, at the address and to the account specified in the
notice demanding payment by the Guarantor; provided, however, that the Guarantor
-------- -------
consents to the assignment by the Owner Trustee to the Indenture Trustee of the
Owner Trustee's right, title and interest in, to and under this Guaranty to the
extent set forth in the Indenture and, notwithstanding anything herein to the
contrary, the Guarantor shall make all payments (other than Excepted Payments)
hereunder directly to the Indenture Trustee until such time as the Indenture
Trustee shall give notice to the Guarantor that the Lien of the Indenture has
been fully discharged, and thereafter to the Owner Trustee. The Guarantor
agrees that it will make all payments due hereunder by wire transfer at or
before 12:00 noon, New York time, on the date due in immediately available funds
to the party to which such payment is to be made.
8
<PAGE>
ARTICLE III
DEFAULT AND REMEDIES
Section 3.1. Enforcement Provisions. The Beneficiaries shall have
----------------------
the right, power and authority to do all things, including instituting or
appearing in any suit or proceeding, not inconsistent with the express
provisions of the Operative Documents or this Guaranty, which they may deem
necessary or advisable to enforce the provisions of this Guaranty and protect
the interests of the Beneficiaries. Each and every default in the payment or
performance of the Obligations shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.
Section 3.2. No Remedy Exclusive. No remedy conferred upon or
-------------------
reserved to the Beneficiaries herein or in the Operative Documents is intended
to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given under this Guaranty or now or hereafter existing at law or in equity.
Section 3.3. Right to Proceed Against Guarantor. In the event of a
----------------------------------
default in any payment or performance of any Obligation owed to any
Beneficiaries when and as the same shall become due, whether at the stated
maturity thereof, by acceleration or otherwise, such Beneficiaries may proceed
to enforce their respective rights hereunder and such Beneficiaries shall have
the right to proceed first and directly against the Guarantor under this
Guaranty without proceeding against any other Person or exhausting any other
remedies which they may have and without resorting to any collateral security
relating thereto. The provisions of Section 6.7 of the Pass Through Trust
Agreement and Section 5.11 of the Indenture shall apply to any actions proposed
to be commenced hereunder against the Guarantor by the Certificateholders or by
the Pass Through Trustee in its capacity as a Loan Participant.
Section 3.4. Guarantor to Pay Costs of Enforcement. The Guarantor
-------------------------------------
agrees to pay all costs, expenses and fees, including, without limitation, all
reasonable attorneys' fees, which may be incurred by the Beneficiaries in
enforcing or attempting to enforce this Guaranty or protecting the rights of the
Beneficiaries hereunder following any default on the part of the Guarantor
hereunder, whether the same shall be enforced by suit or otherwise.
9
<PAGE>
Section 3.5. No Waiver of Rights. No delay in exercising or omission
-------------------
to exercise any right or power accruing upon any default, omission or failure
of performance hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
ARTICLE IV
COVENANTS OF GUARANTOR
Section 4.1. Maintenance of Corporate Existence. So long as any of
----------------------------------
the Obligations remain outstanding or any amounts due and owing by the Lessee
with respect thereto remain unpaid, the Guarantor will maintain its corporate
existence and will not merge or consolidate with any other corporation nor
dissolve or otherwise sell or dispose of all or substantially all of its assets
as an entirety, unless the successor or transferee corporation (if other than
the Guarantor) shall expressly and unconditionally assume, in a written
instrument delivered to the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee, the punctual performance and observance of
all covenants, conditions and obligations of this Guaranty to be performed by
the Guarantor.
Section 4.2. Financial Statements. The Guarantor shall provide to
--------------------
the Owner Participant and the Indenture Trustee, within thirty (30) days after
the Guarantor is required to file the same with the Securities and Exchange
Commission (the "SEC") or any successor agency, a copy of each annual report and
---
any amendment to an annual report (currently Form 10-K), filed by the Guarantor
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as the same may be amended from time to time, and all financial statement
reports, notices, proxy statements or other documents that are sent or made
generally available by the Guarantor to holders of its registered securities
and all regular and periodic reports filed by the Guarantor with the SEC except
for reports on SEC Forms 3, 4 or 5 or any comparable reports.
Section 4.3. Support Agreement. The Guarantor will cause one or more
-----------------
of the Lessee's Affiliates to enter into the Support Agreements as required by
Section 10.9 of the Participation Agreement.
10
<PAGE>
ARTICLE V
GENERAL
Section 5.1. Benefitted Parties. This Guaranty is entered into by
------------------
the Guarantor for the benefit of the Beneficiaries in accordance with the
provisions of this Guaranty and the Operative Documents. This Guaranty shall
not be deemed to create any right in, or to be in whole or part for the benefit
of, any person other than the Beneficiaries and the Guarantor and their
respective permitted successors and assigns. The Guarantor may not assign any
of its rights or obligations hereunder except in accordance with Section 4.1
hereof.
Section 5.2. Interpretations. The article and section headings of
---------------
this Guaranty are for reference purposes only and shall not affect its
interpretation in any respect.
Section 5.3. Entire Agreement; Counterpart; Amendments; Governing
----------------------------------------------------
Law; Etc. This Guaranty (a) constitutes the entire agreement, and supersedes
- -------- -
all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof; (b) may be executed in
-
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument; (c) may be modified
-
only by an instrument in writing signed by the duly authorized representatives
of the parties hereto and (d) has been delivered in the State of New York and
-
shall be governed in all respects, including validity, interpretation and effect
by, and shall be enforceable in accordance with, the laws of the State of New
York. Subject to Section 2.5 hereof, this Guaranty shall terminate when the
Obligations have been fully, indefeasibly and unconditionally paid and performed
in full.
If any provision of this Guaranty shall be held to be invalid by any
court of competent jurisdiction, the invalidity of such provisions shall not
affect any of the remaining provisions, and any such invalidity in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto hereby waive any provision thereof that renders any term or provision
hereof invalid or unenforceable in any respect.
Section 5.4. Further Assurances. The Guarantor will execute and
------------------
deliver all such instruments and take all
11
<PAGE>
such actions as the Beneficiaries may from time to time reasonably request in
order fully to effectuate the purposes of this Guaranty.
Section 5.5. Notices. All notices and other communications in
-------
respect of this Guaranty to the Guarantor or the Beneficiaries shall be given as
provided in the applicable provisions of the Participation Agreement.
Section 5.6. Consent to Jurisdiction. Any legal suit, action or
-----------------------
proceeding arising out of or relating to this Guaranty or any transaction
contemplated hereby may be instituted in any state or Federal court in the
County of New York and State of New York and, to the extent permitted by
applicable law, the Guarantor waives any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding and
irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding.
12
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed in its name and behalf and its corporate seal to be affixed hereto and
attested by its duly authorized officers, and the Beneficiaries have accepted
the same, as of the date first above written.
ATTEST: MOBIL CORPORATION
By: ______________________ By: _______________________
Name: Name:
Title: Title:
ACCEPTED:
WILMINGTON TRUST COMPANY, in both its
individual capacity and as Owner Trustee
By: _________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, in
its individual capacity and as Indenture
Trustee
By: _________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, in
its individual capacity and as Pass
Through Trustee under each of the Pass
Through Trust Documents and as Loan
Participant
By: _______________________
Name:
Title:
FLEET NATIONAL BANK
By: _________________________
Name:
Title:
13
<PAGE>
EXHIBIT 4.9
APPENDIX A
DEFINITIONS
-----------
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise defined
in an Operative Document or the context thereof shall otherwise require, and
such meanings are equally applicable both to the singular and plural forms of
the terms defined. Any term defined below by reference to any agreement or
instrument shall have such meaning whether or not such agreement or instrument
is in effect. The terms "hereof", "herein", "hereunder" and comparable terms
------ ------ ---------
refer to the entire agreement with respect to which such terms are used and not
to any particular Section, subsection, paragraph or other subdivision thereof.
Unless the context otherwise requires, references to (i) agreements
-
shall include sections, schedules, exhibits and appendices thereto and shall be
deemed to mean and include such agreements (and sections, schedules, exhibits
and appendices) as the same may be amended, supplemented and otherwise modified
from time to time in accordance with the terms thereof; (ii) parties to
--
agreements or government agencies shall be deemed to include the successors and
permitted assigns of such parties and the successors and assigns of such
agencies and (iii) laws or regulations shall be deemed to mean such laws or
---
regulations as the same may be amended from time to time and any superseding
laws or regulations covering the same subject matter.
Unless otherwise specified herein or in any Operative Document, all
accounting terms used in any Operative Document shall be interpreted, all
accounting determinations made pursuant to the terms of any Operative Documents
shall be made, and all financial statements delivered pursuant to the terms of
any Operative Document shall be prepared, in accordance with GAAP.
"Actual Knowledge" shall mean, (i) as it applies to the Owner Trustee,
---------------- -
the Indenture Trustee or the Pass Through Trustee, actual knowledge of,
including any information contained in any written notices received by, an
officer in its Corporate Trust Office; (ii) as it applies to the Owner
--
Participant, actual knowledge of, including any information contained in any
written notices received by, any officer of the Owner Participant or any
Affiliate thereof whose responsibilities include administration of the trans-
actions contemplated by the Operative Documents; (iii) as it applies to the
---
Trust Company, actual knowledge of, including any information contained in
written notices received by,
<PAGE>
any officer of the Trust Company whose responsibilities include administration
of the transactions contemplated by the Operative Documents; (iv) as it applies
--
to the Lessee, actual knowledge of, including any information contained in any
written notices received by, the Chief Executive Officer, the President or any
Vice President or any other executive officer of the Lessee whose
responsibilities include administration of the transactions contemplated by the
Operative Documents and (v) as it applies to the Guarantor, actual knowledge
-
of, including any information contained in any written notices received by, the
Chief Executive Officer, the President or any Vice President or any other exe-
cutive officer of the Guarantor whose responsibilities include administration
of the transactions contemplated by the Operative Documents.
"Additional Notes" shall mean non-recourse Secured Notes issued by the
----------------
Owner Trustee in connection with a Supplemental Financing and in accordance
with Section 2.08 of the Indenture.
"Affiliate" shall mean, with respect to any Person, any other Person,
---------
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, the term
"control" (including the correlative meanings of the terms "controlling",
- -------- -----------
"controlled by" and "under common control with"), as used with respect to any
- -------------- -------------------------
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities or by contract or otherwise;
provided, however, that the Trust Company shall not be considered to be an
- -------- -------
Affiliate of either the Owner Trustee or the Owner Participant and that
neither the Owner Trustee nor the Owner Participant shall be considered to be an
Affiliate of the Trust Company.
"After-Tax Basis", in the context of determining the amount of a
---------------
payment to be made on such basis, shall mean the payment of an amount which,
after subtraction of the net increase, if any, in United States Federal, state
and local income tax liability incurred by the recipient of such payment as a
result of the receipt or accrual of such payment (which net increase shall be
calculated by taking into account any reduction in such taxes resulting from
any tax benefits realized or deemed to be realized in any taxable year by the
recipient as a result of the event or circumstances giving rise to such
payment), shall equal the
2
<PAGE>
amount that would have been payable if no such net increase in tax liability had
been incurred. In calculating the amount payable by reason of this provision,
all United States Federal, state and local income taxes payable and tax benefits
realized or deemed to be realized shall be determined (except to the extent
provided otherwise in any Operative Document) on the assumptions that (i) the
-
recipient is taxable on all income at the highest marginal federal income tax
rate applicable to corporate taxpayers as of the date of the payment to be made
on an After-Tax Basis and the actual marginal state and local income tax rate
applicable as of such date to the recipient, as determined by the recipient in
its reasonable, good faith judgment and certified by the recipient to the payer
in writing and, if requested by the payer, as verified by a nationally
recognized accounting firm mutually acceptable to the recipient and the payer;
(ii) all tax benefits are utilized by the recipient (x) at the rates specified
- --- -
in clause (i) and (y) in each of the recipient's taxable years in which such tax
-
benefits are first allowable; and (iii) tax benefits deemed to be realized in
---
any taxable year other than the year of payment are taken in account at their
present value, using a discount rate equal to the Debt Rate.
"Amortization Schedule" for the Installment Secured Notes shall mean
---------------------
the amortization schedule for the Installment Secured Notes set forth in Exhibit
B to the Indenture.
"Appraisal Procedure" shall mean a procedure for determining any
-------------------
amount, value or period. Such procedure shall be commenced by the delivery of
written notification as specified in the Operative Documents by the Lessee to
the Lessor or the Owner Participant, as the case may be, or by the Owner
Participant or the Lessor, as the case may be, to the Lessee, that it desires to
obtain an appraisal with respect to such amount, value or period. If required
by the relevant provision of the applicable Operative Document, such parties
shall first attempt to agree on such matter. If such parties are unable to agree
on such matter within the time period specified in the applicable Operative
Document, or if such parties are not required to attempt to agree, such parties
shall thereupon consult for the purpose of selecting a mutually acceptable
Independent appraiser. If within ten (10) days from the date the parties are re-
quired to so consult, they are unable to agree upon the
3
<PAGE>
appointment of a mutually acceptable Independent appraiser, then each of such
parties shall appoint an Independent appraiser, and such Independent appraisers
shall jointly determine such matter. If one party does not so appoint an
Independent appraiser, then the Independent appraiser appointed by the other
shall determine such matter as the sole appraiser. If such two Independent
appraisers cannot agree on such matter within twenty (20) days after their ap-
pointment, such matter shall be determined by such two Independent appraisers
and a third Independent appraiser chosen within ten (10) days after such twenty
(20) day period by such two Independent appraisers or, if such three (3)
Independent appraisers fail to reach an agreement, the determination of the
appraiser that differs most from the second highest determination shall be
excluded (unless such difference is less than 10% from either of the other
determinations), the remaining two determinations shall be averaged (or all
three (3) shall be averaged, if the third determination is not discarded due to
the preceding parenthetical) and such average shall constitute the determination
of the appraisers. If such two Independent appraisers fail to agree upon the
appointment of a third Independent appraiser within the allotted time period,
such appointment shall be made by the New York City office of the American
Arbitration Association or any organization successor thereto, upon the request
of any such parties from a panel of arbitrators having familiarity with assets
similar to the assets comprised by the Facility Assets. The determination of the
appraiser or the appraisers so chosen shall be given within twenty (20) days of
the appointment of a mutually acceptable Independent appraiser or such third
appraiser, whichever is earlier. Except to the extent expressly provided
otherwise in any Operative Document, fees and expenses of the appraisers
appointed in connection with an Appraisal Procedure shall be paid by the Lessee,
except also that, if the Appraisal Procedure is utilized in connection with the
actual purchase by the Lessee of the Facility pursuant to Section 6.1(a) of the
Lease or in connection with a Renewal Term actually entered into pursuant to the
exercise by the Lessee of a renewal option pursuant to Section 5.1 of the Lease,
all such fees and expenses shall be borne equally by the Lessee and the Lessor.
"Appraiser" shall mean Marshall & Stevens Incorporated.
---------
"Assignment" shall mean the Assignment of Warranties, in
----------
substantially the Form of Exhibit F to the Participation Agreement, from Mobil
Oil Corporation to the
4
<PAGE>
Owner Trustee, dated the Closing Date and delivered pursuant to Sections 3.1 and
4.2 of the Participation Agreement.
"Basic Lease Term" shall mean the period commencing on the Closing
----------------
Date and ending on the Basic Lease Term Expiry Date, or such shorter period as
may result from earlier termination of the Lease.
"Basic Lease Term Expiry Date" shall mean the twentieth anniversary
----------------------------
of the Closing Date.
"Basic Rent" shall mean the rent payable pursuant to Section 3.1 of
----------
the Lease.
"Basic Rent Payment Dates" during the Basic Lease Term or any Renewal
------------------------
Term shall mean and include each January 2 and July 2 during the Basic Lease
Term or such Renewal Term and the Basic Lease Term Expiry Date and any Renewal
Term Expiry Date. The first Basic Rent Payment Date shall be July 2, 1997.
"Basic Rent Percentages" shall mean the percentages set forth in
----------------------
Schedule 1 to the Lease, subject to adjustment in accordance with Section 4 of
the Lease and Section 2.12 of the Participation Agreement.
"Beneficial Interest" shall have the meaning
-------------------
specified in Section 16.1 of the Participation Agreement.
"Beneficial Interest Purchase Price" shall have the meaning specified
----------------------------------
in Section 16.1 of the Participation Agreement.
"Board of Directors" shall mean, with respect to any Person, either
------------------
the board of directors of such Person or a duly authorized committee of said
board having power to act for such board with respect to the matter in question.
"Business Day" shall mean any day other than a Saturday or Sunday or
------------
any other day on which banks located in New York, New York, Fairfax, Virginia,
the city in which the Corporate Trust Office of the Owner Trustee is located or,
so long as any Pass Through Certificate is outstanding, the city in which the
Corporate Trust Office of the Pass Through Trustee is located, are required or
authorized to remain closed.
5
<PAGE>
"Capital Stock" shall mean, with respect to any Person, any and all
-------------
shares, interests, participations or other equivalents (however designated) in
such Person's capital stock, whether now outstanding or issued after the date of
the Participation Agreement, including, without limitation, all Common Stock and
Preferred Stock of such Person.
"Casualty Redemption Date" shall have the meaning specified in
------------------------
Section 3.02(a) of the Indenture.
"Certificate" shall mean any of the Pass Through Certificates.
-----------
"Certificateholder" shall have the meaning specified in the Pass
-----------------
Through Trust Agreement.
"Change in Tax Law" shall mean any change in United States federal or
-----------------
Texas law with respect to Taxes, or any regulation thereunder or official
interpretation thereof, that is proposed, enacted, adopted or issued after
Closing.
"Claims" shall mean any and all liabilities (including, without
------
limitation, negligence, warranty, statutory, product, strict or absolute
liability, liability in tort or otherwise), obligations, losses, damages,
penalties, fines, sanctions, claims, Environmental Claims, actions, or suits of
whatever kind or nature, investigations, judgments, Liens (including any Lien in
favor of any Governmental Authority upon the Facility for environmental
liabilities and costs or violations of any Environmental Laws) and, shall
include all reasonable costs, expenses and disbursements in connection therewith
or related thereto, of any kind or nature, including, without limitation,
reasonable legal fees and expenses and costs of investigation.
"Closing" shall have the meaning set forth in Section 2.5 of the
-------
Participation Agreement.
"Closing Date" shall mean the date set forth in the notice of closing
------------
delivered by the Lessee pursuant to Section 2.4 of the Participation Agreement
or such other later date on which the closing of the transactions contemplated
by Section 2 of the Participation Agreement shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
6
<PAGE>
"Common Stock" shall mean, with respect to any Person, any and all
------------
shares, interests, participations and other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now out-
standing or issued after the date of the Participation Agreement, and includes,
without limitation, all series and classes of such common stock.
"Components" shall mean appliances, parts, instruments,
----------
appurtenances, accessories, equipment and other property of whatever nature
originally included in the Facility Assets on the Closing Date.
"Confidential Information" shall mean (a) the MTPX Technology and all
------------------------ -
data and other information determined by the Lessee, the Guarantor, the Operator
or any of their respective designees to be "Confidential Information" with
respect to the MTPX Technology and any improvements, modifications, changes or
additions to the MTPX Technology during the Lease Term or the period during
which the Ground Lease or any Support Agreement is effective and (b) any other
-
technology, information or data relating to the production, marketing, sale or
distribution of paraxylene or benzene, toluene and xylene or any components
thereof determined by the Lessee, the Guarantor, the Operator or any of their
respective designees to be "Confidential Information", including, without
limitation, processes, formulae, data, reports, software, know-how,
improvements, discoveries, developments, designs, patented and unpatented
inventions, trade secrets, techniques, marketing plans, strategies, forecasts,
new products, unpublished financial statements, budgets, projections, licenses,
prices, costs, customer and supplier lists and compilations of information.
"Conveyancing Instrument" shall mean the Special Warranty Deed, Bill
-----------------------
of Sale and Assignment of Facility Assets, from Mobil Oil Corporation to the
Owner Trustee, dated the Closing Date and delivered pursuant to Sections 3.1
and 4.2 of the Participation Agreement.
"Corporate Trust Office" shall mean (i) when used with respect to the
---------------------- -
Pass Through Trustee, the office of the Pass Through Trustee in the city at
which at any particular time its corporate trust business shall be principally
administered; (ii) when used with respect to the Indenture Trustee, the
--
Indenture Trustee Office and (iii) when used with respect to the Owner Trustee,
---
the Corporate Trust Administration department of the Trust Company or such
other office of the Owner Trustee in the city at which at any
7
<PAGE>
particular time its corporate trust business shall be principally
administered.
"Debt Percentage" shall mean the percentage set forth as the "Debt
---------------
Percentage" in Schedule 2 to the Participation Agreement.
"Debt Rate" shall mean the weighted average interest rate borne by
---------
the Secured Notes originally issued under the Indenture.
"Easements" shall have the meaning specified in the Ground Lease.
---------
"EBO Date" shall mean each of the Initial EBO Date and the Second
--------
EBO Date, as the context may require.
"EBO Percentage" shall mean the applicable percentage set forth as an
--------------
"EBO Percentage" in Schedule 4 to the Lease, subject to adjustment in accordance
with Section 4 of the Lease and Section 2.12 of the Participation Agreement.
"EBO Purchase Price" shall mean each of the Initial EBO Purchase
------------------
Price and the Second EBO Purchase Price, as the context may require.
"Eligible Bank" shall mean any bank or trust company (including the
-------------
Indenture Trustee and the Pass Through Trustee) which shall be a member of the
Federal Reserve System and shall have a combined capital, surplus and undivided
profits of not less than $100,000,000.
"Employer Plan" shall mean each plan as to which the Owner Participant
-------------
is a party in interest by virtue of (i) Section 3(14)(C) of ERISA or (ii)
- --
Section 3(14)(E) of ERISA (to the extent it relates to subsection (C)) or (iii)
---
Section 3(14) (G) of ERISA (to the extent it relates to subsection (C) or (E))
(but only to the extent subsection (E) relates to subsection (C)).
"Environmental Claims" shall mean any Claim, action, cause of action,
--------------------
investigation conducted by a Governmental Authority or written notice by any
Person or entity alleging potential liability (including, without limitation,
potential liability for cleanup costs, Remedial Action, Releases, governmental
response costs, natural resources damages, property damages, personal
injuries, or penalties)
8
<PAGE>
arising out of, based on or resulting from (a) the presence or release into the
-
environment of any Hazardous Material or (b) circumstances forming the basis of
-
any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean all United States Federal, state and
------------------
local laws and regulations, relating to pollution or protection of the
environment (including, without limitation, ambient air, surface, water,
groundwater, land surface or subsurface strata, wetlands, wildlife, aquatic
species, vegetation and natural resources), including, without limitation,
laws and regulations relating to emissions, discharges, Releases or threatened
Releases of Hazardous Materials or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials. Environmental Laws include, but are not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980; the Federal Insecticide, Fungicide, and Rodenticide Act; the Resource
Conservation Recovery Act; the Superfund Amendments and Reauthorization Act of
1986; the Toxic Substances Control Act; the Hazardous Material Transportation
Act; the Clean Air Act; the Federal Water Pollution Control Act; the Safe
Drinking Water Act and their state and local counterparts or equivalents.
"Environmental Lien" shall mean any Lien in favor of any Governmental
------------------
Agency resulting from Environmental Claims.
"Environmental Permits" shall mean all permits, consents, licenses,
---------------------
certificates and other approvals or authorizations required under Environmental
Laws.
"Equity Percentage" shall mean an amount equal to 100% minus the Debt
-----------------
Percentage, which amount shall be not less than 15%.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974.
"ERISA Plan Assets" shall mean the assets of (i) an employee benefit
----------------- -
plan subject to Part 4 of Subtitle B of Title I of ERISA or (ii) a "Plan" within
--
the meaning of Section 4975(e)(1) of the Code or (iii) any other entity deemed
---
to hold "plan assets" as defined in 29 C.F.R. (S)2510.3-101 of any plan.
9
<PAGE>
"Event of Loss" shall mean any of the following events: (a) the (i)
------------- - -
loss, theft, destruction or disappearance of or (ii) occurrence of damage
--
(which, in the Lessee's reasonable, good faith opinion, renders repair or
replacement uneconomic) to the Facility Assets or a Significant Portion thereof;
(b) the permanent condemnation, confiscation or seizure of, or requisition of
-
title to, the Facility Assets or a Significant Portion thereof by any
Governmental Authority; (c) the requisition of use of the Facility Assets or a
-
Significant Portion thereof by any Governmental Authority for a period (i) which
-
has been on going for one year and which is reasonably expected to exceed the
remaining portion of the Basic Lease Term or (ii) which extends beyond the date
--
which is twelve (12) months prior to the scheduled expiration of the Basic Lease
Term or any Renewal Term, as the case may be or (d) the receipt of insurance
-
proceeds based upon an actual or constructive total loss of the Facility Assets
or a Significant Portion thereof. The occurrence of any of the events set forth
above in this definition with respect to the Site or a Significant Portion of
the Site may constitute, as determined in the Lessee's reasonable judgment, an
Event of Loss with respect to the Facility Assets.
"Excepted Payments" shall mean and include (i) any indemnity or other
----------------- -
payment (whether or not Supplemental Rent) payable under any Operative Document
(including, without limitation, any amount payable by the Guarantor under the
Guaranty in respect of indemnity amounts payable by the Lessee under any
Operative Document) directly to any Person (including, without limitation, the
Trust Company or State Street Bank and Trust Company in its individual capacity)
other than the Indenture Trustee, any Holder, the Owner Trustee, the Trust
Estate or the Indenture Estate; (ii) (A) insurance proceeds, if any, payable to
-- -
the Trust Company, the Owner Trustee or the Owner Participant under insurance
separately maintained by the Trust Company, the Owner Trustee or the Owner
Participant as permitted by Section 13.4 of the Lease except to the extent
that the payment of any such proceeds diminishes any recovery available under an
insurance policy required to be maintained under Section 13 of the Lease or
(B) proceeds of personal injury or property damage liability insurance payable
-
to or for the benefit of the Trust Company, the Owner Trustee or the Owner
Participant under any Operative Document; (iii) any amount payable to the Owner
---
Participant pursuant to the Tax Indemnity Agreement (including any periodic
payments thereunder) or for the account of the Owner Participant pursuant to
Section 12.2 of the Participation Agreement (or any
10
<PAGE>
amount payable by the Guarantor under the Guaranty in respect of amounts payable
to the Owner Participant pursuant to the Tax Indemnity Agreement or for the
account of the Owner Participant pursuant to Section 12.2 of the Participation
Agreement); (iv) that portion of Stipulated Loss Value, Termination Value and
--
EBO Purchase Price payments attributable to Tax Indemnity Agreement obligations
of the Lessee (or payments by the Guarantor under the Guaranty in respect of
such portion of Stipulated Loss Value, Termination Value and EBO Purchase
Price); (v) if the Lessee exercises a purchase option under Section 6 or Section
-
7 of the Lease and assumes the Secured Notes on a full recourse basis pursuant
to Section 3.04 of the Indenture, that portion of the applicable purchase price
in excess of the principal of and accrued interest on the Outstanding Secured
Notes; (vi) if the Lessee or its designee purchases the Beneficial Interest
--
pursuant to Section 16.1 of the Participation Agreement, that portion of the
applicable purchase price in excess of the principal of and accrued interest on
the Outstanding Secured Notes and (vii) interest at the Overdue Rate payable
---
(to the extent permitted by applicable law) by the Lessee (or the Guarantor) to
the Trust Company, the Owner Trustee or the Owner Participant on any of the
amounts described in clauses (i) through (vi) above; together with the right to
demand, collect, sue for, exercise remedies to enforce, or otherwise obtain
amounts referred to in clauses (i) through (vii) of this definition.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
"Facility" shall mean the Facility Assets and the leasehold estate
--------
created by the Ground Lease in the Site.
"Facility Assets" shall mean the assets identified in Exhibit A to the
---------------
Lease, together with (x) all Components thereof, (y) all Replacement Components
- -
which may from time to time be incorporated in or installed in or attached
thereto, title to which shall have vested in the Lessor pursuant to Section
11.5(b) or 11.7 of the Lease, and (z) those Modifications to the Facility Assets
-
described in Section 11.5(b) of the Lease, title to which shall have vested in
the Lessor pursuant to such Section 11.5(b).
"Fair Market Rates" of any service shall mean the cash price that
-----------------
would be obtained in an arm's-length transaction between an informed and
willing provider of such service (under no compulsion to provide such service)
and an informed and willing user of such service (under no com-
11
<PAGE>
pulsion to use such service) of the service in question, at the location where
such service is to be provided.
"Fair Market Renewal Term" shall mean a period, during which the
------------------------
Facility Assets may be leased for Fair Market Rental Value as permitted by
Section 5.1 of the Lease, commencing at the end of the Basic Lease Term or any
Renewal Term and ending on the date chosen by the Lessee pursuant to Section 5.3
of the Lease or such shorter period as may result from earlier termination of
the Lease.
"Fair Market Rental Value" or "Fair Market Sales Value" of any
------------------------- -----------------------
property or services as of any date shall mean the cash rent or cash price that
would be obtained in an arm's-length lease or sale, respectively, between an
informed and willing lessee or buyer (under no compulsion to lease or purchase)
and an informed and willing lessor or seller (under no compulsion to lease or
sell) of the property or services in question; provided that the "Fair Market
--------
Rental Value" or "Fair Market Sales Value" for the Facility Assets shall be (A)
-
determined on the assumption that the Facility Assets (w) are unencumbered by
-
the Lease, including any purchase or renewal options thereunder and the Bene-
ficial Interest purchase option under Section 16.1 of the Participation
Agreement, (x) have been maintained in accordance with the requirements of
-
Section 11 of the Lease and (y) are in a condition suitable for the production
-
of paraxylene using the MTPX Technology, (B) determined on the assumption that
-
the lessee or buyer will have all the rights and obligations of the Ground
Lessee set forth in the Ground Lease and all rights and obligations under any
Support Agreements that are to be entered into pursuant to Section 10.9 of the
Participation Agreement and are necessary to permit the operation of the
Facility Assets for their intended purpose as contemplated by such Section
10.9 and (C) determined without regard to the presence of the Facility Assets
-
within the Refinery, it being understood that for purposes hereof the Facility
Assets are to be valued solely on a stand-alone basis but in place at their
current location; provided further that, notwithstanding the foregoing, for
-------- -------
purposes of Section 16.1 of the Lease, such value shall be determined without
making the assumptions described in clauses (A)(x) and (A)(y) and clause (B) of
the preceding proviso.
"Final Appraisal" shall mean the appraisal delivered pursuant to
---------------
Section 4.5(a) of the Participation Agreement.
12
<PAGE>
"Final Determination" shall mean (i) a decision, judgment, decree or
------------------- -
other order by any court of competent jurisdiction that resolves the matter,
which decision, judgment, decree or other order has become final (i.e., the
- -
earliest of when (x) all allowable appeals have been exhausted by either party
-
to the action or (y) the time for filing all allowable appeals has expired; (ii)
- --
a closing agreement entered into under Section 7121 of the Code (or any
successor provision) or any other settlement agreement entered into in
connection with the administrative or judicial proceedings, in any case with
the Lessee's consent; (iii) the expiration of the time for instituting an
---
initial suit with respect to a claimed deficiency and for instituting a claim
for refund, or, if a refund claim was filed, the expiration of the time for
instituting suit with respect thereto or (iv) in the case of a Tax subject to
--
indemnification by the Lessee under the Participation Agreement or the Tax
Indemnity Agreement, the point in time when the Tax Indemnitee is no longer
required to contest the imposition of such Tax pursuant to Section 12.2(e) of
the Participation Agreement or Section 7 of the Tax Indemnity Agreement, as the
case may be.
"Fixed Price Purchase Amount" shall mean the amount specified as such
---------------------------
in Schedule 4 to the Lease
Lessor's Cost.
"GAAP" shall mean generally accepted accounting principles in the
----
United States of America.
"Governmental Actions" shall mean all applicable actions,
--------------------
authorizations, consents, approvals, waivers, exceptions, variances,
franchises, filings, orders, permits, licenses, exemptions, publications,
notices from and declarations of any Governmental Authority, including, with-
out limitation, those pertaining to Environmental Laws and Environmental
Permits.
"Governmental Authority" shall mean any applicable nation or
----------------------
government, any state, county, municipality or other political subdivision
thereof or any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Governmental Rule" shall mean applicable statutes, laws, rules,
-----------------
codes, ordinances, decisions, regulations, permits, certificates and orders of
any Governmental Authority now or hereafter in effect and any interpretation
thereof by competent Governmental Authority, including any judicial or
administrative order, consent decree, settlement
13
<PAGE>
agreement or judgment, including, without limitation, Environmental Laws.
"Ground Lease" shall mean the Ground Lease Agreement, dated as of the
------------
Closing Date, by and between the Ground Lessor, as lessor, and the Owner
Trustee, as lessee, relating to the Site.
"Ground Lessee" shall mean the Owner Trustee as lessee under the
-------------
Ground Lease.
"Ground Lessor" shall mean Mobil Oil Corporation or any successor,
-------------
assignee or other transferee, as lessor under the Ground Lease.
"Guarantor" shall mean Mobil Corporation, a Delaware corporation, in
---------
its capacity as guarantor, or any successor, assignee or other transferee, as
guarantor under the Guaranty, as permitted by the terms of the Guaranty.
"Guaranty" shall mean the Guaranty, dated as of May 28, 1997, by
--------
the Guarantor in favor of the Owner Trustee, the Trust Company, the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Cer-
tificateholders from time to time.
"Hazardous Materials" shall mean all substances or materials regulated
-------------------
at any time of determination as toxic or hazardous according to any United
States federal or State of Texas law or regulation.
"Holder" shall mean a registered holder of a Secured Note and shall
------
include, so long as the Pass Through Trustee is a registered holder of a Secured
Note, the Pass Through Trustee.
"Indemnitee" shall mean the Owner Trustee (both in its individual and
----------
its trust capacities), the Owner Participant, the Indenture Trustee (both in
its individual and its trust capacities), the Pass Through Trustee (both in its
individual and trust capacities) and the Loan Participant.
"Indenture" shall mean the Trust Indenture, Deed of Trust, Assignment
---------
of Lease and Security Agreement, dated as of the Closing Date, between the Owner
Trustee and the Indenture Trustee.
14
<PAGE>
"Indenture Default" shall mean an event which, after giving of notice
-----------------
or lapse of time, or both, would become an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified in the Granting
----------------
Clause of the Indenture.
"Indenture Event of Default" shall have the meaning specified in
--------------------------
Section 5.02 of the Indenture.
"Indenture Indebtedness" shall have the meaning specified in the
----------------------
Recitals to the Indenture.
"Indenture Supplement" shall mean any indenture supplement,
--------------------
substantially in the form of Exhibit D to the Indenture, that may be executed
and delivered by the Owner Trustee and the Indenture Trustee from time to time.
"Indenture Trustee" shall have the meaning specified in the preamble
-----------------
to the Indenture.
"Indenture Trustee Office" shall mean the office of the Indenture
------------------------
Trustee located at Two International Place, Boston, Massachusetts 02110 or such
other office as may be designated by the Indenture Trustee to the Owner Trustee
and the Lessee.
"Indenture Trustee's Liens" shall mean any Lien on or relating to or
-------------------------
affecting all or any part of the Facility, the Site, the Lease, the Trust
Estate, the Indenture Estate or any payment of Rent (a) which results from any
-
act of, or failure to act by, or any Claim against or affecting, the Indenture
Trustee (in its individual capacity or as trustee) unrelated to the Indenture
Trustee's participation in the transactions contemplated by the Participation
Agreement or any other Operative Document, or which results from any violation
by the Indenture Trustee (in its individual capacity or as trustee) of any of
the terms of the Operative Documents; (b) which results from any Tax owed by the
-
Indenture Trustee (in its individual capacity or as trustee), except that
Indenture Trustee's Liens shall not include any Lien resulting from any Tax for
which the Lessee is obligated to indemnify the Indenture Trustee (in its
individual capacity or as trustee) pursuant to Section 12.2 of the Participation
Agreement until such time as the Lessee shall have already paid to, or on behalf
of, the Indenture Trustee, the Tax or an indemnity with respect to the same or
(c) which results from any Claim against the Indenture Trustee arising out of
- --
the voluntary or involuntary transfer
15
<PAGE>
(other than pursuant to Section 16.1 of the Lease) by the Indenture Trustee of
all or any part of its interest in the Facility, the Lease, the Trust Estate,
the Indenture Estate or any payment of Rent.
"Independent" shall mean, when used with respect to any specified
-----------
Person, a Person who (1) is in fact independent; (2) does not have any direct
- -
financial interest in the Trust Company, the Owner Trustee, the Owner Partici-
pant or the Lessee or any Affiliate of any of them and (3) is not connected with
-
the Trust Company, the Owner Participant or the Lessee or any such Affiliate as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions. Whenever it is provided that any
Independent Person's opinion or certificate shall be furnished to the Indenture
Trustee, such Person shall be appointed by the Lessee and approved by the
Indenture Trustee in the exercise of reasonable care and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Independent Investment Banker" shall mean an independent investment
-----------------------------
banking institution of national standing appointed by the Lessee on behalf of
the Owner Trustee; provided that if the Indenture Trustee shall not have
--------
received written notice of such an appointment at least ten (10) days prior to
the relevant Redemption Date or Lease Termination Date or if a Lease Event of
Default shall have occurred and be continuing, "Independent Investment Banker"
-----------------------------
shall mean such an institution appointed by the Indenture Trustee.
"Initial EBO Date" shall mean the date set forth as the
----------------
"Initial EBO Date" in Schedule 4 to the Lease.
"Initial EBO Purchase Price" shall mean the product of (x) Lessor's
-------------------------- -
Cost and (y) the EBO Percentage specified in Schedule 4 to the Lease for the
-
Initial EBO Date, as the same may be adjusted as specified in the Lease.
"Initial Secured Notes" shall mean the Secured Notes issued under the
---------------------
Indenture on the Closing Date or any Secured Notes issued in exchange therefore
pursuant to Sections 2.06 and 2.07 of the Indenture.
"Initial Sublease" shall mean the sublease agreement, dated as of the
----------------
Closing Date, between the Lessee and the Operator.
16
<PAGE>
"Interest Payment Date" shall mean each January 2 and July 2.
---------------------
"Investment" shall have the meaning specified in Section 2.1 of
----------
the Participation Agreement.
"Lease" shall mean the Facility Assets Lease Agreement, dated as of
-----
the Closing Date, between the Lessor and the Lessee.
"Lease Default" shall mean an event which, after giving of notice or
-------------
lapse of time, or both, would become a Lease Event of Default.
"Lease Event of Default" shall have the meaning specified in Section
----------------------
15 of the Lease.
"Lease Supplement" shall mean any supplement to the Lease entered
----------------
into pursuant to the Lease.
"Lease Term" shall mean, collectively, the Basic Lease Term and
----------
all Renewal Terms (if any).
"Lease Termination Date" shall mean the last day of the Lease Term,
----------------------
whether occurring by reason of expiration of the Lease Term or upon earlier
termination of the Lease pursuant to the terms thereof (including, without
limitation, termination pursuant to Section 16.1 of the Lease).
"Lessee" shall mean Mobil Chemical Finance (Texas) Inc., a Delaware
------
corporation, or any successor, assignee or other transferee, as lessee, under
the Lease, as permitted by the Operative Documents.
"Lessee's Net Present Value Cost" shall mean the sum of the net
-------------------------------
present value of Basic Rent payable through the Second EBO Date and the net
present value of the Second EBO Purchase Price, in each case discounted semi-
annually at the rate specified in Schedule 4 to the Participation Agreement;
provided that, with respect to any
- --------
adjustment made under Section 4 of the Lease after the Second EBO Date, Lessee's
Net Present Value Cost shall mean the net present value of Basic Rent payable
through the end of the then scheduled Lease Term discounted semi-annually at a
rate to be supplied by the Lessee.
"Lessor" shall mean the Owner Trustee as lessor under the Lease.
------
17
<PAGE>
"Lessor's Cost" shall mean the amount set forth in the notice of
-------------
closing delivered by the Lessee pursuant to Section 2.4 of the Participation
Agreement.
"Lessor's Liens" shall mean any Lien on or relating to or affecting
--------------
all or any part of the Facility, the Site, the Lease, the Trust Estate, the
Indenture Estate or any payment of Rent (a) which results from any act of, or
-
any failure to act by, or any Claim against or affecting, the Trust Company or
the Owner Trustee unrelated to its interest in the Facility, the administration
of the Trust Estate or the Trust Company's or the Owner Trustee's participation
in the transactions contemplated by the Participation Agreement or
any other Operative Document, or which results from any violation by the Trust
Company or the Owner Trustee of any of the terms of the Operative Documents;
(b) which results from any Tax owed by the Trust Company or the Owner Trustee,
- --
except that Lessor's Liens shall not include any Lien resulting from any Tax for
which the Lessee is obligated to indemnify the Trust Company or the Owner
Trustee until such time as the Lessee shall have already paid to, or on behalf
of, the Trust Company or the Owner Trustee, as the case may be, the Tax or an
indemnity with respect to the same or (c) which results from any Claim against
-
the Trust Company or the Owner Trustee arising out of the voluntary or
involuntary transfer (other than pursuant to Section 16.1 of the Lease) by the
Owner Trustee of all or any part of its interest in the Facility, the Lease, the
Trust Estate, the Indenture Estate or any payment of Rent, including, without
limitation, by means of granting a security interest therein other than the Lien
of the Indenture.
"Lien" shall mean any mortgage, pledge, security interest,
----
encumbrance, lien, right of others or charge of any kind, including, without
limitation, any Environmental Liens, any right of first refusal, any title
defect, conditional sale or other title retention agreement or any lease in
the nature thereof or the filing of, or agreement to give, any financing
statement under the UCC (or any similar law) of any jurisdiction.
"Loan Participant" shall mean and include each Holder (including, so
----------------
long as it holds a Secured Note, any Pass Through Trustee).
"Loan Participant's Liens" shall mean any Lien on or relating to, or
------------------------
affecting all or any part of, the Facility, the Site, the Lease, the Trust
Estate, the In-
18
<PAGE>
denture Estate or any payment of Rent (a) which results from any act of, or any
-
failure to act by, or any Claim against or affecting, the Loan Participant
unrelated to the Loan Participant's participation in the transactions
contemplated by the Operative Documents or which results from any violation by
the Loan Participant of any of the terms of the Operative Documents; (b) which
-
results from any Tax owed by the Loan Participant, except that Loan
Participant's Liens shall not include any Lien resulting from any Tax for which
the Lessee is obligated to indemnify the Loan Participant until such time as the
Lessee shall have already paid to, or on behalf of, the Loan Participant the Tax
or an indemnity with respect to the same or (c) which results from any Claim
-
against the Loan Participant arising out of the voluntary or involuntary
transfer (other than pursuant to Section 16.1 of the Lease) by the Loan
Participant of all or any part of its interest in the Secured Notes, the
Facility, the Lease, the Trust Estate, the Indenture Estate or any payment of
Rent.
"Majority in Interest of Holders of Notes" shall mean, as of any date
----------------------------------------
of determination, Holders holding in aggregate more than 51% of the total
principal amount of the Secured Notes Outstanding.
"Make-Whole Amount" shall mean, with respect to the principal amount
-----------------
of any Outstanding Secured Note of any series to be redeemed or purchased on any
Redemption Date, the amount which the Independent Investment Banker determines
as of the fourth Business Day prior to such Redemption Date to equal the excess,
if any, of (x) the sum of the present values of all the remaining scheduled
-
payments of principal and interest from the Redemption Date to maturity of such
Secured Note, discounted semi-annually on each Interest Payment Date at a rate
equal to the Treasury Rate plus 0.10%, based on a 360-day year of twelve 30-day
months, over (y) the unpaid principal amount of such Secured Note plus accrued
-
but unpaid interest on such Secured Note (but not any accrued interest in
default).
"Maturity Date" shall mean, with respect to the Secured Note of any
-------------
series, the date specified as the "Maturity Date" for such series on Exhibit B
to the Indenture.
"Memorandum of Lease" shall mean the short-form of Lease or memorandum
-------------------
of lease to be recorded pursuant to Section 19.5 of the Lease.
19
<PAGE>
"Modifications" shall mean alterations, modifications, additions and
-------------
improvements of or to the Facility Assets but shall not include any Component or
Replacement Component.
"Monthly Date" shall mean any date set forth in the first column of
------------
Schedule 3 to the Lease.
"MTPX Technology" shall mean the proprietary catalyst and processes
---------------
designed and manufactured by the Chemical Products Division of Mobil Chemical
Company for the production of paraxylene as in use with the Facility Assets on
the Closing Date.
"Nonseverable Modification" shall mean any Modification to the
-------------------------
Facility Assets which is not a Severable Modification.
"Non-tax Pricing Assumptions" shall have the meaning specified in
---------------------------
Schedule 2 to the Participation Agreement.
"Note Register" shall have the meaning specified in Section 2.04 of
-------------
the Indenture.
"Obsolescence Termination" shall have the meaning specified in
------------------------
Section 7.2(a) of the Lease.
"Obsolescence Termination Election" shall have the meaning specified
---------------------------------
in Section 7.2(a) of the Lease.
"Officer's Certificate" and "Officers' Certificate" of any Person
--------------------- ---------------------
shall mean a certificate signed on be half of such Person by the Chairman, the
President, any Vice President, any Assistant Vice President, Financial Services
Officer, the Controller, Assistant Treasurer or the Treasurer of such Person
or any other individual duly authorized and acting in such capacity or, in the
case of the Owner Trustee, the Pass Through Trustee or the Indenture Trustee, a
Responsible Officer of the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee.
"Operative Documents" shall mean the Conveyancing Instrument, the
-------------------
Assignment, the Guaranty, the Indenture, each Indenture Supplement, the Lease,
the Participation Agreement, the Secured Notes, the Ground Lease, the Tax
Indemnity Agreement and the Trust Agreement.
"Operator" shall mean Mobil Oil Corporation or any other sublessee or
--------
operator under any sublease, assignment,
20
<PAGE>
operating or other agreement entered into in accordance with Section 14.2 of the
Lease.
"Outstanding" shall mean, when used with respect to the Secured Notes
-----------
as of any date of determination, all
Secured Notes theretofore authenticated and delivered under the Indenture,
except:
(i) Secured Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Secured Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Loan Participants with respect to such
Secured Notes, provided that if such Secured Notes are to be redeemed or
--------
purchased, notice of such redemption or purchase has been duly given (or
provision thereof satisfactory to the Indenture Trustee has been made) and
not revoked or otherwise withdrawn pursuant to the Indenture and
(iii) Secured Notes paid or in exchange for which or in lieu of which
other Secured Notes have been authenticated and delivered pursuant to the
Indenture;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Secured Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Secured Notes
owned by or pledged to the Owner Trustee, the Lessee, the Owner Participant, or
any Affiliate of the Lessee, the Owner Trustee or the Owner Participant, shall
be disregarded and deemed not to be Outstanding, unless such Person owns 100% of
the Secured Notes owned by all Persons, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Secured Notes which
the Indenture Trustee knows to be so owned or pledged shall be so disregarded.
Secured Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Secured Notes and
that the pledgee is not the Owner Trustee, the Lessee, the Owner Participant, or
any Affiliate of the Owner Trustee, the Lessee or the Owner Participant.
21
<PAGE>
"Overdue Rate" shall mean a rate per annum equal to (i) with respect
------------ -
to amounts owing to the Loan Participant constituting payments or prepayments of
any Secured Notes of any series, the rate of interest on such series of Secured
Notes and (ii) with respect to amounts owing to the Owner Participant, the
--
Lessee or the Ground Lessor, the rate of interest publicly announced from time
to time by Citibank, N.A. in New York City as its "prime" or "base" rate plus 1%
(computed on the basis of the actual days elapsed during the relevant period and
a 365 day year).
"Owner Participant" shall mean Fleet National Bank, a national banking
-----------------
association, and each Person to whom a transfer is effected in accordance with
and pursuant to the terms of Section 13 of the Participation Agreement.
"Owner Participant's Liens" shall mean any Lien on or relating to or
-------------------------
against all or any part of the Facility, the Site, the Lease, the Trust Estate,
the Indenture Estate or any payment of Rent (a) which results from any act of,
-
or any failure to act by, or any Claim against or affecting, the Owner
Participant unrelated to the Owner Participant's participation in the
transactions contemplated by the Operative Documents or which results from any
violation by the Owner Participant of any of the terms of the Operative Docu-
ments; (b) which results from any Tax owed by the Owner Participant, except
-
that Owner Participant's Liens shall not include any Lien resulting from any Tax
for which the Lessee is obligated to indemnify the Owner Participant (or any
member of its consolidated group) until such time as the Lessee shall have
already paid to, or on behalf of, the Owner Participant (or such member of its
consolidated group), the Tax or an indemnity with respect to the same or (c)
-
which results from any Claim against the Owner Participant arising out of the
voluntary or involuntary transfer (other than pursuant to Section 16.1 of the
Lease) by the Owner Participant of all or any part of its interest in the
Facility, the Lease, the Trust Estate, the Indenture Estate or any payment of
Rent, including, without limitation, by means of granting a security interest
therein other than the Lien of the Indenture.
"Owner Participant's Net Economic Return" shall mean the original
---------------------------------------
Owner Participant's anticipated (i) after-tax yield on the sum of the Investment
-
(on the assumption that none of the Investment is comprised of borrowed funds)
plus the Transaction Expenses paid by the Lessor, computed using the multiple
investment sinking fund method of analysis and (ii) total (but not periodic)
--
after-tax cash flow
22
<PAGE>
as a percentage of Lessor's Cost, each as computed by the original Owner
Participant in accordance with the assumptions and methods of calculation
employed in the original calculation of the Basic Rent Percentages, Stipulated
Loss Value Percentages, Termination Value Percentages and EBO
Percentages as of April 1, 1997 (as such assumptions may have been modified
pursuant to Section 4 of the Lease or Section 2.12 of the Participation
Agreement) through each EBO Date and the end of the Basic Lease Term; provided
that (a) in the case of any Modification to the Facility Assets financed
-
pursuant to a Supplemental Financing in which the Owner Participant has made an
equity investment, the Owner Participant's Net Economic Return shall be computed
in accordance with the terms and conditions agreed to by the Owner Participant
and the Lessee at the time of such Supplemental Financing and (b) in the case
-
of any Modification financed pursuant to a Supplemental Financing in which the
Owner Participant has not made an equity investment, the Tax Pricing Assumptions
with respect to such Modification and such Supplemental Financing shall be
determined under the law in effect at the time of such Supplemental Financing
and by taking into account the United States federal, state and local tax
posture of the Owner Participant at the time of such Supplemental Financing, as
determined by the Owner Participant in its reasonable, good faith judgment and
certified by the Owner Participant to the Lessee in writing and, if requested
by the Lessee, verified by a nationally recognized independent accounting firm
mutually acceptable to the Owner Participant and the Lessee.
"Owner Trustee" shall have the meaning set forth in the preamble to
-------------
the Trust Agreement.
"Owner Trustee Documents" shall have the meaning specified in Section
-----------------------
2 of the Trust Agreement.
"Participant" shall mean the Loan Participant or the Owner Participant
-----------
and "Participants" shall mean all of them.
------------
"Participation Agreement" shall mean the Participation Agreement,
-----------------------
dated as of May 28, 1997, among the Lessee, the Owner Participant, the Pass
Through Trustee, the Indenture Trustee and the Owner Trustee.
"Pass Through Certificates" shall mean any certificates from time to
-------------------------
time issued and outstanding under and pursuant to the Pass Through Trust
Documents.
23
<PAGE>
"Pass Through Trust" shall mean, with respect to any Pass Through
------------------
Trust Supplement, the trust created by the Pass Through Trust Agreement, as
modified by such Pass Through Trust Supplement.
"Pass Through Trust Agreement" shall mean the Pass Through Trust
----------------------------
Agreement, dated as of October 4, 1996 among the Guarantor, the Lessee, the Pass
Through Trustee and certain other parties, as modified or amended pursuant to
the applicable provisions thereof.
"Pass Through Trust Documents" shall mean the Pass Through Trust
----------------------------
Agreement and each Pass Through Trust Supplement.
"Pass Through Trust Property" in the case of each Pass Through Trust,
---------------------------
shall mean the "Property" as defined in the Pass Through Trust Agreement and the
applicable Pass Through Trust Supplement.
"Pass Through Trust Supplement" shall mean the Pass Through Trust
-----------------------------
Supplement 1997A-1, dated as of the Closing Date, among the Guarantor, the
Lessee and the Pass Through Trustee, as modified or amended pursuant to
applicable provisions thereof and of the Pass Through Trust Agreement.
"Pass Through Trustee" shall mean State Street Bank and Trust Company,
--------------------
not in its individual capacity except as expressly provided in any Pass
Through Trust Document or in any Operative Document, but solely as Pass
Through Trustee under the Pass Through Trust Documents, or its successor in
interest, and any successor trustee appointed as provided therein.
"Pass Through Trustee's Liens" shall mean the "Trustee's Liens", as
----------------------------
such term is defined in Section 7.16 of the Pass Through Trust Agreement.
"Pass Through Underwriter" shall have the meaning set forth in Section
------------------------
2.9(a) of the Participation Agreement.
"Permitted Investments" shall mean (i) obligations of the United
--------------------- -
States as of America, or obligations fully guaranteed as to interest and
principal by the United States of America; (ii) certificates of deposit issued
--
by an Eligible Bank or interest-bearing insured accounts in an Eligible Bank;
(iii) commercial paper, rated at least P-1 (or comparable rating) by Moody's
- ----
Investors Service, Inc. (or
24
<PAGE>
any successor thereto) or at least A-1 (or comparable rating) by Standard and
Poor's Corporation (or any successor thereto) or (iv) a money market fund
--
registered under the Investment Company Act of 1940, the portfolio of which is
limited to U.S. government obligations and U.S. agency obligations.
"Permitted Liens" shall mean (a) the respective rights and interests
--------------- -
of the Lessee, the Owner Participant, the Lessor, the Indenture Trustee and the
Holders, as provided in the Operative Documents; (b) Lessor's Liens, Owner
-
Participant's Liens, Indenture Trustee's Liens, Loan Participant's Liens and
Pass Through Trustee's Liens; (c) Liens for Taxes either not delinquent or being
-
contested in good faith and by appropriate proceedings, so long as such pro-
ceedings do not involve any material danger of the sale, forfeiture or loss of
any material part of the Facility or title thereto or any interest therein; (d)
-
materialmen's, mechanics', workers', repairmen's, employees' or other like
Liens, arising in the ordinary course of business of the Lessee or Operator or
any other sublessee or operator under any sublease, assignment, operating or
other agreement permitted by the Lease, or arising in the course of construct-
ing, repairing, equipping or installing, modifying or expanding the Facility
or any part thereof, for amounts either not yet delinquent or being contested in
good faith and by appropriate proceedings so long as such proceedings do not
involve any material danger of the sale, forfeiture or loss of any material part
of the Facility or title thereto or any interest therein; (e) Liens arising out
-
of judgments or awards with respect to which at the time an appeal or pro-
ceeding for review is being prosecuted in good faith so long as execution of
such judgment or award shall have been stayed or otherwise lifted pending such
appeal or proceeding for review and so long as during such proceeding there is
no material danger of the sale, forfeiture or loss of any material part of the
Facility or title thereto or any interest therein; (f) Liens, assignments and
-
subleases permitted by Section 14.2 of the Lease and the rights of the Operator
under the Initial Sublease and the rights of any other Operator or any sub-
sublessee under any other sublease (or sub-sublease) permitted by Section 14.2
of the Lease; (g) Liens that do not materially adversely affect the use of the
-
Facility for its intended purposes, do not secure the payment or performance of
any obligation with respect to borrowed money, and do not create any material
risk of loss of title or possession of the Site or the Facility Assets and (h)
-
the rights and interests of the Ground Lessor as permitted by the Ground Lease.
25
<PAGE>
"Person" shall mean any individual, partnership, corporation, trust,
------
unincorporated association, joint venture, government or any department or
agency thereof or any other entity.
"Pre-Closing Change in Tax Law" shall mean a change in the Code or
-----------------------------
Treasury Regulations (other than with respect to the alternative minimum tax)
that is enacted or adopted after April 1, 1997 and prior to the Closing that
affects the Tax Pricing Assumptions set forth in Schedule 2 to the Participation
Agreement.
"Preferred Stock" shall mean, with respect to any Person, any and all
---------------
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock, whether now outstanding or issued
after the date of the Participation Agreement, and includes, without limitation,
all classes and series of preferred or preference stock.
"Premium" shall mean the Make-Whole Amount, if any, payable pursuant
-------
to Article III of the Indenture.
"Premium Termination Date" shall mean, with respect to any Series
------------------------
1997-A Secured Notes, the date set forth as the "Premium Termination Date" with
------------------------
respect to such series in Exhibit B to the Indenture.
"Purchase Notice" shall have the meaning specified in Section 6.2(a)
---------------
of the Lease.
"Purchase Redemption Date" shall have the meaning specified in Section
------------------------
3.02(c) of the Indenture.
"Redemption Date" shall mean the date on which the Secured Notes are
---------------
to be redeemed pursuant to Section 3.02, 3.05 or 3.06 of the Indenture.
"Redemption Price" shall have the meaning specified in Section 3.10
----------------
of the Indenture.
"Refinery" shall mean the refinery and chemical complex, located in
--------
Beaumont, Texas, and operated on the Closing Date by one or more Affiliates of
the Lessee, within the boundaries of which the Site is located, but excluding
the Facility.
"Refunded Secured Notes" shall have the meaning specified in Section
----------------------
15.1 of the Participation Agreement.
26
<PAGE>
"Refunding Secured Notes" shall have the meaning specified in Section
-----------------------
15.1 of the Participation Agreement.
"Registration Statement" shall mean the Registration Statement on
----------------------
Form S-3 that was filed by Mobil Corporation, Mobil Marine Finance Company I
Inc., Mobil Marine Finance Company II Inc., Mobil Lease Finance Company Inc.,
Mobil Chemical Finance (Texas) Inc., Mobil Chemical Finance (Louisiana) Inc.,
Mobil Petrorail Finance Inc., Mobil Transport Finance Company Inc. and Mobil
Equipment Finance Company Inc. with the SEC, and became effective on November
12, 1996, as the same may be modified and supplemented from time to time with
respect to the offering of the Pass Through Certificates.
"Related Indemnitee Group" shall mean, with respect to each
------------------------
Indemnitee, its Affiliates, officers, directors, employees, agents,
representatives, successors and assigns.
"Release" shall mean the release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migrating into
the environment of any Hazardous Material through or in the air, soil, surface
water or groundwater; provided that the presence in compliance with
--------
Environmental Laws of toluene, xylene, benzene, paraxylene or other chemicals,
hydrocarbons or substances used in or related to the production of benzene or
paraxylene in the Facility Assets shall not constitute a Release.
"Relevant Amendment" shall have the meaning specified in Section 3.04
------------------
of the Indenture.
"Relevant Date" shall have the meaning specified in Section 3.04 of
-------------
the Indenture.
"Relevant Date Supplement" shall have the meaning specified in Section
------------------------
3.04 of the Indenture.
"Relevant Taxes" shall mean any United States federal or Texas Taxes
--------------
(other than net income tax) upon or with respect to the Facility or any Lease or
sublease rentals with respect thereto, or any amount payable upon a purchase of
the Facility Assets or the Beneficial Interest by the Lessee, or otherwise with
respect to or in connection with the transactions contemplated by the Operative
Documents, that would (x) be payable by the Lessee or the Oper-
27
<PAGE>
ator or (y) result in indemnity payments by the Lessee pursuant to Section 12.2
-
of the Participation Agreement.
"Remedial Action" shall mean actions required by any Governmental
---------------
Authority to (i) clean up, remediate, remove or treat Hazardous Materials in
-
the environment; (ii) prevent the Release or further Release or minimize the
--
further Release of Hazardous Materials or (iii) investigate and determine if a
---
remedial response is needed, to design such a response and post-remedial
investigation, monitoring, operation and maintenance.
"Renewal Notice" shall have the meaning specified in Section 5.3 of
--------------
the Lease.
"Renewal Term" shall mean any Fair Market Renewal Term.
------------
"Renewal Term Expiry Date" shall mean the scheduled expiration date of
------------------------
any Renewal Term.
"Rent" shall mean, collectively, Basic Rent and Supplemental Rent.
----
"Replacement Component" shall mean a replacement to any Component or
---------------------
Replacement Component, title to which shall have vested in the Lessor pursuant
to Section 11.5(b) or Section 11.7 of the Lease.
"Request" shall have the meaning specified in Section 2.08(b) of the
-------
Indenture.
"Required Modifications" shall have the meaning set forth in Section
----------------------
11.3 of the Lease.
"Responsible Officer", when used with respect to the Owner Trustee,
-------------------
the Indenture Trustee or the Pass Through Trustee, shall mean an officer in its
corporate trust administration department (or any successor group of the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee, as the case may be)
or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also shall mean, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Return Arrangement Period" shall mean (a) for the Basic Lease Term,
------------------------- -
the period, if any, commencing on
28
<PAGE>
the eighteenth anniversary of the Closing Date and ending on the earlier of (x)
-
the date the Lessee shall have given irrevocable notice of its intention to
exercise its option to purchase the Facility Assets pursuant to Section 6 of the
Lease or to renew the Lease pursuant to Section 5 of the Lease and (y) the date
-
the Facility Assets are returned to the Lessor and (b) for any Renewal Term, the
-
period, if any, commencing on the date that is two (2) years preceding the last
-
day of such Renewal Term chosen by the Lessee pursuant to Section 5.3 of the
Lease and ending on the earlier of (xx) the date the Lessee shall have given
--
irrevocable notice of its intention to exercise its option to purchase the
Facility Assets pursuant to Section 6 of the Lease or to renew the Lease
pursuant to Section 5 of the Lease and (yy) the date the Facility Assets are
--
returned to the Lessor.
"Return Confidential Information" shall mean all Confidential
-------------------------------
Information necessary to the operation of the Facility as modified by the
Modifications described in Section 11.5(b) of the Lease.
"SEC" shall mean the Securities and Exchange Commission.
---
"Second EBO Date" shall mean the date set forth as the "Second EBO
---------------
Date" in Schedule 4 to the Lease.
"Second EBO Purchase Price" shall mean the product of (x) Lessor's
------------------------- -
Cost and (y) the EBO Percentage specified as for the Second EBO Date in Schedule
-
4 to the Lease, as the same may be adjusted as specified in the Participation
Agreement and the Lease.
"Secured Notes" shall mean all notes from time to time issued and
-------------
Outstanding under and pursuant to the Indenture.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Series 1997-A Secured Notes" shall mean the Series 1997 A Secured
---------------------------
Notes, issued under Section 2.01 of the Indenture, and shall include any Series
1997 A Secured Notes issued in exchange therefor or replacement thereof pursuant
to Section 2.07 of the Indenture.
"Severable Modification" shall mean any Modification to the Facility
----------------------
Assets permitted under the Lease which
29
<PAGE>
can be readily removed from the Facility Assets without causing material damage
to the Facility Assets.
"Significant Portion" shall mean with respect to (i) the Facility
------------------- -
Assets, any portion thereof suffering any of the events in clauses (a), (b), (c)
or (d) of the definition of Event of Loss for which the total cost of repair,
rebuilding or replacement to the condition and repair then required by the terms
of the Lease is at least 15% of the Stipulated Loss Value of the Facility Assets
determined as of the Stipulated Loss Value Determination Date next succeeding
the date of the applicable event or occurrence and (ii) the Site or the
--
Refinery, any portion thereof that, in the reasonable judgment of the Lessee is
material to the functioning or operation of the Facility Assets as intended
under the Lease.
"Site" shall have the meaning set forth in the Ground Lease.
----
"Special Termination" shall have the meaning specified in Section
-------------------
7.2(a) of the Lease.
"Special Termination Election" shall have the meaning specified in
----------------------------
Section 7.2(a) of the Lease.
"Specified Lease Event of Default" shall mean a Lease Default or Lease
--------------------------------
Event of Default, in each case described in paragraph (a), (g) or (h) of
Section 15 of the Lease.
"Stipulated Loss Value", shall mean with respect to the Facility
---------------------
Assets, as of any Stipulated Loss Value Determination Date, (i) during the Basic
-
Lease Term, the amount determined by multiplying Lessor's Cost by the
Stipulation Loss Value Percentage set forth opposite such Stipulated Loss Value
Determination Date in Schedule 2 to the Lease and (ii) during any Renewal Term,
--
as determined pursuant to Section 5.4 of the Lease.
"Stipulated Loss Value Determination Date" shall mean any of the dates
----------------------------------------
set forth on Schedule 2 to the Lease.
"Stipulated Loss Value Percentages" shall mean the percentages set
---------------------------------
forth in Schedule 2 to the Lease, subject to adjustment in accordance with
Section 4 of the Lease and Section 2.12 of the Participation Agreement.
30
<PAGE>
"Subsidiary" of any Person shall mean any corporation, association or
----------
other business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled to vote in the election of directors, managers or
trustees thereof (without regard to the occurrence of any contingency) is at the
time owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries (within the meaning of this definition) of that
Person, or a combination thereof.
"Supplemental Financing" shall mean any financing of the cost of any
----------------------
Modification to the Facility Assets pursuant to Section 14 of the Participation
Agreement.
"Supplemental Rent" shall mean (i) any and all amounts, liabilities
----------------- -
and obligations (other than Basic Rent and any amounts payable under Section
2.4(a) of the Lease) which the Lessee assumes or agrees to pay to or on behalf
of the Owner Trustee, the Owner Participant, the Trust Company, the Loan
Participant or the Indenture Trustee under any Operative Document, including,
without limitation, any payments of indemnification or Stipulated Loss Value
or Termination Value or, to the extent provided in Section 3.8 of the Lease,
Premium and (ii) any amounts which are expressed in the Indenture to be payable
--
at the Lessee's expense.
"Support Agreement" shall have the meaning set forth in Section 10.9
-----------------
of the Participation Agreement.
"Taxes" shall mean any and all taxes, impositions, fees, levies,
-----
assessments, duties, withholdings or other governmental charges of any nature
whatsoever (together with any related interest, fines, penalties or additions to
tax), however imposed or asserted, by any United States Federal, state or local
government or taxing authority (including any possession or territory thereof),
or any foreign government or any taxing authority or subdivision thereof, or any
international taxing authority or any subdivision or taxing authority thereof,
including, without limitation, rental, income, withholding, sales, use,
transfer, leasing, personal property, real property, excise, receipts,
franchise, value-added, stamp, filing, recording, documentation or license
taxes.
"Tax Claim" shall have the meaning specified in Section 12.2(e) of the
---------
Participation Agreement.
"Tax Indemnitee" shall mean the Owner Trustee (both in its individual
--------------
capacity and in its trust capacity),
31
<PAGE>
the Owner Participant and the Indenture Trustee (both in its individual capacity
and in its trust capacity) but shall not include (i) the Loan Participant, (ii)
- --
the Pass Through Trustee or (iii) any Certificateholder.
---
"Tax Indemnity Agreement" shall mean the Tax Indemnity Agreement,
-----------------------
dated as of the Closing Date, between the Owner Participant and the Lessee.
"Tax Pricing Assumptions" shall have the meaning specified in Schedule
-----------------------
2 to the Participation Agreement.
"Termination Date" shall have the meaning specified in Section 7.2 of
----------------
the Lease.
"Termination Election" shall have the meaning specified in Section
--------------------
7.2(a) of the Lease.
"Termination Owner" shall mean the Person designated as such by the
-----------------
Owner Participant in accordance with Section 10.9 of the Participation
Agreement.
"Termination Purchase Price" shall have the meaning specified in
--------------------------
Section 7.3 of the Lease.
"Termination Redemption Date" shall have the meaning specified in
---------------------------
Section 3.02(b) of the Indenture.
"Termination Value" shall mean with respect to the Facility Assets (i)
----------------- -
as of the Closing Date or any Monthly Date during the Basic Lease Term, the
amount determined by multiplying Lessor's Cost by the Termination Value
Percentage set forth opposite such date in Schedule 3 to the Lease and (ii)
--
during any Renewal Term, as determined pursuant to Section 5.4 of the Lease.
"Termination Value Percentages" shall mean the percentages set forth
-----------------------------
on Schedule 3 to the Lease, subject to adjustment in accordance with Section 4
of the Lease and Section 2.12 of the Participation Agreement.
"Transaction Expenses" shall mean the following fees, expenses,
--------------------
disbursements and costs incurred in connection with the preparation, execution
and delivery of the Operative Documents and the Pass Through Trust Documents and
the consummation of the transactions contemplated thereby on the Closing Date,
as applicable, provided that such fees, expenses, disbursements and costs (other
--------
than de minimis amounts) will be subject to the prior written approval of
32
<PAGE>
the Lessee (such approval not to be unreasonably withheld), and invoices for all
such fees, expenses, disbursements and costs shall have been presented for
payment on or prior to the 180th day following the Closing Date: (i) the
-
reasonable attorneys' fees and expenses of Thelen, Marrin, Johnson & Bridges
LLP and local counsel to the Owner Participant (limited as set forth in a side
letter between the Owner Participant and the Lessee) and of counsel to the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee; (ii) the initial
--
(but not ongoing) fees and expenses of the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee; (iii) document preparation, printing and dis-
---
tribution costs and governmental filing fees; (iv) fees and expenses of the
--
Appraiser with respect to the Final Appraisal; (v) the fees and commissions of
-
the Pass Through Underwriter in connection with the offering and sale of the
Pass Through Certificates; (vi) other costs associated with the issuance of the
--
Secured Notes and the Pass Through Certificates, including the fees of
independent rating agencies and printer charges and (vii) the reasonable fees,
---
expenses and disbursements of special counsel for the Underwriter in
connection with the Operative Documents; provided that, other than as set forth
--------
in clause (vii) of this sentence, "Transaction Expenses" shall not include the
--------------------
fees, expenses or disbursements of any law firm not specifically named in
Section 4.7 of the Participation Agreement or any fees and expenses of financial
advisors or brokers retained by or acting on behalf of a Participant.
"Transferee" shall have the meaning specified in Section 13.2 of the
----------
Participation Agreement.
"Treasury Rate" shall mean, with respect to each Secured Note to be
-------------
redeemed or purchased, a per annum rate (expressed as a semi-annual equivalent
and as a decimal and, in the case of United States Treasury bills, converted to
a bond equivalent yield), determined to be the per annum rate equal to the semi-
annual yield to maturity of United States Treasury securities maturing on the
Average Life Date of such Secured Note, as determined by interpolation between
the most recent weekly average yields to maturity for two series of United
States Treasury securities, (A) one maturing as close as possible to, but
-
earlier than, the Average Life Date of such Secured Note and (B) the other
-
maturing as close as possible to, but later than, the Average Life Date of such
Secured Note, in each case as published in the most recent H.15(519) (or, if a
weekly average yield to maturity of United States Treasury securities maturing
on the Average Life Date of such Secured Note is reported in the most re-
33
<PAGE>
cent
H.15(519), as published in H.15(519)). H.15(519) shall mean "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication,
published by the Board of Governors of the Federal Reserve System. The most
recent H.15(519) shall mean the latest H.15(519) which is published prior to the
close of business on the fourth Business Day preceding the Redemption Date. For
purposes hereof, "Average Life Date" shall mean, with respect to each Secured
-----------------
Note to be redeemed, the date which follows the Redemption Date by a period
equal to the Remaining Weighted Average Life of such Secured Note. For purposes
hereof, "Remaining Weighted Average Life" shall mean, for any Secured Note, as
-------------------------------
of any date of determination, the number of days equal to the quotient obtained
by dividing (a) the sum of the products obtained by multiplying (i) the amount
- -
of each then remaining installment of principal, including the payment due on
the maturity of such Secured Note by (ii) the number of days from
--
and including the Redemption Date to but excluding the scheduled payment date of
such principal payment, by (b) the then unpaid principal amount of such Secured
-
Note.
"Treasury Regulations" shall mean the income tax regulations issued,
--------------------
published or promulgated under the Code by the United States Department of the
Treasury.
"Trust Agreement" shall mean the Trust Agreement dated as of May 19,
---------------
1997 between the Owner Participant and the Trust Company.
"Trust Company" shall mean Wilmington Trust Company, a Delaware
-------------
banking corporation, in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 3.2 of the
------------
Trust Agreement.
"Trust Expenses" shall have the meaning specified in Section 8.1 of
--------------
the Trust Agreement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
-------------------
amended.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
---
of New York or in any other applicable jurisdiction.
"Underwriter" shall mean Goldman, Sachs & Co.
-----------
34
<PAGE>
"Underwriting Agreement" shall mean the Underwriting Agreement to be
----------------------
entered into among the Guarantor, the Lessee and the Underwriter relating to the
purchase and sale of the Pass Through Certificates.
"U.S. Government Obligations" shall mean securities that are direct
---------------------------
obligations of the United States of America for the payment of which its full
faith and credit is pledged which are not callable or redeemable, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Govern ment Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt so long as such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Wharf" shall mean the wharf, if any, at the Refinery through which
-----
materials or feed-stock used in the production of paraxylene at the Facility
Assets may be delivered.
35
