<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1994
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission File Number: 1-1153
NEWMONT MINING CORPORATION
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1806811
- - ----------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1700 Lincoln Street, Denver, Colorado 80203
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
303-863-7414
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (X) Yes ( ) No
There were 86,044,258 shares of common stock outstanding on October 21, 1994.
Exhibit index is on page 19.
There are 225 pages included in this report.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Income
(In thousands, except per share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------------------
1994 1993
--------- --------
<S> <C> <C>
Sales and other income
Sales $ 150,063 $176,665
Dividends, interest and other 6,772 4,819
---------- --------
156,835 181,484
---------- --------
Costs and expenses
Costs applicable to sales (83,001) (89,037)
Depreciation, depletion and amortization (24,192) (27,238)
Exploration (19,523) (15,686)
General and administrative (10,485) (8,935)
Interest, net of capitalized interest of
$6,609 in 1994 and $2,478 in 1993 (307) (2,820)
Other (4,250) (6,518)
---------- --------
(141,758) (150,234)
---------- --------
Equity in income of affiliated companies 5,991 1,527
---------- --------
Income before income taxes 21,068 32,777
Income tax (provision) benefit 1,338 (2,993)
Minority interest in income of Newmont Gold
Company (1,982) (4,126)
---------- --------
Net income 20,424 25,658
Preferred stock dividends (3,953) (3,953)
---------- --------
Net income applicable to common shares $ 16,471 21,705
========== ========
Net income per common share $ 0.19 $ 0.25
========== ========
Weighted average number of shares of common
stock and common stock equivalents outstanding 86,190 85,678
Cash dividends declared per common share $ 0.12 $ 0.12
</TABLE>
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NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Income
(In thousands, except per share)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------
1994 1993
-------- ---------
<S> <C> <C>
Sales and other income
Sales $439,168 $ 469,130
Gain on sale of securities - 29,607
Dividends, interest and other 10,401 14,970
-------- ---------
449,569 513,707
-------- ---------
Costs and expenses
Costs applicable to sales (238,777) (246,123)
Depreciation, depletion and amortization (68,284) (83,194)
Exploration (47,726) (37,826)
General and administrative (31,882) (25,549)
Interest, net of capitalized interest of
$16,890 in 1994 and $5,537 in 1993 (905) (10,308)
Other (35,095) (8,604)
-------- --------
(422,669) (411,604)
-------- --------
Equity in income of affiliated companies 11,093 74
-------- --------
Income before income taxes and cumulative effect
of change in accounting principle 37,993 102,177
Income tax (provision) benefit 27,069 (15,340)
Minority interest in income of Newmont Gold Company (5,725) (9,088)
-------- --------
Income before cumulative effect of change in
accounting principle 59,337 77,749
Cumulative effect of change in accounting
principle - 38,470
-------- --------
Net income 59,337 116,219
Preferred stock dividends (11,859) (11,913)
-------- --------
Net income applicable to common shares $ 47,478 $104,306
======== ========
Income per share:
Income before cumulative effect of change
in accounting principle $ 0.55 $ 0.77
Cumulative effect of change in accounting
principle - 0.45
-------- --------
Net income per share $ 0.55 $ 1.22
======== ========
Weighted average number of shares of common stock
and common stock equivalents outstanding 86,142 85,419
Dividends declared per common share $ 0.36 $ 0.36
</TABLE>
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NEWMONT MINING CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------ -----------
<S> <C> <C>
Assets
Cash and cash equivalents $ 239,782 $ 69,750
Short-term investments 13,991 18,709
Inventories 112,515 122,246
Other 41,300 18,259
---------- ----------
Current assets 407,588 228,964
Property, plant and mine development, net 1,047,626 794,530
Other 169,166 162,916
---------- ----------
Total assets $1,624,380 $1,186,410
========== ==========
Liabilities
Short-term debt $ 15,739 $ 15,739
Accounts payable 23,246 17,937
Accrued income taxes 323 2,143
Other accrued liabilities 91,976 74,215
---------- ---------
Current liabilities 131,284 110,034
Long-term debt 593,634 192,000
Reclamation liabilities 67,207 71,093
Other long-term liabilities 84,704 92,040
---------- ----------
Total liabilities 876,829 465,167
---------- ----------
Minority interest in Newmont Gold Company 78,895 91,411
---------- ----------
Contingencies
Stockholders' Equity
Preferred stock 14,375 14,375
Common stock 137,659 137,274
Capital in excess of par value 301,463 293,031
Retained earnings 215,159 185,152
---------- ----------
Total stockholders' equity 668,656 629,832
---------- ----------
Total liabilities and stockholders'
equity $1,624,380 $1,186,410
========== ==========
</TABLE>
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NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Operating activities:
Net income $ 59,337 $ 116,219
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 68,284 83,194
Minority interest, net of dividends 1,996 9,088
Undistributed earnings of affiliates (11,093) (74)
Deferred taxes (28,941) (66,172)
Debt repayment at less than monetized amount - (18,072)
Gain on sale of affiliate shares - (29,607)
--------- ---------
89,583 94,576
(Increase) decrease in operating assets:
Inventories 10,628 (39,592)
Other assets 5,984 (16,061)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses 6,218 1,384
Accrued income taxes (1,820) (17,417)
Other liabilities (7,288) 22,975
Other operating (2,004) 289
--------- ---------
Net cash provided by operating activities 101,301 46,154
--------- ---------
Investing activities:
Additions to property, plant and mine development (310,951) (150,436)
Proceeds from sale of securities - 66,978
Other 12,098 (3,096)
--------- ---------
Net cash used in investing activities (298,853) (86,554)
--------- ---------
Financing activities:
Short-term borrowings - 4,798
Proceeds from long-term borrowings 528,634 15,000
Repayments of long-term borrowings (127,000) (66,075)
Proceeds from issuance of common stock 8,936 9,399
Dividends paid on common stock (31,127) (30,719)
Dividends paid on preferred stock (11,859) (13,000)
--------- ---------
Net cash provided by (used in) financing
activities 367,584 (80,597)
--------- ---------
Net increase (decrease) in cash and cash equivalents 170,032 (120,997)
Cash and cash equivalents at beginning of period 69,750 291,024
--------- ---------
Cash and cash equivalents at end of period $ 239,782 $ 170,027
========= =========
</TABLE>
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NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------
1994 1993
--------- --------
<S> <C> <C>
Supplemental information:
Interest paid, net of amounts capitalized of
$16,890 in 1994 and $5,537 in 1993 $ (4,038) $ 7,643
Income taxes paid $ 19,157 $ 47,803
</TABLE>
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NEWMONT MINING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Preparation of Financial Statements
These unaudited interim financial statements of Newmont Mining Corporation
and subsidiaries (collectively the "Corporation") have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission. Such rules and regulations allow the omission of certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles, so long
as the statements are not misleading.
In the opinion of management, these financial statements reflect all
adjustments which are necessary to a fair statement of the results for the
periods presented. All adjustments were of a normal recurring nature except
for the following: (1) for the nine months ended September 30, 1994, a charge
of $27.1 million related to environmental obligations associated with former
mining activities as discussed in Note 5 herein; (2) for the nine months ended
September 30, 1994, an income tax benefit of $16.2 million resulting from the
resolution of certain tax issues associated with prior years; and (3) for the
nine months ended September 30, 1993, a benefit to income of $38.5 million for
the cumulative effect of a change in accounting principle effective January 1,
1993 for accounting for income taxes as discussed in Item 8, Note 5 of the
Corporation's Form 10-K for the year ended December 31, 1993. These interim
financial statements should be read in conjunction with the annual financial
statements of the Corporation included in its 1993 annual report on Form 10-K.
All share and per share information have been restated to reflect a
1.2481 to 1 share stock split declared March 21, 1994.
Certain prior year amounts have been reclassified to conform with the
current year presentation.
(2) Transaction with Newmont Gold Company
Effective January 1, 1994, Newmont Gold Company ("NGC"), the principal
operating subsidiary of the Corporation, acquired essentially all of the
Corporation's non-NGC assets and assumed essentially all of the Corporation's
non-NGC liabilities in a tax- free transaction. As part of the transaction,
the Corporation transferred 8,649,899 shares of NGC stock to NGC, reducing the
Corporation's interest in NGC to 89.2% from 90.1%. The result of the
transaction is that the common shareholders of both entities have interests in
the same assets and liabilities. Furthermore, the Corporation declared a
1.2481 shares to 1 share stock split on March 21, 1994 which will result in per
share earnings of the two entities being comparable.
The transfer of assets, NGC common stock and liabilities to NGC was
recorded at historical cost since the transaction was between entities under
common control. As a result of the transaction, consolidated retained earnings
increased approximately $14 million and the minority interest in NGC decreased
by a like amount since net liabilities with a historical cost of approximately
$202 million were transferred to NGC, offset partially by the Corporation's
decrease in ownership of NGC.
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(3) Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------ ------------
(In thousands)
<S> <C> <C>
Current:
Ore and in-process $ 64,815 $ 55,874
Precious metals 17,560 38,090
Materials and supplies 27,698 25,907
Other 2,442 2,375
-------- --------
$112,515 $122,246
======== ========
Non-current:
Ore in stockpiles (included
in other assets) $ 39,309 $ 40,206
======== ========
</TABLE>
(4) Sale-leaseback of the Refractory Ore Treatment Plant
In September 1994, the Corporation entered into a sale and leaseback
agreement for its refractory ore treatment plant located in Carlin, Nevada for
$349 million. The transaction has been accounted for as a financing for
financial statement purposes, with the cost of the refractory ore treatment
plant continuing to be recognized as an asset and depreciated. The lease is
for 21 years and the aggregate future minimum lease payments as of September
30, 1994 were $679.4 million. These payments begin in January 1996 and are
$30.2 million annually in 1996 through 1999. The lease has purchase options
during and at the end of the lease at predetermined prices.
In connection with this transaction, the Corporation entered into certain
interest rate contracts to hedge the interest cost of the financing. These
contracts were settled for a gain of $11.0 million which will be recognized as
a reduction of interest expense over the term of the lease.
(5) Contingencies
The Corporation is involved in several matters concerning environmental
obligations primarily associated with former mining activities. Based upon the
Corporation's best estimate of its liability for these matters, $61.3 million
was accrued at September 30, 1994, excluding $18.8 million also accrued for
reclamation costs relating to currently producing mineral properties. The
amounts are included in reclamation liabilities and other current liabilities.
The $61.3 million at September 30, 1994 includes a charge of $7.1 million taken
in the second quarter of 1994 as a result of the Corporation revising its
estimate of the costs associated with these matters. Depending upon the
ultimate resolution of these matters, the Corporation believes that it is
reasonably possible that the liability for these matters could be as much as
65% greater or 15% lower than the amount accrued at September 30, 1994.
A discussion of the environmental obligations and related insurance
receivables associated with former mining activities as of September 30, 1994
follows.
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Idarado Mining Company ("Idarado") - 80.1% owned by NGC
In July 1992, the Corporation and Idarado signed a consent decree with the
State of Colorado ("State") which was agreed to by the U.S. District Court of
Colorado to settle a lawsuit brought by the State under the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"), generally
referred to as the "Superfund Act." Idarado settled natural resources damages,
past and future response costs and provided habitat enhancement work. In
addition, Idarado agreed in the consent decree to undertake specified
remediation work related to its former mining activities in the Telluride/Ouray
area of Colorado. The Corporation's best estimate of the cost of this work is
included in the gross liability, as previously discussed. If the remediation
work does not meet certain measurement criteria specified in the consent
decree, the State and court reserve the right to require Idarado to perform
other remediation work. Idarado and the Corporation have obtained a $16.3
million letter of credit to secure their obligations under the consent decree.
Resurrection Mining Company ("Resurrection") - 100% owned by NGC
In 1983, the State of Colorado ("State") filed a lawsuit under the
Superfund Act which involves a joint venture mining operation near Leadville,
Colorado in which Resurrection is a joint venturer. This action was
subsequently consolidated with a lawsuit filed by the U. S. Environmental
Protection Agency ("EPA") in 1986. The EPA is taking the lead role on cleanup
issues. The proceedings sought to compel the defendants to remediate the
impacts of pre-existing mining activities which the government agencies claim
are causing substantial environmental problems in the area. The mining
operations of the joint venture are operated by ASARCO, the other joint
venturer. The governments have made the Corporation, Resurrection, the joint
venture and ASARCO defendants in the proceedings. They are also proceeding
against other companies with interests in the area.
The EPA divided the remedial work into two phases. Phase I addresses a
drainage and access tunnel owned by the joint venture - the Yak Tunnel. Phase
II addresses the remainder of the site.
In 1988 and 1989, the EPA issued administrative orders with respect to
Phase I work for the Yak Tunnel. The joint venture, ASARCO, Resurrection and
the Corporation have collectively implemented those orders by constructing a
water treatment plant which was placed in operation in early 1992. The joint
venture is in negotiations regarding remaining remedial work for Phase I, which
primarily consists of monitoring and environmental maintenance activities.
The parties have entered into a consent decree with respect to Phase II
which apportions liabilities and responsibilities for the site among the
various parties. The EPA has not yet completed work to define the remedies for
Phase II. Accordingly, the Corporation cannot yet determine the full extent or
cost of its share of remedial action which will be required under Phase II.
Moreover, in addition to such remedial action, the government agencies may seek
to recover for damages to natural resources.
Although the ultimate amount of Resurrection's and the Corporation's share
of such costs for Phase I and Phase II cannot be presently determined, the
Corporation's best estimate of its potential exposure for these costs is
included in the gross liability for these matters, previously discussed.
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Dawn Mining Company ("Dawn") - 51% owned by NGC
Dawn leased a currently inactive open-pit uranium mine on the Spokane
Indian Reservation in the State of Washington ("State"). The mine is subject
to regulation by agencies of the U. S. Department of Interior, the Bureau of
Indian Affairs and the Bureau of Land Management, as well as the EPA. Dawn
also owns a nearby uranium millsite facility.
In 1991, Dawn's lease was formally terminated. As a result, Dawn was
required to file a formal reclamation plan. Dawn does not have sufficient
funds to pay for such a reclamation plan or to pay for the closure of its mill.
Dawn proposed to the State a mill closure plan which could potentially generate
the necessary funds to reclaim the mine and the mill. The State notified Dawn
that the proposed plan was not the State's preferred alternative and was not
consistent with certain policy considerations of the State. Dawn has submitted
a revised mill closure plan to address the State's concerns. The State has not
yet acted on the revised proposed plan. The Corporation's best estimate for
the future costs related to these matters is included in the gross liability
for environmental matters, previously discussed.
The Department of Interior previously notified Dawn that when the lease
was terminated, it would seek to hold Dawn and the Corporation (as Dawn's then
51% owner) liable for any costs incurred as a result of Dawn's failure to
comply with the lease and applicable regulations. The Corporation would
vigorously contest any such claims. The Corporation cannot reasonably predict
the likelihood or outcome of any future action against Dawn or the Corporation
arising from this matter.
Insurance Receivables
The Corporation has recorded net long-term receivables from insurance
companies of approximately $17 million at September 30, 1994 for both a portion
of the costs previously expended and for estimated future costs associated with
environmental obligations covered by insurance policies associated with former
mining activities. This amount is substantially less than the amount the
Corporation has or will claim from the insurance carriers. All of the claims
are contested by the insurance carriers. Prior to 1993, three of the carriers
commenced actions against the Corporation seeking judgments that they had no
liability. Significant discovery was commenced only in the action relating to
the Corporation's environmental impairment liability ("EIL") insurance policy;
the other two actions were not aggressively prosecuted by the carriers. In the
fall of 1993, the Corporation instituted a comprehensive lawsuit against all of
its carriers, other than the EIL carrier. In addition, in 1993, the
Corporation designated new lead counsel for all the insurance recovery actions.
Based on the views of prior lead counsel, the Corporation had believed
that significant progress in certain settlement discussions would have been
achieved by mid-summer 1994, but that expectation was not realized. The
absence of such anticipated progress in settlement discussions, as well as the
Corporation's discussions with new lead counsel for the insurance recovery
actions regarding its review of such actions, caused the Corporation in the
second quarter of 1994 to provide a $20 million valuation allowance on its
insurance receivables resulting in the net amount above. Although the
Corporation cannot predict the outcome of the legal actions or assure receipt
of the amounts recorded, the Corporation will continue to vigorously pursue
recovery under the insurance policies and believes that it is reasonably
possible that the ultimate amounts recovered will exceed the net receivable
recorded as of September 30, 1994. The net receivable recorded at September
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30, 1994 represents the probable amount the Corporation expects to receive
based upon its evaluation of the discussions with the insurance companies, its
discussions with in-house and outside counsel regarding the merits of the
various claims made and defenses raised, its interpretation of the insurance
policies and its factual investigation of the issues.
(6) Supplementary Data
The ratio of earnings to fixed charges for the nine months ended September
30, 1994 was 1.6. The ratio of earnings to combined fixed charges and
preferred stock dividends for the nine months ended September 30, 1994 was less
than 1.0:1 due to the $27.1 million of non-cash charges related to
environmental obligations discussed in Note 5. The amount of the coverage
deficiency was $0.7 million.
<PAGE> 12
PAGE 12
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
As discussed in Note 2 of Item 1, effective January 1, 1994, Newmont Gold
Company ("NGC"), the principal producing operating subsidiary of Newmont Mining
Corporation ("NMC"), acquired essentially all of the NMC corporate assets
(except for approximately 86 million shares of common stock of NGC held by NMC)
and assumed essentially all of the NMC corporate liabilities which it did not
already own or have an interest. In that the transaction occurred within NMC's
consolidated group, it had minimal impact on consolidated results of
operations, liquidity and capital resources. NMC's consolidated group is
referred to hereafter as the "Corporation".
In conjunction with the transaction with NGC, NMC declared a 1.2481 to 1
share stock split to equate NMC's outstanding shares to the shares it holds in
NGC. All share and per share information has been restated for the stock
split. The following discussion summarizes the Corporation's results of
operations for the quarters and nine month periods ended September 30, 1994 and
1993 and changes in financial condition from December 31, 1993 to September 30,
1994. This discussion should be read in conjunction with the Management's
Discussion and Analysis included in the Corporation's 1993 annual report on
Form 10-K.
RESULTS OF OPERATIONS
The Corporation earned $20.4 million, or $0.19 per share, and $59.3
million, or $0.55 per share, in the quarter and nine months ended September 30,
1994, respectively, compared with $25.7 million, or $0.25 per share, and $116.2
million, or $1.22 per share, in the respective 1993 periods. The nine months
ended September 30, 1994 includes a tax benefit of $16.2 million resulting from
the resolution of certain tax issues associated with prior years and $27.1
million of charges ($17.6 million after-tax) associated with environmental
obligations discussed in Note 5 of Item 1, which together net to a charge of
$0.01 per share on an after-tax basis after considering NGC's minority
interest. The nine months ended September 30, 1993 includes a gain of $29.6
million, or $19.3 million and $0.22 per share after-tax, on the sale of an
investment in Newcrest Mining Limited, a former subsidiary of NMC, in addition
to a benefit of $38.5 million, or $0.45 per share, for the cumulative effect of
a change in accounting principle for income taxes. Earnings for the 1994
periods were impacted by anticipated lower gold production.
Sales revenue decreased $26.6 million, or 15%, for the third quarter of
1994 compared to the same quarter of 1993 and decreased $30.0 million, or 6%,
for the first nine months of 1994 compared to 1993. The following table shows
the impact of price and quantity variances between the periods on sales
revenues (in millions):
<TABLE>
<CAPTION>
1994 Compared to 1993
----------------------------------
Third Quarter First Nine Months
-------------- -----------------
<S> <C> <C>
Increase (decrease) in sales
revenues due to changes in:
Average sales price $ (0.3) $ 14.6
Quantity sold (26.3) (44.6)
------- ------
Total $ (26.6) $(30.0)
======= ======
</TABLE>
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PAGE 13
The following table reflects the gold ounces sold and average price
received for the respective periods:
<TABLE>
<CAPTION>
Third Quarter Nine Months
Ended September 30, Ended September 30,
------------------ -------------------
1994 1993 1994 1993
------ ------ -------- --------
<S> <C> <C> <C> <C>
Ounces sold (in thousands) 388.1 456.0 1,142.8 1,262.8
Average price per ounce $ 387 $ 387 $ 384 $ 372
</TABLE>
Production decreased in the 1994 periods as the Corporation began its
transition to ready itself to process large quantities of refractory ore at its
Carlin operations. In June 1994, the Corporation shut down its Mill No. 2 at
Carlin to facilitate the incorporation of parts of this mill into the
Corporation's new refractory ore treatment plant which will process high-grade
refractory ore. This plant was expected to become fully operational by the end
of the third quarter of 1994 but because of a crack that occurred in a weld of
a riding ring of the double rotator mill at the end of August, complete startup
is now expected by the first part of November. The Corporation expects this
delay will have a minimal impact on its production for the year which is now
expected to be approximately 1.5 million ounces.
The decrease in 1994 production attributable to sales revenues is
partially offset by the Corporation's equity interest in Minera Yanacocha S.A.
("Yanacocha"), a 38% owned Peruvian corporation which commenced production in
August 1993. Yanacocha sold 89,700 ounces, or 34,100 ounces to the
Corporation's interest, and 204,500 ounces, or 77,700 ounces to the
Corporation's interest, in the third quarter and first nine months of 1994,
respectively, compared to 25,200 ounces, or 9,600 ounces to the Corporation's
interest, in the 1993 third quarter when Yanacocha commenced operations.
Yanacocha's average operating costs, excluding depreciation, depletion and
amortization, were $131 per ounce and $133 per ounce in the third quarter and
first nine months of 1994, respectively, compared to $145 in the 1993 periods.
The Corporation's equity income is a result of this investment.
In 1993, the Corporation realized gold prices above average market prices
due to a hedging program. No production in 1994 has been hedged. In the third
quarter of 1994, the Corporation entered into several hedging transactions that
begin in January 1996 and continue through December 2000 for future production
from its Indonesian property, Minahasa. These hedge transactions total 125,000
ounces per year at an average price of $454 an ounce, plus the Corporation
receives 40% of the difference of any market price above the hedged price.
Construction of the Minahasa project commenced in the third quarter of 1994 and
operations are expected to commence in early 1996.
The Corporation's costs applicable to sales decreased in the aggregate,
but increased on a per ounce basis in the 1994 periods over the 1993 periods.
The following table summarizes the significant components of these costs per
ounce of gold sold:
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PAGE 14
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ----------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Production costs $183 $158 $179 $159
Royalties 25 29 24 29
Other 5 5 5 6
---- ---- ---- ----
$213 $192 $208 $194
==== ==== ==== ====
</TABLE>
In the aggregate, production costs were approximately the same for the
third quarter of 1994 compared to the third quarter of 1993 and increased $4.3
million for the nine months ended September 30, 1994 compared to the same
period in 1993. The per ounce increases in 1994 for the third quarter and nine
months and the aggregate increase for the nine months are a result of
processing higher cost ores in the 1994 periods as reflected in lower mill
recoveries and higher waste-to-ore ratios.
For the 1994 third quarter and nine month period, royalty costs on an
aggregate basis were $9.9 million and $27.1 million, respectively. This
compares to royalty costs in the 1993 third quarter and nine month period of
$13.0 million and $36.6 million, respectively. Royalty costs on an aggregate
and per ounce basis were lower in the 1994 periods than the same periods in
1993 due to less royalty-burdened ore being treated in the 1994 periods.
Depreciation, depletion and amortization decreased $3.0 million and $14.9
million in the 1994 third quarter and first nine months, respectively, when
compared to the same periods of 1993. The decrease between quarters and $7.0
million of the decrease between the nine month periods was a result of
facilities that became either fully depreciated or placed on standby status and
thus no comparable depreciation was taken in 1994 periods. Another $4.6
million of the decrease in the 1994 nine month period was due to a change in
estimated useful lives of certain depreciable assets effective July 1, 1993.
Exploration expense in the 1994 periods is up over the comparable 1993
periods as had been anticipated due to increased exploration activity.
Compared to the 1993 amounts, general and administrative expense increased
by $1.5 million and $6.3 million in the third quarter and first nine months of
1994, respectively, primarily due to the Corporation's expanding international
activities.
Net interest expense decreased during the third quarter and first nine
months of 1994 due to almost all interest costs for such periods being
capitalized as a result of major construction projects at the Carlin
operations, primarily the refractory ore treatment plant, as well as a
processing plant in Uzbekistan.
Other expenses were higher in the nine months ended September 30, 1994
compared to the same period in 1993 due to charges made in the 1994 second
quarter, as discussed in Note 5 of Item 1. A valuation allowance of $20.0
million was made against long-term receivables from insurance companies for
recoveries related to environmental obligations associated with former mining
activities and a provision of $7.1 million was made for additional estimated
environmental related costs associated with the same former mining activities.
The valuation allowance resulted in a net receivable balance
<PAGE> 15
PAGE 15
from insurance companies of approximately $17 million at September 30, 1994.
The Corporation recorded the valuation allowance after discussions with counsel
regarding its review of the litigation with the insurance companies and due to
the absence of expected settlement discussions. Nevertheless, the Corporation
intends to vigorously pursue its claims against the insurance companies and
believes it is reasonably possible that it will ultimately recover more than
the receivable recorded at September 30, 1994, although there can be no
assurance that this amount will be recovered. Since the actual cash payments
for the environmental obligations are expected to occur over a number of years
and the Corporation cannot predict when it will receive insurance recoveries,
the charges for the valuation allowance as well as additional environmental
obligations are not expected to have any significant negative impact on the
Corporation's liquidity. The Corporation continuously monitors and reviews its
environmental obligations, and although the Corporation believes that it has
adequately accrued for such costs, as additional facts become known, additional
provisions may be required.
In Oregon, a petition drive has placed an initiative on the ballot for the
fall election which would require the backfilling of open pit gold mines. The
Corporation's Grassy Mountain project is in Oregon and is expected to be an
open pit mine. If the initiative is passed, it may be uneconomic to mine the
current reserves. Total capitalized costs attributable to Grassy Mountain at
September 30, 1994 were approximately $34 million.
During the second quarter of 1994, the Corporation recognized a $16.2
million income tax benefit as a result of the resolution of certain tax issues
associated with prior years. This, combined with a deferred tax benefit of
approximately $9.5 million associated with the previously mentioned $27.1
million total charge associated with environmental obligations, resulted in the
tax benefit for the first nine months of 1994. In addition, the benefits of
percentage depletion contribute to an overall negative effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of 1994, the Corporation's capital
expenditures were $311.0 million and cash flow from operating activities was
$101.3 million. Other significant sources of cash during the period were
borrowings of $528.6 million. These borrowings include $349.1 million under a
sale and leaseback agreement for the Corporation's refractory ore treatment
plant as discussed in Note 4 of Item 1, of which $127.0 million was used to pay
down the outstanding balances which had been drawn under the Corporation's
revolving credit facility. In addition, $52.5 million of project financing
debt was borrowed which relates to the construction of the Uzbekistan
processing plant. Of the capital expenditures, $146.1 million was spent on the
refractory ore treatment facility, $47.6 million was spent on the Uzbekistan
project and $20.6 million was spent on Minahasa, the Indonesian property. In
addition, the Corporation capitalized $30.1 million of mining costs associated
with the Post deposit in Nevada. Due to the diverse waste-to-ore ratios of the
deposit, costs are capitalized to the extent they do not relate to current
production.
The Corporation believes that its operating cash flow, along with its cash
balance of $239.8 million as of September 30, 1994, and a $400 million
revolving credit facility, on which no amounts were outstanding at September
30, 1994, provides adequate liquidity to finance the Corporation's capital
investment programs. However, the Corporation continuously monitors capital
markets and may utilize alternative sources of funds available to it. The
Corporation expects to fund maturities of its debt through operating cash flow
or by refinancing the debt as it becomes due, or both.
<PAGE> 16
PAGE 16
Other current assets increased from December 31, 1993 partially due to a
$13 million reclassification from other long-term assets of the balance of a
trust account which terminates within the next twelve months.
Other accrued liabilities increased from December 31, 1993, primarily due
to an increase in accrued expenses associated with property, plant and mine
development because of increased construction activity.
The decrease in minority interest in subsidiaries is a result of the
transaction with NGC. In that approximately $202 million of net liabilities
were assumed by NGC, this decreased the minority interest by approximately $21
million. This decrease was partially offset by the minority interest in NGC
increasing from 9.9% to 10.8%. The net decrease was offset by a like increase
to retained earnings.
<PAGE> 17
PAGE 17
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4.1* - Pass Through Trust Agreement dated as of July 15, 1994 between
Newmont Gold Company and The First National Bank of Chicago relating to the
Pass Through Certificates, Series 1994-A1.
4.2** - Lease dated as of September 30, 1994 between the Newmont Gold
Company and Shawmut Bank Connecticut, National Association relating to Trust
No. 1.
4.3** - Trust Indenture and Security Agreement dated as of July 15, 1994
between Shawmut Bank Connecticut, National Association and The First National
Bank of Chicago relating to Trust No. 1.
4.4 - In reliance upon Item 601(b)(4)(iii) of Regulation S-K, various
instruments defining the rights of holders of long-term debt of the Corporation
are not being filed herewith because the total of securities authorized under
each such instrument does not exceed 10% of the total assets of the
Corporation. The Corporation hereby agrees to furnish a copy of any such
instrument to the Commission upon request.
11 - Statement re Computation of Per Share Earnings.
12.1 - Statement re Computation of Ratio of Earnings to Fixed Charges.
12.2 - Statement re Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
27 - Financial Data Schedule.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter ended September 30,
1994.
* A substantially similar Pass Through Agreement (except for price-related
information) relating to the Pass Through Trust Certificates, Series 1994-A2
(the "Series 1994-A2 Certificates") was entered into by Newmont Gold Company
and The First National Bank of Chicago. The front cover of the Pass Through
Agreement files as an exhibit hereto indicates the material differences between
such Agreement and the Pass Through Agreement relating to the Series 1994-A2
Certificates.
** These agreements relate to a 75% undivided interest in Newmont Gold
Company's refractory gold ore treatment facility (the "Facility"; each such
agreement is referred to as a "75% Undivided Interest Agreement" and
collectively the "75% Undivided Interest Agreement"). Substantially similar
agreements (except for price-related information) relating to the remaining 25%
undivided interest in the Facility (each a "25% Undivided Interest Agreement")
also were entered into on the same dates as the 75% Undivided Interest
Agreements. The front cover of the relevant 75% Undivided Interest Agreement
which is filed as an exhibit hereto indicates the material differences between
such 75% Undivided Interest Agreement and the relevant 25% Undivided Interest
Agreement.
<PAGE> 18
PAGE 18
SIGNATURES
Pursuant to the requirements 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.
NEWMONT MINING CORPORATION
(Registrant)
Date: October 27, 1994 /s/ WAYNE W. MURDY
Wayne W. Murdy
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ GARY E. FARMAR
Gary E. Farmar
Vice President and Controller
(Principal Accounting Officer)
<PAGE> 19
PAGE 19
EXHIBIT INDEX
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Exhibit 4.1 - Pass Through Trust Agreement dated as of
July 15, 1994 between Newmont Gold Company
and The First National Bank of Chicago
relating to the Pass Through Certificates,
Series 1994-A1.
Exhibit 4.2 - Lease dated as of September 30, 1994 between
the Newmont Gold Company and Shawmut Bank
Connecticut, National Association relating
to Trust No. 1.
Exhibit 4.3 - Trust Indenture and Security Agreement dated
as of July 15, 1994 between Shawmut Bank
Connecticut, National Association and The
First National Bank of Chicago relating to
Trust No. 1.
Exhibit 11 - Statement re Computation of Per Share Earnings
Exhibit 12.1 - Statement re Computation of Ratio of Earnings
to Fixed Charges
Exhibit 12.2 - Statement re Computation of Ratio of Earnings
to Combined Fixed Charges and Preferred Stock
Dividends
Exhibit 27 - Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 4.1
=================================================================
PASS THROUGH TRUST AGREEMENT
Dated as of
July 15, 1994
BETWEEN
THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely
as Pass Through Trustee,
AND
NEWMONT GOLD COMPANY
Newmont Gold Company
Pass Through Trust, 1994-A1
=================================================================
A Pass Through Agreement dated as of July 15, 1994 between The First National
Bank of Chicago and Newmont Gold Company relating to the Pass Through
Certificates, Series 1994-A2, was also entered into by the parties thereto.
Such Pass Through Agreement is identical in all material respects to this Pass
Through Agreement except for aggregate amount, final scheduled regular
distribution date and CUSIP number, with respect to the Pass Through
Certificates, and principal amount, maturity and interest rate with respect to
the Equipment Notes.
<PAGE> 2
CROSS REFERENCE SHEET
Between
Provisions of the Trust Indenture Act of 1939, as amended,
and the Pass Through Trust Agreement:
<TABLE>
<CAPTION>
Section of
Section of the Act the Agreement
- - ------------------ -------------
<S> <C>
310(a)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
310(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
310(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
(1)310(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
310(b)(i)-(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01, 10.03
310(b)(remainder) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12, 4.01
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.07
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.07
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09, 7.10
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03, 7.05
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.08
</TABLE>
____________________
(1) * Intentionally deleted.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
ARTICLE II
DESIGNATIONS; PASS THROUGH TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
SECTION 2.01. Designations; Aggregate Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02. Issuance of Pass Through Certificates; Acquisition of Equipment Notes . . . . . . . . . . . . . 10
SECTION 2.03. Declaration of Trust; Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Limitation of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.05. Execution of Pass Through Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06. Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.07. Form of Pass Through Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.08. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Pass Through Certificates . . . . . . . . . . . 14
SECTION 2.10. Cancellation of Pass Through Certificates; Destruction Thereof . . . . . . . . . . . . . . . . 16
SECTION 2.11. Temporary Pass Through Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.12. Pass Through Certificates Issuable in the Form of a Registered Global Security . . . . . . . . 17
SECTION 2.13. Appointment of Authenticating Agent; Paying Agent and Registrar . . . . . . . . . . . . . . . . 19
</TABLE>
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ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Representations, Warranties and Covenants of the Company . . . . . . . . . . . . . . . . . . . 19
SECTION 3.02. Offices for Payments; Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.03. Representations and Warranties of the Pass Through Trustee . . . . . . . . . . . . . . . . . . 21
SECTION 3.04. Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.05. No Representations or Warranties as to Documents . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.06. Payments from Trust Property Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.07. Limitation of the Company's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership of Pass Through Certificates . . . . . . . . . . . . . . . . 24
SECTION 4.02. Disclosure of Certificateholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.03. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.04. Reports by the Pass Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Distribution Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.02. Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.03. Certificate Account and Special Payments Account . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.04. Distributions from Certificate Account and Special Payments Account . . . . . . . . . . . . . . 27
SECTION 5.05. Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.06. Investment of Special Payment Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.07. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
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ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.02. Proof of Execution of Instruments and of Holding of Certificates . . . . . . . . . . . . . . . 31
SECTION 6.03. Certificateholders to Be Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.04. Pass Through Certificates Owned by the Company and Related Owner Trustees Deemed
Not Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.05. Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.06. ERISA Plan Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.02. Incidents of Sale of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.03. Pass Through Trustee May Prove Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.04. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.05. Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.06. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.07. Limitations on Suits by Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.08. Unconditional Right of Certificateholders to Receive Principal,
Interest and Premium, and to Institute Certain Suits . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.09. Control by Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.10. Waiver of Past Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.11. Notice of Pass Through Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.02. Pass Through Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.03. Certain Rights of the Pass Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.04. Pass Through Trustee Not Responsible for Recitals. . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
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SECTION 8.05. Pass Through Trustee and Agents May Hold Pass Through
Certificates; Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.06. Moneys Held by Pass Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.07. Right of Pass Through Trustee to Rely on Officers' Certificate . . . . . . . . . . . . . . . . 43
SECTION 8.08. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of Pass Through
Trustee; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.02. Persons Eligible for Appointment as Pass
Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.03. Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.04. Merger, Conversion, Consolidation or
Succession to Business of Pass Through Trustee . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.05. Appointment of Separate Pass Through
Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements Without Consent of
Certificateholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.02. Supplemental Agreements With Consent of
Certificateholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.03. Effect of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.04. Documents to Be Given to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.05. Notation on Pass Through Certificates in
Respect of Supplemental Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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SECTION 11.06. Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.07. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.08. Amendments, Waivers, etc., of Related
Indenture Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 12.02. Application by Pass Through Trustee of Funds
Deposited for Payment of Pass Through Certificates. . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.03. Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.04. Transfer of Moneys Held by Pass Through
Trustee and Paying Agent Unclaimed for Two Years and Eleven Months . . . . . . . . . . . . . . 57
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.02. No Legal Title to Trust Property in
Certificateholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.03. Certificates Nonassessable and Fully Paid . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.04. Pass Through Agreement for the Benefit of
the Company, the Pass Through Trustee and the Certificateholders . . . . . . . . . . . . . . . 58
SECTION 13.05. Limitation on Rights of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.07. Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 13.08. Conflict of Any Provision of Pass Through
Agreement with the Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.09. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.10. No Oral Modifications or Continuing Waivers . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.11. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13.13. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13.14. Governing Law; Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13.15. Distributions Due on Days Other than
Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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EXHIBIT A - Form of Pass Through Certificate
SCHEDULE I - Description of Equipment Notes and
Related Indenture Documents
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PASS THROUGH TRUST AGREEMENT 1994-A1
PASS THROUGH TRUST AGREEMENT dated as of July 15, 1994,
between NEWMONT GOLD COMPANY, a Delaware corporation (the "Company"), and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association organized under
the laws of the United States of America, not individually but solely as Pass
Through Trustee (the "Pass Through Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall have the
respective meanings set forth or referred to in Article I hereof;
WHEREAS, pursuant to the Participation Agreements, the Company
has agreed to cause the Equipment Notes to be issued and sold to the Pass
Through Trustee, and the Pass Through Trustee has agreed to purchase the
Equipment Notes, which will be held in trust as Trust Property for the benefit
of the Certificateholders;
WHEREAS, in order to facilitate such sale, the Company has
agreed, pursuant to the Underwriting Agreement, to cause the Pass Through
Trustee to issue and sell the Pass Through Certificates to the Underwriters;
WHEREAS, pursuant to this Pass Through Agreement, the Pass
Through Trustee will execute, authenticate and deliver the Pass Through
Certificates to the Underwriters upon receipt by the Pass Through Trustee of
the purchase price therefor, which will be applied in accordance with this Pass
Through Agreement to purchase the Equipment Notes;
WHEREAS, the Pass Through Trustee hereby declares the creation
of this Pass Through Trust for the benefit of the Certificateholders, and the
initial Certificateholders of such Pass Through Certificates, as the grantors
of such Pass Through Trust, by their respective acceptances of such Pass
Through Certificates, join in the creation of the Pass Through Trust;
WHEREAS, to facilitate the sale of the Equipment Notes to, and
the purchase of the Equipment Notes by, the Pass Through Trustee on behalf of
this Pass Through Trust, the Company has duly authorized the execution and
delivery of this Pass Through Agreement as the "issuer," as such term is
<PAGE> 10
defined in and solely for purposes of the Securities Act, of the Pass Through
Certificates and as the "obligor," as such term is defined in and solely for
purposes of the Trust Indenture Act, with respect to all such Pass Through
Certificates; and
WHEREAS, this Pass Through Agreement is subject to the
provisions of the Trust Indenture Act and shall, to the extent applicable, be
governed by such provisions;
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
The following terms (except as otherwise expressly provided or
unless the context otherwise clearly requires) for all purposes of this Pass
Through Agreement have the respective meanings specified in this Section. All
other terms used in this Pass Through Agreement that are defined in the Trust
Indenture Act (as defined below) or the definitions of which in the Securities
Act (as defined below) are referred to in the Trust Indenture Act (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of this Pass Through Agreement. All
accounting terms used and not expressly defined herein have the meanings given
to them in accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" means the accounting principles
that are generally accepted at the date or time of any computation or otherwise
at the date hereof. The words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Pass Through Agreement as a whole and not
to any particular Article, Section or other subdivision. References to
designated "Articles," "Sections," "subsections" and other subdivisions of this
Pass Through Agreement are to the designated Articles, Sections, subsections
and other subdivisions of this Pass Through Agreement as originally executed.
The terms defined in this Article include the plural as well as the singular.
"Affiliate" has, for any Person, the meaning specified in Rule
0-2 under the Trust Indenture Act.
2
<PAGE> 11
"Applicable Law" means all laws, including Federal, state and
local laws, ordinances, judgments, decrees, injunctions, writs and orders, and
rules, regulations, orders, interpretations, licenses and permits of any
Governmental Authority.
"Authenticating Agent" has the meaning set forth in Section
2.13 hereof.
"Business Day" means any day other than Saturday, Sunday or
other day on which banking institutions in the States of New York, Illinois or
Connecticut, or any other state in which the Pass Through Trustee or any
Related Indenture Trustee or Related Owner Trustee for the Pass Through Trust
maintains an office for the receipt or disbursement of funds for the
transactions contemplated herein or in any Indenture Documents for the
Equipment Notes, are authorized or required by law to close.
"Certificate Account" means the account or accounts created
and maintained pursuant to Section 5.03(a).
"Certificateholder" means the registered holder of any Pass
Through Certificate as evidenced on the Register.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution and delivery of this Pass Through Agreement such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"Company" means Newmont Gold Company, a Delaware corporation,
and its permitted successors and assigns hereunder.
"Corporate Trust Office" means the corporate trust office of
the Pass Through Trustee located at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Services Division, or
such other office at which the Pass Through Trustee's corporate trust business
shall be administered and which the Pass Through Trustee shall have specified
by notice in writing to the Company and the Certificateholders.
3
<PAGE> 12
"Delivery Date" means, for any Equipment Notes, the Closing
Date (as such term is defined in the related Participation Agreement) for such
Equipment Notes.
"Depository" means the depository of the Registered Global
Certificate representing the Pass Through Certificates and any successor to
such depository appointed by the Company pursuant hereto. Such depository
initially shall be The Depository Trust Company, a New York corporation.
"Distribution Date" means any Regular Distribution Date or
Special Distribution Date or both.
"Dollars" and "$" mean lawful currency of the United States of
America.
"Equipment Note" means any "Note," as such term is defined in
the related Indenture, issued by an Owner Trustee pursuant to such Indenture
and listed in Schedule I hereto, which is to be held by the Pass Through
Trustee as part of the Trust Property.
"Event of Default" has the meaning specified in Section 7.01
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fractional Undivided Interest" means, for any Pass Through
Certificate, the fractional undivided interest in the Pass Through Trust that
is evidenced thereby.
"Governmental Authority" shall mean any Federal, state,
county, municipal, regional or other governmental or taxing authority, agency,
board or court.
"Government Obligations" means direct obligations of the
United States of America which are not callable, redeemable or payable prior to
maturity, in whole or in part, directly or indirectly, by any Person.
"Indenture" means for any Equipment Note, the trust indenture
and security agreement listed in Schedule I hereto between the Related
Indenture Trustee and the Related Owner Trustee pursuant to which such
Equipment Note is issued as such agreement may be modified, supplemented or
amended from time to time in accordance with the related Indenture Documents,
and "Indentures" means all such Indentures for all Equipment Notes.
4
<PAGE> 13
"Indenture Default" means, for any Indenture, any event or
condition defined as a "Default" under such Indenture.
"Indenture Documents" means for any Equipment Note, the
related Indenture, the related Trust Agreement and Lease, in each case as
defined in such Indenture, and the related Participation Agreement.
"Indenture Event of Default" means, for any Indenture, any
event or condition defined as an "Indenture Event of Default" in such
Indenture.
"Indenture Trustee" means, for any Equipment Note, the Person
defined as such in the related Indenture.
"Initial Regular Distribution Date" means the first Regular
Distribution Date following the Issuance Date.
"Issuance Date" means the date of the issuance of the Pass
Through Certificates, which shall be the same date as the Delivery Date.
"Lease" means, for any Equipment Note, the agreement between
the Company, as lessee, and the Related Owner Trustee, as lessor, that is
defined as the "Lease" in the related Indenture.
"Letter of Representations" means a letter from the Company
and the Pass Through Trustee to, and accepted by, the Depository in form and
substance satisfactory to the Company and the Pass Through Trustee, as such
letter may be modified or supplemented, or any successor letter thereto.
"Lien" means any mortgage, pledge, lien, charge, disposition
of title, encumbrance, lease or security interest.
"Majority in Interest of Certificateholders" means, at any
time, Pass Through Certificates then Outstanding (or the proxy therefor)
representing in the aggregate not less than a majority of the aggregate
Fractional Undivided Interests of the Pass Through Certificates then
Outstanding under the Pass Through Trust.
"Officers' Certificate" means a certificate signed by a
Responsible Officer of the Company, any Indenture Trustee or any Owner Trustee,
as the case may be, delivered to the Pass Through Trustee. Each such
certificate shall include the statements provided for in Section 13.07.
5
<PAGE> 14
"Opinion of Counsel" means a written opinion of legal counsel,
who in the case of counsel (a) for the Company may be (i) an attorney employed
by the Company who is generally empowered to deliver such written opinions or
(ii) other counsel designated by the Company and reasonably satisfactory to the
Pass Through Trustee and (b) for any Owner Trustee or Indenture Trustee, an
attorney selected by such Person and reasonably satisfactory to the Pass
Through Trustee.
"Outstanding" means, as of the date of determination and
subject to the provisions of Section 6.04 hereof, all Pass Through Certificates
theretofore authenticated and delivered, with the exception of the following:
(i) Pass Through Certificates theretofore cancelled by the
Pass Through Trustee or delivered to the Pass Through Trustee for
cancellation pursuant to Section 2.10;
(ii) All Pass Through Certificates if money in the amount
required to make the final distribution thereon in accordance with
Section 12.01 has been theretofore deposited with the Pass Through
Trustee in trust for the Certificateholders pending such final
distribution; and
(iii) Pass Through Certificates in exchange for or in lieu of
which other Pass Through Certificates have been authenticated and
delivered pursuant to Article II hereof.
"Overdue Scheduled Payment" means any Scheduled Payment that
is not received within five Business Days after the Regular Distribution Date
applicable to such Scheduled Payment.
"Owner Participant" means, for any Equipment Note, the Person
defined as such in the related Indenture.
"Owner Trustee" means, for any Equipment Note, the Person
defined as such in the related Indenture.
"Participation Agreement" means for any Equipment Note, the
agreement among the Company, the Owner Participant, the Related Owner Trustee,
the Related Indenture Trustee and the Pass Through Trustee, that is defined as
the "Participation Agreement" in the related Indenture and listed in Schedule I
hereto, and pursuant to which the Pass Through Trustee agrees to purchase such
Equipment Note upon the issuance thereof by such Owner Trustee, and
"Participation
6
<PAGE> 15
Agreements" means all such Participation Agreements for all Equipment Notes.
"Pass Through Agreement," "this Pass Through Agreement" and
other like words mean this Pass Through Trust Agreement as the same may be
modified, supplemented or amended from time to time in accordance with the
provisions hereof.
"Pass Through Certificate" means any of the certificates
designated in Section 2.01 hereof and executed, authenticated and delivered by
the Pass Through Trustee, in accordance with this Pass Through Agreement.
"Pass Through Default" means an Event of Default or an event
or condition that, with the giving of notice or the lapse of time or both,
would become an Event of Default.
"Pass Through Trust" means the trust created in accordance
with this Pass Through Agreement, the estate of which consists of the Trust
Property.
"Pass Through Trustee" means The First National Bank of
Chicago, a national banking association, not in its individual capacity except
as expressly stated herein, but solely in its capacity as Pass Through Trustee
under this Pass Through Agreement, and its successors and assigns as Pass
Through Trustee hereunder.
"Paying Agent" has the meaning set forth in Section 3.04
hereof.
"Permitted Investments" means any Government Obligations.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, nonincorporated organization
or government or any agency or political subdivision thereof.
"Pool Balance" means as of any date of determination the
aggregate unpaid principal amount of the Equipment Notes on such date plus the
amount of the principal payments on such Equipment Notes held by the Pass
Through Trustee and not yet distributed (other than earnings thereon and
without giving effect to any losses on investments thereof). The Pool Balance
as of any Regular Distribution Date or Special Distribution Date shall be
computed after giving effect to the payment of principal, if any, on the
Equipment Notes and the distribution thereof being made on that date.
7
<PAGE> 16
"Pool Factor" means as of any date of determination the
quotient (rounded to the seventh decimal place) computed by dividing (i) the
Pool Balance by (ii) the aggregate original amount of the Pass Through
Certificates. The Pool Factor as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes and the distribution thereof being
made on that date.
"Record Date" means any Record Date specified in Section 5.02
hereof.
"Register" has the meaning set forth in Section 3.02 hereof.
"Registered Global Certificate" means any Pass Through
Certificate issued to the Depository in accordance with Article II and bearing
the legend prescribed in Section 2.12(a).
"Registrar" has the meaning set forth in Section 3.02 hereof.
"Regular Distribution Date" means any date specified in
Section 5.01 hereof for the distribution of any Scheduled Payment from the Pass
Through Trust to the Certificateholders.
"Related Indenture Trustee" means any Indenture Trustee under
an Indenture relating to any Equipment Note, and "Related Indenture Trustees"
means all such Indenture Trustees for all Equipment Notes.
"Related Owner Participant" means any Owner Participant under
a Trust Agreement relating to any Equipment Note, and "Related Owner
Participants" means all such Owner Participants for all Equipment Notes.
"Related Owner Trustee" means any Owner Trustee under a Trust
Agreement relating to any Equipment Note, and "Related Owner Trustees" means
all such Owner Trustees for all Equipment Notes.
"Responsible Officer" means the president or any other officer
with authority of at least a vice president; or, in the case of the Pass
Through Trustee, a vice president, assistant vice president or a trust officer
of the Pass Through Trustee in its Corporate Trust Administration department.
8
<PAGE> 17
"Scheduled Payment" means any scheduled payment of principal
of (whether by installment or redemption or otherwise) and interest on any
Equipment Note to be made in the amounts and on the date set forth for such
payment in such Equipment Note, but does not include any Overdue Scheduled
Payment.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Distribution Date" means any date specified in
Section 5.01 hereof on which a Special Payment is to be distributed from the
Pass Through Trust to the Certificateholders.
"Special Payment" means any payment (including any Overdue
Scheduled Payment) other than a Scheduled Payment on any Equipment Note or any
proceeds from the sale of such Equipment Note pursuant to Article VII.
"Special Payments Account" means the account or accounts
created and maintained for the Pass Through Trust pursuant to Section 5.03(b).
"Tangible Net Worth" means, with respect to a Person, the
excess of tangible assets over liabilities of such Person as shown on its
balance sheet as of the end of its most recent fiscal period for which a
balance sheet is available or as of such other date as the context may require,
and determined on the basis of generally accepted accounting principles.
"Trust Agreement" means, for any Equipment Note, the agreement
between an Owner Trustee and an Owner Participant that is defined as the "Trust
Agreement" in the related Indenture.
"Trust Indenture Act" means (except as otherwise provided in
Sections 4.04, 11.01, 11.02 and 11.06) the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Pass Through Agreement was
first qualified under such Act.
"Trust Property" means all money, instruments, including the
Equipment Notes, and other property held as the property of the Pass Through
Trust, including all distributions thereon and proceeds thereof.
"Underwriters" means the several Underwriters named in the
Underwriting Agreement.
9
<PAGE> 18
"Underwriting Agreement" means the Underwriting Agreement
dated September 26, 1994 among the Company and Salomon Brothers Inc, Chemical
Securities Inc., CS First Boston Corporation and Lazard Freres & Co.
ARTICLE II
DESIGNATIONS; PASS THROUGH TRUST FORMATION;
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
SECTION 2.01. Designations; Aggregate Amount.
(a) The Pass Through Trust created hereby shall be designated Newmont Gold
Company Pass Through Trust, 1994-A1. The Pass Through Certificates evidencing
Fractional Undivided Interests in the Pass Through Trust shall be designated as
the Newmont Gold Company 1994 Pass Through Certificates, Series A1 (herein
sometimes called the "Series A1 Pass Through Certificates") and shall bear such
designation upon their face. The Series A1 Pass Through Certificates shall be
the only instruments evidencing a fractional undivided interest in the Pass
Through Trust.
(b) All Pass Through Certificates shall be substantially
identical except as to denomination and as may otherwise be provided herein.
The Pass Through Certificates will have no rights, benefits or interest in
respect of any other separate pass through trust or the trust property held in
such other pass through trust. All Pass Through Certificates shall be in all
respects equally and ratably entitled to the benefits of the Pass Through Trust
without preference, priority, or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Pass Through Agreement.
(c) Except as provided in Section 2.09 hereof, the aggregate
amount of Series A1 Pass Through Certificates that may be authenticated,
delivered and outstanding under this Pass Through Agreement is limited to
$175,436,000.
SECTION 2.02. Issuance of Pass Through Certificates;
Acquisition of Equipment Notes. (a) Subject to the terms set forth herein, on
the Issuance Date (i) the Company shall direct the Underwriters to execute a
wire transfer or intra-bank transfer to the Pass Through Trustee in the amount
of the total proceeds payable by such Underwriters pursuant to the Underwriting
Agreement with respect to the
10
<PAGE> 19
Series A1 Pass Through Certificates and (ii) the Pass Through Trustee shall
execute, authenticate and deliver the Series A1 Pass Through Certificates to
the Underwriters as provided in the Underwriting Agreement upon receipt by the
Pass Through Trustee of such proceeds.
The Pass Through Certificates executed, authenticated and
delivered by the Pass Through Trustee in accordance with this Section 2.02(a)
shall equal in the aggregate the aggregate principal amount of the Equipment
Notes to be purchased by the Pass Through Trustee pursuant to the Participation
Agreements, and evidence the entire ownership of the Pass Through Trust. The
Pass Through Trustee shall issue and sell such Pass Through Certificates, in
authorized denominations and in such Fractional Undivided Interests, so as to
result in the receipt of consideration in an amount equal to the aggregate
principal amount of such Equipment Notes and, concurrently therewith, the Pass
Through Trustee shall purchase, pursuant to the terms and conditions of the
Participation Agreements, such Equipment Notes at a purchase price equal to the
amount of such consideration so received. Except as provided in Sections 2.08
and 2.09, the Pass Through Trustee shall not execute, authenticate or deliver
Pass Through Certificates in excess of the aggregate amount determined in
accordance with this subsection (a).
(b) The obligations of the Pass Through Trustee to
participate in the transactions described in clause (a) of this Section 2.02
are subject to (i) receipt by the Pass Through Trustee of a certificate of the
Company to the same effect as the certificate of the Company delivered to the
Underwriters pursuant to Section 6(e) of the Underwriting Agreement, and (ii)
satisfaction or waiver of the conditions for the purchase by the Underwriters
of the Pass Through Certificates set forth in Section 6 of the Underwriting
Agreement, which satisfaction or waiver for the purposes hereof shall be
conclusively demonstrated by the receipt by the Pass Through Trustee of the
total proceeds payable by such Underwriters pursuant to the Underwriting
Agreement with respect to the Series A1 Pass Through Certificates.
SECTION 2.03. Declaration of Trust; Authorization. Each
initial Certificateholder, by its payment for and acceptance of any Series A1
Pass Through Certificate is hereby deemed (1) as grantor, to join in the
creation and declaration of this Pass Through Trust and (2) as beneficiary of
such Pass Through Trust, to authorize and direct the Pass Through Trustee to
execute and deliver all documents to which the Pass Through Trustee is a party
that may be necessary or desirable to consummate the transactions contemplated
hereby and to
11
<PAGE> 20
exercise its rights and perform its duties under the Participation Agreements,
the Indentures and this Pass Through Agreement.
The Pass Through Trustee hereby acknowledges and accepts this
grant of trust and declares that it will hold the Trust Property as Pass
Through Trustee upon this Pass Through Trust for the use and benefit of the
Certificateholders.
SECTION 2.04. Limitation of Powers. The Pass Through Trust
shall be constituted solely for the purpose of making the investment in the
Equipment Notes provided for herein, and, except as set forth herein, the Pass
Through Trustee shall not be authorized or empowered to acquire any other
investments or engage in any other activities and, in particular, the Pass
Through Trustee shall not be authorized or empowered to do anything that would
cause such Pass Through Trust to fail to qualify as a "grantor trust" for
federal income tax purposes (including as subject to this restriction, to
acquire any interest in the Facility (as defined in the respective related
Indentures) by bidding such Equipment Notes or otherwise, or taking any action
with respect to the Facility once acquired).
SECTION 2.05. Execution of Pass Through Certificates. The
Pass Through Certificates shall be signed on behalf of the Pass Through Trustee
by an authorized officer of the Pass Through Trustee. Such signatures may be
the manual or facsimile signatures of such officer and minor errors or defects
in any reproduction of any such signature shall not affect the validity or
enforceability of any Pass Through Certificate which has been duly
authenticated and delivered by the Pass Through Trustee.
If any such officer of the Pass Through Trustee who signs any
of the Pass Through Certificates subsequently ceases to be such officer before
the Pass Through Certificate so signed is authenticated and delivered or
disposed of by the Pass Through Trustee, such Pass Through Certificate
nevertheless may be authenticated and delivered or disposed of as though the
person who signed such Pass Through Certificate had not ceased to be such
officer of the Pass Through Trustee.
SECTION 2.06. Certificate of Authentication. The Pass
Through Trustee shall duly authenticate and deliver Pass Through Certificates
in authorized denominations equalling in the aggregate, the aggregate principal
amount of the Equipment Notes to be purchased for the Pass Through Trust by the
Pass Through Trustee pursuant to the Participation Agreements, and evidencing
the entire ownership of the Pass Through Trust.
12
<PAGE> 21
Only such Pass Through Certificates as shall bear thereon a certificate of
authentication substantially in the form set forth in Exhibit A, executed by
the Pass Through Trustee by manual or facsimile signature of one of its
authorized officers, shall be entitled to the benefits of the Pass Through
Trust or be valid or obligatory for any purpose. Such certificate by the Pass
Through Trustee upon any Pass Through Certificate executed by the Pass Through
Trustee shall be conclusive evidence that the Pass Through Certificate so
authenticated has been duly authenticated and delivered hereunder and that the
Certificateholder, as evidenced on the Register, is entitled to the benefits of
the Pass Through Trust.
SECTION 2.07. Form of Pass Through Certificates. The Pass
Through Certificates shall be substantially in the form set forth in Exhibit A
hereto. The Pass Through Certificates shall be issuable as registered
securities without coupons and shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plans as set forth
herein. The Pass Through Certificates shall be issued in denominations of
$1,000 and any integral multiple thereof and shall be dated the date of their
authentication.
The Pass Through Certificates may be issued with appropriate
insertions, omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Pass Through Agreement, as may be required to comply with
any law or with any rules or regulations pursuant thereto, or with the rules of
any securities market in which the Pass Through Certificates are admitted to
trading, or to conform to general usage.
SECTION 2.08. Registration, Transfer and Exchange. The Pass
Through Trustee will keep at each office or agency to be maintained for the
purpose as provided in Section 3.02 a Register or Registers in which, subject
to such reasonable regulations as it may prescribe, it will register, and will
register the transfer of, Pass Through Certificates as provided in this
Article. Such Register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time.
Upon due presentation for registration of transfer of any Pass
Through Certificate at any such office or agency, the Pass Through Trustee
shall execute, authenticate and deliver in the name of the transferee or
transferees a new Pass Through Certificate or Pass Through Certificates in
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authorized denominations and for a like aggregate Fractional Undivided
Interest.
Any Pass Through Certificate or Pass Through Certificates may
be exchanged for a Pass Through Certificate or Pass Through Certificates in
other authorized denominations and for a like aggregate Fractional Undivided
Interest. Pass Through Certificates to be exchanged shall be surrendered at
any office or agency to be maintained by the Pass Through Trustee for the
purpose as provided in Section 3.02, and the Pass Through Trustee shall
execute, authenticate and deliver in exchange therefor the Pass Through
Certificate or Pass Through Certificates which the Certificateholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously or
previously outstanding.
All Pass Through Certificates presented for registration of
transfer, exchange, redemption or payment shall (if so required by the Pass
Through Trustee) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Pass Through Trustee
duly executed by, the Certificateholder or his or her attorney duly authorized
in writing.
The Pass Through Trustee may require payment from the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any exchange or registration of
transfer of Pass Through Certificates. No service charge to the
Certificateholder shall be made for any such transaction.
All Pass Through Certificates issued upon any transfer or
exchange of Pass Through Certificates shall be entitled to the same benefits
under this Pass Through Agreement as the Pass Through Certificates surrendered
upon such transfer or exchange.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Pass Through Certificates. If any temporary or definitive Pass Through
Certificate becomes mutilated, defaced or is apparently destroyed, lost or
stolen, the Pass Through Trustee in its discretion may execute, authenticate
and deliver, a new Pass Through Certificate of like Fractional Undivided
Interest, bearing a number not contemporaneously or previously outstanding, in
exchange and substitution for the mutilated or defaced Pass Through
Certificate, or in lieu of and substitution for the Pass Through Certificate so
apparently destroyed, lost or stolen. In every case the applicant for a
substitute Pass Through Certificate shall furnish to the Pass Through Trustee
and any agent of the Pass
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Through Trustee such security or indemnity as may be required by them to
indemnify and defend and to save each of them harmless from any such
substitution and, in every case of destruction, loss or theft, evidence to
their satisfaction of the apparent destruction, loss or theft of such Pass
Through Certificate and of the ownership thereof.
Upon the issuance of any substitute Pass Through Certificate,
the Pass Through Trustee may require payment from the Certificateholder of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the
reasonable fees and expenses of the Pass Through Trustee) connected therewith.
If a notice of termination for the Pass Through Trust has been or is about to
be given pursuant to Section 12.01 and a Pass Through Certificate becomes
mutilated or defaced or is apparently destroyed, lost or stolen, the Pass
Through Trustee may, instead of issuing a substitute Pass Through Certificate,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated or defaced Pass Through Certificate), if the applicant
for such payment furnishes to the Pass Through Trustee and any agent of the
Pass Through Trustee such security or indemnity as any of them may require to
save each of them harmless from all risks, however remote, resulting from such
payment and, in every case of apparent destruction, loss or theft, the
applicant shall also furnish to the Pass Through Trustee and any agent of the
Pass Through Trustee evidence to their satisfaction of the apparent
destruction, loss or theft of such Pass Through Certificate and of the
ownership thereof.
Every substitute Pass Through Certificate issued pursuant to
the provisions of this Section by virtue of the fact that any Pass Through
Certificate is apparently destroyed, lost or stolen will constitute conclusive
evidence of the Fractional Undivided Interest evidenced by the Pass Through
Certificate that it replaces, whether or not the apparently destroyed, lost or
stolen Pass Through Certificate may be enforceable at any time by anyone and
will be entitled to all the benefits of (but will be subject to all the
limitations of rights set forth in) the Pass Through Trust equally and
proportionately with any and all other Pass Through Certificates duly
authenticated and delivered therefor. All Pass Through Certificates will be
held and owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, defaced, or apparently destroyed, lost or stolen Pass
Through Certificates and will preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter
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enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10. Cancellation of Pass Through Certificates;
Destruction Thereof. All Pass Through Certificates surrendered for payment,
redemption, registration of transfer or exchange, if surrendered to any agent
of the Pass Through Trustee, shall be delivered to the Pass Through Trustee for
cancellation or, if surrendered to the Pass Through Trustee, shall be cancelled
by it; and no Pass Through Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Pass Through Agreement.
The Pass Through Trustee shall destroy cancelled Pass Through Certificates held
by it in accordance with its customary procedures.
SECTION 2.11. Temporary Pass Through Certificates. Pending
the preparation of definitive Pass Through Certificates, the Pass Through
Trustee may execute, authenticate and deliver temporary Pass Through
Certificates (printed, lithographed, typewritten or otherwise reproduced, in
each case in form satisfactory to the executing officer of the Pass Through
Trustee, as evidenced by such officer's execution thereof). Such temporary
Pass Through Certificates shall be issuable as registered Pass Through
Certificates without coupons, of any authorized denomination, and substantially
in the form of the definitive Pass Through Certificates but with such
omissions, insertions and variations as may be appropriate for temporary Pass
Through Certificates, all as may be determined by the executing officer of the
Pass Through Trustee, as evidenced by such officer's execution thereof.
Temporary Pass Through Certificates may contain such reference to any
provisions of this Pass Through Agreement as may be appropriate. Every such
temporary Pass Through Certificate shall be executed and authenticated by the
Pass Through Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Pass Through Certificates.
Without unreasonable delay the Company shall furnish definitive Pass Through
Certificates and thereupon temporary Pass Through Certificates shall be
surrendered in exchange therefor without charge at any office or agency to be
maintained by the Pass Through Trustee for the purpose pursuant to Section
3.02, and the Pass Through Trustee shall execute, authenticate and deliver in
exchange for such temporary Pass Through Certificates such definitive Pass
Through Certificates evidencing a like aggregate Fractional Undivided Interest
in authorized denominations. Until so exchanged, temporary Pass Through
Certificates shall be entitled to the same benefits
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under the Pass Through Trust as definitive Pass Through Certificates.
SECTION 2.12. Pass Through Certificates Issuable in the Form
of a Registered Global Security. The Pass Through Certificates initially shall
be issued as one or more Registered Global Certificates in accordance with this
Section. To the extent that the provisions of this Section conflict with any
other provisions of this Pass Through Agreement, the provisions of this Section
shall control.
(a) The Pass Through Trustee shall, in accordance with this
Article, execute, authenticate and deliver, one or more Registered Global
Certificates which (i) in the aggregate, shall represent, and shall be
denominated in an amount equal to, the aggregate Fractional Undivided Interests
of all of the Pass Through Certificates, (ii) shall be registered in the name
of the Depository or its nominee, (iii) shall be delivered by the Pass Through
Trustee to the Depository or pursuant to the Depository's instruction, and (iv)
shall bear a legend substantially to the following effect: "Unless this
Registered Global Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange or payment, and any Registered
Global Certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein."
(b) Notwithstanding any other provision of this Section or of
Section 2.08, the Registered Global Certificates may be transferred, in whole
but not in part and in the manner provided in Section 2.08, by the Depository
to a nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor Depository selected or approved by the Company upon
notice to the Pass Through Trustee or to a nominee of such successor
Depository.
(c) The Depository shall be a clearing agency registered
under the Exchange Act and any other applicable statute or regulation.
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(d) If at any time the Depository notifies the Company that
it is unwilling or unable to continue as Depository or if at any time the
Depository shall no longer be eligible under subsection (c) above, and a
successor Depository is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, as the case
may be, this Section shall no longer be applicable to the Pass Through
Certificates and the Pass Through Trustee, upon the written request of the
Company, will execute, authenticate and deliver Pass Through Certificates in
definitive registered form without coupons, in authorized denominations, and in
an aggregate Fractional Undivided Interest equal to the Fractional Undivided
Interest of the Registered Global Certificates then outstanding in exchange for
such Registered Global Certificates. In addition, the Company may at any time
and in its sole discretion determine that the Pass Through Certificates shall
no longer be represented by a Registered Global Certificate and that the
provisions of this Section shall no longer apply to such Pass Through
Certificates. In such event the Pass Through Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company, will notify
the Depository of the availability of such Pass Through Certificates in
definitive form and will execute, authenticate and deliver, Pass Through
Certificates in definitive registered form without coupons, in authorized
denominations and in an aggregate Fractional Undivided Interest equal to the
Fractional Undivided Interest of the Registered Global Certificates then
outstanding in exchange for such Registered Global Certificates. Upon the
exchange of the Registered Global Certificates for such Pass Through
Certificates in definitive registered form without coupons, in authorized
denominations, such Registered Global Certificates shall be cancelled by the
Pass Through Trustee. Such Pass Through Certificates in definitive registered
form issued in exchange for the Registered Global Certificates pursuant to this
subsection (d) shall be registered in such names and in such authorized
denominations as the Depository shall instruct the Pass Through Trustee. The
Pass Through Trustee shall deliver such Pass Through Certificates to the
Persons in whose names such Pass Through Certificates are so registered.
(e) As long as the Pass Through Certificates are represented
by Registered Global Certificates, all distributions shall be made to the
holder of such Registered Global Certificate as the Certificateholder, or to
such Persons as such holder may designate, by wire transfer of immediately
available funds on the date such distributions are due, and the Company shall
or shall cause the Pass Through Trustee to provide to the Depository any
notices referred to
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in the related Letter of Representations in accordance with such Letter of
Representations.
SECTION 2.13. Appointment of Authenticating Agent; Paying
Agent and Registrar. (a) The Pass Through Trustee may appoint an
authenticating agent (the "Authenticating Agent") with respect to the Pass
Through Certificates which shall be authorized to act on behalf of the Pass
Through Trustee to authenticate the Pass Through Certificates issued upon
original issue and upon exchange or registration of transfer thereof or
pursuant to Section 2.09 of this Pass Through Agreement. Pass Through
Certificates so authenticated shall be entitled to the benefits of this Pass
Through Agreement and shall be valid and obligatory for all purposes as if
authenticated by the Pass Through Trustee. Whenever reference is made in this
Pass Through Agreement to the authentication and delivery of Pass Through
Certificates by the Pass Through Trustee or the Pass Through Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Pass Through Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Pass Through Trustee by an Authenticating Agent.
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Representations, Warranties and Covenants of
the Company. (a) All of the representations and warranties of the Company set
forth or incorporated by reference in Section 1 of the Underwriting Agreement
are incorporated by reference in this Pass Through Agreement as if set forth
herein and the Company represents and warrants that such representations and
warranties are true and correct on the date hereof, except to the extent that
such representations and warranties expressly relate solely to an earlier date
or later date (in which case such representations and warranties were correct
on and as of such earlier date or will be correct on and as of such later date,
as the case may be).
(b) The Company will at all times, except as permitted under
subsection (c) below, maintain its existence as a corporation under the laws of
the State of Delaware, and maintain its good standing under the laws of the
State of Nevada and any other State of the United States in which the conduct
of its business or the ownership or leasing of assets
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used in its business requires such qualification and where the failure to be so
qualified would have a material adverse effect on the operations, business,
properties, assets or condition of the Company and its consolidated
subsidiaries taken as a whole, and will do or cause to be done all things
necessary to preserve and keep in full force and effect its rights (charter and
statutory) and franchises derived from or arising under Applicable Laws of the
United States or any state thereof; provided that the Company may discontinue
any non-material right or franchise, or discontinue any right or franchise if
its board of directors shall determine that such discontinuance is necessary or
desirable in the conduct of the Company's business and does not materially and
adversely affect the Company's ability to perform its obligations hereunder.
(c) The Company may consolidate or merge with another
corporation, or sell substantially all of its assets to another Person provided
that (i) after giving effect thereto, no event of default shall have occurred
and be continuing under any Lease, (ii) no default shall have occurred and be
continuing under Section 16(a)(1) or 16(5) of any Lease, (iii) in the case of
any transaction among Affiliates, after giving effect to such transaction, the
successor corporation shall (a) own all of the gold reserves and resources, and
the related mining equipment, theretofore owned by the Company, and (b) have no
material increase in liabilities in relation to the liabilities of the Company
immediately prior thereto, (iv) in the case of any transaction other than one
among Affiliates, after giving effect thereto, the successor corporation shall
have a Tangible Net Worth equal to or in excess of the Tangible Net Worth of
the Company immediately prior thereto, and (v) the Pass Through Trustee shall
receive from the successor corporation an agreement reasonably satisfactory in
form and substance to the Pass Through Trustee containing an effective
assumption by such successor corporation of the due and punctual performance
and observance of each covenant and condition to be performed or observed by
the Company hereunder.
(d) Upon any consolidation or merger, or any sale of
substantially all the assets of the Company as an entirety in accordance with
this Section, the successor corporation formed by such consolidation or the
Person into which the Company is merged or to which such sale is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Pass Through Agreement with the same effect as if such
successor corporation or such Person, as the case may be, had been named as the
Company herein and therein. No such sale of substantially all of the
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assets of the Company as an entirety shall have the effect of releasing the
Company or any successor corporation which shall theretofore have become such
in the manner prescribed in this Section from its liability hereunder.
(e) The Pass Through Trustee shall receive an Officer's
Certificate and an Opinion of Counsel of the Company as conclusive evidence
that any consolidation, merger, sale, lease or conveyance, and any assumption
complies with the provisions of this Section and the Pass Through Trustee shall
be entitled to rely upon the same for all purposes hereof.
SECTION 3.02. Offices for Payments; Registrar. So long as any
Pass Through Certificates remain outstanding, the Pass Through Trustee will
maintain the following: (a) an office or agency where the Pass Through
Certificates may be presented for payment and (b) a facility or agency in New
York, New York where such Pass Through Certificates may be presented or
surrendered for registration of transfer and for exchange and for redemption as
provided in this Pass Through Agreement (the "Registrar"). Written notice of
the location of each such other office or agency and of any change of location
thereof shall be given by the Pass Through Trustee to the Company, the Owner
Trustees, the Indenture Trustees and the Certificateholders. In the event that
no such office or agency shall be maintained or no such notice of location or
of change of location shall be given, presentations and demands may be made and
notices may be served at the Corporate Trust Office of the Pass Through
Trustee. The Registrar shall keep a register (the "Register") with respect to
the Pass Through Certificates and their transfer and exchange. The Pass
Through Trustee may appoint one or more co-registrars ("Co-Registrars") and may
terminate any such appointment at any time upon written notice. The term
"Registrar" includes any Co-Registrar.
Any Registrar shall be a bank or trust company organized and
doing business under the laws of the United States or any state, with a
combined capital and surplus of at least $100,000,000, or a direct or indirect
subsidiary of such an entity, or a member of a bank holding company group,
having a combined capital and surplus of at least $100,000,000 and such
subsidiary or member itself having a capital and surplus of at least
$10,000,000.
SECTION 3.03. Representations and Warranties of the Pass
Through Trustee. (a) The Pass Through Trustee, in its individual capacity
(except with respect to clause (iv) below), represents, warrants and agrees
that:
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(i) it is a validly existing national banking association duly
organized under the laws of the United States of America, holding a
valid certificate to do business as a national banking association
with banking and trust powers and has the corporate power and
authority to enter into and perform its obligations under this Pass
Through Agreement;
(ii) this Pass Through Agreement has been duly authorized by all
necessary corporate action on its part, and neither the execution and
delivery hereof nor its performance of any of the terms and provisions
hereof will violate any Federal law or regulation relating to its
banking or trust powers or contravene or result in any breach of, or
constitute any default under its articles of association or by-laws or
the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it or its properties may be bound
or affected;
(iii) the execution, delivery and performance by the Pass Through
Trustee of this Pass Through Agreement will not require the
authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in
respect of, any United States or state governmental authority or
agency regulating the banking and corporate trust activities of the
Pass Through Trustee other than (i) the registration of the Pass
Through Certificates under the Securities Act and under the securities
laws of any state in which the Pass Through Certificates may be
offered for sale if the laws of such state require such action and
(ii) the qualification of the Pass Through Agreement under the Trust
Indenture Act pursuant to an order of the Securities and Exchange
Commission; and
(iv) this Pass Through Agreement has been duly executed and
delivered by it and, assuming that this Pass Through Agreement is the
legal, valid and binding obligation of the Company, is the legal,
valid and binding obligation of the Pass Through Trustee, enforceable
against the Pass Through Trustee in accordance with its terms except
as limited by bankruptcy, insolvency, moratorium, reorganization,
receivership, fraudulent conveyance or similar laws or equitable
principles of general application to or affecting the enforcement of
creditors' rights and remedies generally from time to time in effect,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
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(b) The representations and warranties set forth in
subsection (a) above shall be deemed to be made by the Pass Through Trustee on
the Issuance Date.
SECTION 3.04. Paying Agents. Whenever the Pass Through
Trustee in its sole discretion shall appoint a paying agent (the "Paying
Agent") for any Pass Through Trust, it will cause the Paying Agent to execute
and deliver an instrument in which the Paying Agent shall agree with the Pass
Through Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent
for distribution to the Certificateholders (whether such sums have
been paid to it by the Pass Through Trustee or the Related Owner
Trustee or Indenture Trustee) in trust for the benefit of the
Certificateholders or of the Pass Through Trustee, and
(b) that it will notify the Pass Through Trustee if the
principal of or interest or premium on the Equipment Notes is not paid
when the same is due and payable.
Anything in this Section to the contrary notwithstanding, the
agreements to hold sums in trust as provided in this Section are subject to the
provisions of Sections 12.03 and 12.04 hereof.
SECTION 3.05. No Representations or Warranties as to
Documents. The Pass Through Trustee neither makes nor shall be deemed to have
made any representation or warranty as to the validity, legality or
enforceability of this Pass Through Agreement, any Pass Through Certificates or
any related Indenture Documents or as to the correctness of any statement
contained in any thereof, except for the representations and warranties of the
Pass Through Trustee made in its individual capacity under this Pass Through
Agreement or in any Participation Agreement.
SECTION 3.06. Payments from Trust Property Only. All
payments to be made by the Pass Through Trustee under the Pass Through Trust
shall be made only from the income and the proceeds from the Trust Property and
only to the extent that the Pass Through Trustee shall have sufficient income
or proceeds from such Trust Property to enable the Pass Through Trustee to make
distributions of the amounts due in respect of the Pass Through Certificates.
Each Certificateholder by its acceptance of a Pass Through Certificate agrees
that it will look solely to the income and proceeds from the Trust Property to
the extent available for distribution to it as provided herein and that the
Pass Through Trustee is not personally
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liable to such Certificateholder for any amounts payable under the Pass Through
Trust except as expressly provided herein.
SECTION 3.07. Limitation of the Company's Liability. The
Company is a party to this Pass Through Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall not be
liable hereunder, except as otherwise expressly provided herein or under the
Pass Through Certificates, except as otherwise expressly provided therein.
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership of Pass
Through Certificates. (a) The Pass Through Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of the Certificateholders. If the Pass Through
Trustee is not the Registrar, the Company shall cause the Registrar to furnish
to the Pass Through Trustee semi-annually not more than 15 days after each
Record Date, as of such Record Date, or at such other times as the Pass Through
Trustee may request in writing, a list, in such form and as of such date as the
Pass Through Trustee may reasonably require, containing all the information in
the possession or control of the Registrar as to the names and addresses of the
Certificateholders and the amounts of the Pass Through Certificates held by
such Certificateholders.
(b) Ownership of the Pass Through Certificates shall be
proved by the Register kept by the Registrar.
SECTION 4.02. Disclosure of Certificateholder Lists. Each
and every Certificateholder, by receiving and holding such Pass Through
Certificate, agrees with the Company and the Pass Through Trustee that neither
the Company, the Pass Through Trustee, the Pass Through Trustee in its
individual capacity nor any agent of any of the foregoing shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of any Certificateholders in accordance with the provisions of
Section 312 of the Trust Indenture Act, regardless of the source from which
such information was derived, and that the Pass Through Trustee shall not be
held accountable by reason
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of mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
SECTION 4.03. Reports by the Company. The Company covenants:
(a) to file with the Pass Through Trustee, within 30 days
after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act or, if
the Company is not required to file information, documents, or reports
pursuant to either of such Sections of the Exchange Act, then to file
with the Pass Through Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such of the supplementary and periodic information, documents, and
reports that would be required pursuant to Section 13 of the Exchange
Act, or, in respect of a security listed and registered on a national
securities exchange, as may be prescribed from time to time in such
rules and regulations;
(b) to file with the Pass Through Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents, and reports
with respect to compliance by the Company with the conditions and
covenants provided for in this Pass Through Agreement as may be
required from time to time by such rules and regulations;
(c) to transmit to the Certificateholders in the manner and
to the extent required by Section 313(c) of the Trust Indenture Act,
within 30 days after the filing thereof with the Pass Through Trustee,
such summaries of any information, documents and reports required to
be filed by the Company pursuant to subsections (a) and (b) of this
Section 4.03 as may be required by rules and regulations prescribed
from time to time by the Commission; and
(d) furnish to the Pass Through Trustee, on or before each
March 15, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer of the
Company as to his or her knowledge of such Company's compliance with
all
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conditions and covenants under this Pass Through Agreement; provided,
that for purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of
notice provided under this Pass Through Agreement; and
(e) to furnish to the Pass Through Trustee, from time to
time, such other financial information as the Pass Through Trustee may
reasonably request.
SECTION 4.04. Reports by the Pass Through Trustee. On or
before each May 15, the Pass Through Trustee shall transmit, in the manner and
to the extent required by Section 313(c) of the Trust Indenture Act, any report
required by Section 313(a) of the Trust Indenture Act to be transmitted by the
Pass Through Trustee to the Certificateholders.
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Distribution Dates. The Regular Distribution
Dates are January 5 and July 5, commencing on July 5, 1995. The Special
Distribution Date for any month in which a Special Payment is to be distributed
will be the twenty-eighth day of such month, except that the Special
Distribution Date for any Special Payment received by the Pass Through Trustee
in connection with a prepayment of any Equipment Note pursuant to Section 2.14
of the related Indenture will correspond to the date of the receipt of such
Special Payment by the Pass Through Trustee. Notice of such Special Payment
shall be mailed as soon as practicable after receipt by the Pass Through
Trustee of the notice of such prepayment.
SECTION 5.02. Record Dates. The Record Dates for the Regular
Distribution Dates are December 21 and June 20, respectively, and the Record
Date for any Special Distribution Date is the fifteenth day preceding such
Special Distribution Date, in any event, whether or not such date is a Business
Day.
SECTION 5.03. Certificate Account and Special Payments
Account. (a) The Pass Through Trustee shall establish and maintain, on behalf
of the Certificateholders, a Certificate Account as one or more non-interest
bearing accounts designated by the Pass Through Trustee to be used for
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the purposes set out in this Section 5.03(a). The Pass Through Trustee shall
hold the Certificate Account in trust for the benefit of the
Certificateholders, and shall make or permit withdrawals therefrom only as
provided in this Pass Through Agreement. Upon receipt of any Scheduled
Payment, the Pass Through Trustee shall immediately deposit such Scheduled
Payment in the Certificate Account.
(b) The Pass Through Trustee shall establish and maintain, as
and when required, on behalf of the Certificateholders, a Special Payments
Account as one or more separate accounts designated by the Pass Through Trustee
to be used for the purposes set out in this Section 5.03(b), which shall be
non-interest bearing except as provided in Section 5.06. The Pass Through
Trustee shall hold such Special Payments Account in trust for the benefit of
the Certificateholders, and shall make or permit withdrawals therefrom only as
provided in this Pass Through Agreement. Upon receipt of any Special Payment,
the Pass Through Trustee shall immediately deposit such Special Payment in the
applicable Special Payments Account.
(c) The Pass Through Trustee shall present any Equipment Note
to the Related Indenture Trustee on the date of its stated final maturity, or
on such earlier date as such Equipment Note is to be redeemed or purchased in
whole pursuant to the relevant Indenture.
SECTION 5.04. Distributions from Certificate Account and
Special Payments Account. (a) On each Regular Distribution Date, or as soon
thereafter as the Pass Through Trustee has confirmed receipt of any Scheduled
Payment due on the Equipment Notes on such Regular Distribution Date, the Pass
Through Trustee shall distribute out of the Certificate Account the entire
amount deposited therein pursuant to Section 5.03(a) by paying to each
Certificateholder of record at the close of business on the Record Date for
such Regular Distribution Date (except as provided in Section 12.01 concerning
the final distribution), at the address for such Certificateholder appearing in
the Register, such Certificateholder's pro rata share (based on the aggregate
Fractional Undivided Interest held by such Certificateholder) of the aggregate
amount in the Certificate Account.
(b) On each Special Distribution Date, or as soon thereafter
as the Pass Through Trustee has confirmed receipt of any Special Payment due on
the Equipment Notes or realized upon the sale of any such Equipment Notes, the
Pass Through Trustee shall distribute out of the Special Payments Account the
entire amount of such Special Payment deposited therein
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pursuant to Section 5.03(b) by paying to each Certificateholder of record at
the close of business on the Record Date for such Special Distribution Date
(except as provided in Section 12.01 concerning the final distribution), at the
address for such Certificateholder appearing in the Register, such
Certificateholder's pro rata share (based on the aggregate Fractional Undivided
Interest held by such Certificateholder) of the aggregate amount in the Special
Payments Account on account of such Special Payment.
(c) The Pass Through Trustee shall at the expense of the
Company notify each Certificateholder by mail at its address as it appears in
the Register of each Special Payment. If the Equipment Notes are to be redeemed
or purchased in whole prior to their maturities, such notice shall be mailed
not less than 20 days prior to the date any such Special Payment is scheduled
to be distributed. For any other Special Payment, such notice shall be mailed
as soon as practicable after the Pass Through Trustee has received funds for
such Special Payment. Such notices of Special Payments shall set forth:
(i) the Special Distribution Date and the Record Date therefor
(except as otherwise provided in Section 12.01);
(ii) the amount of the Special Payment for each $1,000 face
amount Pass Through Certificate and the amount thereof constituting
principal, premium, if any, and interest on the Equipment Notes;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the same date as a
Regular Distribution Date, the total amount to be received on such
date for each $1,000 face amount Pass Through Certificate.
If the amount of premium, if any, payable upon the redemption or purchase in
whole of an Equipment Note has not been calculated at the time that the Pass
Through Trustee mails the notice of the related Special Payment, it shall be
sufficient if the notice sets forth the other amounts to be distributed and
states that any premium received will also be distributed.
If any cancellable redemption of the Equipment Notes is
cancelled, the Pass Through Trustee, as soon as possible after learning
thereof, shall, at the expense of the Company, notify by mail each
Certificateholder at its address as it appears on the Register.
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(d) Any Scheduled Payment or Special Payment to be
distributed pursuant to this Article shall be payable at the Corporate Trust
Office of the Pass Through Trustee or at any office or agency maintained for
such purpose pursuant to Section 3.02, provided that any Scheduled Payment or
Special Payment may be payable at the option of the Pass Through Trustee or its
Paying Agent by mailing checks for such Scheduled Payment or Special Payment
payable to or upon the written order of the Certificateholders entitled thereto
as they appear on the Register.
SECTION 5.05. Statements to Certificateholders. (a) On each
Regular Distribution Date and Special Distribution Date, the Pass Through
Trustee shall include with each distribution to Certificateholders a statement,
giving effect to such distribution to be made on such Regular Distribution Date
or Special Distribution Date, as the case may be, setting forth the following
information (as to (i) and (ii) below, for each $1,000 face amount Pass Through
Certificate):
(i) The amount of such distribution allocable to principal
and the amount allocable to premium, if any, on the Equipment Notes;
(ii) The amount of such distribution allocable to interest on
the Equipment Notes; and
(iii) The Pool Balance and the Pool Factor of the Pass Through
Trust.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Pass
Through Trustee shall furnish to each Person who at any time during such
calendar year was a Certificateholder a statement containing the sum of the
amounts determined pursuant to clauses (a)(i) and (a)(ii) of this Section for
the Pass Through Trust for such calendar year or, in the event such Person was
a Certificateholder during a portion of such calendar year, for the applicable
portion of such year.
SECTION 5.06. Investment of Special Payment Moneys. Any
money received by the Pass Through Trustee pursuant to Section 5.03(b)
representing a Special Payment that is not to be promptly distributed shall, to
the extent practicable, be invested by the Pass Through Trustee in Permitted
Investments as directed in writing by the Company pending distribution of such
Special Payment pursuant to Section 5.04. Any investment made pursuant to this
Section 5.06 shall be in such Permitted
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Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 5.04 on the
applicable Special Distribution Date and the Pass Through Trustee shall hold
any such Permitted Investments until maturity. The proceeds upon maturity of
any Permitted Investment shall not be reinvested pending distribution. The
Pass Through Trustee, when authorized by the Company, may trade with itself in
the purchase and sale of securities for such investment. The Pass Through
Trustee shall have no liability with respect to any investment made pursuant to
this Section, other than by reason of the willful misconduct or gross
negligence of the Pass Through Trustee. All income and earnings from such
investments shall be distributed on such Special Distribution Date as part of
such Special Payment. Although the Company recognizes that it may obtain a
broker confirmation or written statement containing comparable information at
no additional cost, the Company hereby agrees that confirmations of investments
made by the Pass Through Trustee pursuant to the Section 5.06 are not required
to be issued by the Pass Through Trustee for each month in which a monthly
statement is rendered. No such statement need be rendered pursuant to the
provisions hereof if no activity occurred in the fund or account during such
preceding month.
SECTION 5.07. Withholding Taxes. The Pass Through Trustee
shall withhold any taxes required to be withheld on payments to any
Certificateholder, except to the extent that such Certificateholder has
furnished evidence reasonably satisfactory to the Pass Through Trustee of any
exemption from withholding claimed by such Certificateholder, and under no
circumstances shall the failure of any such Certificateholder to receive any
amounts so withheld constitute an Event of Default.
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Pass Through Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
substantially similar instruments signed by such Certificateholders in person
or by an agent duly appointed in writing, and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
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instruments are delivered to the Pass Through Trustee. Proof of execution of
any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Pass Through Agreement and (subject to Sections 8.02
and 8.03) conclusive in favor of the Pass Through Trustee, if made in the
manner provided in this Article.
(b) For the purpose of determining the Certificateholders
entitled to vote or consent to any direction, waiver or other action of such
Certificateholders under Section 7.10 or 7.11, the Company may set a record
date for such vote or consent by specifying such record date in an Officer's
Certificate delivered to the Pass Through Trustee. Notwithstanding Section
316(c) of the Trust Indenture Act, such record date shall be a date not more
than 15 days prior to the first solicitation of such vote or consent.
SECTION 6.02. Proof of Execution of Instruments and of
Holding of Certificates. Subject to Sections 8.02 and 8.03, the execution of
any instrument by a Certificateholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Pass Through Trustee. The holding of Pass Through Certificates shall be
proved by the Register or by a certificate of the Registrar.
SECTION 6.03. Certificateholders to Be Treated as Owners.
Prior to due presentment for registration of transfer of any Pass Through
Certificate, each Indenture Trustee, the Pass Through Trustee, any agent of any
Indenture Trustee or the Pass Through Trustee, the Paying Agent, the Registrar
and the Company may deem and treat the Person in whose name such Pass Through
Certificate shall be registered upon the Register as the absolute owner of such
Pass Through Certificate (whether or not such Pass Through Certificate shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment on account of the principal payable with
respect to and, subject to the provisions of this Pass Through Agreement,
interest payable with respect to such Pass Through Certificate and for all
other purposes; and neither any Indenture Trustee nor the Pass Through Trustee
(nor any agent of any Indenture Trustee or the Pass Through Trustee) nor the
Paying Agent nor the Registrar nor the Company shall be affected by any notice
to the contrary. All such payments so made to any such person, or upon his
order, shall be valid, and, to the extent of the sum or sums so paid, effectual
to satisfy and discharge the liability for moneys payable upon any such Pass
Through Certificate.
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SECTION 6.04. Pass Through Certificates Owned by the Company
and Related Owner Trustees Deemed Not Outstanding. In determining whether the
Certificateholders of the requisite aggregate Fractional Undivided Interest
have concurred in any direction, consent or waiver under this Pass Through
Agreement, Pass Through Certificates that are owned by the Company, any Related
Owner Trustee or Related Owner Participant or any obligor on such Pass Through
Certificates or by any Affiliate of the Company, any such Related Owner Trustee
or Related Owner Participant or any obligor on such Pass Through Certificates
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination; provided that for the purpose of determining whether the
Pass Through Trustee shall be protected in relying on any such direction,
consent or waiver, only if a Responsible Officer of the Pass Through Trustee
has actual knowledge that certain Pass Through Certificates are so owned shall
such Pass Through Certificates be so disregarded; and provided further that if
all Pass Through Certificates that would be deemed Outstanding in the absence
of the foregoing provision are owned by either (i) any Related Owner Trustee
or Affiliate thereof or Related Owner Participant or Affiliate thereof or (ii)
any combination of the foregoing, then such Pass Through Certificates shall be
deemed Outstanding for the purpose of any such determination. Pass Through
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Pass Through
Trustee the pledgee's right so to act with respect to such Pass Through
Certificates and that the pledgee is not the Company, any Related Owner Trustee
or Related Owner Participant or any obligor upon the Pass Through Certificates
or any Affiliate of the Company, any Related Owner Trustee or Related Owner
Participant or any obligor on such Pass Through Certificates. In case of a
dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Pass Through Trustee in accordance with
such advice. Upon request of the Pass Through Trustee, the Company shall, and
shall request the Related Owner Trustees and the Related Owner Participants to,
furnish to the Pass Through Trustee promptly an Officers' Certificate listing
and identifying all Pass Through Certificates, if any, known by the Company or
any such Related Owner Trustee or Related Owner Participant to be owned or held
by or for the account of any of the above-described persons; and the Pass
Through Trustee shall be entitled to accept such Officers' Certificates as
conclusive evidence of the facts set forth therein and of the fact that all
Pass Through Certificates not listed therein are Outstanding for the purpose of
any such determination. For the purpose of determining whether Pass Through
Certificates are Outstanding as described in this Section, an "obligor" on such
Pass
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Through Certificates shall include any obligor or any Affiliate of any such
obligor on any Equipment Notes that constitute Trust Property.
SECTION 6.05. Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Pass Through Trustee, as
provided in Section 6.01, of any action taken by the Certificateholders of the
percentage in aggregate of Fractional Undivided Interests specified in this
Pass Through Agreement in connection with such action, any Certificateholder of
a Pass Through Certificate, the serial number of which is shown by the evidence
to be included among the serial numbers of the Pass Through Certificates, the
Certificateholders of which have consented to such action, may, by filing
written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article, revoke such action so far as concerns such Pass
Through Certificate. Except as aforesaid, any such action taken shall be
conclusive and binding upon such Certificateholder for such Pass Through
Certificate and upon all future Certificateholders and owners of such Pass
Through Certificate and of any Pass Through Certificates issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Pass Through Certificate or otherwise. Any
action taken by such Certificateholders of the percentage in aggregate of
Fractional Undivided Interests specified in this Pass Through Agreement in
connection with such action shall be conclusively binding upon the Pass Through
Trustee and all the Certificateholders.
SECTION 6.06. ERISA Plan Prohibition. No employee benefit
plan subject to Part 4 of Subtitle B of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or plan subject to Section
4975 of the Code or any trust created under any such employee benefit plan or
plan, nor any governmental plan (as defined in Section 3(32) of ERISA or
Section 414(d) of the Code) organized in a jurisdiction having prohibitions on
transactions with such governmental plan similar to those contained in Section
406 of ERISA or Section 4975 of the Code (such employee benefit plan, plan and
governmental plan are hereinafter collectively referred to as an "ERISA Plan"),
or any Person treated as holding assets of an ERISA Plan may acquire or hold
the Pass Through Certificates. The purchase by any person of any Pass Through
Certificate constitutes a representation by such Person to the Company, the
Related Owner Participants, the Related Owner Trustees, the Related Indenture
Trustees and the Pass Through Trustee that such Person is not an ERISA Plan and
that such Person is not acquiring, and has not acquired, such Pass Through
Certificate with assets of an ERISA Plan.
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ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default. If an Indenture Event of
Default under an Indenture relating to any Equipment Note that constitutes
Trust Property (an "Event of Default") shall occur and be continuing, then, and
in each and every case, the Pass Through Trustee may vote all of the Equipment
Notes under such Indenture, and upon the direction of the Majority In Interest
of Certificateholders, the Pass Through Trustee shall vote a corresponding
majority of such Equipment Notes in favor of directing the Related Indenture
Trustee to declare the unpaid principal of such Equipment Notes then
outstanding, together with interest accrued but unpaid thereon and all other
amounts due under such Equipment Notes and the related Indenture, to be due and
payable under, and in accordance with the provisions of, such Indenture. In
addition, if such Event of Default shall have occurred and be continuing, the
Pass Through Trustee may in accordance with such related Indenture vote such
Equipment Notes to direct the Related Indenture Trustee regarding the exercise
of remedies provided in such Indenture.
If an Event of Default shall have occurred and be continuing,
the Pass Through Trustee also may in its discretion, and upon the direction of
the Majority In Interest of Certificateholders shall, by such officer or agent
as it may appoint, sell, convey, transfer and deliver any Equipment Notes held
in such Pass Through Trust that are subject to the corresponding Indenture
Event of Default, without recourse to or warranty by the Pass Through Trustee
or any Certificateholder, to any Person. In any such case, the Pass Through
Trustee shall sell, assign, contract to sell or otherwise dispose of and
deliver any such Equipment Notes in one or more parcels at public or private
sale or sales, at any location or locations at the option of the Pass Through
Trustee, all upon such terms and conditions as it may reasonably deem advisable
and at such prices as it may reasonably deem advisable, for cash. If the Pass
Through Trustee so decides or is required to sell or otherwise dispose of any
Equipment Notes pursuant to this Section, the Pass Through Trustee shall take
such of the actions described above as it may reasonably deem most effective to
complete the sale or other disposition of such Equipment Notes, so as to
provide for the payment in full of all amounts due on such Equipment Notes.
Notwithstanding the foregoing, any action taken by the Pass Through Trustee
under this Section shall not, in the
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reasonable judgment of the Pass Through Trustee, be adverse to the best
interests of the Certificateholders.
SECTION 7.02. Incidents of Sale of Equipment Notes. Upon any
sale of all or any part of the Equipment Notes made either under the power of
sale given under this Pass Through Agreement or otherwise for the enforcement
of this Pass Through Agreement, the following shall be applicable:
(1) Any Certificateholder, the Pass Through Trustee in its
individual or any other capacity or any other Person may bid for and
purchase any of such Equipment Notes, and upon compliance with the
terms of sale, may hold, retain, possess and dispose of such Equipment
Notes in its or their own absolute right without further
accountability.
(2) The receipt of the Pass Through Trustee or of the officer
making such sale shall be a sufficient discharge to any purchaser for
his purchase money, and, after paying such purchase money and
receiving such receipt, such purchaser or its personal representative
or assigns shall not be obliged to see to the application of such
purchase money, or be in any way answerable for any loss,
misapplication or non-application thereof.
(3) Any moneys collected by the Pass Through Trustee upon any
sale made either under the power of sale given by this Pass Through
Agreement or otherwise for the enforcement of the Pass Through Trust,
shall be deposited and distributed as a Special Payment as provided in
Article V.
SECTION 7.03. Pass Through Trustee May Prove Debt. If any
amount payable under any Equipment Note held by any Pass Through Trust is not
paid when due and payable, the Pass Through Trustee, in its own name and as
trustee of an express trust, as holder of such Equipment Note shall be, to the
extent permitted by and in accordance with the terms of the related Indenture
Documents, entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the applicable Owner Trustee
or other obligor upon such Equipment Note and collect in the manner provided by
law out of the property of such Owner Trustee or such other obligor upon such
Equipment Note, as the case may be, wherever situated, the moneys adjudged or
decreed to be payable.
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All rights of action and of asserting claims under this Pass
Through Agreement, or under any of the Pass Through Certificates, may be
prosecuted and enforced by the Pass Through Trustee without the possession of
any of such Pass Through Certificates or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Pass Through Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Pass Through
Trustee, each predecessor Pass Through Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Certificateholders.
In any proceedings brought by the Pass Through Trustee (and
also any proceedings involving the interpretation of any provision of this Pass
Through Agreement) the Pass Through Trustee shall be held to represent all the
Certificateholders, and it shall not be necessary to make any such
Certificateholders parties to any such proceedings.
SECTION 7.04. Remedies Cumulative. Each and every right,
power and remedy given to the Pass Through Trustee specifically or otherwise
under the Pass Through Trust shall be cumulative and shall be in addition to
every other right, power and remedy specifically given thereunder or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically given thereunder or otherwise existing
may be exercised from time to time and as often and in such order as may be
deemed expedient by the Pass Through Trustee or the Certificateholders, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the Pass
Through Trustee or of any Certificateholder in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of
the applicable Owner Trustee or the Company, as the case may be, or to be an
acquiescence therein.
SECTION 7.05. Suits for Enforcement. If an Indenture Event
of Default has occurred, has not been waived and is continuing, the Pass
Through Trustee may in its discretion and subject to its rights of appropriate
indemnification under Sections 7.07 and 8.03 and Article IX hereof, to the
extent permitted by and in accordance with the Indenture Documents, proceed to
protect and enforce its rights and rights of the Certificateholders by such
appropriate
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judicial proceedings as the Pass Through Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement under the Pass Through Trust or in aid of the exercise of any
power granted thereunder or to enforce any other legal or equitable right
vested in the Pass Through Trustee or the Certificateholders under such Pass
Through Trust or by law; provided that any sale of any portion of the Trust
Property shall be done in accordance with Section 7.02.
SECTION 7.06. Discontinuance of Proceedings. If the Pass
Through Trustee or any Certificateholder institutes any proceeding to enforce
any right, power or remedy under the Pass Through Trust, and such proceeding is
discontinued or abandoned for any reason or is determined adversely to the Pass
Through Trustee or such Certificateholder, then and in every such case the
applicable Owner Trustee and the applicable Indenture Trustee, the Pass Through
Trustee, the Certificateholders and the Company shall, subject to any
determination in such proceeding, be restored to their former positions and
rights under the Pass Through Trust with respect to the Trust Property and all
rights, remedies and powers of the Pass Through Trustee and the
Certificateholders shall continue as if no such proceeding had been instituted.
SECTION 7.07. Limitations on Suits by Certificateholders. No
Certificateholder shall have any right by virtue or by availing of any
provision of the Pass Through Trust to institute any action or proceeding at
law or in equity or in bankruptcy or otherwise upon or under or with respect to
the Pass Through Trust, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
thereunder, unless such Certificateholder previously has notified the Pass
Through Trustee in writing of an Event of Default and of the continuance
thereof, as provided herein, and the Certificateholders of the Pass Through
Certificates then Outstanding (or the proxy therefor) representing in the
aggregate not less than 25% of the Fractional Undivided Interests of Pass
Through Certificates then Outstanding have requested in writing that the Pass
Through Trustee institute such action or proceedings in its own name as trustee
under the Pass Through Trust and have offered to the Pass Through Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Pass Through Trustee for
60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such action or proceedings and no direction
inconsistent with such written request has been
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given to the Pass Through Trustee pursuant to Section 7.10; it being understood
and intended, and being expressly covenanted by such Certificateholder with
every other Certificateholder and the Pass Through Trustee, that no one or more
Certificateholders shall have any right in any manner whatever to affect,
disturb or prejudice the rights of any other Certificateholder or to obtain or
seek to obtain priority over or preference to any other Certificateholder or to
enforce any right under the Pass Through Trust, except in the manner provided
therein and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Pass Through Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 7.08. Unconditional Right of Certificateholders to
Receive Principal, Interest and Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Pass Through Agreement or any Pass
Through Certificate, the right of any Certificateholder to receive
distributions of Scheduled Payments or Special Payments pursuant to Article V
on or after the respective due dates set forth herein, or, subject to Section
7.07, to institute suit for the enforcement of any such distribution on or
after such respective dates as provided herein, shall not be impaired or
affected without the consent of such Certificateholder. The purchase by any
Certificateholder of any Pass Through Certificate constitutes the consent of
such Certificateholder to the retention by the Pass Through Trustee of certain
amounts otherwise distributable to such Certificateholder in accordance with
Section 5.07.
SECTION 7.09. Control by Certificateholders. A Majority In
Interest of Certificateholders has the right to direct the Pass Through Trustee
as to the time, method, and place of conducting any proceeding for any remedy
available to the Pass Through Trustee, or exercising any trust or power
conferred on the Pass Through Trustee under the Pass Through Trust; provided
that such direction is not otherwise than in accordance with law and the
provisions of the Pass Through Trust and the Pass Through Trustee has received,
to the extent provided in Sections 7.07 and 8.03 and Article IX hereof, such
reasonable indemnification as it may require against the costs, expenses and
liabilities to be incurred by the Pass Through Trustee; and provided further
that the Pass Through Trustee has the right to decline to follow any such
direction if the Pass Through Trustee, being advised by counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Pass Through Trustee in good faith
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by its board of directors, the executive committee, or a trust committee of
directors or Responsible Officers of the Pass Through Trustee determines that
the action or proceedings so directed would involve the Pass Through Trustee in
personal liability or if the Pass Through Trustee in good faith so determines
that the actions or forebearances specified in or pursuant to such direction
would be unduly prejudicial to the interests of the Certificateholders not
joining in the giving of said direction, it being understood that the Pass
Through Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such Certificateholders.
Nothing in this Pass Through Agreement shall impair the right
of the Pass Through Trustee in its discretion to take any action deemed proper
by the Pass Through Trustee and which is not inconsistent with such direction
by Certificateholders.
SECTION 7.10. Waiver of Past Events of Default. Upon written
instructions from a Majority in Interest of Certificateholders, the Pass
Through Trustee shall waive any past Event of Default and its consequences and
upon such waiver such Event of Default will cease to exist and any Event of
Default arising therefrom will be deemed to have been cured for every purpose
of the Pass Through Trust, but no such waiver will extend to any subsequent or
other Event of Default thereunder or impair any right consequent thereon;
provided that any such waiver will be effective to waive any such past Event of
Default and its consequences as described above if, but only if, the
correlative Indenture Event of Default has been waived under the related
Indenture by the requisite holders of the Equipment Notes outstanding
thereunder; and provided further that in the absence of written instructions
from all Certificateholders (or the proxy therefor), the Pass Through Trustee
shall not waive any Event of Default (i) consisting of the failure to pay any
principal of, or premium (if any), or interest on, or other amounts due under,
any Equipment Note and the consequent failure to distribute any related
Scheduled Payment or Special Payment pursuant to Article V on or after the
respective due date therefor set forth herein or (ii) in respect of a covenant
or provision under the Pass Through Trust that, under Article XI hereof, cannot
be modified or amended without the consent of each Certificateholder (or the
proxy therefor).
SECTION 7.11. Notice of Pass Through Defaults. The Pass
Through Trustee shall, in the manner and to the extent required by Section
313(c) of the Trust Indenture Act, notify the Certificateholders of all Pass
Through Defaults actually
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known to a Responsible Officer of the Pass Through Trustee, unless such Pass
Through Defaults have been cured before the giving of such notice; provided
that, except in the case of the failure to pay any principal of or interest on
or any other amount due under any of the Equipment Notes and the consequent
failure to distribute any related Scheduled Payment or Special Payment pursuant
to Article V on or after the respective due date therefor set forth herein, the
Pass Through Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
of directors or trustees or Responsible Officers of the Pass Through Trustee in
good faith determines that the withholding of such notice is in the interests
of the Certificateholders.
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through Trustee. The Pass
Through Trustee hereby acknowledges its acceptance of all right, title and
interest in and to the Equipment Notes acquired as Trust Property pursuant to
the applicable Participation Agreements and Section 2.02, and declares that the
Pass Through Trustee holds and will hold such right, title, and interest,
together with all other property constituting the Trust Property, for the
benefit of all then present and future Certificateholders, upon the trusts set
forth in the Pass Through Trust.
SECTION 8.02. Pass Through Trustee's Liens. The Pass Through
Trustee agrees that it will, in its individual capacity and at its own cost and
expense (but without any right of indemnity in respect of any such cost or
expense under Article IX hereof) promptly take such action as may be necessary
to duly discharge all Liens on any part of the Trust Property that result from
claims against it in its individual capacity not related to the administration
of such Trust Property or any other transaction pursuant to this Pass Through
Agreement.
SECTION 8.03. Certain Rights of the Pass Through Trustee.
Subject to Section 315 of the Trust Indenture Act:
(a) the Pass Through Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate or any other certificate, statement, instrument, opinion,
report,
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notice, request, consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request of any Related Indenture Trustee or Related
Owner Trustee in connection with the Pass Through Trust shall be
sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof is specifically prescribed herein) upon
which the Pass Through Trustee may rely to prove or establish a matter
set forth therein;
(c) the Pass Through Trustee may consult with counsel and any
advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Pass Through Trustee shall not be obligated to
exercise any of the trusts or powers vested in it at the request,
order or direction of the Certificateholders in accordance with the
provisions thereof, unless such Certificateholders have offered to the
Pass Through Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Pass Through Trustee shall not be liable for any
action taken or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it under the Pass Through Trust;
(f) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default, the Pass Through
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or document
unless requested in writing to do so by the Majority in Interest of
Certificateholders; provided that if the payment within a reasonable
time to the Pass Through Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Pass Through Trustee, not reasonably assured to the
Pass Through Trustee by the security afforded to it by the terms of
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the Pass Through Trust, the Pass Through Trustee may require
reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if paid by the Pass
Through Trustee or any predecessor trustee, shall be repaid by the
Company upon demand;
(g) the Pass Through Trustee may execute any of the trusts or
powers under the Pass Through Trust or perform any duties thereunder
either directly or by or through agents or attorneys not regularly in
its employ and the Pass Through Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent or attorney
appointed by it with due care; and
(h) the Pass Through Trustee shall not be required to expend
or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of
its rights or powers under the Pass Through Trust, if the Pass Through
Trustee has determined in good faith that the repayment of such funds
or adequate indemnity against such liability is not reasonably assured
to it.
SECTION 8.04. Pass Through Trustee Not Responsible for
Recitals. The Pass Through Trustee assumes no responsibility for the
correctness of the recitals contained herein or in the Pass Through
Certificates, except for the execution and authentication of the Pass Through
Certificates by the Pass Through Trustee in accordance with Section 2.05 and
2.06, respectively.
SECTION 8.05. Pass Through Trustee and Agents May Hold Pass
Through Certificates; Collections. The Pass Through Trustee and any agent of
the Pass Through Trustee, in its individual or any other capacity, may become
the owner or pledgee of Pass Through Certificates with the same rights it would
have if it were not the Pass Through Trustee or such agent and, subject to the
applicable provisions of the Trust Indenture Act, may otherwise deal with the
Company, any Related Indenture Trustee or Related Owner Trustee and receive,
collect, hold and retain collections therefrom with the same rights it would
have if it were not the Pass Through Trustee or such agent.
SECTION 8.06. Moneys Held by Pass Through Trustee. Subject
to Sections 5.06 and 12.04 hereof, all moneys received by the Pass Through
Trustee shall, until used or applied as provided herein, be held in trust for
the purposes for which
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they were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Subject to Section 5.06,
neither the Pass Through Trustee nor any agent thereof shall be under any
liability for interest on any moneys received by it hereunder.
SECTION 8.07. Right of Pass Through Trustee to Rely on
Officers' Certificate. Subject to Section 8.03, whenever in the administration
of the Pass Through Trust the Pass Through Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering
or omitting any action thereunder, such matter (unless other evidence in
respect thereof is specifically prescribed herein) may, in the absence of bad
faith on the part of the Pass Through Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Pass
Through Trustee by the Company, any Related Indenture Trustee or any Related
Owner Trustee, as the case may be, and such certificate, in the absence of bad
faith on the part of the Pass Through Trustee, shall be full warrant to the
Pass Through Trustee for any action taken, suffered or omitted by it under the
provisions of this Pass Through Agreement upon the faith thereof.
SECTION 8.08. Compensation. The Company covenants and agrees
to pay, and the Pass Through Trustee shall be entitled to receive upon
presentation of a reasonably detailed invoice, reasonable compensation and
payment or reimbursement for its reasonable advances, expenses and
disbursements (including the reasonable compensation and expenses and
disbursements of its counsel, agents and other persons not regularly in its
employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Pass Through Trust or
the Trust Property, except any such advance, expense or disbursement
attributable to the Pass Through Trustee's negligence, willful misconduct or
bad faith or incurred as a result of the breach of its representation and
covenant set forth in Section 8.02, and shall have a priority claim on the
Trust Property for the payment of such compensation, advances, expenses and
disbursements to the extent that such compensation, advances, expenses and
disbursements shall not be paid by the Company.
In addition, the Pass Through Trustee shall be entitled to
reimbursement from, and shall have a priority claim on, all property and funds
held or collected by the Pass Through Trustee in its capacity as Pass Through
Trustee for any tax incurred without negligence, bad faith or willfull
misconduct on its part, arising out of or in connection with the acceptance or
administration of the Pass Through Trust
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(other than any tax attributable to the Pass Through Trustee's compensation for
serving as such), including any costs and expenses incurred in contesting the
imposition of any such tax. If the Pass Through Trustee reimburses itself from
the Trust Property for any such tax it shall within 30 days mail a brief report
setting forth the circumstances thereof to all Certificateholders as their
names and addresses appear in the Register.
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
The Company hereby agrees, whether or not any of the
transactions contemplated hereby shall be consummated, to assume liability for,
and does hereby indemnify, protect, save and keep harmless the Pass Through
Trustee, in its individual capacity, and its successors, assigns, agents and
servants, with respect to the claims of the Pass Through Trustee for payment or
reimbursement under Section 8.08 and from and against any and all liabilities,
obligations, losses, damages, penalties, taxes (excluding any taxes payable by
the Pass Through Trustee on or measured by any compensation received by the
Pass Through Trustee for its services under this Pass Through Agreement and
excluding any tax attributable to the failure of the Pass Through Trust to
qualify as a "grantor trust", or to be otherwise disregarded, for Federal,
state or local income tax purposes), claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Pass
Through Trustee in its individual capacity (whether or not also agreed to be
indemnified against by any other Person under any other document) in any way
relating to or arising out of this Pass Through Agreement or the enforcement of
any of the terms hereof, or in any way relating to or arising out of the
administration of the Pass Through Trust or the Trust Property or the action or
inaction of the Pass Through Trustee hereunder, except only (i) in the case of
negligence, willful misconduct or bad faith of the Pass Through Trustee in the
performance of its duties hereunder, (ii) as may result from the inaccuracy of
any representation or warranty of the Pass Through Trustee herein or in any
Participation Agreement or (iii) as otherwise provided in Section 8.02 hereof.
The Pass Through Trustee in its individual capacity shall be entitled to
indemnification, from the Trust Property, for any liability, obligation, loss,
damage, penalty, claim, action,
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suit, cost, expense or disbursement indemnified against pursuant to this
Article IX to the extent not reimbursed by the Company or others, but without
releasing any of them from their respective agreements of reimbursement; and to
secure the same the Pass Through Trustee shall have a prior Lien on the Trust
Property. The indemnities contained in this Article IX shall survive the
termination of this Pass Through Agreement or the Pass Through Trust and the
resignation or removal of the Pass Through Trustee hereunder or thereunder.
The Pass Through Trustee, in its individual capacity, shall
notify the Company promptly of any tax for which it may seek indemnity. The
Company shall defend against the imposition of such tax and the Pass Through
Trustee, in its individual capacity shall cooperate in the defense. The
Company need not pay for any taxes paid, in settlement or otherwise, without
its consent.
Notwithstanding anything else to the contrary contained in
this Pass Through Trust Agreement or any of the Transaction Documents, the
Company shall not indemnify any party for any Federal, state or local income
taxes imposed upon the Pass Through Trust by reason of the Pass Through Trust
failing to be classified as a "grantor trust", or otherwise being disregarded,
for Federal, state or local income tax purposes.
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of Pass Through
Trustee; Appointment of Successor. (a) The Pass Through Trustee may resign at
any time as trustee of the Pass Through Trust without cause by giving at least
30 days prior written notice to the Company, the Related Indenture Trustees and
the Related Owner Trustees, such resignation to be effective upon the
acceptance of the trusteeship by a successor Pass Through Trustee. In
addition, a Majority in Interest of Certificateholders may at any time remove
the Pass Through Trustee without cause by an instrument in writing delivered to
the Company, the Related Owner Trustees, the Related Indenture Trustees and the
Pass Through Trustee, and the Pass Through Trustee shall promptly notify each
Certificateholder of such removal in writing, such removal to be effective upon
the acceptance of the trusteeship by a successor Pass Through Trustee. In the
case of the resignation or removal of the Pass Through Trustee, a Majority
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in Interest of Certificateholders may appoint a successor Pass Through Trustee
by an instrument signed by such Certificateholders. If a successor Pass
Through Trustee shall not have been appointed within 90 days after such notice
of resignation or removal, the Pass Through Trustee, the Company or any
Certificateholder may apply to any court of competent jurisdiction to appoint a
successor Pass Through Trustee to act until such time, if any, as a successor
shall have been appointed as provided above. The successor Pass Through
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Pass Through Trustee appointed as provided above
within one year from the date of the appointment by such court.
(b) If at any time any of the following occurs with respect
to the Pass Through Trust:
(i) the Pass Through Trustee fails to comply with the
requirements of Section 310 of the Trust Indenture Act after written
request for such compliance by any Certificateholder who has been a
bona fide Certificateholder for at least six months; or
(ii) the Pass Through Trustee ceases to be eligible in
accordance with the provisions of Section 10.02 to act as trustee for
the Pass Through Trust and fails to resign after written request for
such resignation by the Company or by any such bona fide
Certificateholder; or
(iii) the Pass Through Trustee becomes incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver or liquidator
of the Pass Through Trustee or of its property shall be appointed, or
any public officer takes charge or control of the Pass Through Trustee
or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then the Company may remove the Pass Through Trustee and appoint a successor
trustee by written instrument, in duplicate, executed by a Responsible Officer
of the Company, one copy of which instrument shall be delivered to the Pass
Through Trustee so removed and one copy to the successor trustee, or, subject
to the provisions of Section 315(e) of the Trust Indenture Act, any
Certificateholder who has been a bona fide Certificateholder for at least six
months may, on behalf of himself or herself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Pass
Through Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove
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the Pass Through Trustee and appoint a successor trustee, which removal and
appointment shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 10.03. The successor Pass Through
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Pass Through Trustee appointed by the
Certificateholders as provided in subsection (a) above within one year from the
date of appointment by such court.
SECTION 10.02. Persons Eligible for Appointment as Pass
Through Trustee. The Pass Through Trust shall at all times have a Pass Through
Trustee which shall be a Person eligible to act as trustee under Section 310(a)
of the Trust Indenture Act and shall be a corporation organized and doing
business under the laws of the United States of America or of any State or the
District of Columbia having a combined capital and surplus of at least
$100,000,000, or a direct or indirect subsidiary of such a corporation, or a
member of a bank holding company group, having a combined capital and surplus
of at least $100,000,000 and such subsidiary or member itself having a capital
and surplus of at least $10,000,000, and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision of examination by
Federal, State or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Pass Through
Trustee ceases to be eligible in accordance with the provisions of this Section
to act as trustee for the Pass Through Trust, the Pass Through Trustee shall
resign immediately as Pass Through Trustee in the manner and with the effect
specified in Section 10.01.
SECTION 10.03. Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section 10.01 for the
Pass Through Trust shall execute and deliver to the Company and to its
predecessor trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor with respect to the Pass Through Trust, as if such successor
trustee was originally named as trustee of the Pass Through Trust.
Notwithstanding the foregoing, on the written request of the Company or the
successor trustee, the trustee
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ceasing to act shall, upon payment of its charges then unpaid and subject to
Section 12.04, pay over to the successor trustee all moneys at the time held by
it with respect to the Pass Through Trust and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee with respect
to the Pass Through Trust to secure any amounts then due it pursuant to the
provisions of Article IX.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 10.02 to act as trustee of the Pass
Through Trust.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the successor trustee shall notify the
Certificateholders of such appointment by first-class mail at their last
addresses as they shall appear in the Register, and shall mail a copy of such
notice to the Company, the Related Indenture Trustees and the Related Owner
Trustees. If the acceptance of appointment is substantially contemporaneous
with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 10.01.
SECTION 10.04. Merger, Conversion, Consolidation or
Succession to Business of Pass Through Trustee. Any corporation into which the
Pass Through 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 Pass Through Trustee is a party, or any corporation
succeeding to the corporate trust business of the Pass Through Trustee, shall
be the successor to the Pass Through Trustee hereunder, provided that, anything
herein to the contrary notwithstanding, such corporation shall be eligible
under the provisions of Section 10.02 to act as trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
If, at the time of such succession to the Pass Through
Trustee, any of the Pass Through Certificates have been authenticated but not
delivered, such successor may adopt the certificate of authentication of the
predecessor Pass
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Through Trustee and deliver such Pass Through Certificates so authenticated;
and, if at that time any of the Pass Through Certificates have not been
authenticated, such successor may authenticate such Pass Through Certificates
either in the name of any of its predecessor or in its own name as the
successor Pass Through Trustee; and in all such cases such certificate of
authentication shall have the full force of the certificate of authentication
of the Pass Through Trustee set forth in Section 2.01; provided that the right
to adopt the certificate of authentication of any predecessor Pass Through
Trustee or to authenticate Pass Through Certificates in the name of any
predecessor Pass Through Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 10.05. Appointment of Separate Pass Through Trustees.
(a) At any time or times, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust Property may at the time be
located or in which any action of the Pass Through Trustee may be required to
be performed or taken, the Pass Through Trustee, by an instrument in writing
signed by it, may appoint one or more individuals or corporations to act as
separate trustee or separate trustees or co-trustee, acting jointly with the
Pass Through Trustee, of all or any part of the Trust Property, to the full
extent that local law makes it necessary for such separate trustee or separate
trustees or co-trustee, acting jointly with the Pass Through Trustee, to act.
(b) The Pass Through Trustee and, at the request of the Pass
Through Trustee, the Company, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction or
by any such separate trustee or separate trustees or co-trustee for the purpose
of more fully confirming such title, rights or duties to such separate trustee
or separate trustees or co-trustee. Upon the acceptance in writing of such
appointment by any such separate trustee or separate trustees or co-trustee,
it, he, she or they shall be vested with such title to the Trust Property or
any part thereof, and with such rights, powers, duties and obligations, as
shall be specified in the instrument of appointment, and such rights, powers,
duties and obligations shall be conferred or imposed upon and exercised or
performed by the Pass Through Trustee, or the Pass Through Trustee and such
separate trustee or separate trustees or co-trustee jointly with the Pass
Through Trustee subject to all the terms of this Pass Through Agreement, except
to the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Pass Through Trustee shall be incompetent
or unqualified to perform
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such act or acts, in which event such rights, powers, duties and obligations
shall be exercised and performed by such separate trustee or separate trustees
or co-trustee, as the case may be. Any separate trustee or separate trustees
or co-trustee may, at any time by an instrument in writing, constitute the Pass
Through Trustee its, her or his attorney-in-fact and agent with full power and
authority to do all acts and things and to exercise all discretion on its, her
or his behalf and in its, her or his name. In case any such separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, the
title to the Trust Property and all assets, property, rights, powers, duties
and obligations and duties of such separate trustee or co-trustee shall, so far
as permitted by law, vest in and be exercised by the Pass Through Trustee,
without the appointment of a successor to such separate trustee or co-trustee
unless and until a successor is appointed.
(c) All provisions of this Pass Through Agreement which are
for the benefit of the Pass Through Trustee (including without limitation
Article IX hereof) shall extend to and apply to each separate trustee or
co-trustee appointed pursuant to the foregoing provisions of this Section
10.06.
(d) Every additional trustee and separate trustee hereunder
shall, to the extent permitted by law, be appointed and act and the Pass
Through Trustee shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon
the Pass Through Trustee in respect of the receipt, custody,
investment and payment of moneys shall be exercised solely by the Pass
Through Trustee;
(ii) all other rights, powers, duties and obligations conferred
or imposed upon the Pass Through Trustee shall be conferred or imposed
and exercised or performed by the Pass Through Trustee and such
additional trustee or trustees and separate trustee or trustees
jointly except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the Pass Through
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 Property in any such
jurisdiction) shall be exercised and performed by such additional
trustee or trustees or separate trustee or trustees;
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(iii) no power hereby given to, or exercisable 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 Pass Through Trustee; and
(iv) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder.
If at any time the Pass Through Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Pass Through Trustee shall
execute and deliver all instruments and agreements necessary or proper to
remove any additional trustee or separate trustee.
(e) Any request, approval or consent in writing by the Pass
Through Trustee to any additional trustee or separate trustee shall be
sufficient warrant to such additional trustee or separate trustee, as the case
may be, to take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section
10.06, the powers of any additional trustee or separate trustee shall not
exceed those of the Pass Through Trustee hereunder.
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements Without Consent of
Certificateholders. The Company and the Pass Through Trustee may enter into an
agreement or agreements supplemental hereto for one or more of the following
purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company herein;
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as the Pass Through
Trustee shall consider to be for the protection of the
Certificateholders;
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(c) to surrender any right or power conferred upon the
Company herein;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein that may be defective or inconsistent with
any other provision contained herein; or to make such other provisions
in regard to matters or questions arising under this Pass Through
Agreement as the Company may deem necessary or desirable and that will
not adversely affect the interests of the Certificateholders;
(e) to correct or amplify the description of any property at
any time that constitutes Trust Property or better to assure, convey
and confirm unto the Pass Through Trustee any such property to be
included in the Trust Property;
(f) to evidence and provide for the acceptance and
appointment hereunder or under the Pass Through Trust of a successor
trustee and to add to or change any of the provisions hereof as may be
necessary to provide for or facilitate the administration of the Pass
Through Trust by more than one trustee, pursuant to the requirements
of Section 10.03;
(g) to modify, eliminate or add to the provisions of this
Pass Through Agreement to the extent necessary to continue the
qualification of this Pass Through Agreement (including any
supplemental agreement) under the Trust Indenture Act, or under any
similar Federal statute enacted after the date hereof, and to add to
this Pass Through Agreement such other provisions as may be expressly
permitted by the Trust Indenture Act, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture Act
as in effect on the date hereof or any corresponding provision in any
similar Federal statute enacted after the date hereof;
(h) to add, eliminate or change any provision hereunder so
long as such action shall not adversely affect the interests of the
Certificateholders;
provided that no such supplemental agreement shall cause any Pass Through Trust
to become taxable as an association within the meaning of Treasury Regulation
Section 301.7701-4.
The Pass Through Trustee is hereby authorized to join in the
execution of any such supplemental agreement, to make any further appropriate
agreements and stipulations that
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may be contained therein and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Pass Through Trustee
shall not be obligated to enter into any such supplemental agreement that
adversely affects the Pass Through Trustee's own rights, duties or immunities
under this Pass Through Agreement or otherwise, whether in its official or
individual capacity.
Any supplemental agreement contemplated by this Section may be
executed without the consent of the Certificateholders of the Outstanding Pass
Through Certificates, notwithstanding any of the provisions of Section 11.02.
SECTION 11.02. Supplemental Agreements With Consent of
Certificateholders. With the consent (evidenced as provided in Article VI) of
the Majority in Interest of Certificateholders, the Company and the Pass
Through Trustee may, from time to time and at any time, enter into an agreement
or agreements supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Pass
Through Agreement or of modifying in any manner the rights of the related
Certificateholders; provided, that no such supplemental agreement shall cause
any Pass Through Trust to become taxable as an association within the meaning
of Treasury Regulation Section 301.7701-4; and provided further that, without
the consent of each Certificateholder (or the proxy therefor), no such
amendment of or supplement to this Pass Through Agreement, or modification of
the terms of, or consent under, any thereof, shall (aa) modify any of the
provisions of Section 7.10 or this Section 11.02, (bb) reduce the amount or
extend the time of payment of any amount owing or payable on the Equipment
Notes or distributions to be made on any Pass Through Certificate pursuant to
Article V, or alter the currency in which any amount payable under any such
Pass Through Certificate is to be paid, or impair the right of any Pass Through
Certificateholder to commence legal proceedings to enforce a right to receive
payment hereunder, (cc) reduce, modify or amend any indemnities in favor of any
Certificateholder (except as consented to by each such Certificateholder
adversely affected thereby (or the proxy therefor)), or (dd) create or permit
the creation of any Lien on the Trust Property or any part thereof, or deprive
any Certificateholder of the benefit of the Pass Through Trust with respect to
the Trust Property, whether by disposition of the Trust Property or otherwise,
except as provided in Section 7.02 or in connection with the exercise of
remedies under Article VII.
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Upon the request of the Company and upon the filing with the
Pass Through Trustee of evidence of the consent of the applicable
Certificateholders required under this Section and other documents, if any,
required by Section 6.01, the Pass Through Trustee shall join with the Company
in the execution of such supplemental agreement unless such supplemental
agreement affects the Pass Through Trustee's own rights, duties or immunities
under this Pass Through Agreement or otherwise, in which case the Pass Through
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental agreement.
It shall not be necessary for the consent of the
Certificateholders under this Section to approve the particular form of any
proposed supplemental agreement, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Pass
Through Trustee of any supplemental agreement relating to any Pass Through
Trust pursuant to the provisions of this Section, the Pass Through Trustee
shall mail a notice thereof by first-class mail to the Certificateholders at
their addresses as they shall appear on the Register, setting forth in general
terms the substance of such supplemental agreement. Any failure of the Pass
Through Trustee to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental agreement.
SECTION 11.03. Effect of Supplemental Agreements. Upon the
execution of any supplemental agreement pursuant to the provisions hereof, this
Pass Through Agreement shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities hereunder and under the Pass Through Trust
of the Pass Through Trustee, the Company and the Certificateholders shall
thereafter be determined, exercised and enforced hereunder and thereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental agreement shall be and be deemed to be
part of the terms and conditions of this Pass Through Agreement and the Pass
Through Trust for any and all purposes.
SECTION 11.04. Documents to Be Given to Trustee. The Pass
Through Trustee, subject to the provisions of Sections 8.02 and 8.03, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental agreement complies with the applicable
provisions of this Pass Through Agreement.
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SECTION 11.05. Notation on Pass Through Certificates in
Respect of Supplemental Agreements. Pass Through Certificates authenticated
and delivered after the execution of any supplemental agreement pursuant to the
provisions of this Article may bear a notation in form approved by the Pass
Through Trustee as to any matter provided for by such supplemental agreement.
If the Company or the Pass Through Trustee shall so determine, new Pass Through
Certificates so modified as to conform, in the opinion of the Company and the
Pass Through Trustee, to any modification of this Pass Through Agreement
contained in any such supplemental agreement may be provided by the Company,
executed and authenticated by the Pass Through Trustee and delivered in
exchange for the Outstanding Pass Through Certificates.
SECTION 11.06. Trust Indenture Act. Any supplemental
agreement executed pursuant to the terms of this Article shall on the date of
the execution thereof conform to the provisions of the Trust Indenture Act as
in force on such date.
SECTION 11.07. Revocation and Effect of Consents. Until an
amendment or waiver becomes effective, a consent to it by a Certificateholder
is a continuing consent by such Certificateholder and every subsequent
Certificateholder of the related Pass Through Certificate, even if notation of
the consent is not made on such Pass Through Certificate. However, any such
Certificateholder or subsequent Certificateholder may revoke the consent as to
his or her Pass Through Certificate if the Pass Through Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every
Certificateholder affected by such amendment or waiver.
SECTION 11.08. Amendments, Waivers, etc., of Related
Indenture Documents. If the Pass Through Trustee, as holder of any Equipment
Note in trust for the benefit of the Certificateholders, receives a request for
a consent to any modification, amendment or supplement to any related Indenture
or other related Indenture Document or to give any consent, waiver,
authorization or approval under such related Indenture or such other related
Indenture Documents, the Pass Through Trustee shall forthwith notify each
Certificateholder, as shown on the Register as of such date, of such request.
Such notice shall request instructions from such Certificateholders with
respect to such request. Subject to Section 7.10, the Pass Through Trustee
shall, as the holder of such Equipment Note, consent or vote with respect
thereto in the same
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proportion as so instructed by the respective Certificateholders.
Notwithstanding the foregoing, but subject to Section 7.09, if an Event of
Default shall have occurred and be continuing, the Pass Through Trustee may, in
its own discretion and at its own direction, consent and notify the Related
Indenture Trustee of such consent to any modification, amendment, supplement or
waiver under any related Indenture Document.
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts. The Pass
Through Trust and the obligations and responsibilities of the Company and the
Pass Through Trustee thereunder shall terminate upon the distribution to all
Certificateholders and the Pass Through Trustee of all amounts required to be
distributed to them pursuant to this Pass Through Agreement and the disposition
of all property held as part of the Trust Property; provided that in no event
shall the Pass Through Trust continue beyond the expiration of 21 years after
the death of the last survivor of Mario Cuomo, Governor of New York State,
living on the date of this Pass Through Agreement.
Notice of termination of the Pass Through Trust, specifying
the applicable Distribution Date upon which the Certificateholders may
surrender their Pass Through Certificates to the Pass Through Trustee for
payment of the final distribution and cancellation thereof, shall be mailed
promptly by the Pass Through Trustee to the Certificateholders not earlier than
the 60th day and not later than the 20th day next preceding such final
distribution specifying (i) the Distribution Date upon which such final
distribution will be made and that such distribution will be made only upon
presentation and surrender of the Pass Through Certificates at the office or
agency of the Pass Through Trustee specified therein, (ii) the amount of any
such final distribution, and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable. The Pass Through Trustee shall
notify the Registrar at the time the Certificateholders are notified of such
final distribution. Upon presentation and surrender of the Pass Through
Certificates, the Pass Through Trustee shall distribute all amounts
distributable on the Pass Through Certificates on such Distribution Date
pursuant to Section 5.04.
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<PAGE> 65
SECTION 12.02. Application by Pass Through Trustee of Funds
Deposited for Payment of Pass Through Certificates. Subject to Section 12.04,
all moneys deposited with the Pass Through Trustee for payment pursuant to
Section 12.01 shall be held in trust and applied by it to the prompt payment,
either directly or through any Paying Agent, to the Certificateholders of the
Pass Through Certificates, of all sums due and to become due thereon; but such
money need not be segregated from other funds except to the extent required by
law.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Pass Through Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and to receive the final distribution with
respect thereto.
SECTION 12.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of the Pass Through Trust, all
moneys then held by any Paying Agent for the Pass Through Trust shall, upon
demand of the Pass Through Trustee, be repaid to it and thereupon such Paying
Agent shall be released from all further liability with respect to such moneys.
SECTION 12.04. Transfer of Moneys Held by Pass Through
Trustee and Paying Agent Unclaimed for Two Years and Eleven Months. Any moneys
deposited with or paid to the Pass Through Trustee or any Paying Agent to be
distributed on any Pass Through Certificate and not applied but remaining
unclaimed for two years and eleven months after the date upon which such amount
has become due and payable, shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
paid to the Related Indenture Trustees by the Pass Through Trustee or such
Paying Agent and the applicable Certificateholder shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to such Related Indenture
Trustees for any payment which such Certificateholder may be entitled to
collect, and all liability of the Pass Through Trustee, or any Paying Agent
with respect to such moneys shall thereupon cease.
57
<PAGE> 66
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting. The Pass Through
Trustee acts hereunder and under the Pass Through Trust not in its individual
capacity but solely as trustee except as expressly provided herein.
SECTION 13.02. No Legal Title to Trust Property in
Certificateholders. No Certificateholder shall have legal title to any part of
the Trust Property. No transfer, by operation of law or otherwise, of any Pass
Through Certificate or other right, title and interest of any Certificateholder
in and to the Trust Property or under the Pass Through Trust shall operate to
terminate the Pass Through Trust or entitle such Certificateholder or any
successor or transferee of such Certificateholder to an accounting or to the
transfer to it of legal title to any part of the Trust Property.
SECTION 13.03. Certificates Nonassessable and Fully Paid. No
Certificateholder shall be personally liable for obligations of the Pass
Through Trust, and the Fractional Undivided Interests shall be nonassessable
for any losses or expenses of the Pass Through Trust or for any reason
whatsoever, and upon authentication of the Pass Through Certificates by the
Pass Through Trustee pursuant to Section 3.02, such Pass Through Certificates
will be and shall be deemed fully paid. No Certificateholder shall have any
right (except as expressly provided herein) to vote or in any manner otherwise
control the operation and management of the Trust Property, the Pass Through
Trust, or the obligations of the parties hereto, nor shall anything set forth
herein or in the Pass Through Certificates be construed so as to constitute the
Certificateholders from time to time as partners or members of an association.
SECTION 13.04. Pass Through Agreement for the Benefit of the
Company, the Pass Through Trustee and the Certificateholders. Nothing in this
Pass Through Agreement or in any Pass Through Certificate, whether express or
implied, shall be construed to give to any person other than the Company, the
Pass Through Trustee, as trustee and in its individual capacity, and the
Certificateholders any legal or equitable right, remedy or claim under or in
respect of this Pass Through Agreement, the Pass Through Trust or any Pass
Through Certificate.
58
<PAGE> 67
SECTION 13.05. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to terminate
the Pass Through Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Pass
Through Trust, nor otherwise affect the rights, obligations, and liabilities of
the parties hereto or any of them. No Certificateholder shall be entitled to
revoke the Pass Through Trust.
SECTION 13.06. Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Pass Through Agreement to be made, given, furnished or filed
shall be in writing, mailed by certified mail, postage prepaid, or by confirmed
telex or telecopy, and (i) if to the Pass Through Trustee, at its office at One
First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 (telecopier:
(312) 407-1708), Attention: Corporate Trust Services Division; or (ii) if to
the Company, addressed to it at its offices at One United Bank Center, 1700
Lincoln Street, Denver, Colorado 80203 (telecopier: (303) 837-6007),
Attention: Treasurer. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
party to this Pass Through Agreement.
Where this Pass Through Agreement provides for notice to
Certificateholders, such notice shall be sufficiently given (unless otherwise
expressly provided herein) if in writing and mailed, first-class postage
prepaid, to each Certificateholder entitled thereto, at his or her last address
as it appears in the Register. In any case where notice to Certificateholders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Certificateholder shall affect the
sufficiency of such notice with respect to other Certificateholders. Where
this Pass Through Agreement provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Certificateholders shall be filed with the Pass
Through Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to any
Certificateholders when
59
<PAGE> 68
such notice is required to be given pursuant to any provision of this Pass
Through Agreement, then any manner of giving such notice as shall be
satisfactory to the Pass Through Trustee shall be deemed to be a sufficient
giving of such notice.
SECTION 13.07. Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. Upon any application or demand by
the Company to the Pass Through Trustee to take any action, the Company shall
furnish to the Pass Through Trustee (i) an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Pass Through Agreement
relating to the proposed action have been complied with and that the proposed
action is in conformity with the requirements of this Pass Through Agreement,
and (ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Pass Through
Agreement relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion required by this Pass Through
Agreement and delivered to the Pass Through Trustee with respect to compliance
with a condition or covenant provided for in this Pass Through Agreement,
except for the certificate required by Section 4.03(d) shall include (a) a
statement that the person making such certificate or opinion has read such
covenant or condition, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters information with respect to which is
in the possession of the Company, upon the certificate, statement or opinion of
or representations by an officer or officers of the Company unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
60
<PAGE> 69
Any certificate, statement or opinion of an officer of the
Company or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants employed by the Company unless such officer or counsel,
as the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Pass Through Trustee shall contain a statement that
such firm is independent.
SECTION 13.08. Conflict of Any Provision of Pass Through
Agreement with the Trust Indenture Act. If and to the extent that any
provision of this Pass Through Agreement limits, qualifies or conflicts with
another provision included in this Pass Through Agreement by operation of
Sections 310 to 317, inclusive, of the Trust Indenture Act (an "incorporated
provision"), such incorporated provision shall control.
SECTION 13.09. Severability. Any provision of this Pass
Through Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 13.10. No Oral Modifications or Continuing Waivers.
No terms or provisions of this Pass Through Agreement or any Pass Through
Certificates may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party or other person against whom
enforcement of the change, waiver, discharge or termination is sought; and any
waiver of the terms hereof or thereof shall be effective only in the specific
instance and for the specific purpose given.
SECTION 13.11. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the parties hereto and the successors and permitted assigns of each,
all as herein provided. Any request, notice, direction, consent, waiver or
other instrument or action by any Certificateholder shall bind the successors
and assigns of such Certificateholder.
61
<PAGE> 70
SECTION 13.12. Headings. The headings of the various
Articles and Sections herein and in the table of contents hereto are for the
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 13.13. Normal Commercial Relations. Anything
contained in this Pass Through Agreement to the contrary notwithstanding, the
Pass Through Trustee and any Certificateholder, or any bank or other affiliate
of any such party, may conduct any banking or other financial transactions, and
have banking or other commercial relationships, with the Company fully to the
same extent as if this Pass Through Agreement were not in effect, including
without limitation the making of loans or other extensions of credit to the
Company for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 13.14. Governing Law; Counterpart Form. THIS PASS
THROUGH AGREEMENT AND EACH PASS THROUGH CERTIFICATE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This
Pass Through 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.
SECTION 13.15. Distributions Due on Days Other than Business
Days. If any Distribution Date is not a Business Day, then such distribution
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the applicable Distribution
Date, and no interest shall accrue for the intervening period.
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<PAGE> 71
IN WITNESS WHEREOF, the parties hereto have caused this Pass
Through Agreement to be duly executed this ____ day of September, 1994 by their
respective officers thereunto duly authorized, and acknowledge that this Pass
Through Agreement has been made and delivered in the City of New York, and this
Pass Through Agreement shall be effective only upon such execution and
delivery.
THE FIRST NATIONAL BANK OF CHICAGO
not in its individual capacity,
except as otherwise expressly
provided herein, but solely
as Pass Through Trustee
By:_________________________________
Title:
NEWMONT GOLD COMPANY
By:_________________________________
Title:
63
<PAGE> 72
Exhibit A to
Pass Through
Agreement
FORM OF PASS THROUGH CERTIFICATE
Unless this pass through certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC") to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.(1)
NEWMONT GOLD COMPANY
PASS THROUGH TRUST, 1994-A1
1994 Pass Through Certificate, Series A1
Final Scheduled Regular Distribution Date:
January 5, 2009
evidencing a fractional undivided interest in a pass through trust,
the property of which includes certain Equipment Notes, each secured
by a percentage of an undivided interest in a refractory gold ore
treatment facility leased to Newmont Gold Company
CUSIP No.: 65163QAA6
Certificate No. _______
Applicable interest rate on Equipment Notes held in Pass
Through Trust, 1994-A1: 8.91%
$___________ Fractional Undivided Interest.
____________________
(1) This paragraph is required only if the Pass Through
Certificates are to be represented by the Registered Global Certificate.
<PAGE> 73
THIS CERTIFIES THAT ______________, for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in the Newmont Gold Company Pass Through Trust, 1994-A1 (the "Pass
Through Trust") created and declared by The First National Bank of Chicago, as
pass through trustee (the "Pass Through Trustee"), pursuant to the Pass Through
Trust Agreement dated as of July 15, 1994 (the "Pass Through Agreement")
between the Pass Through Trustee and Newmont Gold Company, a corporation
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Pass Through Agreement. This Pass Through Certificate is one of
the duly authorized Pass Through Certificates designated as "Newmont Gold
Company 1994 Pass Through Certificates, Series A1." This Pass Through
Certificate is issued under and is subject to the terms, provisions, and
conditions of the Pass Through Agreement, to which the Certificateholder of
this Pass Through Certificate by virtue of the acceptance hereof assents and by
which such Certificateholder is bound. The property of the Pass Through Trust
(the "Trust Property") includes certain Equipment Notes (the "Equipment
Notes"). The Equipment Notes are secured by a percentage of an undivided
interest in a refractory gold ore treatment facility leased to the Company.
Subject to and in accordance with the terms of the Pass
Through Agreement, from funds then available to the Pass Through Trustee, there
will be distributed on each January 5 and July 5 (a "Regular Distribution
Date"), commencing on July 5, 1995, to the Person in whose name this Pass
Through Certificate is registered at the close of business on the 15th day
preceding the applicable Regular Distribution Date, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution
Date, the receipt of which has been confirmed by the Pass Through Trustee,
equal to the product of the percentage interest in the Pass Through Trust
evidenced by this Pass Through Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Pass Through Agreement, if Special Payments on the Equipment Notes are received
by the Pass Through Trustee, from funds then available to the Pass Through
Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Pass Through Certificate is registered
at the close of business on the 15th day preceding such Special Distribution
Date, an amount in respect of such Special Payments on the Equipment Notes, the
receipt of which has been confirmed by the Pass Through Trustee, equal to the
product of the percentage interest in the Pass Through Trust evidenced by this
Pass Through Certificate and an amount equal to the sum
A-2
<PAGE> 74
of such Special Payments so received. If a Distribution Date is not a Business
Day, distribution shall be made on the immediately following Business Day with
the same force and effect as if made on such Distribution Date and no interest
shall accrue during the intervening period. The Special Distribution Date
shall be the day of the month determined as provided in the Pass Through
Agreement. The Pass Through Trustee shall mail notice of each Special Payment
and the Special Distribution Date therefor to the Certificateholder of this
Pass Through Certificate.
Distributions on this Pass Through Certificate will be made by
the Pass Through Trustee to the Person entitled thereto, without the
presentation or surrender of this Pass Through Certificate or the making of any
notation hereon. Except as otherwise provided in the Pass Through Agreement
and notwithstanding the above, the final distribution on this Pass Through
Certificate will be made after notice is mailed by the Pass Through Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Pass Through Certificate at the office or agency of the Pass Through
Trustee specified in such notice.
NO EMPLOYEE BENEFIT PLAN SUBJECT TO PART 4 OF SUBTITLE B OF TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR ANY TRUST CREATED UNDER ANY SUCH
EMPLOYEE BENEFIT PLAN OR PLAN, NOR ANY GOVERNMENTAL PLAN (AS DEFINED IN SECTION
3(32) OR ERISA OR SECTION 414(d) OF THE CODE) ORGANIZED IN A JURISDICTION
HAVING PROHIBITIONS ON TRANSACTIONS WITH SUCH GOVERNMENTAL LAWS SIMILAR TO
THOSE CONTAINED IN SECTION 406 OF ERISA OR SECTION 414(d) OF THE CODE (SUCH
EMPLOYEE BENEFIT PLAN, PLAN AND GOVERNMENTAL PLAN ARE HEREINAFTER COLLECTIVELY
REFERRED TO AS AN "ERISA PLAN"), OR ANY OTHER PERSON TREATED AS HOLDING ASSETS
OF AN ERISA PLAN MAY ACQUIRE OR HOLD THE PASS THROUGH CERTIFICATES. THE
PURCHASE BY ANY PERSON OF ANY PASS THROUGH CERTIFICATE CONSTITUTES A
REPRESENTATION BY SUCH PERSON TO THE COMPANY, THE RELATED OWNER PARTICIPANTS,
THE RELATED OWNER TRUSTEES, THE RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE THAT SUCH PERSON IS NOT AN ERISA PLAN AND THAT SUCH PERSON IS NOT
ACQUIRING, AND HAS NOT ACQUIRED, SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF
AN ERISA PLAN.
This Pass Through Certificate shall be governed by and
construed in accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this
Pass Through Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
A-3
<PAGE> 75
Unless the certificate of authentication hereon has been
executed by the Pass Through Trustee, by manual signature, this Pass Through
Certificate shall not be entitled to any benefit under the Pass Through Trust
or be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this
Pass Through Certificate to be duly executed.
NEWMONT GOLD COMPANY
PASS THROUGH TRUST, SERIES 1994-A1
By: THE FIRST NATIONAL BANK OF
CHICAGO,
as Pass Through Trustee
By: ________________________
Authorized Signatory
A-4
<PAGE> 76
(FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
Dated:
This is one of the Pass Through Certificates referred to in the
within-mentioned Pass Through Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO,
as Pass Through Trustee
By: __________________________
Authorized Signatory
A-5
<PAGE> 77
(Reverse of Pass Through Certificate)
The Pass Through Certificates do not represent a direct
obligation of, or an obligation guaranteed by, or an interest in, the Company
or the Pass Through Trustee or any affiliate thereof. The Pass Through
Certificates are limited in right of payment, all as more specifically set
forth on the face hereof and in the Pass Through Agreement. All payments or
distributions made to Certificateholders under the Pass Through Agreement shall
be made only from the Trust Property and only to the extent that the Pass
Through Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the Pass Through
Agreement. Each Certificateholder of this Pass Through Certificate, by its
acceptance hereof, agrees that it will look solely to the income and proceeds
from the Trust Property to the extent available for distribution to such
Certificateholder as provided in the Pass Through Agreement. In connection
with withholding taxes, under certain circumstances the Pass Through Trustee
may retain certain amounts otherwise distributable to a Certificateholder. The
purchase by any Certificateholder of any Pass Through Certificate constitutes
the consent of such Certificateholder to such retention in accordance with the
terms of the Pass Through Agreement. This Pass Through Certificate does not
purport to summarize the Pass Through Agreement and reference is made to the
Pass Through Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby. A copy of the
Pass Through Agreement may be examined during normal business hours at the
principal office of the Pass Through Trustee, and at such other places, if any,
designated by the Pass Through Trustee, by any Certificateholder upon request.
As of the date of issuance of this Pass Through Certificate,
and assuming that no early redemption, purchase or default in respect of the
Equipment Notes shall occur, the aggregate scheduled repayments of principal on
the Equipment Notes for the Pass Through Trust and the resulting Pool Factors
for the Pass Through Trust after taking into account each such repayment are
set forth below:
A-6
<PAGE> 78
Pass Through Trust, 1994-A1
<TABLE>
<CAPTION>
Regular Scheduled Principal
Distribution Payments on
Date Equipment Notes Pool Factor
------------ ------------------- -----------
<S> <C> <C>
$ 0.0000000
</TABLE>
The Pass Through Agreement permits, with certain exceptions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under the
Pass Through Trust at any time by the Company and the Pass Through Trustee with
the consent of the Majority In Interest of Certificateholders in the Pass
Through Trust. Any such consent by the Certificateholder of this Pass Through
Certificate shall be conclusive and binding on such Certificateholder and upon
all future Certificateholders of this Pass Through Certificate and of any Pass
Through Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this Pass
Through Certificate. The Pass Through Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Pass Through Certificates.
As provided in the Pass Through Agreement and subject to
certain limitations set forth therein, the transfer of this Pass Through
Certificate is registrable in the Register upon surrender of this Pass Through
Certificate for registration of transfer to the Pass Through Trustee in its
capacity as Registrar, or by any successor Registrar, duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Pass Through Trustee and the Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly authorized in writing, and
thereupon one or more new Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Pass Through
Trust will be issued to the designated transferee or transferees.
The Pass Through Certificates are issuable only as registered
Pass Through Certificates without coupons in minimum denominations of $1,000
Fractional Undivided Interest and integral multiples thereof. As provided in
the Pass Through Agreement and subject to certain limitations set forth
therein, the Pass Through Certificates are exchangeable for new Pass Through
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through Trust, as requested by the
Certificateholder surrendering the same.
A-7
<PAGE> 79
No service charge will be made for any such registration of
transfer or exchange, but the Pass Through Trustee shall require payment of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Pass Through Trustee, the Registrar, and any agent of the
Pass Through Trustee or the Registrar may treat the person in whose name this
Pass Through Certificate is registered as the owner hereof for all purposes,
and neither the Pass Through Trustee, the Registrar, nor any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Pass
Through Agreement and the Pass Through Trust created thereby shall terminate
upon the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to the Pass Through Agreement and the disposition
of all property held as part of the Trust Property.
A-8
<PAGE> 80
Schedule I to
Pass Through Agreement
Newmont Gold Company
Pass Through Trust, 1994-A1
Equipment Notes;
Related Indenture Documents
1. Equipment Notes (Newmont Gold Company Trust No. 1)
Interest Rate: 8.91%
Maturity: January 5, 2009
Principal Amount: $131,577,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Newmont Gold Company Trust No.
1) dated as of July 15, 1994, between Shawmut Bank Connecticut,
National Association, as Owner Trustee, and The First National Bank of
Chicago, as Indenture Trustee;
Participation Agreement (Newmont Gold Company Trust No. 1) dated as of
July 15, 1994, among Newmont Gold Company, as Lessee, Philip Morris
Capital Corporation, as Owner Participant, Shawmut Bank Connecticut,
National Association, as Owner Trustee, The First National Bank of
Chicago, as Indenture Trustee, and The First National Bank of Chicago,
as Pass Through Trustee;
Trust Agreement (Newmont Gold Company Trust No. 1) dated as of July
15, 1994, between Philip Morris Capital Corporation, as Owner
Participant and Shawmut Bank Connecticut, National Association, as
Owner Trustee; and
Lease Agreement (Newmont Gold Company Trust No. 1) dated as of
September 30, 1994, between Shawmut Bank Connecticut, National
Association, as Owner Trustee and Lessor, and Newmont Gold Company, as
Lessee.
I-1
<PAGE> 81
2. Equipment Notes (Newmont Gold Company Trust No. 2)
Interest Rate: 8.91%
Maturity: January 5, 2009
Principal Amount: $43,859,000
Related Indenture Documents:
Trust Indenture and Security Agreement (Newmont Gold Company Trust No.
2) dated as of July 15, 1994, between Shawmut Bank Connecticut,
National Association, as Owner Trustee, and The First National Bank of
Chicago, as Indenture Trustee;
Participation Agreement (Newmont Gold Company Trust No. 2) dated as of
July 15, 1994, among Newmont Gold Company, as Lessee, Philip Morris
Capital Corporation, as Owner Participant, Shawmut Bank Connecticut,
National Association, as Owner Trustee, The First National Bank of
Chicago, as Indenture Trustee, and The First National Bank of Chicago,
as Pass Through Trustee;
Trust Agreement (Newmont Gold Company Trust No. 2) dated as of July
15, 1994, between Philip Morris Capital Corporation, as Owner
Participant and Shawmut Bank Connecticut, National Association, as
Owner Trustee; and
Lease Agreement (Newmont Gold Company Trust No. 2) dated as of
September 30, 1994, between Shawmut Bank Connecticut, National
Association, as Owner Trustee and Lessor, and Newmont Gold Company,
as Lessee.
I-2
<PAGE> 1
EXHIBIT 4.2
CERTAIN RIGHTS OF THE LESSOR UNDER THIS LEASE AND IN THE UNDIVIDED INTEREST
HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, THE
FIRST NATIONAL BANK OF CHICAGO, AS INDENTURE TRUSTEE. THIS LEASE HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 21(e) FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
============================================================
LEASE
dated as of
September 30, 1994
between
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as Owner Trustee
under Trust Agreement No. 1,
dated as of July 15, 1994,
with Philip Morris Capital Corporation,
as Lessor
and
NEWMONT GOLD COMPANY,
as Lessee
============================================================
NEWMONT GOLD ORE TREATMENT FACILITY
Trust No. 1
A Lease dated as of September 30, 1994 between Shawmut Bank Connecticut,
National Association and Newmont Gold Company relating to Trust No. 2 was also
entered into by the parties thereto. Such Lease is identical in all material
respects to this Lease except it relates to Trust No. 2 rather than to Trust
No. 1.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Section Title Page
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SECTION 1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Lease of Undivided Interest; Sublease of Site Interest; and Lease Term. . . . . . . . . . . 2
SECTION 3. Rent; Adjustments to Rent; and Ground Lease Rent . . . . . . . . . . . . . . . . . . . . . . 3
(a) Interim Rent and Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Supplemental Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Failure to Pay Supplemental Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) Adjustments for Changes in Pricing Assumptions . . . . . . . . . . . . . . . . . . . . . 5
(f) Further Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(g) Adequacy of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 4. Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 5. Return of the Undivided Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Return of the Undivided Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Disposition Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. Warranty of the Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Disclaimer of Other Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 7. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
(i)
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<TABLE>
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SECTION 8. Operation and Maintenance; Marking;
Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Replacement of Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Reports of Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(f) Title to Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(g) Funding of Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(h) Failure to Finance; Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i) Marking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(j) Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(k) Contest of Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Event of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Consequences of an Event of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Damage Not Constituting an Event of Loss . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Excess Loss Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Application of Payments Not Relating to an Event of Loss . . . . . . . . . . . . . . . 18
(f) Other Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 10. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 12. Assignment or Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 13. Lease Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Lease Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
(ii)
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<TABLE>
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SECTION 14. Purchase Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 15. Early Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 16. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 17. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) No Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Exercise of Other Rights or Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 19. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 20. Right to Perform for Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 21. Amendments and Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(a) Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(b) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(c) Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) True Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(e) Original Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(f) Other Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(g) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(h) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(i) Counterpart Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(j) Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
SCHEDULES
SCHEDULE 1 Pricing Assumptions
SCHEDULE 2 Basic Rent Payments
SCHEDULE 3 Stipulated Loss Values
(iii)
<PAGE> 5
SCHEDULE 4 Early Buy-Out Price
SCHEDULE 5 Termination Values
EXHIBIT
EXHIBIT A Certificate of Acceptance
(iv)
<PAGE> 6
LEASE
THIS LEASE, dated as of September 30, 1994, between SHAWMUT
BANK CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, but
solely as Owner Trustee under Trust Agreement No. 1, dated as of July 15, 1994
(Trust Agreement No. 1), with Philip Morris Capital Corporation (the Owner
Participant), as Lessor (the Lessor), and NEWMONT GOLD COMPANY, a Delaware
corporation, as lessee (the Lessee).
W I T N E S S E T H :
WHEREAS, the Lessee desires to lease the Undivided Interest
from the Lessor and to sublease the Site Interest from the Ground Lease Lessee;
and
WHEREAS, (i) the Lessor is willing to lease the Undivided
Interest, and (ii) the Ground Lease Lessee is willing to sublease the Site
Interest, in each case to the Lessee and on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS.
For purposes hereof, capitalized terms used herein shall have
the meanings set forth in Appendix A to the Participation Agreement, dated as
of July 15, 1994, among the Owner Participant, the Owner Trustee, individually
and as Owner Trustee under Trust Agreement No. 1, the Indenture Trustee,
individually and as Indenture Trustee under an Indenture, dated as of July 15,
1994, with the Owner Trustee, the Pass Through Trustee, individually and as
Pass Through Trustee under the Pass Through Trust Agreement, and the Lessee.
References herein to sections, paragraphs and clauses are to sections,
paragraphs and clauses in this Lease unless otherwise indicated.
<PAGE> 7
SECTION 2. LEASE OF UNDIVIDED INTEREST; SUBLEASE OF SITE
INTEREST; AND LEASE TERM.
(a) Lease of Undivided Interest, etc. Upon and subject
to the terms and conditions of this Lease, (i) the Lessor agrees to lease to
the Lessee, and the Lessee hereby agrees to lease from the Lessor, the
Undivided Interest and (ii) the Ground Lease Lessee agrees to sublease to the
Lessee, and the Lessee hereby agrees to sublease from the Ground Lease Lessee,
the Site Interest. The term of this Lease (the Lease Term) shall begin on the
Closing Date and shall end on September 30, 2015, or such earlier or later date
on which, or to which, this Lease shall have been terminated, extended or
renewed, or the Lessee shall have exercised its Early Purchase Option, all
pursuant to the terms hereof. During the Lease Term, the Lessee agrees to
perform all terms and conditions of the Ground Lease Lessee under the Ground
Lease and Easement.
(b) Character of the Facility. It is the express
intention of the Lessor and the Lessee that the Facility and the Undivided
Interest shall at all times be and remain personal property as to all persons
and for all purposes to the fullest extent permitted by Applicable Law. In the
event that, notwithstanding the foregoing, a court of competent jurisdiction
shall make a final determination that some part or portion of the Undivided
Interest constitutes real property under Applicable Law, then this Lease shall
be deemed to be and shall be construed as a divisible and severable contract
between the Lessor and the Lessee for the leasing of respectively (i) the part
or portion of the Undivided Interest so determined to constitute real property
under Applicable Law, and (ii) the remainder of the Undivided Interest, all to
the same extent and with the same force and effect as though a separate lease
had been entered into by the Lessor and the Lessee in respect of the part or
portion of the Undivided Interest so determined to constitute real property and
the remainder of the Undivided Interest and the amount of each installment of
Basic Rent payable in respect of the part or portion of the Facility so
determined to constitute real property shall bear the same relationship to the
aggregate amount of such installment of Basic Rent as the cost to the Lessor of
such part or portion of the Undivided Interest so determined to constitute real
property shall bear to Facility Cost.
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<PAGE> 8
SECTION 3. RENT; ADJUSTMENTS TO RENT; AND GROUND LEASE RENT.
(a) INTERIM RENT AND BASIC RENT. The Lessee shall pay to
the Lessor as Interim Rent and Basic Rent for the Undivided Interest, the
following amounts:
(1) on the Basic Lease Commencement Date, an amount with
respect to the Interim Term, equal to all Interim Rent.
(2) on each Rent Payment Date during the Basic Lease
Term, an amount, determined initially on the basis of the Pricing
Assumptions, but subject to adjustments pursuant to this Section 3 and
subject to Section 3(g), equal to the product obtained by multiplying
Facility Cost by the percentage set forth opposite the number of such
Rent Payment Date in Schedule 2 hereto (as such Schedule may be
amended from time to time pursuant to a Lease Supplement) with respect
to the respective periods indicated on such schedule.
(3) on each Rent Payment Date during any Fixed Rate
Renewal Term, an amount equal to 50% of the average of all
installments of Basic Rent during the Basic Lease Term.
(4) on each Rent Payment Date during any Fair Market
Renewal Term, an amount equal to the Fair Market Rental Value of the
Undivided Interest established for such Fair Market Renewal Term
pursuant hereto.
Clause (2) above to the contrary notwithstanding, if the Lessee shall pay any
amount pursuant to clause (1) above, it shall thereafter have the right to
reduce the amount of Basic Rent payable pursuant to clause (2) by an amount
equal to the excess, if any, of (i) the amount of Basic Rent payable on any
Rent Payment Date over (ii) the amount of principal and interest due and
payable on such Date with respect to the Notes, and such right shall continue
until such time as the Lessee shall have recovered, by set- off, the full
amount paid under such clause (1), together with interest on the outstanding
balance thereof at a rate equal to the Overdue Rate for the period from the
Basic Lease Commencement Date to the Rent Payment Date on which the foregoing
amount shall have been recovered in full.
-3-
<PAGE> 9
(b) SUPPLEMENTAL RENT. The Lessee shall pay the
following amounts as supplemental rent (Supplemental Rent):
(1) on demand, any amount (other than Basic Rent,
Stipulated Loss Value, Termination Value and the Early Buy- Out Price)
which the Lessee is required to pay, or agrees to pay, under this
Lease or any other Transaction Document.
(2) on the date provided herein, any amount payable
hereunder as Stipulated Loss Value, Termination Value, Early Buy-Out
Price or Fair Market Value.
(3) on demand and in any event on the next succeeding
Rent Payment Date, to the extent permitted by Applicable Law, interest
at a rate equal to the Overdue Rate on any payment of Basic Rent or
Supplemental Rent not paid when due (whether or not the Lessee's
payment obligation is subject to any period of grace) for any period
for which the same shall be overdue.
(4) on any Refunding Date, an amount equal to premium, if
any, and, if such Refunding Date shall occur on any date other than a
Rent Payment Date, accrued and unpaid interest, on the Notes so
refunded which shall be payable on the date of such Refunding in
accordance with the terms of such Notes and the Indenture.
(5) on any date of prepayment of the Notes (other than
pursuant to a Refunding), an amount equal to the premium, if any,
required to be paid with respect to the Notes being prepaid on such
date.
(6) on the dates provided for in the Ground Lease and
Easement, an amount equal to the Ground Lease Rent due under the
Ground Lease and Easement.
(c) FAILURE TO PAY SUPPLEMENTAL RENT. If the Lessee
shall fail to pay Supplemental Rent when the same shall be due and payable, the
Lessor shall have all rights, powers and remedies provided for herein, at law
or in equity, in respect of the nonpayment of Basic Rent.
(d) FORM OF PAYMENT. All payments of Rent shall be made
in immediately available funds on the date each such payment shall be due
hereunder and shall be paid to either (i) in the case of payments other than
Excepted
-4-
<PAGE> 10
Payments or Ground Lease Rent, the Indenture Trustee so long as the Notes shall
be outstanding, and thereafter as the Lessor may direct by notice in writing to
the Lessee, or (ii) in the case of Excepted Payments and Ground Lease Rent, the
Person entitled to receive such payments under the terms hereof or of any other
Transaction Document at such address as such Person may direct by notice in
writing to the Lessee. The Lessee shall cause each transfer of funds to be
initiated by such time as shall permit oral confirmation of such transfer to be
given no later than 11:00 a.m., New York City time, on the applicable payment
date. If the date on which any payment of Rent is due shall not be a Business
Day, such payment shall be payable on the next succeeding Business Day,
together with interest thereon at the Overdue Rate for the period from, and
including, the due date to, but excluding, such next succeeding Business Day.
(e) ADJUSTMENTS FOR CHANGES IN PRICING ASSUMPTIONS.
Basic Rent, Stipulated Loss Value and Termination Value shall be subject to
adjustment, upward or downward, to preserve Net Economic Return in consequence
of, (i) any Tax Law Change, (ii) any change in the actual interest rate on, the
schedule for the amortization of, and any other material term of, the Notes, if
different from that assumed in the Pricing Assumptions, (iii) a Closing Date
which shall occur on any date other than September 30, 1994, provided, however,
that no such change in the Closing Date shall result in any adjustment with
respect to any issues arising under section 168(d)(3) of the Code, (iv)
Transaction Expenses being greater than 1.72922% of Facility Cost and (v)
changes from the Depreciation Deductions set forth in the Pricing Assumptions.
Adjustments, if any, pursuant to clauses (i) through (v) above shall be made
on, and be effective as of, the Closing Date except that a further adjustment
may be made, if necessary, to reflect Transaction Expenses paid after the
Closing Date. Prior to the Closing Date, the Lessor, based upon information
provided by the Owner Participant, shall provide to the Lessee, upon reasonable
request and reasonable advance notice, alternative adjustments to Basic Rent,
Stipulated Loss Value and Termination Value to reflect the final adjustment to
the Pricing Assumptions both with and without concurrent adjustment to the
Early Buy-Out Price. In each such case, the Lessee, in its sole discretion,
may choose to effect either of such alternative adjustments by giving prompt
written notice to such effect to the Lessor and the Owner Participant.
(f) FURTHER ADJUSTMENTS. Basic Rent, Stipulated Loss
Value, Termination Value and the Early Buy-Out Price (in each case, after
giving effect to any prior adjustments pursuant to Section 3) shall be subject
to further adjustment, upward or downward, to reflect, and to preserve Net
Economic Return in consequence of, any Additional Equity Investment, any
Supplemental
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<PAGE> 11
Financing, any Refunding of the Notes and as a result of any portion of the
Facility being placed in service for Federal income tax purposes after December
31, 1994 (the "In Service Date"), which adjustment shall be made on or before
the Rent Payment Date next following the date of such investment, financing or
Refunding, or the In Service Date, as the case may be, and shall be effective
with respect to such Basic Rent Payment and all payments of Basic Rent,
Stipulated Loss Value, Termination Value and the Early Buy- Out Price payable
thereafter. If, in connection with any Refunding of the Notes, the Lessee
shall have paid, as Supplemental Rent, an amount equal to accrued and unpaid
interest on the Notes being refunded on a Refunding Date which is not a Rent
Payment Date, Basic Rent payable on the Rent Payment Date next succeeding such
Refunding Date (if not yet adjusted to reflect such Refunding pursuant to this
Section 3(f)) shall be reduced by the amount of such Supplemental Rent payment.
(g) ADEQUACY OF PAYMENTS. Each installment of Basic Rent
payable on each Rent Payment Date shall be, under any circumstances and in any
event, at least sufficient to pay on such Rent Payment Date, and any payment of
Stipulated Loss Value, Termination Value or the Early Buy-Out Price payable on
any date on which the payment of any such value shall be required or permitted
hereunder shall be, under any circumstances and in any event, at least
sufficient to pay on such date, all principal of, premium, if any, and interest
on, all Notes then due and payable. The amount of each adjustment to Basic
Rent, Stipulated Loss Value, Termination Value and, if and when required, the
Early Buy-Out Price shall first be determined by the Owner Participant, but
shall be subject to verification, at the Lessee's expense, by an Independent
Auditor if the Lessee shall so request. Subject only to such verification,
such adjustment shall be conclusive and binding on the Lessee if the Owner
Participant confirms to the Lessee in writing that such adjustment was computed
on a basis consistent with the original computation of Basic Rent, Stipulated
Loss Value, Termination Value and Early Buy-Out Price. Each adjustment
pursuant to this Section 3 shall be evidenced by the execution and delivery of
a Lease Supplement, but shall be effective on and as of the date provided
herein without regard to the date on which such Lease Supplement is actually
executed and delivered.
-6-
<PAGE> 12
SECTION 4. NET LEASE.
This Lease shall be a net lease and the Lessee hereby
acknowledges and agrees that the Lessee's obligation to pay all Rent hereunder,
and the rights of the Lessor in and to such Rent, shall be absolute and
unconditional and shall not be affected by any event, circumstance or reason
whatsoever, including (i) any set-off, abatement, counterclaim, suspension,
recoupment, reduction, defense or other right which the Lessee may have against
the Lessor, the Owner Participant, the Indenture Trustee, any vendor or
manufacturer with respect to the Facility or any Component incorporated
therein, or any other Person, (ii) any defect in the design or condition of the
Facility, the Facility Site, any Component incorporated therein or the
Undivided Interest, the merchantability thereof, the fitness thereof for any
particular purpose, title to the Facility, the Facility Site, any Component
incorporated therein or the Undivided Interest, the quality of the material or
the workmanship thereof, the conformity thereof to the Plans and
Specifications, or the absence of any latent or other defects, whether or not
discoverable, (iii) any loss, theft or destruction of the Facility, or any
interference, interruption or cessation, of whatever duration, in the use or
possession thereof, of any Component incorporated therein, or of the Undivided
Interest by the Lessee or any Person, (iv) any restriction, prevention or
curtailment of or interference with any use of the Facility, the Facility Site
or of the Undivided Interest, (v) any insolvency, bankruptcy, reorganization or
similar proceeding by or against the Lessee, the Lessor, the Owner Participant
or any other Person, (vi) the invalidity, illegality or unenforceability of any
Transaction Document (including this Lease), any other infirmity herein or
therein, or any lack of right, power or authority of the Lessee, the Lessor,
the Owner Participant, the Indenture Trustee or any other Person to enter into
this Lease or any other Transaction Document, (vii) the breach or failure of
any warranty or representation made in any Transaction Document by the Lessor,
the Owner Participant, the Indenture Trustee or any other Person, (viii) any
amendment or other change of, or any assignment of rights under, this Lease or
any other Transaction Document, or any waiver or any other action or inaction
under or in respect of this Lease or any other Transaction Document, or any
exercise or nonexercise of any right or remedy under this Lease or any other
Transaction Document, including the exercise of any foreclosure or other remedy
under the Indenture or this Lease, or the sale of the Facility, the Facility
Site, any Component incorporated therein or the Undivided Interest, or (ix) any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing. The Lessee hereby waives, to the extent permitted by Applicable
Law, any and all rights which it may now have or which at any time hereafter
may be conferred upon it, by statute or otherwise, to terminate, cancel, quit
or
-7-
<PAGE> 13
surrender this Lease except in accordance with the express terms hereof. If
for any reason whatsoever this Lease shall be terminated in whole or in part by
operation of law or otherwise, except as specifically provided herein, the
Lessee nonetheless agrees to pay to the Lessor an amount equal to each
installment of Basic Rent and all Supplemental Rent at the time such payment
would have become due and payable in accordance with the terms hereof had this
Lease not been terminated in whole or in part. Each payment of Rent made by
the Lessee shall be final and, except as provided in Section 3(a) hereof, the
Lessee shall not seek to recover all or any part of such payment from the
Lessor or any other Person for any reason whatsoever.
SECTION 5. RETURN OF THE UNDIVIDED INTEREST.
(a) RETURN OF THE UNDIVIDED INTEREST. Upon the
expiration of the Lease Term or the termination of this Lease pursuant to the
terms hereof, the Lessee shall surrender possession of the Undivided Interest
to the Lessor, subject to the terms and provisions of the Ground Lease and
Easement and the Facility Agreements. At the time of such return the Undivided
Interest shall be free and clear of all Liens (other than Lessor's Liens, Owner
Participant's Liens and the Lien of the Ground Lease and Easement and the
Facility Agreements) and the Facility shall be in the condition and repair
required by Section 8 and shall be capable of operating in compliance with all
Applicable Laws and Governmental Actions relating to the Facility. At the time
of the return of the Undivided Interest, the Lessee will, at the Lessor's
option, either remove all Severable Modifications title to which is in the
Lessee, or sell or lease such Modifications to the Lessor for a price or at a
rental equal to the Fair Market Value or Fair Market Rental Value thereof. At
the time of such return, the Lessee shall provide the Lessor with spares and
other supplies used in the operation of the Facility in amounts sufficient to
enable to the User to operate the Facility consistent with Prudent Mining
Industry Practice and all Applicable Laws.
(b) DISPOSITION SERVICES. The Lessee agrees that if it
does not exercise its option hereunder to renew this Lease or to purchase the
Undivided Interest, then during the last eighteen months of the Basic Term or
the applicable Renewal Term, as the case may be, the Lessee will fully
cooperate with the Lessor in connection with the Lessor's efforts to dispose
of, and, in addition, at the request of the Lessor, the Lessee will make a
reasonable effort to dispose of, the Undivided Interest and the Lessor's
interest under the Ground Lease and Easement and the Facility Agreements. The
Lessor agrees to reimburse the
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<PAGE> 14
Lessee for its reasonable out-of-pocket costs and expenses incurred in
connection with such efforts, whether or not the Lessor disposes of the
Undivided Interest.
(c) INSPECTION. During the last year of the Lease Term,
(i) the Lessor may retain an independent consultant at the Lessee's expense to
inspect the Facility for purposes of confirming that the return conditions set
forth in this Section 5 will be complied with upon redelivery to the Lessor at
the end of the Lease Term, and (ii) with reasonable notice and during normal
business hours, the Lessee will cooperate in all reasonable respects with the
efforts of the Lessor, or such independent consultant, to inspect the Facility
and any records relating to the Facility then in the possession of the Lessee
or any Affiliate thereof in order to confirm compliance with the return
conditions set forth in clause (a) of this Section 5; provided that any such
cooperation shall not interfere with the normal operation of the Facility by
the Lessee.
SECTION 6. WARRANTY OF THE LESSOR.
(a) QUIET ENJOYMENT. The Lessor warrants that during the
Lease Term, so long as no Event of Default or Bankruptcy Default shall have
occurred and be continuing, it will not take any action in violation of, or to
disturb, the Lessee's quiet enjoyment, possession and use of the Facility,
including the Undivided Interest, in accordance with the terms hereof and of
the other Transaction Documents.
(b) DISCLAIMER OF OTHER WARRANTIES. The warranty set
forth in paragraph (a) above is in lieu of all other warranties of the Lessor,
whether written or oral or express or implied, with respect to this Lease, the
Facility, any Component incorporated therein or the Undivided Interest. As
between the Lessor and the Lessee, execution by the Lessee of the Certificate
of Acceptance shall be conclusive proof of the compliance of the Facility and
the Undivided Interest with all requirements of this Lease, and THE LESSOR
LEASES AND THE LESSEE TAKES THE UNDIVIDED INTEREST AS IS AND WHERE IS, and the
Lessor shall not be deemed to have made, and THE LESSOR HEREBY DISCLAIMS, ANY
OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING THE DESIGN OR CONDITION OF THE FACILITY, ANY COMPONENT
INCORPORATED THEREIN OR THE UNDLVLDED INTEREST, THE MERCHANTABILITY THEREOF OR
THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE FACILITY, ANY
COMPONENT INCORPORATED THEREIN OR THE
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<PAGE> 15
UNDIVIDED INTEREST, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR THE
CONFORMITY THEREOF TO THE PLANS AND SPECIFICATIONS, OR THE ABSENCE OF ANY
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL THE LESSOR BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT,
STRICT OR OTHERWISE), it being agreed that all such risks, as between the
Lessor and the Lessee, are to be borne by the Lessee.
SECTION 7. LIENS.
Excepting only Permitted Liens, the Lessee will not directly
or indirectly create, incur, assume or suffer to exist any Liens on or with
respect to the Site Interest or the Facility or any Component incorporated
therein or the Undivided Interest, or the Lessor's title thereto or any
interest of the Lessor therein. The Lessee will promptly, at its own expense,
take such action as may be necessary duly to discharge any Lien other than
Permitted Liens.
SECTION 8. OPERATION AND MAINTENANCE; MARKING; INSPECTION.
(a) OPERATION AND MAINTENANCE. The Lessee covenants that
it will (i) operate, service, repair and maintain the Facility and the Site
Interest so that the condition and operating efficiency thereof will be
maintained and preserved, ordinary wear and tear excepted, in a manner
consistent with (x) Prudent Mining Industry Practice, (y) such operating
standards as shall be required to enforce warranty claims against the
Contractor and all vendors, manufacturers and subcontractors, and (z) the terms
and conditions of all insurance policies in effect with respect to the
Facility, Site Interest, or the Undivided Interest, (ii) comply with Applicable
Law affecting the Facility, the Facility Site, or the Undivided Interest and
the use, operation and maintenance thereof (including, the disposal of wastes
and other by-products of the Facility) unless the validity or applicability of
any such Law is being contested as permitted by Section 8(k), and (iii) keep
and maintain proper books and records relating to all services rendered and all
funds expended for operation and maintenance of the Facility and the Facility
Site and the acquisition, construction and installation of all Replacement
Components and Modifications, all in accordance with GAAP and Prudent Mining
Industry Practice. The Lessor shall not be obliged to maintain, alter, repair,
rebuild or replace any Component incorporated in the Facility. The Lessee
further covenants that other assets or
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<PAGE> 16
facilities of Newmont located in the Carlin Complex, the use and operation of
which have or may have a material impact on the Facility, shall be maintained
by Newmont consistent with Prudent Mining Industry Practice. The Lessee
covenants and agrees that, to the extent the Lessee receives any payments under
any Contracts which, in the aggregate, are in excess of Lessor's Share of
$10,300,000, the Lessee shall apply such excess to the cost of repairs or
modifications to the Facility made by or for the Lessee in order to bring the
Facility into compliance with the Plans and Specifications. For purposes of
the immediately preceding sentence, capital costs heretofore or hereafter
incurred by the Lessee to complete the Facility or to add Nonseverable Optional
Modifications which exceed $343,199,000.00 shall be deemed to have been paid
from such excess payments under the Contracts and applied as required by such
sentence.
(b) INSPECTION. Subject to Section 8(j) hereof, any of
the Lessor, the Owner Participant or the Indenture Trustee shall have the
right, but not the duty, to inspect the Facility and the Site Interest at its
expense. Upon the request of any such Person, the Lessee shall, upon
reasonable notice and during ordinary business hours, make the Facility and the
Site Interest, and the Lessee's operating, maintenance and repair records
pertaining to the Facility and the Site Interest, available to such Person for
inspection. Notwithstanding the first sentence of this clause, if the Lessor,
the Owner Participant or the Indenture Trustee has given the Lessee notice
that it desires to inspect the Facility or the Site Interest in connection with
a Default, then the reasonable expenses of such inspection shall be for the
account of the Lessee.
(c) REPLACEMENT OF COMPONENTS. If and to the extent
required by paragraph (a) above and in compliance with the Lessee's covenant
thereunder, unless prohibited by Applicable Law, the Lessee, at its sole
expense, will promptly replace each Component, the replacement of which shall
be required in accordance with Prudent Mining Industry Practice or Applicable
Law (each such Component so replaced being herein referred to as a Replacement
Component), which may from time to time fail to function in accordance with its
intended use, or become worn out, destroyed, damaged beyond repair, lost,
condemned, confiscated, stolen or seized for any reason whatsoever. In
addition, in the ordinary course of maintenance, service, repair or testing,
the Lessee may remove any Component incorporated in the Facility; PROVIDED that
the Lessee shall cause such Component to be replaced by a Replacement Component
as promptly as practicable and, upon replacement of such Component in
accordance with this paragraph (c), the Lessee shall be entitled to retain the
entire amount of the net proceeds (including the Undivided Interest in such net
proceeds) of any sale or disposition of such removed Component. Each
Replacement Component shall be
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<PAGE> 17
free and clear of all Liens except Permitted Liens and shall be in as good
operating condition as, and shall have a value and utility at least equal to,
the Component replaced, assuming such replaced Component was in the condition
and repair required under paragraph (a) above. The Undivided Interest in each
Component removed from the Facility shall remain the property of the Lessor, no
matter where located, until such time as such Component shall be replaced by a
Replacement Component. Immediately upon the incorporation of any Replacement
Component, without further act, (i) title to an Undivided Interest in the
removed Component shall thereupon vest in the Lessee or its designee, free and
clear of all rights of the Lessor, the Owner Participant or the Indenture
Trustee, (ii) title to an undivided interest in such Replacement Component, the
percentage of which shall be equal to the Lessor's Share, shall thereupon vest
in the Lessor and (iii) such undivided interest in such Replacement Component
shall become subject to this Lease and be deemed part of the Undivided Interest
and the Facility for all purposes hereof to the same extent that the Lessor had
an Undivided Interest in the Component originally incorporated in the Facility.
(d) MODIFICATIONS. The Lessee shall make all Required
Modifications in accordance with Prudent Mining Industry Practice and
Applicable Law. The Lessee may make any Severable Modification and any
Nonseverable Modification (other than a Required Modification) when, and under
the circumstances under which, the Lessee, in its sole discretion, shall deem
any such Modification appropriate (each such Modification being herein referred
to as an Optional Modification). All Required and Optional Modifications, once
initiated, shall be completed in a good and workmanlike manner, with reasonable
dispatch. No Severable Optional Modification or Nonseverable Optional
Modification shall impair the value, utility or useful life of the Facility or
cause the Facility to be "limited use property" for Federal income tax
purposes; provided, however, that the Lessee shall use its best efforts to
avoid impairing the value, utility or useful life of the Facility or causing it
to become "limited use property" as a consequence of making Required
Modifications and if the Lessee shall have the right to choose alternative
methods for implementing any Required Modification, one of which alternative
methods would avoid impairing the value, utility or useful life of the Facility
or causing it to become "limited use property", the Lessee will implement such
alternative method.
(e) REPORTS OF MODIFICATIONS. On or before April 1 of
each year throughout the Lease Term, commencing April 1, 1995, the Lessee shall
furnish the Lessor with a report describing separately and in reasonable detail
each Modification having a cost in excess of $500,000 which was incorporated in
the Facility during the preceding calendar year (or, in the case of the report
to
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<PAGE> 18
be furnished on or before April 1, 1995, during the period from the Closing
Date through March 31, 1995). Each such report shall indicate, separately with
respect to each Modification, the actual cost thereof, the arrangement for the
financing thereof and the Person who holds title thereto or to an undivided
interest therein in accordance herewith.
(f) TITLE TO MODIFICATIONS. Title to an undivided
interest, the percentage of which shall be equal to the Lessor's Share, in each
Modification shall vest, as follows:
(1) in the case of each Nonseverable Optional
Modification and each Required Modification, whether or not the Lessor
shall have financed or provided financing therefor (in whole or in
part) by an Additional Equity Investment or a Supplemental Financing,
or both, effective on the date such Modification shall have been
incorporated in the Facility, the Lessor shall, without further act,
acquire title to such an undivided interest therein;
(2) in the case of each Severable Optional Modification,
if the Lessor shall have provided financing therefor (to the full
extent of the Lessor's Share of the actual cost thereof) by an
Additional Equity Investment or a Supplemental Financing, or both,
then effective on the date of payment, or the date on which the Lessor
shall unconditionally be obligated to make payment of an amount equal
to the product obtained by multiplying the cost (or the then estimated
cost) thereof by the Lessor's Share, the Lessor shall, without further
act, acquire title to such undivided interest in such Modification;
and
(3) in the case of each Severable Optional Modification,
if the Lessor's Share of the cost thereof shall not have been financed
by the Lessor by an Additional Equity Investment or a Supplemental
Financing, or both, title to such Modification shall vest in the
Lessee and, subject only to the provisions of Section 5(a), the Lessor
shall have no interest therein, and neither such Modification nor any
such undivided interest shall thereafter be, or be deemed to be,
incorporated in the Facility or the Undivided Interest.
Immediately upon title to such undivided interest in any Modification vesting
in the Lessor pursuant to clauses (1) or (2) above, such undivided interest in
such Modification shall, without further act, become subject to this Lease and
be deemed part of the Undivided Interest and of the Facility for all purposes
hereof.
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<PAGE> 19
(g) FUNDING OF MODIFICATIONS. The Lessee may request
that the Lessor provide financing of an undivided interest, the percentage of
which shall be equal to the Lessor's Share, of the capital cost of any
Modification incorporated in the Facility at any time during the twelve months
preceding such request. The Lessor may, with funds provided by the Owner
Participant, in the Owner Participant's sole discretion, make an additional
direct investment in any such Modification (any such direct investment being
herein referred to as an Additional Equity Investment). If no Bankruptcy
Default, Payment Default or Event of Default shall have occurred and be
continuing, and if the Lessee elects to effect, and arranges, such transaction,
the Lessor shall issue one or more Supplemental Financing Notes to finance (x)
the excess, if any, of (A) an amount equal to the product obtained by
multiplying the actual cost of any such Modification by the Lessor's Share,
over (B) any Additional Equity Investment, or (y) if the Owner Participant
shall elect not to make any Additional Equity Investment, an amount equal to
the product obtained under sub-clause (A) of clause (x) above (such issue being
herein called a Supplemental Financing). Such Supplemental Financing Notes
shall be issued in a Supplemental Financing to one or more Persons (other than
a Person affiliated with the Lessee within the meaning of section 318 of the
Code) under the Indenture and in a public or private sale; provided that, as
conditions precedent to any such issuance and sale (1) the Lessor and the Owner
Participant shall have received a tax opinion satisfactory to the Owner
Participant to the effect that under Applicable Law there is no unindemnified
adverse tax consequence resulting from such Supplemental Financing, (2) the
Notes outstanding immediately prior to a Supplemental Financing and the
Supplemental Financing Notes will be rated at Investment Grade upon completion
of the Supplemental Financing and Newmont shall not be on credit watch for a
possible downgrade at such time, (3) the Supplemental Financing Notes shall
mature on or prior to the expiration of the Basic Lease Term and, so long as
there are Notes outstanding under the Indenture, the conditions set forth in
Section 2.15(b) of the Indenture shall have been satisfied, (4) the
Supplemental Financing Notes are in an aggregate principal amount of (x) not
less than the Lessor's Share of $10,000,000 and, when added to the original
principal amount of all prior issues of Supplemental Financing Notes, (y) not
more than the Lessor's Share of $40,000,000, (5) such Supplemental Financing,
together with all prior Supplemental Financings, do not exceed four in number,
and (6) the principal amount of the Lessor's Supplemental Financing Notes,
together with the principal amount of all prior issues of the Lessor's
Supplemental Financing Notes and all Notes issued on the Closing Date, do not
exceed 80% of the sum of Facility Cost plus the cost of all Modifications
theretofore financed hereunder and then being financed and title to which shall
have vested or shall then vest in the Lessor. All Supplemental Financing Notes
shall be issued and
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<PAGE> 20
secured under the Indenture and shall be pari passu with the Notes. The Lessor
shall have the right to receive any and all certificates, documents, opinions
or other instruments as the Lessor may reasonably request in connection with
any such Supplemental Financing.
(h) FAILURE TO FINANCE; PURCHASE RIGHTS. The failure or
inability of the Lessor to make an Additional Equity Investment or to effect a
Supplemental Financing in respect of any such Modification shall not in any
manner affect the Lessee's obligation to make any Required Modification in
accordance with the terms hereof, in which case the Lessee shall carry out such
obligation at its own expense and title to such Modification shall in such case
vest as provided herein. The preceding sentence to the contrary
notwithstanding, the Lessee shall have the right to terminate this Lease and
purchase the Facility for (i) the applicable Termination Value if the Lessee
shall propose financing of Required Modifications having an aggregate capital
cost greater than $20,000,000, or (ii) the higher of Fair Market Value or
Termination Value if the Lessee shall propose Nonseverable Optional
Modifications having an aggregate capital cost greater than $20,000,000, and,
in either such case, the Lessor shall decline to effect a Supplemental
Financing or the Lessee and the Lessor shall be unable to reach agreement on
satisfactory financing arrangements with respect thereto. In any such case,
the Lessee shall give notice of its election to the Lessor and such purchase
shall occur on the next Rent Payment Date, or if such Rent Payment date shall
be less than twenty (20) days following the date of the foregoing notice, the
second Rent Payment Date following the date of the foregoing notice. If the
Lessee gives notice to the Lessor of its election to exercise the purchase
option provided for in this Section 8(h) and has established to the
satisfaction of the Lessor the circumstances which entitle it to exercise such
option and, where applicable, the Fair Market Value of the Undivided Interest,
the Lessor shall promptly give notice to the Indenture Trustee of the Lessee's
exercise of such option and on the first Rent Payment Date thereafter, the
Lessee shall pay to the Lessor an amount equal to the Termination Value or the
then Fair Market Value of the Undivided Interest, as applicable, plus all Basic
Rent and Supplemental Rent then due and payable, in which case this Lease shall
terminate and the Lessor shall transfer the Undivided Interest to the Lessee on
an as is, where is basis, free and clear of all Lessor's Liens and Owner
Participant's Liens, but without any other recourse, representation or
warranty.
(i) MARKING. The Lessee agrees, at its own cost, expense
and liability, to maintain in a prominent place a durable, readily visible
inscription of such type and content as from time to time may be required by
law or otherwise deemed necessary by the Lessor or the Indenture Trustee in
order to protect the
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<PAGE> 21
title of the Lessor to the Undivided Interest, the rights of the Lessor under
this Lease and the Lien of the Indenture Trustee under the Indenture. The
Lessee will promptly replace such marking if the same shall have been removed,
defaced, obliterated or destroyed.
(j) ENVIRONMENTAL COMPLIANCE. In order to protect its
interest therein, but at its own risk and expense, if the Lessee shall have
delivered, or shall be required to deliver, a written notification pursuant to
Section 10(b)(i)(G) of the Participation Agreement, the Lessor shall, during a
reasonable period thereafter, have the right, but not the duty, and acting
solely upon instructions from the Owner Participant, upon reasonable notice, to
either (i) conduct an environmental site assessment of the Site Interest and
Facility, which shall be dedicated to the subject matter of such notice and the
circumstances, events or occurrences described, or required to be described,
therein, or (ii) during regular business hours, inspect the Facility and the
Site Interest and conduct tests thereon to determine the extent to which there
are any conditions, circumstances or practices relating to either the Facility,
the Site Interest or the operation thereof, or to the conduct of activities
thereon, which violate, or give rise to material liability or material
remediation under, any Environmental Law at, upon or within the Site Interest
or the Facility. If, after the Lessee receives from the Lessor a written
request to remediate any material violation of any Environmental Law, the
Lessee fails to do so promptly or, after commencement, to continue diligently
to effect such remediation, the Lessor shall have the right, but not the duty,
and acting solely upon instructions from the Owner Participant, to enter upon
the Site Interest, upon reasonable notice at any reasonable time and at
Lessee's expense, to investigate or to remedy such violation. In exercising
its rights hereunder, the Lessor shall use reasonable efforts to minimize
interference with the Lessee's business, but no such entry shall be deemed to
violate the Lessor's covenant of quiet enjoyment and, except in the case of the
negligence or wilful misconduct of the Lessor or its agents, the Lessor shall
not be liable for any interference, loss or damage to the Lessee's property or
business caused thereby.
(k) CONTEST OF REQUIREMENTS OF LAW. If, with respect to
any requirement of Applicable Law or any Governmental Action relating to the
use, operation, maintenance or repair of the Facility, the Facility Site or the
construction or installation of a Modification, the Lessee (i) is contesting
diligently and in good faith by appropriate proceedings such requirement, or
(ii) shall have been excused or exempted by a valid nonconforming use permit,
waiver, variance, extension or forbearance exempting the Lessee from such
requirement and if no Event of Default or Bankruptcy Default has occurred and
is continuing, then the failure by the Lessee to comply with such requirement
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<PAGE> 22
shall not constitute a Default or Event of Default hereunder; provided that
such contest or noncompliance does not extend beyond the last day of the Lease
Term and does not involve (1) any danger of foreclosure, forfeiture or loss of
the Facility or the Facility Site or any part thereof, (2) criminal liability
being imposed on the Lessor, the Trust Estate, the Owner Participant, the
Indenture Trustee or the Pass Through Trustee, (3) any substantial danger of
the sale of, or the creation of any Lien (other than a Permitted Lien) on, the
Site Interest, the Easement or the Facility, (4) material civil liability being
imposed on the Lessor, the Trust Estate, the Owner Participant, the Indenture
Trustee or the Pass Through Trustee or (5) with respect to the conditions noted
in clause (ii) above, the extension of the ultimate imposition of such
requirement beyond the last day of the Lease Term. The Lessee shall provide
the Lessor with notice of any contest of the type described in clause (i) above
in detail sufficient to enable the Lessor to ascertain whether such contest
would be reasonably likely to have any adverse effect of the type described in
the above proviso.
SECTION 9. LOSS.
(a) EVENT OF LOSS. In the event that the Facility, the
Easements or the Site Interest shall suffer either (i) an Event of Loss or (ii)
an event which, in the reasonable opinion of the Lessee, might constitute an
Event of Loss, such fact and the date of the occurrence thereof shall promptly
be reported by the Lessee to the Lessor. In the case of any event described in
clause (ii) of the preceding sentence, the Lessee shall determine, within six
months of the occurrence of such event, whether such event constitutes an Event
of Loss and shall furnish the Lessor with a copy of the opinion of an
independent engineer upon which such determination is based.
(b) CONSEQUENCES OF AN EVENT OF LOSS. Upon the
occurrence of an Event of Loss, the Lessee shall purchase the Undivided
Interest by paying or causing to be paid to the Lessor the Stipulated Loss
Value applicable on the first following Rent Payment Date occurring at least
twenty (20) days following the occurrence of an Event of Loss, plus any Basic
Rent and additional Supplemental Rent then due and payable, in which case this
Lease shall terminate and the Lessor shall transfer the Undivided Interest to
the Lessee on an as is, where is basis, free and clear of all Lessor's Liens
and Owner Participant's Liens, but without any other recourse, representation
or warranty, express or implied, by the Lessor or the Owner Participant;
provided that where such Event of Loss results from loss, damage or destruction
of the Facility or Site Interest, not later than 60 days prior to such Rent
Payment Date the Lessee may irrevocably elect
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<PAGE> 23
to, and shall thereafter, rebuild and restore the Facility and Site Interest to
the condition in which it was required to be maintained at the time of such
Event of Loss, in which case this Lease shall continue in full force and
effect; provided further that no such election to rebuild or restore the
Facility and Site Interest shall be permitted without the consent of the Lessor
unless (x) the Lessee has established to the reasonable satisfaction of the
Lessor that the aggregate uninsured cost of replacing and restoring the
Facility and Site Interest and other assets of Newmont located in the Carlin
Complex and damaged at the time of such occurrence do not exceed $50,000,000,
and (y) the Company's then outstanding senior unsecured debt is rated at or
above Investment Grade. During any period of rebuilding or restoration of the
Facility and the Site Interest after an Event of Loss, payments received by the
Lessor, the Indenture Trustee or the Lessee from any Governmental Authority,
insurer or other Person with respect to such Event of Loss (other than payments
of insurance separately maintained by the Owner Participant which shall be paid
to, or retained by the Owner Participant) shall be paid to or retained by the
Indenture Trustee (or the Lessor after payment in full of the Notes and release
of the Lien of the Indenture) and shall be applied in accordance with the
provisions of Section 10(b). If an Event of Loss shall occur during any
Renewal Term, the Lessee shall have the right to terminate this Lease, in which
case the Lessee shall pay to the Lessor the then applicable Stipulated Loss
Value on the following Rent Payment Date as provided above plus all accrued and
unpaid Basic Rent and all Supplemental Rent relating to and payable in
consequence of events occurring prior to the date of such termination.
(c) Damage Not Constituting an Event of Loss. In the
event of damage to the Facility, the Easements or Site Interest which does not
constitute an Event of Loss, the Lessee shall promptly restore the Facility,
the Easements or Site Interest to the condition to which it is required to be
maintained hereunder.
(d) Excess Loss Proceeds. Payments received by the
Lessor, the Indenture Trustee or the Lessee of the type described in Section
9(b) or Section 9(e) in excess of Stipulated Loss Value or the amounts required
to restore or replace that portion of the Facility or the Site Interest that
has been destroyed, damaged, loss, condemned, confiscated, stolen, seized or
requisitioned, as the case may be, shall be paid to the Lessee or the Lessor as
their respective interests may appear.
(e) Application of Payments Not Relating to an Event of
Loss. Unless a Bankruptcy Default, Payment Default or Event of Default shall
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<PAGE> 24
have occurred and be continuing, payments (except under insurance separately
maintained by the Owner Participant) received at any time by the Lessor, the
Indenture Trustee, the Pass Through Trustee or the Lessee from any Governmental
Authority, insurer 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 Undivided Interest or Lessor's interest in the Site Interest
or any part thereof not constituting an Event of Loss shall be paid to or
retained by the Indenture Trustee (or the Lessor after the payment in full of
the principal of, premium, if any, and interest on, the Notes and the discharge
of the Indenture) and first shall be applied in accordance with the provisions
of Section 10(b) to restore or replace what has been destroyed, damaged, lost,
condemned, confiscated, stolen, seized or requisitioned, and second in
accordance with the provisions of Section 9(d).
(f) Other Dispositions. Notwithstanding the foregoing
provisions of this Section 9, so long as a Bankruptcy Default, Payment Default
or Event of Default shall have occurred and be continuing, any amount that
would otherwise be payable to or for the account of, or that would otherwise be
retained by, the Lessee pursuant to this Section 9 or Section 10 shall be paid
to the Indenture Trustee (or the Lessor after the principal of, premium, if
any, and interest on the Notes shall have been paid in full and the Lien of the
Indenture shall have been discharged) as security for the obligations of the
Lessee under this Lease and, at such time thereafter as no Bankruptcy Default,
Payment Default or Event of Default shall exist, such amount shall be paid
promptly to the Lessee unless this Lease shall theretofore have been declared
to be in default pursuant to Section 17(a), in which event such amount shall be
disposed of in accordance with the provisions hereof, of the Indenture and of
the Trust Agreement.
SECTION 10. INSURANCE.
(a) Coverages. The Lessee will, at its own expense,
cause to be carried and maintained insurance, with financially sound and
reputable insurers satisfactory to the Lessor, the following insurance with
respect to the Facility and the operation thereof:
(i) "all risk" property insurance with respect to damage
to or destruction of the Facility including fire and extended coverage
insurance, with the broadest coverage then available and in any case
including fire, theft, flood, water damage, collapse, earthquake,
windstorm, hale, boiler and machinery, lightning, explosion and
falling objects (i.e., aircraft)
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<PAGE> 25
covering the full (100%) replacement cost of the Facility without
deduction for depreciation;
(ii) business interruption insurance covering loss of
revenues attributable to the total or partial suspension or delay of
or interruption in the operation of the Facility caused by loss or
damage to or the destruction of the Facility or the Facility Site as a
result of the perils referred to in clause (i) above;
(iii) comprehensive general liability insurance, including
contractual liability insurance, with a combined single limit of no
less than $50,000,000 per occurrence for bodily injury, including
personal injury, and property damage;
(iv) statutory workers' compensation insurance meeting all
requirements of Applicable Law including coverage for employers'
liability with limits of no less than $500,000 per accident; and
(v) comprehensive automobile liability insurance for all
owned, non-owned, and hired vehicles with bodily injury limits of no
less than $5,000,000 per person, $5,000,000 per accident, and property
damage limits of no less than $5,000,000 per accident.
Deductibles in self insurance amounts with respect to any of such policies
shall not exceed $2,500,000 on a per occurrence basis. All such policies shall
in any event be in amounts (after deductibles or self-insurance amounts) and
against risks (i) consistent with Prudent Mining Industry Practice, (ii) at
least comparable in amounts and against risks customarily insured against by
the Lessee for other properties of the Lessee located in the western United
States and (iii) sufficient to prevent the Lessor and the Indenture Trustee
from becoming at any time a co-insurer with respect to any loss relating to
events or occurrences covered under any policy. Any policies with respect to
property insurance shall (i) name the Lessee, the Lessor and the Indenture
Trustee as insureds, as their interests may appear, and name the Indenture
Trustee as sole loss payee so long as any Notes are outstanding and thereafter
name the Lessor as sole loss payee, (ii) waive any right to claim any premiums
or commissions against the Lessor, the Owner Participant or the Indenture
Trustee, (iii) provide that the insurers shall waive any rights of subrogation
against the Lessor, the Owner Participant or the Indenture Trustee, (iv)
provide that if such insurance is cancelled for any reason whatsoever, or any
substantial change is made in the coverage which affects the interest of the
Lessor, the Owner Participant or the Indenture Trustee, or if such
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insurance is allowed to lapse for nonpayment of premium, such cancellation,
change or lapse shall not be effective against the Lessor, the Owner
Participant or the Indenture Trustee for 60 days after receipt by the Lessor,
the Owner Participant and the Indenture Trustee, respectively, of written
notice from any applicable insurers of such cancellation, change or lapse, and
(v) provide that each of the Lessor, the Owner Participant and the Indenture
Trustee shall be permitted to make payments to effect the continuation of such
insurance coverage upon notice of cancellation due to nonpayment of premiums.
Each such policy shall be primary without right of contribution from any other
insurance which is carried by the Lessor, the Owner Participant or the
Indenture Trustee with respect to its interest in the Facility. Any policies
with respect to general liability shall name the Lessor, the Owner Participant
and the Indenture Trustee as additional insureds. The Lessee shall, within 30
days after the renewal of each such policy, furnish to the Lessor, the Owner
Participant and the Indenture Trustee a certificate signed by an independent
insurance broker satisfactory to the Lessor, the Owner Participant and the
Indenture Trustee showing the insurance then maintained by the Lessee pursuant
hereto and stating that in the opinion of such independent broker such
insurance complies with the provisions hereof. The Lessee shall not reduce the
amounts of its general liability insurance as in effect on the Closing Date.
In the event that the Lessee shall fail to maintain insurance as herein
provided the Lessor, the Owner Participant or the Indenture Trustee may at its
option maintain insurance which is required to be maintained by the Lessee
hereunder, and, in such event, the Lessee shall reimburse such party upon
demand for the cost thereof, together with interest thereon at the Overdue
Rate, as Supplemental Rent. Nothing in this Section 10 shall prohibit the
Lessee or the Owner Participant from placing at its expense insurance on or
with respect to the Facility or the Undivided Interest, or the operation of
either thereof, naming the Lessee or the Owner Participant, as the case may be,
as insured and loss payee, in an amount exceeding the amount of insurance
required to be maintained by the Lessee hereunder from time to time, unless, in
the case of insurance maintained by the Lessee, such insurance would conflict
with or otherwise limit the insurance to be provided or maintained by the
Lessee in accordance herewith.
(b) Application of Insurance Proceeds. Subject to
Section 9(f), all insurance proceeds (except under insurance separately
maintained by the Owner Participant) up to Lessor's Share of $10,000,000 on
account of any physical loss or damage to the Undivided Interest, Lessor's
interest in the Easements or the Site Interest or any part thereof (less the
actual costs, fees and expenses incurred in the collection thereof) shall be
paid to the Lessee, and all insurance proceeds (except under insurance
separately maintained by the Owner Participant) equal to or greater than
Lessor's Share of $10,000,000 in the
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aggregate on account of physical loss or damage shall be paid to the Indenture
Trustee (or the Lessor after the principal of, premium, if any, and interest on
the Notes shall have been paid in full and the Lien of the Indenture shall have
been discharged) and all such proceeds shall be applied and dealt with as
follows:
(i) except as provided in clause (ii) below, all such
proceeds shall be paid over to the Lessee or as it may direct from
time to time as restoration progresses, to pay (or reimburse the
Lessee for) the cost of restoration, if the amount of such proceeds
received by the Indenture Trustee or the Lessor, together with such
additional amount, if any, theretofore expended by the Lessee out of
its own funds for such restoration, are sufficient to pay the
estimated cost of completing such restoration, but only upon a written
application and an officer's certificate of the Lessee showing in
reasonable detail the nature of such restoration and the estimated
cost to complete such restoration and stating that no Bankruptcy
Default, Payment Default or Event of Default has occurred and is
continuing (which certification shall be concurred in by a licensed
professional engineer). Upon the written request of the Lessee,
accompanied by evidence satisfactory to the Owner Participant and the
Indenture Trustee that such restoration has been completed and the
costs thereof paid in full and that there are no mechanics' or similar
Liens for labor or materials supplied in connection therewith, the
balance, if any, of such proceeds shall be paid over or assigned to
the Lessee or as it may direct; and
(ii) All such proceeds in respect of an Event of Loss for
which no election has been (or can be) made as provided in Section
9(b) shall be applied to pay Stipulated Loss Value in accordance with
Section 9(b) and thereafter in accordance with Section 9(d).
SECTION 11. INDEMNIFICATION.
The Lessee agrees, whether or not any of the transactions
contemplated hereby shall be consummated and whether or not this Lease shall
have expired or terminated, to assume liability for, and to indemnify, protect,
save and keep harmless each Indemnitee on the terms and conditions set forth in
Section 13 of the Participation Agreement.
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SECTION 12. ASSIGNMENT OR SUBLEASE.
The Lessee may not assign its leasehold interest under this
Lease without the Lessor's prior written consent to be given or withheld in the
Lessor's absolute and sole discretion, except that the Lessee may assign its
leasehold interest under this Lease to any of its Affiliates, but unless the
Owner Participant and the Indenture Trustee have consented to such assignment
the Lessee will remain primarily liable for the performance of its obligations
hereunder. Concurrently with any assignment pursuant to this Section 12, the
Lessor, the Indenture Trustee and Owner Participant shall receive satisfactory
assignment and assumption agreements, opinions and any other documents or
instruments reasonably requested by the Lessor, the Indenture Trustee or Owner
Participant in connection with such assignment. So long as the outstanding
senior unsecured debt of Newmont shall be rated Investment Grade, the Lessee
may, without the consent of the Lessor, sublease the Undivided Interest or the
Facility to any Person. Notwithstanding any such sublease, the Lessee will
remain primarily liable for the performance of all of its obligations
hereunder. Any such sublease shall be subject and subordinate to this Lease.
SECTION 13. LEASE RENEWALS.
(a) LEASE RENEWAL. At the end of the Basic Lease Term or
the then applicable Renewal Term, as the case may be, provided that no Event of
Default or Bankruptcy Default shall have occurred and be continuing and the
Notes shall have been paid in full, the Lessee shall have the right to exercise
one of the following two options to renew the term of this Lease for the
Renewal Term or Terms described below:
(1) At the end of the Basic Lease Term, the Fixed Rate
Renewal Term, if any, elected by the Lessee under clause (2) below, or
any expiring Fair Market Renewal Term theretofore elected by the
Lessee under this clause (1), upon notice given as provided in Section
13(b), the Lessee may renew the term of this Lease during the
remaining term of the Facility Agreements for one or more periods of
not less than two years (each such period so determined being herein
referred to as a Fair Market Renewal Term), each at a Fair Market
Rental Value, payable on each Rent Payment Date occurring during such
Fair Market Renewal Term; provided, however, that if the Lessee shall
elect more than one Fair Market Renewal Term, all such Fair Market
Renewal Terms shall be successive; and provided, further, that
notwithstanding the foregoing, the
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last Fair Market Renewal Term may be for a period of less than two
years if the period from the expiration of the preceding Fair Market
Renewal Term to the expiration date of the Ground Lease and Easement
shall be less than two years; and
(2) Upon notice given as provided in Section 13(b), at
the end of the Basic Lease Term only, the Lessee may renew the term of
this Lease for one period of one year (such period so determined being
herein referred to as the Fixed Rate Renewal Term).
(b) NOTICE. Not less than eighteen months prior to the
expiration date of the Basic Lease Term, the Fixed Rate Renewal Term or any
then applicable Fair Market Renewal Term, the Lessee may indicate its desire to
exercise the lease renewal option described in either Section 13(a)(1) or, only
in respect of the expiration of the Basic Lease Term, Section 13(a)(2). Any
such election shall be irrevocable as to the Lessee, but be binding on the
Lessor only if on the effective date thereof no Event of Default or Bankruptcy
Default shall have occurred and be continuing.
(c) TERMS. All the terms and provisions of this Lease
shall be applicable during any Renewal Term.
(d) DETERMINATIONS. If the Lessee and the Owner
Participant shall have failed to agree upon the Fair Market Rental Value and
the Fair Market Value (which Fair Market Value shall be estimated both as of
the commencement of the relevant Renewal Term and as of the end thereof) of the
Undivided Interest at least six months prior to the commencement of the
relevant Renewal Term, such values shall be determined by the Appraisal
Procedure.
SECTION 14. PURCHASE OPTIONS.
Unless an Event of Default or Bankruptcy Default shall have
occurred and be continuing, the Lessee shall have the right to exercise one of
the following options to purchase the Undivided Interest:
(1) On the Early Buy-Out Date, at a purchase price equal
to the sum of (a) the Early Buy-Out Price and (b) any Basic Rent and
Supplemental Rent then due (the Early Purchase Option);
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(2) On the date of expiration of the Basic Lease Term,
the Fixed Rate Renewal Term or any then applicable Fair Market Renewal
Term, at a purchase price equal to Fair Market Value; or
(3) On the date of expiration of the Basic Lease Term, at
a purchase price equal to the Fixed Price Option Price.
Written notice of the Lessee's election (i) to exercise the Early Purchase
Option shall be given to the Lessor and the Owner Participant at least 180 days
prior to the Early Buy-Out Date or (ii) to purchase the Undivided Interest
under either clause (2) or clause (3) above shall be given to the Lessor and
the Owner Participant at least eighteen months prior to the date of purchase.
Any election hereunder shall be irrevocable as to the Lessee, but be binding on
the Lessor only if on the effective date thereof no Event of Default or
Bankruptcy Default shall have occurred and be continuing. In the event of an
election under clause (2) above, the Lessee and the Owner Participant shall
promptly agree upon the Fair Market Value of the Undivided Interest as of the
date fixed for purchase or, if they shall have failed to agreed on such Fair
Market Value at least six months prior to the date of purchase, such Fair
Market Value shall be determined by the Appraisal Procedure. If the Lessee
shall have elected to purchase the Undivided Interest hereunder, payment of the
applicable purchase price (or, in the case of the Early Purchase Option, the
portion of the Early Buy-Out Price payable on the Early Buy-Out Date, as set
forth in Schedule 4 hereto) shall be made in immediately available funds
against delivery of (i) a bill of sale transferring and assigning to the Lessee
all right, title and interest of the Lessor in and to the Undivided Interest
free and clear of all Lessor's Liens and all Owner Participant's Liens, but
without other recourse, representation or warranty, and (ii) the agreement of
the Lessor and the Indenture Trustee (if the Indenture shall not have been
satisfied and discharged prior to such date)(in recordable form) terminating
their respective interests in the Undivided Interest and under the Transaction
Documents to which the Lessor or the Indenture Trustee, as the case may be, is
a party, except that indemnity obligations of the Lessee with respect to
periods prior to the date of purchase shall survive. In connection with any
sale by the Lessor to the Lessee under this Section 14, the Lessor may
specifically disclaim representations and warranties (other than as
contemplated by clause (i) of the preceding sentence) in a manner comparable to
that set forth in the second sentence of Section 6(b).
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SECTION 15. EARLY TERMINATION.
(a) In addition to the rights of the Lessee under Section
8 above and subject to the last sentence hereof, on any Rent Payment Date
occurring after July 5, 2003, the Lessee may terminate this Lease if (i) the
Lessee, in its sole discretion (as evidenced by an Officer's Certificate),
shall have determined that the Facility is obsolete or surplus or uneconomic
for the Lessee's needs, (ii) the Facility shall be in the condition and repair
required by Section 5 for the return of the Undivided Interest and (iii) no
Event of Default, Payment Default or Bankruptcy Default shall have occurred and
be continuing. Such termination shall occur on a Rent Payment Date which shall
be not less than six months following the date on which the Lessee shall have
delivered written notice of termination (the Termination Date). On the
Termination Date, unless the Lessor shall have elected to retain the Undivided
Interest pursuant to paragraph (b) hereof, the Lessee shall pay to the Lessor
the Termination Value, plus any Rent then due and payable and unpaid.
Following the notice of termination delivered hereunder, unless the Lessor
shall have elected to retain the Undivided Interest pursuant to paragraph (b)
hereof, the Lessee, as the non-exclusive agent for the Lessor, shall use its
best efforts to effect a sale of the Undivided Interest for cash to a Person
which is not an Affiliate of the Lessee. The Lessee shall certify to the
Lessor the identity of any bidder and the terms of the purchase proposed. The
Lessor shall have the concurrent right to seek, directly or through other
agents, cash bids for such purchase. On the Termination Date the Lessor shall
effect a transfer of the Undivided Interest to the Person, if any, who shall
have submitted the highest bid for the purchase of the Undivided Interest.
Upon any such sale and receipt of the proceeds thereof (but not earlier than
the Termination Date) the net proceeds of such sale shall be paid to the
Lessee, to the extent of Termination Value theretofore paid hereunder, and the
balance, if any, of such proceeds shall be paid to the Lessor. If, however, no
sale of the Undivided Interest shall have been completed on or prior to the
Termination Date, this Lease shall continue in full force and effect. It is
understood and agreed that the Lessee shall have the right to deliver a maximum
of two notices of termination under this Section 15.
(b) Right of Lessor to Retain Undivided Interest. The
Lessor may with the consent of the Owner Participant irrevocably elect to
retain, rather than sell, the Undivided Interest in the event a termination
notice has been delivered by the Lessee pursuant to paragraph (a) of this
Section 15 by giving written notice to the Lessee and the Indenture Trustee at
least 45 days prior to the Termination Date. If the Lessor elects to retain
the Undivided Interest pursuant to this paragraph (b), the Lessor, on the
Termination Date, shall pay to the Indenture Trustee an amount equal to the
principal amount of the outstanding
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Notes to be redeemed in connection with such termination plus all interest
accrued on such principal amount to the applicable Redemption Date as provided
for in the Indenture plus the premium, if any, due on the Notes on such
Termination Date. If the Lessor elects to retain the Undivided Interest
pursuant to this paragraph (b), the Lessee shall (A) pay to the Lessor on the
Termination Date any unpaid Rent (including an amount equal to the prepayment
premium, if any, due on the Notes and the interest which will accrue on the
principal amount of the Notes to be redeemed in connection with such
termination to the Termination Date) due on or prior to such Termination Date,
but shall not be required to pay Termination Value and (B) deliver to the
Lessor on the Termination Date such instrument as the Lessor shall reasonably
request to evidence the release of the Undivided Interest from all Liens other
than Lessor's Liens, Owner Participant's Liens or the Lien of the Indenture.
SECTION 16. EVENTS OF DEFAULT.
(a) The term Event of Default, wherever used herein,
shall mean any of the following events (whatever the reason for such 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
Governmental Rule or Governmental Action):
(1) the Lessee shall fail to make, or cause to be made,
payment of Basic Rent, Stipulated Loss Value, Termination Value or any
payment required to be made in accordance with Section 3.2(b) of the
Tax Indemnity Agreement within 5 Business Days after the due date; or
(2) the Lessee shall fail to make any other payment of
Supplemental Rent within 20 Business Days after receipt by the Lessee
of written notice from the Lessor; or
(3) the Lessee shall fail to perform or observe in any
material respect any other covenant, condition or agreement to be
performed or observed by it hereunder, or under any other Transaction
Document, which failure shall continue unremedied for 30 days after
receipt of written notice from the Lessor, unless (a) such default is
curable but cannot be cured within 30 days (it being understood that a
breach of Section 12 is not a curable Default), and (b) the Lessee is
diligently pursuing the cure of such default, provided that, unless
Lessee exercises its purchase option in accordance with paragraph (b)
below, such default
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must be cured within 365 days, except that certain defaults, such as
operating the Facility in violation of Environmental Laws, which would
materially reduce the value of the Facility or expose the Owner
Participant or the Owner Trustee to recourse liability, must be cured
within 90 days; or
(4) any material representation or warranty (other than
the Lessee's Tax Representations) by the Lessee in this Lease, any
other Transaction Document to which the Lessee is a party, or any
agreement, document or certificate delivered by the Lessee in
connection herewith or therewith shall prove to have been incorrect in
any material respect when any such representation or warranty was made
or given, shall remain material when discovered and shall not have
been cured within 30 days after receipt of written notice by the
Lessee from the Lessor, unless the Lessee shall be diligently
proceeding to cure such representation and shall effect such cure
within 180 days after receipt of such written notice; or
(5) the Lessee 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 of 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 fail generally to
pay its debts as they become due, 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 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 90 days; or
(6) the declaration of an event of default under any
Financing Lease to which the Lessee is a party, as lessee;
(7) the Ground Lease and Easement shall have terminated
or be of no further force and effect, or
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(8) the Lessee shall have failed to maintain the
insurance required by clauses (i) and (iii) of Section 10(a) and such
failure has continued for five Business Days after written notice
thereof from the Lessor.
(b) Incurable Default. Notwithstanding Sections 16(a)(3)
and 16(a)(4), if (i) the Lessee is diligently pursuing the cure of a Default
which has remained unremedied for a period of at least (x) 270 days, in the
case of Defaults under Section 16(a)(3)(70 days, if the applicable cure period
is 90 days in accordance with Section 16(a)(3)), or (y) 100 days, in the case
of Defaults under Section 16(a)(4), (ii) the Lessee, in its reasonable
judgment, does not believe that such Default can be cured within the applicable
cure period, and (iii) the Lessee has demonstrated to the reasonable
satisfaction of the Owner Participant its inability to cure such Default within
such applicable cure period, the Lessee shall have the right, upon at least 20
days' written notice, to purchase the Undivided Interest at the end of the
applicable cure period. On the first Business Day following the end of such
applicable cure period, the Lessee shall pay to the Lessor the higher of the
then Fair Market Value of the Facility or the Stipulated Loss Value and the
Lessor shall deliver to the Lessee the documents stipulated in the penultimate
sentence of Section 14.
SECTION 17. REMEDIES.
(a) REMEDIES. Upon the occurrence of any Event of
Default and so long as the same shall be continuing, the Lessor may, at its
option, declare this Lease to be in default by written notice to such effect
given to the Lessee, and at any time thereafter the Lessor may exercise one or
more of the following remedies, as the Lessor in its sole discretion shall
elect:
(1) the Lessor may, by notice to the Lessee, rescind or
terminate this Lease and exercise its rights under the Facility
Agreements;
(2) the Lessor may sell the Undivided Interest, together
with its interest under the Ground Lease and Easement, the Facility
Agreements and any other Transaction Document to which the Lessor is a
party, or any part thereof, at public or private sale, as the Lessor
may determine, free and clear of any rights of the Lessee in the
Undivided Interest and without any duty to account to the Lessee with
respect to such action or inaction or any proceeds with respect
thereto (except to the extent required by paragraph (4) below if the
Lessor shall elect to exercise its rights
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thereunder), in which event the Lessee's obligation to pay Basic Rent
hereunder for periods commencing after the date of such sale shall be
terminated (except to the extent that Basic Rent is to be included in
computations under paragraph (3) or (4) below if the Lessor shall
elect to exercise its rights thereunder);
(3) the Lessor may, whether or not the Lessor shall have
exercised or shall thereafter at any time exercise its rights under
paragraph (2) above, demand, by written notice to the Lessee
specifying a Rent Payment Date not earlier than 10 days after the date
of such notice, that the Lessee pay to the Lessor, and the Lessee
shall pay to the Lessor, on the Rent Payment Date specified in such
notice, as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the Basic Rent due after the Rent Payment Date
specified in such notice), any unpaid Rent due through the Rent
Payment Date specified in such notice plus whichever of the following
amounts the Lessor, in its sole discretion, shall specify in such
notice (together with interest on such amount at the interest rate
specified in Section 3(b)(3) from the Rent Payment Date specified in
such notice to the date of actual payment):
(i) an amount equal to the excess, if any, of
Stipulated Loss Value, computed as of the Rent Payment Date
specified in such notice, over the Fair Market Rental Value of
the Undivided Interest (determined on the basis of the actual
condition of the Facility) until the end of the Basic Lease
Term or the then applicable Renewal Term, after discounting
such Fair Market Rental Value semiannually to present value as
of the Rent Payment Date specified in such notice at a rate
equal to the Overdue Rate as of the date of such notice;
(ii) an amount equal to the excess, if any, of
such Stipulated Loss Value over the Fair Market Value of the
Undivided Interest (determined on the basis of the actual
condition of the Facility) as of the Rent Payment Date
specified in such notice;
(iii) an amount equal to the greater of (A) such
Stipulated Loss Value, (B) such discounted Fair Market Rental
Value or (C) such Fair Market Value (assuming, in the case of
(B) and (C) above, that the Facility was then maintained in
accordance with this Lease) and, in such event, upon full
payment by the
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Lessee of all sums due hereunder, the Lessor shall, at its
option, either (x) exercise its reasonable best efforts
promptly to sell the Undivided Interest together with its
interest under the Facility Agreements and any other
Transaction Document to which the Lessor is a party, and pay
over to the Lessee the sale proceeds up to the amount claimed
under (A), (B) or (C) above and actually paid by the Lessee to
the Lessor, or (y) deliver to the Lessee (AA) a bill of sale
transferring and assigning to the Lessee all right, title and
interest of the Lessor in and to the Undivided Interest free
and clear of all Lessor's Liens and Owner Participant's Liens,
but without recourse or warranty, and (BB) the agreement of the
Lessor terminating its interest under the Facility Agreements
and any other Transaction Document to which the Lessor is a
party, whereupon this Lease shall terminate, except that
indemnity obligations of the Lessee that relate to the period
prior to the date of termination shall survive; or
(iv) an amount equal to the excess of (A) the
present value as of the Rent Payment Date specified in such
notice of all installments of Basic Rent until the end of the
Basic Lease Term, discounted semiannually at a rate equal to
the Average Applicable Rate, over (B) the present value as of
such Rent Payment Date of the Fair Market Rental Value of the
Undivided Interest (determined on the basis of the actual
condition of the Facility) until the end of the Basic Lease
Term, discounted semiannually at a rate equal to the Average
Applicable Rate; or
(4) if the Lessor shall have sold the Undivided Interest
together with its interest under the Ground Lease and Easement, the
Facility Agreements and any other Transaction Document to which the
Lessor is a party pursuant to paragraph (2) above, the Lessor, in lieu
of exercising its rights under paragraph (3) above with respect to the
Undivided Interest and its interest under the Facility Agreements and
any other Transaction Document to which the Lessor is a party, 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 due for periods commencing after the next Rent Payment
Date following the date of such sale), any unpaid Basic Rent and
Supplemental Rent due through such Rent Payment Date, plus the amount
of any deficiency between the sale proceeds and Stipulated Loss Value,
computed as of such Rent Payment Date, together
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with interest at the Overdue Rate on the amount of such Rent and such
deficiency from the date of such sale until the date of actual
payment.
(b) NO RELEASE. No rescission or termination of this
Lease, in whole or in part, or repossession of the Undivided Interest or
exercise of any remedy under paragraph (a) of this Section 17 shall, except as
specifically provided therein, relieve the Lessee of any of its liabilities and
obligations hereunder. In addition, the Lessee shall be liable, except as
otherwise provided above, for any and all unpaid Rent due hereunder before,
after or during the exercise of any of the foregoing remedies, including all
reasonable legal fees and other costs and expenses incurred by the Lessor or
the Indenture Trustee by reason of the occurrence of any Event of Default or
the exercise of the Lessor's remedies with respect thereto. At any sale of the
Undivided Interest and the Lessor's interest under the Ground Lease and
Easement, the Facility Agreements and any Transaction Documents to which the
Lessor is a party or any part thereof pursuant to Section 17(a), the Lessor,
the Owner Participant or the Indenture Trustee may bid for and purchase such
property.
(c) REMEDIES CUMULATIVE. No remedy under paragraph (a)
of this Section 17 is intended to be exclusive, but each shall be cumulative
and in addition to any other remedy provided under such paragraph (a) or
otherwise available to the Lessor at law or in equity. No express or implied
waiver by the Lessor of any Default or Event of Default hereunder shall in any
way be, or be construed to be, a waiver of any future or subsequent Default or
Event of Default. The failure or delay of the Lessor in exercising any rights
granted it hereunder upon any 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. To the extent
permitted by Applicable Law, the Lessee hereby waives any rights now or
hereafter conferred by statute or otherwise which may require the Lessor to
sell, lease or otherwise use the Undivided Interest or the Facility in
mitigation of the Lessee's damages as set forth in paragraph (a) of this
Section 17 or which may otherwise limit or modify any of the Lessor's rights
and remedies provided in such paragraph.
(d) EXERCISE OF OTHER RIGHTS OR REMEDIES. In addition to
all other rights and remedies provided in this Section 17, 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.
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SECTION 18. NOTICES.
All communications and notices provided for in this Lease
shall be given in person or by means of telex, facsimile, 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
mail, or by a nationally recognized overnight courier service, addressed as
follows:
(i) if to the Lessor:
Shawmut Bank Connecticut, National Association,
as OwnerTrustee
777 Main Street
Hartford, CT 06115
Attention: Corporate Trust Administration;
(ii) if to the Lessee:
Newmont Gold Company
One United Bank Center
1700 Lincoln Street
Denver, CO 80203
Attention: Treasurer;
(iii) in each case with copies to:
(A) the Indenture Trustee:
The First National Bank of Chicago,
as Indenture Trustee
One First National Plaza, Suite 0126
Chicago, IL 60670
Attention: Corporate Trust Division;
and
(B) the Owner Participant:
Philip Morris Capital Corporation
800 Westchester Avenue
Rye Brook. NY 10573-1301
-33-
<PAGE> 39
Attention: Vice President-Leasing
or at such other address as such parties or such Persons shall from time to
time designate by notice in writing to such other parties or such other
Persons. All such communications and notices given in such manner shall be
effective on the date of receipt of such communication or notice.
SECTION 19. SUCCESSORS AND ASSIGNS.
This Lease, including all agreements, covenants,
representations and warranties, shall be binding upon and inure to the benefit
of the Lessor and its successors and permitted assigns, and the Lessee and its
successors and, to the extent permitted hereby, assigns.
SECTION 20. RIGHT TO PERFORM FOR LESSEE.
If the Lessee shall fail to make any payment of Rent to be
made by it hereunder or shall fail to perform or comply with any of its other
agreements contained herein, the Lessor, the Owner Participant or the Indenture
Trustee may, but shall not be obligated to, make such payment or perform or
comply with such agreement, and the amount of such payment and the amount of
all costs and expenses (including reasonable attorneys' and other
professionals' fees and expenses) of the Lessor, the Owner Participant or the
Indenture Trustee incurred in connection with such payment or the performance
of or compliance with such agreement, as the case may be, together with
interest thereon at the Overdue Rate, shall be deemed Supplemental Rent,
payable by the Lessee upon demand.
SECTION 21. AMENDMENTS AND MISCELLANEOUS.
(a) AMENDMENTS IN WRITING. The terms of this Lease shall
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by written instrument signed by the Lessor and the
Lessee.
(b) SURVIVAL. All agreements, indemnities,
representations and warranties contained in the Transaction Documents or any
agreement, document or certificate delivered pursuant hereto or thereto or in
connection herewith or
-34-
<PAGE> 40
therewith shall survive the execution and delivery of this Lease and the
expiration or other termination of this Lease.
(c) SEVERABILITY OF PROVISIONS. Any provision of this
Lease which may be determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and no such prohibition or
unenforceability in any jurisdiction shall invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by
Applicable Law, the Lessee hereby waives any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.
(d) TRUE LEASE. This Lease constitutes an agreement of
lease as to the Undivided Interest, and an agreement of sublease as to the
undivided interest in the Site Interest, and nothing herein shall be construed
as conveying to the Lessee any right, title or interest in or to the Facility
(including the Undivided Interest) or the Site Interest (including such
undivided interest), except as lessee or sublessee.
(e) ORIGINAL LEASE. The single executed original of this
Lease marked "Original" shall be the "Original" of this Lease. To the extent
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 or
possession of any counterpart other than the "Original".
(f) OTHER LEASE. Newmont shall not exercise its rights
to terminate the Other Lease and/or purchase the interest in the Facility being
leased thereby under section 8(h), 9(b), 14, 15 thereof, to renew such Other
Lease under Section 13 thereof, to assign or sublease the interest leased
thereby to any Person pursuant to Section 12 thereof or to cause the Other
Owner Trustee to issue notes pursuant to Section 8(g) thereof or Section 14 of
the Other Participation Agreement, unless Newmont, as Lessee, shall be capable
at such time of taking the same actions under the parallel sections of this
Lease or the Participation Agreement, as the case may be, and concurrently
exercises its right to do so.
(g) GOVERNING LAW. To the extent permitted by Applicable
Law, this Lease shall be governed by and construed in accordance with the law
of the State of New York.
-35-
<PAGE> 41
(h) 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.
(i) 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 counterparts delivered to the Indenture Trustee pursuant
to the Indenture being deemed the "Original" and all other counterparts being
deemed duplicates.
(j) PURCHASE FOR INVESTMENT. The Lessor hereby
represents and warrants to the Lessee that the Lessor has purchased the
Undivided Interest for investment and not with any present intention to resell
such Undivided Interest, provided that the disposition by the Lessor of the
Undivided Interest shall at all times be within its control.
-36-
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have each caused this
Lease to be duly executed as of the date first above written, by their
respective officers thereunto duly authorized.
SHAWMUT BANK CONNECTICUT, N.A.,
not in its individual capacity,
but solely as Owner Trustee
under Trust Agreement No. 1,
dated as of July 15, 1994, with
Philip Morris Capital Corporation
By /s/ Robert L. Reynolds
Title: Assistant Vice President
NEWMONT GOLD COMPANY,
as Lessee
By /s/ Patricia A. Flanagan
Title: Assistant Vice President
-37-
<PAGE> 43
SCHEDULE 1
to
LEASE
PRICING ASSUMPTIONS
Basic Rent, Stipulated Loss Value, Special Casualty and Early
Buy-Out Price, as set forth in the Lease as originally executed, have been
computed on the basis of the following pricing assumptions:
<TABLE>
<S> <C>
INVESTMENT PERCENTAGE 23.60467%
LOAN PERCENTAGE 76.39533%
INTEREST RATE ON INITIAL SERIES NOTE 9.048% per annum
(WEIGHTED AVERAGE)
DEPRECIATION DEDUCTIONS 7-year recovery period deductions in
respect of 99.75% of Facility Cost; and
15-year recovery period deductions in
respect of 0.25% of Facility Cost
OWNER PARTICIPANT'S TAX YEAR-END December 31
CLOSING DATE September 30, 1994
TRANSACTION EXPENSES 1.72922% of Facility Cost paid by the
Owner Participant in addition to its
Investment
INTERIM RENT An amount equal to accrued and unpaid
interest on the Notes through July 5,
1995.
</TABLE>
-1-
<PAGE> 44
SCHEDULE 1
to
LEASE
<TABLE>
<S> <C>
RENT PAYMENT DATES January 5 and July 5 of each year, except
that the last
Rent Payment Date shall occur on September
30, 2015
FIRST RENT PAYMENT DATE July 5, 1995
EARLY BUY-OUT DATE January 5, 2012
LAST RENT PAYMENT DATE September 30, 2015
MARGINAL TAX RATE 35%, plus 1% in respect of state tax
ESTIMATED TAX PAYMENTS 100% current, quarterly
ACCOUNTING METHOD Accrual
AMORTIZATION OF NOTES See attachments
</TABLE>
-2-
<PAGE> 45
SCHEDULE 2
TO
LEASE
SCHEDULE OF BASIC RENT PAYMENTS
<TABLE>
<CAPTION>
Basic Rent Basic
Payment Date Rent Percentage
- - ------------ ---------------
Advance Rent Arrears Rent
<S> <C> <C>
Jul 5 1995 0.00000000 0.00000000
Jan 5 1996 3.44638353 0.00000000
Jul 5 1996 0.00000000 5.20945072
Jan 5 1997 3.36783888 0.00000000
Jul 5 1997 0.00000005 5.28799536
Jan 5 1998 3.28229591 0.00000000
Jul 5 1998 0.00000001 5.37353829
Jan 5 1999 3.18913106 0.00000000
Jul 5 1999 0.00000000 5.46670318
Jan 5 2000 3.12036806 0.00000000
Jul 5 2000 0.00000000 5.53546619
Jan 5 2001 3.01176873 0.00000000
Jul 5 2001 0.00000000 5.64406552
Jan 5 2002 5.33457673 0.00000000
Jul 5 2002 0.00000000 3.32125752
Jan 5 2003 5.38940046 0.00000000
Jul 5 2003 0.00000000 3.26643379
Jan 5 2004 6.09256473 0.00000000
Jul 5 2004 0.00000000 2.56326952
Jan 5 2005 6.25712603 0.00000000
Jul 5 2005 0.00000000 2.39870822
Jan 5 2006 8.21257023 0.00000000
Jul 5 2006 0.00000000 2.13970068
Jan 5 2007 8.73340171 0.00000000
Jul 5 2007 0.00000003 1.84595127
Jan 5 2008 9.05454447 0.00000000
Jul 5 2008 0.00000000 1.52480848
Jan 5 2009 9.50967527 0.00000000
Jul 5 2009 0.09940496 1.06967770
Jan 5 2010 9.32213648 0.00000000
Jul 5 2010 0.00000000 1.15781153
Jan 5 2011 10.57935297 0.00000000
Jul 5 2011 0.72206524 0.00000000
Jan 5 2012 9.85728773 0.00000000
Jul 5 2012 10.57935297 0.00000000
Jan 5 2013 0.00000000 0.00000000
Jul 5 2013 10.57935297 0.00000000
Jan 5 2014 0.00000000 0.00000000
Jul 5 2014 10.57935297 0.00000000
Jan 5 2015 0.00000000 0.00000000
Jul 5 2015 2.18760061 0.00000000
Sep 30 2015 0.00000000 0.31030218
------------ -----------
TOTAL 142.50755279 52.11514015
</TABLE>
<PAGE> 46
SCHEDULE 3
TO
LEASE
SCHEDULE OF STIPULATED LOSS VALUES
<TABLE>
<CAPTION>
Percent
of
Date Facility Cost
----- -------------
<S> <C>
Sep 30 1994 104.04293837
Jul 5 1995 111.42623882
Jan 5 1996 115.92146618
Jul 5 1996 111.52809318
Jan 5 1997 115.57976152
Jul 5 1997 110.89496490
Jan 5 1998 114.69348363
Jul 5 1998 109.78568484
Jan 5 1999 113.38704642
Jul 5 1999 108.28874752
Jan 5 2000 111.67103235
Jul 5 2000 106.36275502
Jan 5 2001 109.54461504
Jul 5 2001 104.04957065
Jan 5 2002 107.07999074
Jul 5 2002 101.36482892
Jan 5 2003 104.30351941
Jul 5 2003 98.49824336
Jan 5 2004 101.35575637
Jul 5 2004 95.43877987
Jan 5 2005 98.22720149
Jul 5 2005 92.23485416
Jan 5 2006 94.94589813
Jul 5 2006 87.10281323
Jan 5 2007 89.68568485
Jul 5 2007 81.46754223
Jan 5 2008 83.91571176
Jul 5 2008 75.54688104
Jan 5 2009 77.85672264
Jul 5 2009 69.32786859
Jan 5 2010 71.39329437
Jul 5 2010 62.61196362
Jan 5 2011 64.55304757
Jul 5 2011 55.58646134
Jan 5 2012 56.60737560
Jul 5 2012 48.25400816
Jan 5 2013 38.85561714
Jul 5 2013 40.25936446
Jan 5 2014 30.49054625
Jul 5 2014 31.60903498
Jan 5 2015 21.54528325
Jul 5 2015 22.37075329
Sep 30 2015 20.00000000
</TABLE>
<PAGE> 47
SCHEDULE 4
to
LEASE
SCHEDULE OF EARLY BUY-OUT PRICE
<TABLE>
<CAPTION>
Percent
of
Date Facility Cost
------ -------------
<S> <C>
January 5, 2012 48.6270614%
Payable in installments, as follows:
January 5, 2012 31.4072366%
April 15, 2012 4.3049562%
June 15, 2012 4.3049562%
September 15, 2012 4.3049562%
December 15, 2012 4.3049562%
</TABLE>
<PAGE> 48
SCHEDULE 5
to
LEASE
SCHEDULE OF TERMINATION VALUES
<TABLE>
<CAPTION>
Termination Date Termination Value
---------------- -----------------
<S> <C>
Sep 30 1994 104.04293837
Jul 5 1995 111.42623882
Jan 5 1996 115.92146618
Jul 5 1996 111.52809318
Jan 5 1997 115.57976152
Jul 5 1997 110.89496490
Jan 5 1998 114.69348363
Jul 5 1998 109.78568484
Jan 5 1999 113.38704642
Jul 5 1999 108.28874752
Jan 5 2000 111.67103235
Jul 5 2000 106.36275502
Jan 5 2001 109.54461504
Jul 5 2001 104.04957065
Jan 5 2002 107.07999074
Jul 5 2002 101.36482892
Jan 5 2003 104.30351941
Jul 5 2003 98.49824336
Jan 5 2004 101.35575637
Jul 5 2004 95.43877987
Jan 5 2005 98.22720149
Jul 5 2005 92.23485416
Jan 5 2006 94.94589813
Jul 5 2006 87.10281323
Jan 5 2007 89.68568485
Jul 5 2007 81.46754223
Jan 5 2008 83.91571176
Jul 5 2008 75.54688104
Jan 5 2009 77.85672264
Jul 5 2009 69.32786859
Jan 5 2010 71.39329437
Jul 5 2010 62.61196362
Jan 5 2011 64.55304757
Jul 5 2011 55.58646134
Jan 5 2012 56.60737560
Jul 5 2012 48.25400816
Jan 5 2013 38.85561714
Jul 5 2013 40.25936446
Jan 5 2014 30.49054625
Jul 5 2014 31.60903498
Jan 5 2015 21.54528325
Jul 5 2015 22.37075329
Sep 30 2015 20.00000000
</TABLE>
<PAGE> 49
EXHIBIT A
TO
LEASE
CERTIFICATE OF ACCEPTANCE
Dated September 30, 1994
Reference is hereby made to the LEASE, dated as of September
1, 1995 (the LEASE), between SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as Owner Trustee under Trust
Agreement No. 1, dated as of July 15, 1994, with Philip Morris Capital
Corporation, as Lessor (the LESSOR) and NEWMONT GOLD COMPANY, as Lessee (the
LESSEE).
(1) THE FACILITY.
The Lessee hereby certifies that the Facility, an Undivided
Interest in which, equal to the Lessor's Share, is the subject of the Lease
referred to herein, has been inspected by the Lessee, found to be in good order
and is ready and available for use. The Lessee hereby further certifies that
the Undivided Interest has been accepted under the Lease on the date hereof.
All capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in Appendix A to the Participation Agreement, dated as
of July 15, 1994, among Philip Morris Capital Corporation, as Owner
Participant, the Lessor, Shawmut Bank Connecticut, N.A. in its individual
capacity and as Owner Trustee, The First National Bank of Chicago, as Indenture
Trustee, The First National Bank of Chicago in its individual capacity and as
Pass Through Trustee and the Lessee.
(2) REPRESENTATIONS BY THE LESSEE.
The Lessee hereby represents and warrants to the Owner
Participant, the Lessor, and the Indenture Trustee that:
(a) The representations and warranties of the Lessee set
forth in the Participation Agreement are true and correct in all
material respects as though made on and as of the date of hereof;
(b) The Lessee has satisfied or complied with all
requirements set forth in the Participation Agreement to be satisfied
or complied with on or prior to the date hereof;
-1-
<PAGE> 50
EXHIBIT A
to
LEASE
(c) No Default or Event of Default has occurred and is
continuing on the date hereof;
(d) The Lessee has obtained, or caused to be obtained,
and there are in full force and effect, such insurance policies with
respect to the Facility and the Facility Site as are required to be
obtained under the terms of the Lease; and
(e) The Lessee has caused the Facility to be duly marked
in accordance with Section 8(i) of the Lease.
IN WITNESS WHEREOF, the Lessee has caused this Certificate of
Acceptance to be duly executed by one of its officers thereunto duly authorized
this 30 day of September, 1994.
NEWMONT GOLD COMPANY,
as Lessee
By______________________________
Treasurer
Accepted on the date set forth above
on behalf of the Lessor:
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
as Owner Trustee
By___________________________________
Title:
-2-
<PAGE> 1
EXHIBIT 4.3
================================================================================
TRUST INDENTURE AND SECURITY AGREEMENT
DATED AS OF JULY 15, 1994,
BETWEEN
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
AS
OWNER TRUSTEE UNDER
TRUST AGREEMENT NO. 1, DATED AS OF
JULY 15, 1994,
WITH PHILIP MORRIS CAPITAL CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
NOT INDIVIDUALLY BUT
SOLELY AS INDENTURE TRUSTEE
================================================================================
NEWMONT GOLD ORE TREATMENT FACILITY
TRUST NO. 1
A Trust Indenture and Security Agreement dated as of July 15, 1994 between
Shawmut Bank Connecticut, National Association and The First National Bank of
Chicago relating to Trust No. 2 was also entered into by the parties thereto.
Such Trust Indenture and Security Agreement is identical in all material
respects to this Trust Indenture and Security Agreement except it relates to
Trust No. 2 rather than to Trust No. 1.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
HABENDUM CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.01. Indenture Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.01. Forms of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02A. Issuance of Notes on the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.02B. Refunding; ERISA Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.03. Execution, Delivery and Authentication of Notes; Form and Maximum Aggregate Principal
Amount; Payment of Interest and Principal; Notice and Calculation of Treasury
Rate, Make Whole Premium Amount. . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.04. Taxes; Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.05. Payments from Indenture Estate Only . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.06. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.08. Termination of Interest in Indenture Estate . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.09. Registration, Transfer and Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.10. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11. Payment of Expenses on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.12. Optional Redemption Upon Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.13. Mandatory Redemption in Whole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.14. Optional Redemption Relating to a Refunding . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.15. Supplemental Financing Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . 29
SECTION 3.01. Application of Certain Payments of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.02. Event of Loss, Termination, Refunding, Purchase on Early Buy-Out Date, Etc. . . . . . . . 29
SECTION 3.03. Payment After Acceleration of the Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.06. Payments to Owner Trustee or Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.07. Investment of Amounts Held by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . 34
SECTION 4.01. Indenture Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.02. Certain Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.03. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Return of Indenture Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.05. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.06. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.07. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V DUTIES OF THE INDENTURE TRUSTEE AND RIGHTS OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . 41
SECTION 5.01. Notice of Indenture Event of Default; Certain Duties and Responsibilities . . . . . . . . 41
SECTION 5.02. Action Upon Instructions: Delivery of Written Instructions to Owner Trustee . . . . . . . 42
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.04. No Duties Except as Specified in Indenture or Instructions and Maintenance of Payment
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.05. No Action Except Under Lease, Indenture or Instructions . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Furnishing of Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.07. Certain Rights of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.01. Covenants of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.02. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.03. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.04. No Representations or Warranties as to Facility or Documents . . . . . . . . . . . . . . . 48
SECTION 6.05. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.06. Reliance; Agents; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.07. Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.08. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VII SUCCESSOR TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.01. Notice of Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.02. Resignation of Indenture Trustee; Appointment of Successor . . . . . . . . . . . . . . . . 50
SECTION 7.03. Appointment of Additional and Separate Indenture Trustees . . . . . . . . . . . . . . . . 52
ARTICLE VIII SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER TRANSACTION DOCUMENTS . . . . . . . . 54
SECTION 8.01. Amendments, Waivers, Etc. of Transaction Documents (Other Than This Indenture) . . . . . . 54
SECTION 8.01A. Amendments to This Indenture With and Without Consent of Holders . . . . . . . . . . . . . 55
SECTION 8.02. Indenture Supplement Without Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.03. Trustees and Representative Protected . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.04. Documents Mailed to Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.05. Form of Amendments and Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.01. Termination of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.02. No Legal Title to Indenture Estate in Holders . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
(iii)
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 9.03. Sale of Undivided Interest by Indenture Trustee is Binding . . . . . . . . . . . . . . . . 57
SECTION 9.04. Indenture for Benefit of Owner Trustee, Indenture Trustee, Owner Participant, Lessee
and Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.05. No Action Contrary to Lessee's Rights Under the Lease . . . . . . . . . . . . . . . . . . 58
SECTION 9.06. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.07. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.08. No Oral Modifications or Continuing Waivers . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.09. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.10. Headings; References to Sections, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.11. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.12. Governing Law: Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
SCHEDULE 1 Definitions
EXHIBIT A Form of Indenture Supplement
(iv)
<PAGE> 6
TRUST INDENTURE AND SECURITY AGREEMENT
TRUST NO. 1
THIS TRUST INDENTURE AND SECURITY AGREEMENT, dated as of July
15, 1994 (this Indenture), between SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association having its principal office at 777
Main Street, Hartford, CT 06115, as Owner Trustee under Trust Agreement No. 1
referred to below, and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association having its principal office at One First National Plaza, Suite
0126, Chicago, Illinois 60670-0126, not individually but solely as Indenture
Trustee hereunder.
W I T N E S S E T H :
WHEREAS, all capitalized terms used herein shall have the
respective meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Owner Trustee have
entered into Trust Agreement No. 1, dated as of July 15, 1994, whereby, among
other things, (i) the Owner Trustee has declared a certain trust for the use
and benefit of the Owner Participant and (ii) the Owner Trustee has been
authorized and directed to execute and deliver this Indenture;
WHEREAS, the Owner Trustee has entered into the Participation
Agreement among the Owner Participant, the Indenture Trustee, the Pass Through
Trustee and Newmont;
WHEREAS, the Owner Trustee, acting as trustee for the benefit
of the Owner Participant, pursuant to Trust Agreement No. 1 and the
Participation Agreement, intends to purchase the Undivided Interest from
Newmont and lease such Undivided Interest to Newmont pursuant to the Lease;
WHEREAS, the Owner Trustee desires by this Indenture, among
other things (i) to provide for the issuance by the Owner Trustee (x) as of the
Closing Date
<PAGE> 7
of its initial Notes evidencing the repayment obligations of the Owner Trustee
in respect of such Notes, (y) from time to time, of Supplemental Financing
Notes evidencing the repayment obligations of the Owner Trustee in respect of a
Supplemental Financing, and (z) as of any Refunding Closing Date, of its
Refunding Note evidencing the repayment obligation of the Owner Trustee in
respect of such Note, all as provided herein and in the Transaction Documents,
and (ii) to provide for the assignment and pledge by the Owner Trustee to the
Indenture Trustee, and for the grant of the lien and encumbrance of a separate
Deed of Trust by Owner Trustee for the benefit of the Indenture Trustee, as
part of the Indenture Estate hereunder, among other things, of certain of the
Owner Trustee's estate, right, title and interest in and to the Undivided
Interest, the Lease, the Facility Agreements and the Purchase Documents and all
payments and other amounts received hereunder or thereunder in accordance with
the terms hereof, other than Excepted Payments, as security for the Owner
Trustee's obligations to the Indenture Trustee and the Holders hereunder, under
the Notes and for the benefit and security of the Indenture Trustee and such
Holders;
WHEREAS, all things have been done to make the Notes, when
executed, delivered and issued by the Owner Trustee and authenticated and
delivered by the Indenture Trustee hereunder, the valid obligations of the
Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the
valid, binding and legal 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;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the principal of and premium,
if any, and interest on, and all other amounts due with respect to, all Notes
from time to time Outstanding and the performance and observance by the Owner
Trustee of all of its respective agreements, covenants and provisions herein
and in the Notes contained for the benefit of the Holders and the Indenture
Trustee 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 Notes by the Holders thereof, and for
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, pledge and confirm, unto the Indenture Trustee
and its successors and assigns for the security and benefit of the Indenture
Trustee and the Holders from time to time of the Notes, a first priority
security interest in, and by
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<PAGE> 8
separate Deed of Trust the Owner Trustee is concurrently granting for the
benefit of the Indenture Trustee a first priority trust deed lien on, all the
estate, right, title and interest of the Owner Trustee in, to and under the
following described property, documents, rights and privileges (which
collectively constitute the Indenture Estate), to wit:
1. The Undivided Interest, including, without limitation,
the Lessor's Share of all Components and Modifications now existing or which
hereafter may become part of the Undivided Interest and title to which shall
vest in the Lessor in accordance with the Lease;
2. The Lease, including, without limitation, all Basic
Rent, Supplemental Rent, payments relating to Stipulated Loss Value,
Termination Value, the Early Buy-Out Price, any other applicable purchase price
and all other payments of any kind thereunder payable to the Owner Trustee and
to exercise any election or option or make any decision or determination or
give any notice, consent, waiver or approval thereunder or in respect thereof,
as well as all the rights, powers and remedies on the part of the Owner
Trustee, whether acting under any such agreement or by statute or law or in
equity, or otherwise, arising out of any Event of Default;
3. All right, title and interest of the Owner Trustee in,
to and under (a) the Bill of Sale and each other Purchase Document and (b) the
Ground Lease and Easement and (c) the Assignment of Contracts, including,
without limitation, (i) all amounts of rent, insurance proceeds and
condemnation, requisition and other awards and payments of any kind for or with
respect to any part of the Indenture Estate and (ii) subject to the terms of
this Indenture, all rights of the Owner Trustee to exercise any election or
option or to make any decision or determination or to give or receive any
notice, consent, waiver or approval or to take any other action under or in
respect of any such document, as well as all the rights, powers and remedies on
the part of the Owner Trustee, whether arising under any document or by statute
or at law or equity or otherwise, arising out of any Event of Default;
4. All monies and securities deposited or required to be
deposited with the Indenture Trustee pursuant to any term of this Indenture or
the Lease and held or required to be held by the Indenture Trustee hereunder;
5. All rents (including Rent), issues, profits, products,
revenues and other income of all property from time to time subjected or
required to be subjected to the Lien of this Indenture, and all right, title
and interest of every nature whatsoever of the Owner Trustee in and to the same
and every part thereof;
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<PAGE> 9
6. All other property of every kind and description, real,
personal and mixed, and interests therein now held or hereafter acquired by the
Owner Trustee pursuant to any term of any Granting Clause Document, whether or
not subjected to the Lien of this Indenture by an Indenture Supplement; and
7. All proceeds of the foregoing.
but excluding, however, from the Indenture Estate the Excepted Payments; and
subject, however, to the rights of the Lessee under the Lease.
Concurrently with the delivery of its request for
authentication of the Notes to be issued on the Closing Date, the Owner Trustee
will deliver to the Indenture Trustee the original executed counterpart of the
Lease, marked "Original" as provided in Section 21(e) of the Lease, together
with executed copies of each Purchase Document.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its respective successors and assigns, in trust for
the benefit and security of the Indenture Trustee and the holders from time to
time of the Notes, without any priority of any one Note above any other, and
for the uses and purposes and subject to the terms and provisions set forth in
this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each
Granting Clause Document to perform all of the obligations assumed by it
thereunder all in accordance with and pursuant to the terms and provisions
thereof, and neither the Indenture Trustee nor the holder of any Note or Notes
shall have any obligation or liability under any Granting Clause Document
solely by reason of the assignments hereunder, nor shall any of the Indenture
Trustee or the Holders of the Notes be required or obligated in any manner to
perform or fulfill any obligations of the Owner Trustee under or pursuant to
any Granting Clause 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 them, or present or file any claim, or take any action to
collect or enforce the payment of any amounts which may have been assigned to
them or to which they may be entitled at any time or times.
Pursuant to the provisions of the Lease, the Lessee is
directed to make all payments of Rent (other than Ground Lease Rent) to either
(i) in the case of
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<PAGE> 10
payments other than Excepted Payments, the Owner Trustee or as the Owner
Trustee may otherwise direct by notice in writing to the Lessee, or (ii) in the
case of Excepted Payments, the Person entitled to receive such payments, at
such address as such Person may direct by notice in writing to the Lessee. The
Owner Trustee agrees that, so long as any Notes shall be Outstanding hereunder,
all payments described in clause (i) above shall be directed to be made to the
Indenture Trustee and that if it should receive any such payments or any
proceeds for or with respect to the Indenture Estate, it will promptly forward
such payments to the Indenture Trustee or in accordance with the Indenture
Trustee's instructions.
The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, any of its
estate, right, title or interest hereby assigned, to anyone other than the
Indenture Trustee (it being understood that the foregoing shall not, subject to
the provisions hereof, limit the rights of the Owner Trustee to assign its
rights to its successor or assigns as contemplated by the Trust Agreement), and
that it will not, except as permitted by this Indenture or with respect to
Excepted Payments, accept any payment from the Lessee, enter into any agreement
amending or supplementing any Granting Clause Document, execute any waiver or
modification of, or consent under, the terms of any Granting Clause Document.
Notwithstanding the Granting Clause or any of the preceding
paragraphs, there are hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excepted Payments, and
nothing contained in the Granting Clause or any of the preceding paragraphs
shall impair in any respect the rights of the Owner Trustee under Sections
2.12, 4.02, 4.03, 5.07, 8.01 or 8.02 hereof.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. INDENTURE DEFINITIONS. For all purposes of
this Indenture, each Indenture Supplement delivered hereunder and each Note
issued pursuant to the provisions hereof (and all Schedules, Exhibits,
Appendices or other attachments hereto or thereto), the following terms shall
have the following meanings (such definitions to be equally applicable to both
the singular and plural forms of the terms defined and, to the extent that such
definitions relate to agreements or
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<PAGE> 11
instruments, such terms shall mean such agreements or instruments as the same
may from time to time be supplemented or amended or the terms thereof waived or
modified to the extent permitted by, and in accordance with, the terms thereof,
hereof and of the Transaction Documents):
Applicable Rate shall mean, with respect to any Notes issued
hereunder from time to time (including any Refunding Notes or Supplemental
Financing Notes), the interest rate per annum specified in such Note or Notes.
Debt shall mean any liability for borrowed money, or any
liability for the payment of money, or other liabilities evidenced or to be
evidenced by bonds, debentures, notes or other similar instruments.
Dollars and $ means the lawful currency of the United States
of America.
Early Buy-Out Notice shall mean a written notice of the Lessee
or Owner Trustee stating that the Notes Outstanding will be redeemed in respect
of the matters specified in clause (iii) of the first sentence of Section 2.13
hereof, which notice shall specify the Early Buy-Out Date and which shall,
whenever given, not be deemed effective for purposes hereof until the date
which is 45 days prior to the applicable Early Buy-Out Date.
Granting Clause Document shall mean each of the documents
referred to in clauses 2 and 3 of the Granting Clause of this Indenture.
Holder or holder shall mean any registered holder from time to time of one or
more Notes.
Indenture Default shall mean an Indenture Event of Default or
an event which, after the 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 hereof.
Indenture Event of Default shall have the meaning specified in
Section 4.01 hereof.
Indenture Supplement shall mean a supplement to this
Indenture, in substantially the form of Exhibit A hereto, with such other or
alternate provisions as shall be consistent with or required by the terms
hereof (including Section 2.15 hereof),
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<PAGE> 12
which shall, in appropriate cases, describe items of property or equipment
included in the property of the Owner Trustee covered by and subject to the
Lien of this Indenture or the Deed of Trust, and which shall also, in
appropriate cases, include a separate amendment of the Deed of Trust in
recordable form.
Independent Investment Banker shall mean an independent
investment banking institution of national standing appointed by the Lessee on
behalf of the Owner Trustee (or directly by the Owner Trustee if an Event of
Default has occurred and is continuing) and identified from time to time in a
writing delivered to the Indenture Trustee.
Interest Payment Date shall mean, (A) with respect to the
Notes issued on the Closing Date (including any Note issued in replacement of
or exchange for any thereof as herein provided), July 5, 1995 and each January
5 and July 5 occurring thereafter and (B) with respect to any other Notes
issued hereunder (including any Note issued in replacement of or exchange for
any thereof as herein provided), the date or dates specified in such Notes, and
ending, in each case, on the date all amounts payable in respect of such Note
have been paid in full; provided that if any such day is not a Business Day
then the relevant Interest Payment Date shall be the next succeeding Business
Day.
Make Whole Premium Amount shall mean, with respect to any Note
redeemed in accordance with Section 2.12 (in the event the Indenture Trustee
shall not have accelerated the Notes), Section 2.13 (ii), 2.13 (iii), 2.13 (iv)
or Section 2.14 prior to the Early Buy-Out Date, the excess, if any, of (a) the
sum of the present value of each of the remaining scheduled principal and
interest payments from the Redemption Date to maturity of such Note, discounted
to the applicable Redemption Date on a semiannual basis at the Treasury Rate
over (b) the aggregate unpaid principal amount of such Note to be redeemed on
such Redemption Date plus any accrued and unpaid interest thereon, as
calculated by the Independent Investment Banker.
Majority in Interest of Holders of the Notes as of a
particular date of determination shall mean (A) subject to clause (B) of this
definition, the Holders of more than 66-2/3% in aggregate unpaid principal
amount of all Notes Outstanding as of such date or (B) to the extent that a
particular matter or question relates only to the Notes of a particular series,
the Holders of more than 66-2/3% in aggregate unpaid principal amount of all
Notes Outstanding as of such date in respect of such series; (excluding, in
each case, any Notes held by (a) the Owner Trustee, the Owner Participant or
any Affiliate of any thereof, or any interests of the Owner Participant therein
by reason of subrogation pursuant to Section 4.02 hereof (unless, in any such
case, all then Outstanding Notes or, in the case of clause (B) hereof, Notes of
the relevant
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<PAGE> 13
series, shall be held by one or more of the Owner Trustee, the Owner
Participant or any Affiliate of any thereof) or (b) the Lessee or any Affiliate
thereof). In all cases in which a Majority in Interest of Holders of the Notes
is entitled to direct the Indenture Trustee to take any action or otherwise
advise the Indenture Trustee, each Holder of Notes then Outstanding, or its
duly authorized agent or attorney-in-fact, shall be entitled to direct the
Indenture Trustee only with respect to the aggregate unpaid principal amount of
Notes (or portion thereof) issued and Outstanding which are registered in the
name of such Holder and which are certified by such Holder or its duly
authorized agent or attorney-in-fact to be (i) held by it for its own account
and not pledged as collateral for any of its obligations or held for the
benefit of other Persons (including, without limitation, holders of Pass
Through Certificates) or (ii) pledged as collateral for one or more of its
obligations, or obligations with respect to which it is acting as trustee under
a related indenture or held for the benefit of other Persons (including,
without limitation, holders of Pass Through Certificates), but in respect of
which it has received a directive, satisfactory in form and substance to the
Indenture Trustee, given by the holder or holders of a proportionate interest
in the obligations secured by, or evidencing a beneficial interest in, such
Notes in accordance with the instrument governing such obligations. More than
one direction can be given by a registered Holder of Notes or its duly
authorized agent or attorney-in-fact pursuant to clause (ii) of the preceding
sentence, and such directions may be contradictory or inconsistent, so long as
each direction to take or refrain from taking the action specified therein or
otherwise advising the Indenture Trustee meets the requirements of said clause
(ii).
Note shall mean any Note issued hereunder (including the Notes
issued on the Closing Date, any Refunding Note or Supplemental Financing Note)
substantially in the form set forth in Section 2.01 hereof, as each such form
may be varied pursuant to the terms hereof or thereof, and such term includes
any such Note issued hereunder in exchange for or in replacement of any thereof
in accordance with the terms hereof.
Note Register shall have the meaning specified in Section 2.09
hereof.
Optional Redemption Notice shall mean a written notice given
by the Owner Trustee, at the direction of the Owner Participant, to the effect
that the Owner Trustee intends to exercise its rights under Section 2.12 hereof
to cause a redemption of all, but not less than all, of the Notes then
Outstanding, which notice shall, in order to be effective for purposes of such
Section 2.12, specify the Indenture Event of Default in respect of which such
election is being made, if applicable, and shall contain an irrevocable
commitment of the Owner Trustee to take the actions contemplated therein
(including payment of the Redemption Price on the applicable Redemption Date).
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<PAGE> 14
Principal Payment Date shall mean, with respect to each Note,
each date on which a regularly scheduled payment of principal is due thereunder
in accordance with the terms thereof.
Record Date shall mean, with respect to the interest or
principal payable on any Interest Payment Date or Principal Payment Date, as
the case may be, the last calendar day (whether or not a Business Day) which is
more than 15 calendar days prior to the related Interest Payment Date or
Principal Payment Date and, with respect to any other amount payable hereunder
or under the Notes, the last calendar day (whether or not a Business Day) which
is more than 15 days prior to the date such amount is to be received by the
Indenture Trustee as herein and in the Notes provided.
Recourse Amount shall have the meaning set forth in Section
2.05 hereof.
Redemption Date shall mean any date upon which the Notes are
to be redeemed pursuant to Sections 2.12, 2.13 or 2.14 hereof.
Redemption Price shall mean the price at which the Notes are
to be redeemed, determined as of the applicable Redemption Date, pursuant to
Sections 2.12, 2.13 or 2.14 hereof.
Refunding Date shall mean, in respect of each Refunding, the
date upon which such Refunding shall occur.
Regular Distribution Date shall have the meaning set forth in
the Pass Through Trust Agreement.
Treasury Rate shall mean, with respect to the determination of
a Make Whole Premium Amount, (i) in the case of a Note bearing a final stated
maturity of less than one year after the related Redemption Date, a rate of
interest per annum, determined by the Independent Investment Banker as of the
Treasury Rate Quote Date, equal to the average yield to maturity of, and
resulting from the bidding for (on a government bond equivalent basis) the
applicable United States Treasury Bill due the week in which such final stated
maturity occurs or (ii) in the case of all other Notes, a rate of interest per
annum determined by the Independent Investment Banker as of the Treasury Rate
Quote Date, to be equal to the average yield to maturity of, and resulting from
the bidding for, the most comparable United States Treasury Notes, as
identified by the Independent Investment Banker, corresponding in maturity to
the Weighted Average Life to Maturity of the Notes then subject to the related
redemption (or, if there is no maturity corresponding to such Weighted Average
Life to Maturity, an interpolation, on a straight-line basis, between the yield
on (a) the United States
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<PAGE> 15
Treasury Note with a constant maturity closest to and greater than the Weighted
Average Life to Maturity of such Notes and (b) the United States Treasury Note
with a constant maturity closest to and less than such Weighted Average Life to
Maturity); such yield to be determined by the Independent Investment Banker by
reference to the yield of the relevant United States Treasury Notes (rounded,
if necessary to the nearest 1/100 of 1% with any figure of 1/200 of 1% or above
rounded upward) as published in "Statistical Release H.15 (519), Selected
Interest Rates" (or any successor publication) by the Board of Governors of the
Federal Reserve System at or prior to 12:00 noon New York time, on the Treasury
Rate Quote Date.
Treasury Rate Quote Date shall mean, with respect to the
determination of a Redemption Price, the third Business Day preceding the
applicable Redemption Date.
Weighted Average Life to Maturity shall mean, with respect to
any indebtedness as at the time of determination thereof, the number of years
obtained by dividing the then Remaining Dollar Years of such indebtedness by
the then outstanding principal amount of such indebtedness. The term Remaining
Dollar Years of any indebtedness means the amount obtained by (i) multiplying
the amount of each then remaining sinking fund, serial maturity or other
required repayment of principal, including repayment at final maturity, by the
number of years (calculated to the nearest 1/12) which will elapse between the
date of determination and the date of that required repayment, and (ii)
totalling all the products obtained in the preceding clause (i).
SECTION 1.02. OTHER DEFINITIONS. For all purposes of this
Indenture, capitalized terms used herein without other definition shall have
the meanings assigned thereto in Appendix A to the Participation Agreement. A
copy of such Appendix A is annexed hereto as Schedule 1 and hereby incorporated
herein by reference.
ARTICLE II
THE NOTES
SECTION 2.01. FORMS OF THE NOTES. The Notes shall each be
substantially in the form set forth below, with such changes that are not
inconsistent with the terms of this Indenture as the Lessee shall deem
desirable (and indicate in writing to the Owner Trustee and the Indenture
Trustee) and are consented to by the Owner Trustee (such consent not to be
unreasonably withheld) at or prior to the time such Note is issued (the
provisions set forth below constituting part of this Indenture).
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<PAGE> 16
________________
SECURED NOTE
ISSUED IN CONNECTION WITH LEASE OF AN UNDIVIDED INTEREST
IN THE NEWMONT GOLD ORE TREATMENT FACILITY TO
NEWMONT GOLD COMPANY
TRUST No. 1
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner
Trustee under Trust Agreement No. 1,
dated as of July 15, 1994,
with the Owner Participant
No. New York, New York
Original Principal Amount: Issue Date:
$ _________ __, 199_
Interest Rate: Maturity Date:
_____% _________, __
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity called
the "Owner Trustee") under that certain Trust Agreement No. 1, dated as of July
15, 1994, between the Owner Participant named therein and the Owner Trustee,
hereby promises to pay to __________ or its registered assigns, the principal
sum of $____________(________________ Dollars), such principal sum to be repaid
in installments having the principal amounts set forth in Annex A hereto on the
Principal Payment Dates therein indicated, together with interest at a rate per
annum equal to the rate specified above under the caption "Interest Rate" on
the unpaid principal amount hereof from time to time outstanding from and
including the date hereof to but not including the date on which such principal
amount is paid in full, payable in arrears on each Interest Payment
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<PAGE> 17
Date (as defined in the Indenture referred to below) and on the date of any
payment of principal hereof; provided, however, that, if any principal amount
in respect of this Note, or any interest in respect of the outstanding
principal amount hereunder, is paid on a date other than an Interest Payment
Date, interest at the rate hereinabove provided for shall continue to accrue on
the outstanding principal amount hereunder at such rate and shall be paid on
the date such principal or interest payment is paid; and provided, further,
however, the final payment of principal hereon on the stated maturity hereof
shall in any and all events equal the then outstanding principal balance
hereof.
Interest shall be calculated on the basis of a year of 360
days of twelve months of 30 days each.
All payments of principal and interest and other amounts to be
made to the Holder hereof by the Owner Trustee hereunder or under the Trust
Indenture and Security Agreement, dated as of July 15, 1994 (as such Trust
Indenture and Security Agreement may be amended or supplemented from time to
time, the "Indenture," the terms defined or incorporated therein and not
otherwise defined herein being used herein with the same meanings), between the
Owner Trustee and The First National Bank of Chicago, as indenture trustee
thereunder (the "Indenture Trustee"), shall be made only from the revenues and
proceeds of the Indenture Estate. Each Holder, by its acceptance of this Note,
agrees that it will look solely to the revenues and proceeds of the Indenture
Estate to the extent available for distribution to the Holder hereof as
provided in the Indenture and that none of the Owner Participant, the Lessee,
the Owner Trustee or the Indenture Trustee are personally liable to the Holder
hereof for any amounts payable under the Indenture or this Note or for any
liability under the Indenture, except, in the case of the Owner Trustee or the
Indenture Trustee, as expressly provided in the Indenture, this Note or in the
Participation Agreement.
Principal and interest and other amounts due hereunder or
under the Indenture shall be payable in Dollars in immediately available funds
prior to 1:00 P.M., New York City time, on the due date thereof to the
Indenture Trustee at the Indenture Trustee's Office. The Indenture Trustee
shall promptly remit (by wire transfer of immediately available funds) each
such amount to such account or accounts of the Holder hereof in whose name this
Note is registered at the close of business on the Record Date for payment of
such amount, at such financial institution or institutions and to such account
or accounts, within the continental United States, as the Holder hereof shall
have designated to the Indenture Trustee in writing and upon compliance with
the reasonable requirements of the Indenture Trustee. If any sum payable
hereunder or under the Indenture falls due on a day which is not a Business
Day, then such sum shall be payable on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
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<PAGE> 18
This Note is one of the Notes referred to in the Indenture
which have been or are to be issued by the Owner Trustee pursuant to the terms
of the Indenture. The Indenture Estate (including, but not limited to, a
separate Deed of Trust given for the benefit of the Indenture Trustee pursuant
to the Indenture) is held by the Indenture Trustee as security for the Notes.
Reference is hereby made to the Indenture and to the Participation Agreement
for a statement of the rights and obligations of the Holder of, and the nature
and extent of the security for, this Note and of the rights and obligations of
the Holders of, and the nature and extent of the security for, the other Notes
issued under the Indenture, 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 and in the Participation Agreement each Holder
hereof agrees by its acceptance of this Note.
There shall be maintained a Note Register for the purpose of
registering transfers and exchanges of Notes at the Indenture Trustee's Office
or at the office of any successor indenture trustee in the manner provided in
Section 2.09 of the Indenture. As provided in the Indenture, this Note may not
be exchanged for Notes of a different authorized denomination or in any other
circumstances except as provided in such Section 2.09, and this Note may only
be transferred in the circumstances contemplated by, and subject to the
conditions of, the provisions of the Indenture (including Sections 2.02B(a) and
2.09 thereof), to all of which conditions and provisions the Holder hereof, by
its acceptance of this Note, agrees to be bound.
Prior to the due presentment for, and due registration of
transfer of this Note as provided in Section 2.09 of the Indenture, the Owner
Trustee, the Indenture Trustee and the Lessee may and shall deem and treat the
person in whose name this Note is registered as the owner hereof for all
purposes hereof or otherwise in respect of the Indenture, whether or not this
Note or any amount payable hereunder is overdue, and none of the Owner Trustee,
the Lessee nor the Indenture Trustee shall be affected by notice to the
contrary.
This Note is subject to prepayment or redemption, in whole or
in part, only as permitted by Sections 2.12, 2.13 and 2.14 of the Indenture,
and the Holder hereof, by its acceptance of this Note, agrees to be bound by
such provisions. If at any time an Indenture Event of Default shall have
occurred and be continuing, this Note may be declared due and payable, all upon
the conditions, in the manner, subject to the restrictions and with the effect
provided in the Indenture, and the Holder hereof, by its acceptance of this
Note, agrees to be bound thereby. Neither this Note nor the Indenture is
cross-collateralized with, or may be cross-defaulted in respect of, any
security or indebtedness of the Lessee (except to the extent that an Event of
Default includes a cross-default to any other Financing Lease) or any security
or indebtedness of Shawmut
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<PAGE> 19
Bank Connecticut, National Association, as trustee with respect to any property
other than the Indenture Estate.
The right of the Holder of this Note to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions and conditions specified
in the Indenture, and the Holder hereof, by its acceptance of this Note, agrees
to be bound by such restrictions and conditions.
This Note shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose, unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Owner Trustee has caused this Note to
be executed in its corporate name by its office thereunto duly authorized, as
of the date below indicated.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, except
as otherwise specified herein, but
solely as Owner Trustee
Date: ________ __, 199_ By_________________________________________
Title:
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<PAGE> 20
(FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Notes referred to in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By___________________________
Authorized Signatory
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<PAGE> 21
Annex A
to
Secured Note
SCHEDULE OF PRINCIPAL PAYMENT DATES
AND PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
Percentage
Principal Payment of Original
Date (Interest Principal Principal
Payment Date Amount to Amount to
Occurring On) be Paid be Paid
- - ----------------- ----------- -----------
<S> <C> <C>
</TABLE>
SECTION 2.02A. ISSUANCE OF NOTES ON THE CLOSING DATE. On the
Closing Date, the Owner Trustee shall issue and execute, and the Indenture
Trustee shall authenticate and deliver, to or at the direction of the Pass
Through Trustee, one or more Notes for original issuance in the aggregate
principal amount, having the maturity dates and bearing the interest rate and
having the other characteristics (including with respect to the repayment of
the aggregate principal amount thereof) as provided for in Indenture Supplement
No. 1 and the request for authentication delivered by the Owner Trustee to the
Indenture Trustee on the Closing Date. The Owner Trustee hereby authorizes the
Indenture Trustee, on behalf of the Owner Trustee, to receive the Loan Proceeds
from the sale to the Pass Through Trustee of such Notes. The Indenture Trustee
shall hold and apply the same as provided in Sections 2, 4 and 5 of the
Participation Agreement. Such Note or Notes shall be registered on the Note
Register in the name of the Pass Through Trustee and may not be transferred
except in accordance with the provisions hereof and of the Transaction
Documents.
SECTION 2.02B. REFUNDING; ERISA REPRESENTATION. (a) In
connection with any Refunding in accordance with and subject to the provisions
of Section 2.14 hereof, Section 14 of the Participation Agreement and the other
Transaction Documents, on the Refunding Date the Owner Trustee, at the
direction of the Lessee, shall issue and execute, and the Indenture Trustee
shall authenticate and
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deliver, one or more Refunding Notes for original issuance in an aggregate
principal amount at least equal to the principal amount outstanding in respect
of, and accrued interest on, the Notes to be redeemed as of the Refunding Date
and having the maturity dates, bearing the interest rates and having the other
characteristics (including with respect to the repayment of the aggregate
principal amount thereof) as provided for in the applicable Refunding Agreement
and other Transaction Documents. The Owner Trustee hereby authorizes the
Indenture Trustee, on behalf of the Owner Trustee, to receive the proceeds from
the sale of such Refunding and the Indenture Trustee shall hold and apply such
proceeds, and take such other actions with respect to such Refunding, as shall
be provided in the applicable Refunding Agreement and other Transaction
Documents. Such Notes shall be registered in the names of such entities as
shall be identified in or pursuant to the Refunding Agreement and,
notwithstanding any provision hereof, may not be transferred or accepted for
registration of transfer, in whole or in part, except in compliance with the
provisions of Section 2.09 hereof and of the Transaction Documents.
(b) Unless the Lessee otherwise agrees in writing, no ERISA
Plan, or any person treated as holding the assets of an ERISA Plan may acquire
or hold, beneficially or of record, any Note, or Supplemental Financing Note.
Unless otherwise agreed to in writing by the parties to the Participation
Agreement, the purchase or other acquisition by any Person of any Note, or
Supplemental Financing Note shall constitute a representation by such Person
and the beneficial owner of any thereof to the Lessee, the Owner Trustee, the
Owner Participant and the Indenture Trustee that such Person is not, and such
beneficial owner is not, an ERISA Plan and that such Person is not, and such
beneficial owner is not, purchasing or otherwise acquiring, and has not
purchased or otherwise acquired, such Note or Supplemental Financing Note with
assets of an ERISA Plan. Each Holder of a Note or Supplemental Financing Note,
by its acceptance thereof shall be deemed to have agreed to the foregoing.
SECTION 2.03. EXECUTION, DELIVERY AND AUTHENTICATION OF
NOTES; FORM AND MAXIMUM AGGREGATE PRINCIPAL AMOUNT; PAYMENT OF INTEREST AND
PRINCIPAL; NOTICE AND CALCULATION OF TREASURY RATE, MAKE WHOLE PREMIUM AMOUNT.
(a) The Notes shall be executed on behalf of the Owner Trustee by manual
signature by one of its Vice Presidents, Assistant Vice Presidents, Trust
Officers or Corporate Trust Officers. Notes bearing the signatures of
individuals who were at any time the proper officers of the Owner Trustee shall
bind the Owner Trustee, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Notes. The Owner Trustee may from time to time execute and deliver Notes
to the Indenture Trustee for authentication upon original issue and such Notes
shall thereupon be authenticated and delivered by the Indenture Trustee upon
the written request of the Owner Trustee signed by an authorized officer. Each
Note issued
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<PAGE> 23
hereunder shall be dated the date of its issuance. No Note shall be secured by
or be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Note a certificate of
authentication in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized offices, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
(b) All Notes shall be issued in fully registered form only,
without coupons, and shall be in the form provided for in Section 2.01 hereof.
All Notes shall be issued in denominations of $1,000,000 (of original principal
amount) or any amount in excess of $1,000,000 which is an integral multiple of
$1,000,000 (except as may be necessary to evidence the entire principal amount
of any Note issued and outstanding hereunder). The maximum aggregate principal
amount of Notes that may be issued hereunder, if so limited, is specified in
Indenture Supplement No. 1 or the request for authorization delivered by the
Owner Trustee with respect thereto.
(c) The principal amount of each Note issued hereunder shall
be due and payable, in installments or as otherwise provided in the form
thereof, on each Principal Payment Date in accordance with the terms thereof;
provided, however, that the final principal installment payment on each Note on
the stated maturity thereof shall in any and all events equal the then
outstanding balance thereof.
(d) Each Note issued hereunder shall bear interest at the
Applicable Rate for such Note on the unpaid principal amount thereof from time
to time outstanding from and including the date of issuance thereof to but not
including the date such principal amount is paid in full. Accrued interest on
each such Note shall be payable in arrears on each Interest Payment Date, on
the date such Note is paid in full and otherwise in accordance with the terms
hereof or thereof. Interest on the Notes shall be calculated on the basis of a
year of 360 days of twelve months of 30 days each.
(e) The Indenture Trustee shall, promptly after the date it
receives notice of an event that could give rise to a redemption of the Notes
and payment of Make Whole Premium Amount (and in any event within two Business
Days after such date), direct the Independent Investment Banker to (i)
determine, to the extent applicable, the Treasury Rate and the Make Whole
Premium Amount, and (ii) deliver written notice of such determinations to the
Owner Participant, the Owner Trustee and the Lessee immediately after each such
determination is made.
SECTION 2.04. TAXES; WITHHOLDING. The Indenture Trustee
shall exclude and withhold from each distribution of principal, premium, if
any, and interest and other amounts due hereunder or under the Notes any and
all withholding taxes
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<PAGE> 24
applicable thereto under Applicable Law. The Indenture Trustee agrees (i) to
act as withholding agent in respect of such amounts and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Holders, (ii) that it will file any necessary
withholding tax returns or statements when due and (iii) that, as promptly as
possible after the payment of such amounts, it will deliver to each Holder
appropriate documentation showing the payment of such amounts, together with
such additional documentary evidence as such Holders may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
reports with respect to the foregoing as it may be required to file under
United States law. For all purposes hereof and of the other Transaction
Documents, any amounts withheld by the Indenture Trustee from a payment due to
a Holder hereunder or under its Note pursuant to this Section 2.04 shall be
deemed to have been received by such Holder, and such Holder hall not be
entitled to receive any amount in respect of such withholding from any party to
the Transaction Documents.
SECTION 2.05. PAYMENTS FROM INDENTURE ESTATE ONLY. All
payments of principal and interest and other amounts to be made by the Owner
Trustee under the Notes and under this Indenture shall be made only from the
revenues and the proceeds of the Indenture Estate. Each Holder of a Note, by
its acceptance of such Note, agrees that it will look solely to the revenues
and proceeds of the Indenture Estate to the extent available for distribution
to it as herein provided and that none of the Owner Participant, the Lessee,
the Owner Trustee or the Indenture Trustee is personally liable to it for any
amounts payable under this Indenture or such Note or for any liability under
this Indenture, except, in the case of the Owner Trustee or the Indenture
Trustee, as expressly provided herein or therein or in the Participation
Agreement.
The Indenture Trustee and each Holder, by its acceptance of a
Note, hereby irrevocably agrees, (i) to the maximum extent permitted by law,
that, in any case in which any Person (other than the Lessee alone) is the
debtor or one of the debtors under the Federal Bankruptcy Act, each of the
Indenture Trustee and the Holders shall be deemed to have made a timely
election pursuant to Section 1111(b)(1)(A)(i) of the Federal Bankruptcy Act (or
any substantially comparable provision which is the successor thereto) as to
the Indenture Estate (which is acknowledged and agreed not to include Excepted
Payments) and (ii) if (A) the Trust Estate, the Owner Participant or the Trust
becomes a debtor subject to the reorganization provisions of the Federal
Bankruptcy Act or any successor provisions or any other applicable bankruptcy
or insolvency statutes, (B) pursuant to such provisions, the Owner Participant
is held to have recourse liability to the Indenture Trustee or the Holder of
any Note directly or indirectly on account of any amount
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<PAGE> 25
payable under the Indenture, and (C) the Indenture Trustee actually receives
any payment which reflects any payment by the Owner Participant on account of
the matters referred to in clause (ii)(B) of this sentence, then the Indenture
Trustee shall promptly refund to the Owner Participant the Recourse Amount,
unless such Recourse Amount has theretofore been distributed to the Holders or
otherwise applied as herein provided. For purposes of this Section 2.05,
"Recourse Amount" means the amount by which the portion of such payment by the
Owner Participant on account of the matters referred to in clause (ii)(B) of
the preceding sentence actually received by the Indenture Trustee exceeds the
amount which would have been received by the Indenture Trustee if the Owner
Participant had not become subject to the recourse liability referred to in
such clause (ii)(B).
SECTION 2.06. METHOD OF PAYMENT. Principal and interest and
other amounts due hereunder or under the Notes shall be payable in Dollars in
immediately available funds prior to 1:00 P.M., New York City time, on the due
date thereof, to the Indenture Trustee at the Indenture Trustee's Office. The
Indenture Trustee shall promptly remit (by wire transfer of immediately
available funds), prior to 3:00 p.m., New York City time, on the date such
amounts are received, all such amounts to such account or accounts of the
Holders in whose name the outstanding Notes are registered at the close of
business on the Record Date for payment, at such financial institution or
institutions and to such account or accounts as such Holders shall have
designated to the Indenture Trustee in writing; provided that if the payment is
received by the Indenture Trustee after 2:00 P.M., New York City time, the
Indenture Trustee shall make payment promptly, but not later than the next
Business Day following the due date thereof. All payments required to be made
to the Owner Trustee hereunder shall be made in immediately available funds to
the Owner Trustee at its address set forth in the Participation Agreement or
such other address as the Owner Trustee may advise the Indenture Trustee in
writing. All such payments to the Owner Trustee shall be remitted by the
Indenture Trustee prior to 3:00 p.m., New York City time, on the date the
corresponding payment is received by the Indenture Trustee; provided that if
the payment is received by the Indenture Trustee after 2:00 p.m., New York City
time, the Indenture Trustee shall make payment promptly, but not later than the
next Business Day following the date such funds are received. If any sum
payable hereunder or under a Note falls due on a day which is not a Business
Day, then such sum shall be payable on the next succeeding Business Day, and no
interest shall accrue for the intervening period. Prior to the due presentment
for, and due registration of transfer of any Note as provided in Section 2.09
hereof, the Owner Trustee, the Lessee and the Indenture Trustee may and shall
deem and treat the person in whose name any Note is registered on the Note
Register as the absolute owner and Holder of such Note for the purpose of
receiving payment of all amounts payable with respect to such Note and for all
other purposes hereunder and otherwise in respect hereof, whether or not such
Note or any
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<PAGE> 26
amount payable thereunder is overdue, and none of the Owner Trustee, the
Indenture Trustee nor the Lessee shall be affected by any notice to the
contrary.
SECTION 2.07. APPLICATION OF PAYMENTS. Each payment of
principal and interest or other amounts due on or in respect of each Note shall
be applied, first, to the payment of interest on such Note due and payable to
the date of such payment, as in such Note provided, second, to the payment of
the principal of such Note then due, and third, to the payment of premium, if
any, due in respect of such Note.
SECTION 2.08. TERMINATION OF INTEREST IN INDENTURE ESTATE. A
Holder of a Note shall not, as such, have any further interest in, or other
right with respect to, the Indenture Estate when and if the principal amount of
and premium, if any, and interest on and other amounts due under all Notes held
by such Holder and all other sums payable to such Holder hereunder and under
the Participation Agreement shall have been paid in full.
SECTION 2.09. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES.
The Indenture Trustee agrees with the Owner Trustee that the Indenture Trustee
shall keep a register (herein sometimes referred to as the Note Register) in
which provisions shall be made for the registration of Notes and the
registration of transfers of Notes. The Note Register shall be kept at the
Indenture Trustee's Office, and the Indenture Trustee is hereby appointed Note
Registrar for the purpose of registering Notes and transfers of Notes as
provided herein. The Note Register shall be maintained in accordance with the
requirements of Section 163(f) of the Code and any successor provision thereto.
Upon surrender for registration of transfer of any Note at the Indenture
Trustee's Office, the Owner Trustee shall, to the extent such transfer has been
effected in accordance with the terms and provisions hereof and of the
Transaction Documents, execute and deliver in the name of the transferee or
transferees designated by the transferor in writing, one or more new Notes of
the same series and of a like aggregate principal amount bearing interest at
the same rate for such series of Notes being transferred. Each new Note
issued upon surrender of any Note for transfer or exchange shall be, unless
otherwise provided in the Indenture Supplement related to such Note, in the
aggregate outstanding principal amount of the Note being transferred or
exchanged and in an original principal amount of $1,000,000 or any amount in
excess of $1,000,000 which is an integral multiple of $1,000,000 (except as may
be necessary to evidence the entire principal amount of any Note issued and
outstanding hereunder) and dated the date to which interest shall have been
paid with respect to such surrendered Note or, if no such interest shall have
been paid, the date of original issuance of such surrendered Note. Subject to
the provisions hereof, whenever any Notes are so surrendered for exchange, the
Owner Trustee shall execute and the Indenture Trustee shall authenticate and
deliver, the Notes which the Holder making the
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<PAGE> 27
exchange is entitled to receive. All Notes issued upon any registration of
transfer or exchange of Notes shall be the valid obligations of the Owner
Trustee evidencing the same respective obligations, and entitled to the same
security and benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
In addition to the foregoing, every Note presented or
surrendered for registration of transfer or exchange in accordance with the
terms hereof shall be accompanied by a written representation and agreement of
the proposed transferee thereof to and for the benefit of the Lessee, the Owner
Participant, the Owner Trustee and the Indenture Trustee (which representation
and agreement shall, except as expressly provided in clause (y) hereof, be in
form and substance satisfactory to each such Person), (x) to the effect that
such transfer will not violate Section 2.02B(b) hereof and that the
representation therein set forth is true and correct as of the date of transfer
or (y) in the event that the Lessee shall elect, to such effect with respect to
compliance with the applicable provisions of ERISA and the Code as are
reasonably acceptable to the Lessee and the Owner Participant.
The transferor shall make a notation on the old, and the
Indenture Trustee shall make a notation on the new, Note or Notes of the amount
of all payments of principal previously made on or in respect of the old Note
or Notes with respect to which such new Note or Notes are issued and the date
to which interest on such old Note or Notes has been paid. The Indenture
Trustee shall not be required to accept for transfer or exchange any
surrendered Note as above provided during the twenty-day period preceding the
due date of any payment on such Note, during the fifteen-day period next
preceding the mailing of a notice of redemption of any Notes of the same series
and maturity or after notice calling such Note or portion thereof for
redemption has been mailed. The Owner Trustee, the Indenture Trustee and the
Lessee may and shall deem and treat the Person in whose name each Note is
registered on the Note Register as the Holder thereof for all purposes
hereunder until due presentment for and due registration of transfer as
provided in this Section 2.09.
SECTION 2.10. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If
each of the Indenture Trustee and the Owner Trustee shall receive to its
satisfaction evidence that any Note shall have become destroyed, lost or
stolen, or if any mutilated Note is surrendered to the Owner Trustee (with a
copy to the Indenture Trustee), the Owner Trustee shall, upon the written
request of the Holder of such Note and instruction of the Indenture Trustee,
and subject to the matters set forth in the next succeeding sentence, execute
and deliver in replacement thereof a new Note of the same series, payable to
the same Person in the same principal amount, dated the date of such Note and
designated as issued under this Indenture. No Note shall be executed and
delivered under this Section 2.10 (i) if the Owner Trustee or the Indenture
Trustee shall have
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<PAGE> 28
notice that the Note in respect of which the same is being replaced has been
acquired by a bona fide purchaser or (ii) unless the Holder of such Note shall
furnish to the Lessee, the Owner Trustee and the Indenture Trustee such
security or indemnity as may be required by each of them to save the Lessee,
the Owner Trustee and the Indenture Trustee harmless in consequence thereof,
together with evidence satisfactory to the Lessee, the Owner Trustee and the
Indenture Trustee of the destruction, loss, mutilation or theft of such Note
and the ownership thereof. Any Note executed and delivered pursuant to this
Section 2.10 shall constitute conclusive evidence of the Owner Trustee's
obligations in respect thereof, as if originally issued, whether or not the
lost, stolen or destroyed Note shall at any time be found.
SECTION 2.11. PAYMENT OF EXPENSES ON TRANSFER. Upon the
issuance of a new Note or Notes pursuant to Section 2.09 or 2.10 hereof, the
Lessee, the Owner Trustee and/or the Indenture Trustee shall require from the
party requesting such new Note or Notes payment of a sum sufficient 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 in connection
therewith or any charges and expenses connected with such tax or other
governmental charge paid or payable in connection therewith, and such issuance
of a new Note or Notes shall otherwise be without cost to the Person or Persons
requesting or receiving the same.
SECTION 2.12. OPTIONAL REDEMPTION UPON EVENT OF DEFAULT. If
an Indenture Event of Default which is also a Event of Default shall have
occurred and be continuing, the Owner Trustee may elect to cause a redemption
of all, but not less than all, of the Notes then Outstanding by delivering to
the Indenture Trustee an Optional Redemption Notice. Upon receipt of such an
Optional Redemption Notice, the Indenture Trustee shall promptly give notice to
each Holder that all Notes Outstanding will be redeemed in whole on a date
selected by the Indenture Trustee (for purposes of a redemption pursuant to
this Section 2.12, the Redemption Date in respect thereof) and specified in
such notice, which shall be not less than 30 nor more than 45 days subsequent
to the date of receipt by the Indenture Trustee of the Owner Trustee's Optional
Redemption Notice; provided, however, that, so long as any Note is held by the
Pass Through Trustee, such date shall be the first Regular Distribution Date
subsequent to the date of receipt by the Holders of notice thereof which would
permit the Pass Through Trustee to give at least 20 days prior notice of the
corresponding distribution. The Redemption Price with respect to a redemption
under this Section 2.12 shall be equal to the aggregate principal amount of the
Notes Outstanding on the Redemption Date, together with interest accrued and
unpaid thereon to, but not including, the Redemption Date, without premium or
other prepayment penalty of any kind if the Indenture Trustee has given the
Owner Trustee notice of its intent to accelerate the Notes as required by
Section 4.03(a) but otherwise together with the
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<PAGE> 29
Make Whole Premium Amount. The Owner Trustee shall pay or cause to be paid to
the Indenture Trustee the Redemption Price on or prior to the Redemption Date.
SECTION 2.13. MANDATORY REDEMPTION IN WHOLE. (a) All Notes
Outstanding shall be redeemed in full, on the dates hereinafter set forth or
referred to, in each of the following circumstances:
(i) In connection with the occurrence of an Event of Loss
with respect to the Facility if the Lessee is required to purchase the
Undivided Interest in accordance with Section 9(b) of the Lease;
(ii) In connection with the sale of the Undivided Interest on
the Termination Date as a result of Lessee's exercise of its early
termination rights contained in Section 15 of the Lease;
(iii) In connection with the Lessee's exercise of its Early
Purchase Option as provided in Section 14(1) of the Lease; and
(iv) In connection with Lessee's election to terminate the
Lease and purchase the Facility in accordance with the second sentence
of Section 8(h) of the Lease.
Following receipt by the Indenture Trustee of notice of the
applicable redemption in the manner prescribed by the Lease, the Indenture
Trustee shall promptly give notice to each Holder that all Notes Outstanding
hereunder will be redeemed on the applicable Redemption Date, determined as
provided in the second succeeding sentence. Failure by the Indenture Trustee
to receive any notice or to give to each Holder a notice shall not, if all
conditions to the relevant redemption set forth in the Transaction Documents
have otherwise been satisfied, render the Notes not subject to redemption, and
if all such other conditions have been satisfied, the Notes shall be redeemed
and the Indenture Trustee shall take the actions specified in Section 9.01
hereof on the applicable Redemption Date with respect to the release of the
Lien of this Indenture and the Deed of Trust. For purposes of any redemption
contemplated by this Section 2.13, (x) the Redemption Date shall be (I) in the
case of a redemption contemplated by clause (i), the Rent Payment Date on which
Stipulated Loss Value is payable under Section 9(b) of the Lease, (II) in the
case of a redemption contemplated by clause (ii), the Termination Date, (III)
in the case of a redemption due to the Lessee's exercise of its Early Purchase
Option, the Early Buy-Out Date or (IV) in the case of a redemption contemplated
by clause (iv), the date specified in such redemption notice and (y) the
Redemption Price shall be equal to the sum of (A) the aggregate principal
amount of the Notes outstanding on the applicable Redemption Date, together
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with interest accrued and unpaid thereon to, but not including, such Redemption
Date and (B) unless otherwise provided pursuant to the provisions of the Notes
outstanding, in the case of a redemption of the type contemplated by clause
(ii) or (iv) of the first sentence of this Section 2.13 which occurs prior to
the Early Buy-Out Date, the Make Whole Premium Amount determined as at the
applicable Redemption Date, but without premium or other prepayment penalty of
any kind in the case of a redemption of the type contemplated by clause (i) or
(iii) of this Section 2.13 or any other redemption occurring on or after the
Early Buy-Out Date.
(b) Notwithstanding any provision hereof or of any other
Transaction Document to the contrary, in the event that for any reason the
Lease is not terminated in the manner contemplated by clauses (i), (iii) and
(iv) of paragraph (a) of this Section 2.13 on the date provided for in the
Lease, the Notes outstanding hereunder shall not be redeemed and no Indenture
Default or Indenture Event of Default shall occur as a result of such
redemption failing to occur.
SECTION 2.14. OPTIONAL REDEMPTION RELATING TO A REFUNDING.
(a) Subject to the provisions of paragraph (b) of this Section 2.14, all Notes
outstanding hereunder shall be redeemed, in whole but not in part, in
connection with a refunding contemplated by Section 14 of the Participation
Agreement. In accordance with the terms of the Refunding Agreement entered
into with respect to such a refinancing, the Indenture Trustee shall give
notice to each Holder that all Notes outstanding hereunder will be redeemed in
whole on the Refunding Date (for purposes of this Section 2.14, the Redemption
Date). The Redemption Price with respect to any redemption contemplated by
this Section 2.14 shall be in an amount equal to the aggregate principal amount
of the Notes outstanding hereunder on the Redemption Date, together with
interest accrued and unpaid thereon to, but not including, the applicable
Redemption Date, together with, unless such Redemption Date occurs on or after
the Early Buy-Out Date or unless otherwise provided in the form of Notes
outstanding, the Make Whole Premium Amount determined as of such Redemption
Date.
(b) Notwithstanding any provision hereof or of any other
Transaction Document to the contrary, in the event that a refunding transaction
of the type referred to in paragraph (a) of this Section 2.14 shall not for any
reason be consummated, the Notes outstanding hereunder shall not be redeemed,
and no Indenture Default or Indenture Event of Default shall occur as a result
of such a transaction not being so consummated.
SECTION 2.15. SUPPLEMENTAL FINANCING NOTES. (a) The Owner
Trustee and the Indenture Trustee shall, at the request of the Lessee, at any
time and from time to time, so long as no Indenture Event of Default that
constitutes an Event
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of Default has occurred and is continuing and subject to the conditions and
restrictions contained in this Indenture (including, without limitation, this
Section 2.15 and Section 8.01 hereof) and Section 8(g) of the Lease, except
that the provisions of clauses (1), (5) and (6) of the proviso to the fourth
sentence of such Section 8(g) may be waived by the Owner Trustee, execute and
deliver an Indenture Supplement providing for the creation of Supplemental
Financing Notes in connection with any Supplemental Financing of any
Modification and subjecting such Modification to the Lien of this Indenture and
of the Deed of Trust. Such Indenture Supplement shall set forth:
(1) the maximum principal amount of such Supplemental
Financing Notes;
(2) the text of such Supplemental Financing Notes (which,
except for the terms of payment thereof, shall be of substantially the
same tenor and effect as the text of the Notes then outstanding set
forth in this Indenture, with such changes as are consistent with and
permitted by this Indenture);
(3) the date of maturity of such Supplemental Financing Notes
(which shall not be later than the date of expiration of the Basic
Lease Term);
(4) the rate of interest on such Supplemental Financing Notes
and the date from which, and the date or dates on which, interest is
payable (which shall be Interest Payment Dates);
(5) the terms for the repayment of the principal amount of
such Supplemental Financing Notes (each regularly scheduled payment of
principal to occur on a Principal Payment Date or Interest Payment
Date);
(6) the terms, if any, as to prepayment or redemption of such
Supplemental Financing Notes at the option of the Owner Trustee, and
as to the premium, if any, payable on any redemption or prepayment of
such Supplemental Financing Notes;
(7) any other particulars necessary to describe and define
such Supplemental Financing Notes within the terms and limitations of
this Indenture and of all other Notes then outstanding; and
(8) any other terms and agreements in respect thereof
provided or permitted by this Indenture or necessary to specify the
terms and conditions on which such Supplemental Financing Notes shall
be issued.
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(b) Notwithstanding any other provision set forth in this
Section 2.15, no Supplemental Financing Notes may be issued without the consent
of a Majority in Interest of Holders of the Notes if (i) the Weighted Average
Life to Maturity of such Supplemental Financing Notes as of the date of
issuance of such Supplemental Financing Notes would be shorter than that of the
Notes then outstanding; (ii) such Supplemental Financing Notes would be issued
for an amount less than 100% of face amount thereof; (iii) such Supplemental
Financing Notes would benefit from collateral security, guarantees, indemnity
rights or other support or rights in excess of, or greater than, that securing,
supporting or applicable to the Notes then outstanding; or (iv) the conditions
set forth in paragraph (e) of this Section 2.15 have not been satisfied.
(c) At any time or from time to time after the execution and
delivery by the Owner Trustee of an Indenture Supplement creating Supplemental
Financing Notes in accordance with Section 2.15(a) hereof, the Owner Trustee
may execute and deliver to the Indenture Trustee such Supplemental Financing
Notes in an aggregate principal amount not exceeding the amount which is
permitted by such Indenture Supplement, and the Indenture Trustee shall
authenticate and deliver such Notes to or upon the written order of the Owner
Trustee after (i) compliance by the Owner Trustee with this Section 2.15, (ii)
receipt by the Indenture Trustee of an amount in cash equal to 100% of the
aggregate principal amount of such Supplemental Financing Notes and (iii)
receipt by the Indenture Trustee of the documents referred to below:
(1) A Lease Supplement, duly authorized, executed and
delivered by the Lessee and the Owner Trustee, providing for
adjustments in Rent, Stipulated Loss Value, Termination Value and (if
applicable) the Early Buy-Out Price under the Lease required to ensure
that payments of such amounts will be adequate to provide for payments
required hereunder and under the Notes, after giving effect to the
issuance of such Supplemental Financing Notes, together with such
instruments of conveyance, assignment and transfer, if any, reasonably
necessary to subject such Lease Supplement to the Lien of this
Indenture and of the Deed of Trust and to perfect such Lien 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;
(2) 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 to the Owner Trustee all
property included in such Modification and to subject such property to
the Lien of this Indenture and of the Deed of Trust, subject to no
Liens other than Permitted Liens;
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(3) originals or certified copies of all Governmental Actions
(if any) necessary for the due and valid issue of such Supplemental
Financing Notes, the due and valid authorization, execution, delivery
and performance by the Owner Trustee of the Indenture Supplement
relating thereto, and the due and valid authorization, execution,
delivery and performance by the Lessee and the Owner Trustee of the
Lease Supplement and the creation of the Lien referred to above, all
of which Governmental Actions shall have been duly obtained and shall
be in full force and effect;
(4) documentation, duly executed and delivered by the
respective parties thereto whereby the proposed Holder of the
Supplemental Financing Notes agrees to be bound by the terms of the
Transaction Documents; and
(5) legal opinions covering the matters referred to above and
opining as to the continued priority of the Lien of this Indenture and
of the Deed of Trust in and to the Indenture Estate, subject only to
Permitted Liens.
(d) The Indenture Trustee may release the cash proceeds
received by it from the issuance of Supplemental Financing Notes pursuant to
Section 2.15(c) hereof to provide funds to pay the costs of or to reimburse one
or more Persons for the payment of the Lessor's Share of the costs of the
relevant Modification, in an amount not exceeding the Fair Market Value of such
Modification, as certified to by an Officers' Certificate of the Lessee (which
Certificate shall be delivered to the Owner Trustee and the Indenture Trustee).
Such Officers' Certificate shall also state (w) that construction of such
Modification has been substantially completed in good and workmanlike manner in
conformity with good construction and engineering practice; (x) that such
construction has been completed in accordance with, and the operation of such
Modification as then constructed will not violate, any Applicable Law (other
than immaterial violations that, in any case or in the aggregate, (i) do not
prevent or interfere with the continued satisfactory operation of such
Modification or the Facility as a whole or (ii) will not result in the
imposition of penalties on the Owner Trustee, the Indenture Trustee or any
Holder of a Note); (y) that such Modification has been reasonably tested to
establish that such Modification is capable of performing its intended
function, and that such testing has not given the Lessee any reason to believe
that such Modification will fail to perform such intended function and (z) that
the installation and operation of such Modification will not adversely affect
in any material respect the value of the Facility or the Undivided Interest,
except insofar as any such adverse impact results from a Required Modification.
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(e) Prior to any issuance of Supplemental Financing Notes
hereunder, each of the conditions contained in Section 8(g) of the Lease (other
than clauses (1), (5) and (6) of the proviso to the fourth sentence thereof)
shall have been satisfied.
(f) Notwithstanding any provision hereof or in the
Transaction Documents to the contrary, if the conditions to issuance of
Supplemental Financing Notes hereinabove referred to in this Section 2.15 are
satisfied, no consent to such issuance shall be required from any Holder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
THE TRUST INDENTURE ESTATE
SECTION 3.01. APPLICATION OF CERTAIN PAYMENTS OF RENT. Each
amount of Interim Rent, Basic Rent and Supplemental Rent payable under Section
3(b)(3) of the Lease with respect to overdue payments of Basic Rent received by
the Indenture Trustee from the Owner Trustee or the Lessee, together with any
amount received by the Indenture Trustee pursuant to Section 4.02 hereof,
shall, except as otherwise provided in Section 3.02, 3.03 or 3.04, be
distributed by the Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required
to pay in full the principal of, premium, if any, and interest then
due on all outstanding Notes shall be distributed to the Persons
entitled thereto; and
second, the balance, if any, of such aggregate amount
remaining thereafter shall be distributed to the Owner Trustee for
distribution by it pursuant to the Trust Agreement.
SECTION 3.02. EVENT OF LOSS, TERMINATION, REFUNDING, PURCHASE
ON EARLY BUY-OUT DATE, ETC. (a) Except as otherwise provided in Section
3.03(a) or 3.04 hereof, but subject to the provisions of Section 9.01 hereof,
the aggregate amount of the payment or payments received by the Indenture
Trustee at any time on or prior to the applicable Redemption Date in respect of
a redemption contemplated by Sections 2.12 (prior to acceleration of the
Notes), 2.13 or Section 2.14 hereof shall be distributed or applied by the
Indenture Trustee in the following order of priority:
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first, so much thereof as shall be required to pay the
Indenture Trustee and the Pass Through Trustee all amounts then due
and payable to each of them under the Transaction Documents shall be
applied to pay the Indenture Trustee and the Pass Through Trustee such
amounts;
second, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price in respect of a redemption to
occur on the applicable Redemption Date, shall be held by the
Indenture Trustee as part of the Indenture Estate until applied to the
redemption of the Notes on such Redemption Date as provided in Section
3.02(b); and
third, the balance thereof, if any, remaining thereafter shall
be distributed to the Owner Trustee for distribution by it pursuant to
the Trust Agreement.
(b) Except as otherwise provided in Sections 3.03(a) and 3.04
hereof, but subject to the provisions of Section 9.01 hereof, in the event the
Notes are redeemed in accordance with the provisions of Sections 2.12 (prior to
acceleration), 2.13 or 2.14 hereof, the Indenture Trustee will apply on the
applicable Redemption Date any amounts then held by it in the Indenture Estate
and received by it from or on behalf of the Owner Trustee, including, without
limitation, any amounts held by the Indenture Trustee pursuant to clause second
of paragraph (a) of Section 3.02 hereof in the following order of priority:
first, so much thereof as shall be required to pay the
Redemption Price of the outstanding Notes pursuant to Sections 2.13 or
2.14 hereof, as the case may be, on such Redemption Date shall be
applied to pay such amounts and to the redemption of the Notes on such
Redemption Date; and
second, the balance, if any, thereof remaining shall be
distributed to the Owner Trustee for distribution by it pursuant to
the Trust Agreement, provided that in the event of a redemption
referred to in Section 2.13(i) and 2.13(ii), the balance shall be paid
to the Lessee and Lessor, as the case may be, in accordance with
Sections 9(d) and 15, respectively, of the Lease.
SECTION 3.03. PAYMENT AFTER ACCELERATION OF THE NOTES. (a)
Except as otherwise provided in Sections 3.04(b), 3.04(c) and 3.04(d) hereof,
all payments received and amounts held or realized (including as a consequence
of the exercise of remedies) by the Indenture Trustee after the Notes have been
accelerated pursuant to Section 4.03(a) and so long as such acceleration has
not been rescinded as provided therein, as well as all payments or amounts then
held by the Indenture Trustee as part
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of the Indenture Estate, shall be promptly distributed by the Indenture Trustee
in the following order of priority:
first, so much of such payments or amounts as shall be
required to reimburse the Indenture Trustee and the Pass Through
Trustee for any Tax, Claim, expense, charge or other loss (including,
without limitation, all amounts to be expended at the expense of, or
charged upon the tolls, rents, revenues, issues, products and profits
of, the property included in the Indenture Estate pursuant to Section
4.04(b) hereof) incurred by the Indenture Trustee and the Pass Through
Trustee (to the extent not previously reimbursed) (including, without
limitation, the expenses of any sale, taking or other proceeding,
reasonable attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by the
Indenture Trustee and the Pass Through Trustee in the protection,
exercise or enforcement of any right, power or remedy or any damages
sustained by the Indenture Trustee and the Pass Through Trustee,
liquidated or otherwise, upon such Indenture Event of Default) shall
be applied by the Indenture Trustee in reimbursement of such expenses;
second, so much of such payments or amounts remaining as shall
be required to reimburse the then existing or prior Holders of the
Notes for payments made pursuant to Section 5.03 hereof (to the extent
not previously reimbursed) shall be distributed to the then existing
holders of the Notes ratably, without priority of one or any other, in
accordance with the amount of the payment or payments made by each
such then existing or prior Holder pursuant to said Section 5.03 and
applicable (in the case of each such then existing Holder of a Note)
as provided in said Section 5.03 to the Notes held by such existing
Holder at the time of distribution by the Indenture Trustee;
third, so much of such payments or amounts as shall be
required to pay in full all amounts then due in respect of principal
of, premium, if any, and interest on the Notes and all other amounts
then due and payable in respect of the Notes, shall be distributed to
the Holders of the Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then,
ratably, without priority of one over the other, in the proportion
that the aggregate unpaid principal amount of all Notes held by each
such Holder, and accrued but unpaid interest thereon to the date of
distribution, bears to the aggregate unpaid principal amount of all
Notes and accrued but unpaid interest thereon to the date of
distribution and all other amounts due hereunder and thereunder;
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fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner Trustee for
distribution by it in accordance with the provisions of the Trust
Agreement.
(b) Subject to Sections 3.02, 3.03(a) and 3.04(b), (c) and
(d), if, at the time of receipt by the Indenture Trustee of any installment of
Basic Rent (whether or not then overdue) or Supplemental Rent, there shall have
occurred and be continuing an Indenture Event of Default, then the Indenture
Trustee may retain such payments (to the extent the Indenture Trustee is not
then required to distribute such amount pursuant to clause "first" of Section
3.01) as part of the Indenture Estate and not otherwise distribute any such
payments until the earliest of (i) the first Business Day occurring more than
180 days following (a) in the case of an Indenture Event of Default under
Section 4.01(b), the date of the occurrence of such Indenture Event of Default
(after giving effect to the grace period set forth in Section 4.01(b)), and (b)
in the case of any other Indenture Event of Default, the date on which the
Indenture Trustee shall have received notice of such Indenture Event of Default
(after giving effect to any applicable grace period), (ii) such time as the
Notes shall have been declared, or shall have become, due and payable pursuant
to Section 4.03, and (iii) such time as such Indenture Event of Default shall
no longer be continuing or have been cured or waived; provided, however, that
following an Indenture Event of Default and the lapse of 180 days during which
period the Indenture Trustee failed to accelerate the Notes, such Indenture
Event of Default shall not thereafter be the basis of a retention of any Basic
Rent or Supplemental Rent payment hereunder.
SECTION 3.04. CERTAIN PAYMENTS. (a) Except as otherwise
provided in this Indenture (including, Section 3.03(b)), any payments received
by the Indenture Trustee for which provision as to the application thereof is
made in the Lease, the Participation Agreement or any Transaction Document
shall be applied forthwith to the purpose for which such payment was made in
accordance with the terms of the Lease or the Participation Agreement, as the
case may be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from the Lessee in respect of the
Indenture Trustee in its individual capacity or any Holder of a Note either
pursuant to Section 13 of the Participation Agreement or as Supplemental Rent,
directly to the Person entitled thereto.
(c) Notwithstanding anything to the contrary contained in
this Article III, (i) any property insurance proceeds received by the Indenture
Trustee in respect of Excepted Payments specified in clause (v) of the
definition of Excepted Payments shall
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be distributed promptly upon receipt by the Indenture Trustee directly to the
Person or Persons entitled thereto, and (ii) any amounts received by the
Indenture Trustee in respect of third party bodily injury or property damage
shall be promptly paid by the Indenture Trustee to the Person or Persons
entitled thereto.
(d) Notwithstanding any other provisions of this Indenture,
all Excepted Payments shall be paid over to the Person or Persons entitled
thereto.
SECTION 3.05. OTHER PAYMENTS. Any payments received by the
Indenture Trustee for which no provision as to the application thereof is made
in this Indenture shall be distributed by the Indenture Trustee (i) to the
extent received or realized at any time prior to the payment in full of all
obligations to the holders of the Notes secured by the Lien of this Indenture
or the Deed of Trust, first, in the manner as provided in clause "first" of
Section 3.03 hereof, second, in the manner provided in Section 3.01 hereof, and
(ii) to the extent received or realized at any time after payment in full of
all obligations to the holders of the Notes secured by the lien of this
Indenture or the Deed of Trust, in the following order of priority: first, in
the manner provided in clause "first" of Section 3.03 hereof, and second, in
the manner provided in clause "second" of Section 3.01 hereof.
SECTION 3.06. PAYMENTS TO OWNER TRUSTEE OR LESSEE. Any
amounts distributed hereunder by the Indenture Trustee to the Owner Trustee or
to the Lessee shall be paid to such Person by wire transfer of funds of the
type received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be specified in the Participation
Agreement or otherwise designated by notice to the Indenture Trustee from time
to time.
SECTION 3.07. INVESTMENT OF AMOUNTS HELD BY INDENTURE
TRUSTEE. Any monies (including, without limitation, the proceeds of the
maturity, sale or other disposition of any Permitted Investment) held by the
Indenture Trustee hereunder as part of the Indenture Estate or otherwise as
contemplated by the Transaction Documents, until paid out by the Indenture
Trustee as herein or therein provided, shall be invested and reinvested in
Permitted Investments and sold, in any case at such prices, including accrued
interest or its equivalent, as are set forth in a written direction of the
Lessee (acting as agent of the Owner Trustee); provided that, if an Event of
Default shall have occurred and be continuing, such investment, reinvestment
and sale shall be directed by the Indenture Trustee, and such Permitted
Investments shall be held by the Indenture Trustee in trust as part of the
Indenture Estate until so sold; provided, further, that the Lessee shall, so
long as no Event of Default shall have occurred and be continuing, be entitled
to receive from the Indenture Trustee, and the Indenture Trustee shall promptly
pay to the Lessee, any profit, income, interest, dividend or gain
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realized upon maturity, sale or other disposition of any Permitted Investment
(except to the extent that any of the foregoing are attributable to amounts
which would be distributable to the Owner Trustee hereunder or under the Lease,
which amounts, together with any such profit, income, interest, dividend or
gain thereon, shall, subject to the next succeeding sentence, be paid to the
Owner Trustee). If the Notes have been accelerated pursuant to Section 4.03(a)
and such acceleration has not been rescinded or if any Event of Default shall
have occurred and be continuing, any net income, profit, interest, dividend or
gain realized upon maturity, sale or other disposition of any Permitted
Investment shall be held as part of the Indenture Estate and shall be applied
by 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, profit, interest,
dividend or gain was realized are required to be distributed in accordance with
the provisions hereof or of the Transaction Documents pursuant to which such
amounts were required to be held. The Indenture Trustee shall not be
responsible for any losses on any investments or sales of Permitted Investments
made pursuant to the procedure specified in this Section 3.07, except as a
result of its wilful misconduct or gross negligence.
ARTICLE IV
INDENTURE EVENTS OF DEFAULT;
REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. 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 order,
rule or regulation of any administrative or governmental body):
(a) any Event of Default (other than in respect of any
Excepted Payment); or
(b) the failure of the Owner Trustee to pay any amount of
principal of, Make Whole Premium Amount, if any, or interest on any
Note within five Business Days after the same shall become due under
such Note; or
(c) any representation or warranty made by the Owner
Participant in the Participation Agreement or by any Person
guaranteeing the obligations of the Owner Participant under the
Transaction Documents in any applicable guarantee or similar agreement
or the Owner Trustee herein or in the Participation
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Agreement shall prove to have been false or incorrect in any material
respect when any such representation or warranty was made or given and
shall remain a misrepresentation or breach of warranty which is
material and adverse to the Holders of the Notes or to their interest
or interests in the Indenture Estate at the time at which such
misrepresentation or breach of warranty is brought or comes to the
attention of the Indenture Trustee; provided, however, that such
misrepresentation or breach of warranty shall not be an Indenture
Event of Default unless all consequences thereof shall not be cured
within 60 calendar days after written notice of such misrepresentation
or breach of warranty is given to the Owner Trustee and the Owner
Participant by the Indenture Trustee; or
(d) any failure by the Owner Trustee to observe or perform
any covenant or obligation of the Owner Trustee under Section 8(b) of
the Participation Agreement or any failure by the Owner Participant to
observe or perform any covenant or obligation of the Owner Participant
under Section 7(b) of the Participation Agreement which is to or for
the benefit of the Indenture Trustee or the Holder of any Note and is
not remedied within a period of 60 calendar days after notice thereof
has been given to the Owner Trustee and the Owner Participant by the
Indenture Trustee; provided that if such failure to comply cannot be
cured by the payment of money within such 60 day period, such failure
to comply shall not be an Indenture Event of Default hereunder so long
as the Owner Trustee or the Owner Participant, as the case may be, is
diligently pursuing the cure thereof (but such period may not exceed
360 days); or
(e) either the Trust Estate or the Owner Trustee with respect
thereto (and not in its individual capacity) shall (i) file, or
consent by answer or otherwise to the filing against it of a petition
for relief or reorganization or arrangement of any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, (ii) make an assignment for the
benefit of its creditors, (iii) consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers of
itself or of any substantial part of its property, or (iv) take
corporate or comparable action for the purpose of any of the
foregoing; or
(f) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Trust Estate or the Owner Trustee with respect thereto (and not in its
individual capacity), a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief
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or approving a petition for relief or reorganization or any other
petition in bankruptcy or of liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Trust Estate or the
Owner Trustee with respect thereto (and not in its individual
capacity), or if any petition for any such relief shall be filed
against the Trust Estate or the Owner Trustee with respect thereto
(and not in its individual capacity) and such petition shall not be
dismissed within 60 calendar days or the order shall be unstayed and
remain in effect of a period of 60 calendar days.
SECTION 4.02. CERTAIN RIGHTS. In the event of the occurrence
of any Event of Default which relates to a default by the Lessee in the payment
of any Interim or Basic Rent due under the Lease, the Owner Trustee (upon
instructions of the Owner Participant) may, at any time prior to the date which
is 15 Business Days after written notice of such Event of Default has been
provided by the Indenture Trustee to the Owner Trustee and the Owner
Participant, without the consent or concurrence of the Indenture Trustee or any
Holder of Notes, pay, as provided in Section 2.06 hereof, for application in
accordance with Section 3.01 hereof a sum equal to the amount of all (but not
less than all) principal and interest as shall then be due and payable on the
Notes. In the event of the occurrence of any Event of Default which relates to
a default by the Lessee in any obligation under the Lease other than the
payment of Interim or Basic Rent, the Owner Trustee (upon instructions of the
Owner Participant) may, at any time prior to the date which is 15 Business Days
after written notice of such Event of Default has been provided by the
Indenture Trustee to the Owner Trustee and the Owner Participant, without the
consent or concurrence of the Indenture Trustee or any Holder of any Note,
exercise the Lessor's rights under Section 20 of the Lease to perform such
obligation on behalf of the Lessee. Solely for the purpose of determining
whether there exists an Indenture Event of Default for purposes of this
Indenture, (a) any timely payment by the Owner Trustee pursuant to, and in
compliance with, the first sentence of this Section 4.02 shall be deemed to
remedy any default by the Lessee in the payment of Interim Rent or Basic Rent
theretofore due and payable and to remedy any default by the Owner Trustee in
the payment of any amount due and payable under the Notes or hereunder in
respect of such Interim Rent or Basic Rent, and (b) any timely performance by
the Owner Trustee of any obligation of the Lessee under the Lease pursuant to,
and in compliance with, the second sentence of this Section 4.02 shall be
deemed to remedy (but solely for the purposes of this Indenture) any Lease
Default to the same extent that like performance by the Lessee itself would
have remedied such Default (but the same shall not relieve the Lessee of its
duty to pay all Rent and perform all of its obligations pursuant to the Lease).
In such event the Owner Participant shall (to the extent of any such payments
made by the Owner Trustee) be subrogated to the rights of the Holders of the
Notes hereunder to receive the relevant
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payment of Interim Rent or Basic Rent from the Indenture Trustee, and the
payment of interest on account of such Rent being overdue, and shall be
entitled to receive such payment upon receipt thereof by the Indenture Trustee;
provided, that the Notes have not been accelerated pursuant to Section 4.03.
Notwithstanding the foregoing, this Section 4.02 shall not apply with respect
to any default in the payment of Interim Rent or Basic Rent due under the
Lease, if the Lessee itself shall have theretofore failed to pay Interim Rent
or Basic Rent in the manner required under the Lease on (i) each of the three
Rent Payment Dates immediately preceding the date of such default or (ii) a
total of six Rent Payment Dates. The Indenture Trustee shall not exercise any
remedies hereunder or under the Lease during any period in which the Owner
Trustee may cure a default by the Lessee under the Lease as provided in this
Section 4.02.
SECTION 4.03. REMEDIES. (a) If an Indenture Event of
Default shall have occurred and be continuing, then and in every such case
after the expiration of any applicable cure period provided for in Section 4.02
and, in the case of an Indenture Event of Default, which is also an Event of
Default, upon the giving of ten (but not more than thirty) Business Days prior
notice thereof to the Owner Trustee and the Owner Participant stating that it
is the intention of the Indenture Trustee or the Majority in Interest of the
Holders of the Notes to terminate the Lease, commence an action to dispossess
the Lessee from its leasehold estate in the Undivided Interest or exercise
comparable remedies under the Lease, the Indenture Trustee may at any time,
and, upon instructions from the Majority in Interest of the Holders of the
Notes, will, by written notice or notices to the Owner Trustee and the Owner
Participant, declare all the Notes to be due and payable, whereupon the unpaid
principal of all Notes then outstanding, together with accrued but unpaid
interest thereon and all other amounts due thereunder and hereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; provided that if prior to such
declaration the Owner Trustee delivers an Optional Redemption Notice exercising
its right to redeem the Notes under Section 2.12 of the Indenture, the
Indenture Trustee's right to declare all the Notes to be due and payable as
herein provided shall be suspended until the Redemption Date provided for in
Section 2.12. In the event that after an Event of Default the Owner Trustee
has declared the Lease to be in default and all amounts payable under Section
17(a)(3)(iii) of the Lease have been received by the Indenture Trustee, all of
the Notes will be deemed to have been declared due and payable. If at any time
after the principal of the Notes shall have been (or deemed to have been)
declared so due and payable, and before any judgment or decree for the payment
of the money so due, or any thereof, shall be entered, all overdue payments of
interest upon the Notes and all other amounts payable under the Notes (except
the principal of the 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,
then and
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in every case such a Majority in Interest of Holders of the Notes may (but
shall not be obligated to), by written instrument filed with the Indenture
Trustee, 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 or
require any holder to repay any amount received as a result of such
declaration.
(b) If the Notes have been accelerated as provided in Section
4.03(a) and so long as such acceleration is not rescinded, then and in every
such case the Indenture Trustee may, consistent with the provisions of this
Section 4.03(b), and without any requirement for prior notice to the Owner
Trustee or the Owner Participant of the Indenture Trustee's intent to exercise
any remedy provided for hereunder (except to the extent expressly provided for
herein), exercise any or all of the rights and powers and pursue any and all of
the remedies pursuant to this Article IV as well as those which are available
to a secured party under the Uniform Commercial Code, to a beneficiary under a
Deed of Trust or under other Applicable Law or in equity and, in the event
there then exists an Event of Default referred to in paragraph (a) of Section
4.01 hereof, any and all of the remedies pursuant to Section 17 of the Lease
and all of the rights and remedies of a lessor under Applicable Law and may
take possession of all or any part of the properties covered or intended to be
covered by the lien and security interest created hereby or pursuant hereto and
may, subject to the provisions of this Indenture, exclude the Owner Trustee and
all Persons claiming under any of them wholly or partly therefrom and sell,
assign or otherwise transfer all or any part thereof or interest therein, free
and clear of the interest of the Owner Trustee, at public or private auction,
with thirty calendar days' prior notice to the Owner Participant and the Owner
Trustee and at such prices and in such manner and on such terms as may be
deemed appropriate by the Indenture Trustee, or the Indenture Trustee may cause
foreclosure of the Deed of Trust by exercise of the power of sale or other
remedies available thereunder in accordance with Applicable Law. Without
limiting any of the foregoing, it is understood and agreed that the Indenture
Trustee may exercise any right of sale of the Undivided Interest available to
it, even though it shall not have taken possession of the Undivided Interest
and shall not have possession thereof at the time of such sale. The foregoing
provisions of this Section 4.03(b) are subject to the condition that, so long
as an Indenture Event of Default that has occurred and is continuing is an
Event of Default, the Indenture Trustee may not proceed to foreclose the Lien
of this Indenture or exercise any of its other remedies hereunder or under the
Deed of Trust, unless it shall (to the extent it has not already done so),
declare the Lease to be in default (it being understood and agreed that the
delivery by the Indenture Trustee of a notice of termination to the Lessee
under such Section 17 of the Lease will be sufficient for such purpose) and
commence the exercise of remedies under Section 17 thereof to terminate the
Lease, dispossess the Lessee of its leasehold estate in the
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Undivided Interest or take comparable action contemporaneously therewith (which
actions have not been stayed by any bankruptcy or similar proceedings with
respect to the Lessee).
(c) Any Holder of the Notes shall be entitled, at any sale
pursuant to Section 17(a) of the Lease or Section 4.03(b) hereof, to credit
against any purchase price bid at such sale by such Holder all or any part of
the unpaid obligations owing to such Holder and secured by the lien of this
Indenture.
SECTION 4.04. RETURN OF INDENTURE ESTATE. (a) After an
acceleration of the Notes as provided herein, at the request of the Indenture
Trustee the Owner Trustee shall promptly execute and deliver to the Indenture
Trustee such instruments of title and other documents as the Indenture Trustee
may deem necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any part of the property included in 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 and requiring the Owner Trustee to execute and deliver
such instruments and documents to the Indenture Trustee, and (ii) to the extent
permitted by Applicable Law, pursue all or part of such property wherever such
property may be or is supposed to be and search for such property and take
possession of and remove 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, from time to time, at the expense of the Indenture Estate, make
all such expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Indenture Estate, as it
may deem proper. In each such case, the Indenture Trustee shall have the right
to maintain, use, sell, transfer, operate, store, lease, control, manage or
dispose of the Indenture Estate and to carry on the business and to exercise
all rights and powers of the Owner Trustee relating to the Indenture Estate, as
the Indenture Trustee shall deem best, including the right to enter into any
and all such agreements with respect to the sale, transfer, maintenance,
insurance, use, operation, storage, leasing, control, management or disposition
of the Indenture Estate or any part thereof as the Indenture Trustee may
determine; and the Indenture Trustee shall be entitled to collect and receive
directly all tolls, rents (including Rent), revenues, issues, income, products
and profits of the Indenture Estate and every part thereof, except Excepted
Payments, without prejudice, however, to the right of the
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Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
hereunder. Such tolls, rents (including Rent), revenues, issues, income,
products and profits shall be applied to pay the expenses of the sale,
transfer, maintenance, insurance, use, operation, storage, leasing, control,
management or disposition of the Indenture Estate and of conducting the
business thereof, and of all maintenance, repairs, replacements, alterations,
additions and improvements, and to make all payments which the Indenture
Trustee may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Indenture Estate or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the properties and books and records of the Owner Trustee),
and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee, and of all
persons properly engaged and employed by the Indenture Trustee.
SECTION 4.05. REMEDIES CUMULATIVE. Each and every right,
power and remedy given to the Indenture Trustee specifically or otherwise in
this Indenture or in the Deed of Trust shall be cumulative and shall be in
addition to every other right, power and remedy herein given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Indenture Trustee in the exercise of any
right, remedy or power or in the pursuance of any remedy shall impair any such
right, power or remedy or be construed to be a waiver of any default on the
part of the Owner Trustee or the Lessee or to be an acquiescence therein.
SECTION 4.06. 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, exercise of the power of
sale under the Deed of Trust, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Indenture Trustee, then and in every such case the
Owner Trustee, the Indenture Trustee and the Lessee shall, subject to any
determination in such proceedings, be restored to their former positions and
rights hereunder with respect to the Indenture Estate, and all rights, remedies
and powers of the Indenture Trustee shall continue as if no such proceedings
had been instituted.
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SECTION 4.07. WAIVER OF PAST DEFAULTS. Upon written
instructions from a Majority in Interest of Holders of the Notes, the Indenture
Trustee shall waive any past default hereunder and its consequences and upon
any such waiver such default shall cease to exist and any Indenture Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon; provided, however, that the
Indenture Trustee shall not, in the absence of written instructions from the
holders of all Notes then outstanding, waive any default in the payment of the
principal of, premium, if any, or interest on, or other amounts due under, any
Notes then outstanding hereunder or in respect of a covenant or provision
hereof which, under Article IX hereof, cannot be modified or amended without
the consent of each Holder of a Note then outstanding.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
AND RIGHTS OF OWNER TRUSTEE
SECTION 5.01. NOTICE OF INDENTURE EVENT OF DEFAULT; CERTAIN
DUTIES AND RESPONSIBILITIES. In the event the Indenture Trustee shall have
knowledge of an Indenture Event of Default or an Indenture Default, the
Indenture Trustee shall give prompt written notice thereof to the Owner
Participant, the Lessee, the Holders and the Owner Trustee. Subject to the
terms of this Indenture, the Indenture Trustee shall take such action, or
refrain from taking such action, with respect to such Indenture Event of
Default or Indenture Default (including with respect to the exercise of any
rights or remedies hereunder) as the Indenture Trustee shall be instructed in
writing by the Majority in Interest of Holders of the Notes. Subject to the
provisions of Section 5.03 hereof, if the Indenture Trustee shall not have
received instructions as above provided, the Indenture Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking any such action, but
shall be under no duty to take or refrain from taking any action, with respect
to such Indenture Default or Indenture Event of Default as it shall determine
to be advisable and in the best interests of the Holders of the Notes. In the
event the Indenture Trustee shall at any time exercise any remedies pursuant to
Section 17 of the Lease or shall elect to foreclose or otherwise enforce this
Indenture, the Indenture Trustee shall forthwith notify the Owner Participant,
the Holders of the Notes, the Owner Trustee and the Lessee. For all purposes
of this Indenture, in the absence of actual knowledge on the part of an officer
in its Corporate Trust Services Division, the Indenture Trustee shall not be
deemed to have knowledge of an Indenture Event of Default or an Indenture
Default (except the failure of the Lessee to pay any installment
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of Interim Rent or Basic Rent under the Lease within one Business Day after the
same shall become due, shall constitute knowledge of an Indenture Event of
Default for purposes of the first sentence of this Section 5.01) unless
notified in writing by the Lessee, the Owner Trustee or one or more Holders of
Notes.
SECTION 5.02. ACTION UPON INSTRUCTIONS: DELIVERY OF WRITTEN
INSTRUCTIONS TO OWNER TRUSTEE. (a) Subject to the terms of Sections 4.07,
5.03 and 5.07 hereof, upon the written instructions at any time and from time
to time of a Majority in Interest of Holders of the Notes, the Indenture
Trustee shall take such of the following actions as may be specified in such
instructions: (i) exercise such election or option, or make such decision or
determination, or give such notice, consent, waiver or approval or exercise
such right, remedy or power or take such other action hereunder or under any
other Transaction Document or in respect of any part or all of the Indenture
Estate as shall be specified in such instructions and permitted under the
Transaction Documents and Applicable Law; (ii) take such action with respect
to, or to preserve or protect, the Indenture Estate (including the discharge of
Liens) as shall be specified in such instructions and as are consistent with
this Indenture; and (iii) take such other action in respect of the subject
matter of this Indenture as is consistent with the terms hereof and the other
Transaction Documents.
(b) If any Event of Default shall have occurred and be
continuing and the Notes have been accelerated as provided herein, on request
of a Majority in Interest of Holders of the Notes, the Indenture Trustee shall,
subject to any representations, agreements or limitations herein expressly
stated, exercise such remedies under Section 17 of the Lease as shall be
specified in such request.
(c) The Indenture Trustee will execute and file or cause to
be filed such financing and continuation statements and such other documents
with respect to this Indenture, supplements hereto and the security interest
created hereunder or pursuant hereto in the Indenture Estate as may be
specified from time to time in written instructions of a Majority in Interest
of Holders of the Notes (which instructions may, by their terms, be operative
only at a future date and which shall be accompanied by the execution form of
such continuation statement so to be filed).
(d) Except during the continuance of an Indenture Event of
Default, (1) the Indenture Trustee undertakes to perform such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee;
and (2) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture;
provided, that
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in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Indenture Trustee, the
Indenture Trustee shall be under a duty to examine the same to determine
whether or not they so conform to the requirements of this Indenture. In the
event that an Indenture Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs. No provision of this Indenture shall be construed to relieve
the Indenture Trustee from liability for its own grossly negligent action, its
own grossly negligent failure to act, or its own willful misconduct, except
that (A) the foregoing shall not be construed to limit the effect of the first
sentence of this paragraph (d) and (B) the Indenture Trustee shall not be
liable for any error of judgment made in good faith by any officer in its
Corporate Trust Services Division or any of its other officers customarily
performing functions similar to those persons who at the time shall be such
officers, unless it shall be established that the Indenture Trustee was
negligent in ascertaining the pertinent facts.
SECTION 5.03. INDEMNIFICATION. The Indenture Trustee shall
not be required to take any action or refrain from taking any action under
Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof unless the Indenture Trustee shall have been indemnified against any
liability, cost or expense (including counsel fees) which may be incurred in
connection therewith. The Indenture Trustee shall not be under any obligation
to take any action under this Indenture and nothing in this Indenture contained
shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its 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 5.01
(other than the first sentence thereof) or 5.02 or Article IV hereof, nor shall
any other provision of this Indenture be deemed to impose a duty on the
Indenture Trustee to take any action, if the Indenture Trustee shall have been
advised by counsel that such action is contrary to the terms hereof or of the
Transaction Documents, or is otherwise contrary to law.
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN INDENTURE OR
INSTRUCTIONS AND MAINTENANCE OF PAYMENT ACCOUNT. The Indenture Trustee shall
not have any duty or obligation to use, operate, store, lease, control, manage,
sell, dispose of or otherwise deal with the Facility or any part of the
Facility, or to otherwise take or refrain from taking any action under, or in
connection with, this Indenture or any part of the Indenture Estate, except as
expressly provided by the terms of this Indenture or as expressly provided in
written instructions as provided in this Indenture; and no
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implied duties or obligations shall be read into this Indenture against the
Indenture Trustee. First Chicago agrees that it will, in its individual
capacity and at its own cost and expense (and without any right of indemnity in
respect of any such cost or expense) promptly take such action as may be
necessary to duly discharge all liens and encumbrances on any part of the
Indenture Estate which result from claims against it in its individual capacity
not related to the Indenture Trustees' interest in the Indenture Estate or the
administration of the Indenture Estate or any other transaction pursuant to
this Indenture or any document included in the Indenture Estate.
SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, INDENTURE 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 or any other part of the Indenture Estate except (i) as required or
permitted by the terms of the Lease or (ii) in accordance with the powers
granted to, or the authority conferred upon, the Indenture Trustee pursuant to
this Indenture and in accordance with the express terms hereof.
SECTION 5.06. FURNISHING OF NOTICES. The Indenture Trustee
will furnish to each Holder of a Note, promptly upon receipt thereof, a
duplicate or copy of each report, notice, request, demand, instruction,
certificate, financial statement, opinion or other instrument furnished to the
Indenture Trustee hereunder, under any other Transaction Document or in
connection with the Indenture Estate, unless the Indenture Trustee has
reasonable cause to believe (based on the face of such document or otherwise)
that such document has already been so distributed.
SECTION 5.07. CERTAIN RIGHTS OF OWNER TRUSTEE.
Notwithstanding any other provisions of this Indenture, including the Granting
Clause hereof (except as expressly provided in paragraph (b) of this Section
5.07):
(a) at all times the Owner Trustee shall have the right,
together with the Indenture Trustee, to receive from the Lessee all
notices, certificates, opinions of counsel and other documents and all
information which any Person is permitted or required to give or
furnish to the Owner Trustee or the Lessor pursuant to any Transaction
Document and to inspect any of the properties of the Lessee as
permitted by Section 8(b) or 8(j) of the Lease:
(b) at all times the Owner Trustee shall have the right to
perform all covenants and obligations on behalf of the Lessee pursuant
to Section 20 of the Lease (it being understood that such performance
will cure an Indenture Event of Default only to the extent set forth
in Section 4.02 hereof and that Interim
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Rent or Basic Rent cure payments by the Owner Trustee shall be applied
as provided in Article III hereof for the payment of such rent);
(c) the Owner Trustee and the Owner Participant shall have
the exclusive right to make all decisions and take all actions
required to be made or taken by the Lessor with respect to the
adjustments contemplated in Section 3(e) and 3(f) of the Lease,
subject to compliance with Section 3(g) of the Lease;
(d) so long as the Notes have not been accelerated as
provided in Section 4.03(a), the Owner Trustee may exercise, to the
exclusion of the Indenture Trustee, all rights conferred on the Lessor
by Sections 5, 13, 14 and 15 of the Lease (other than with respect to
the receipt of funds payable by the Lessee in respect thereof);
(e) so long as no Indenture Event of Default (other than an
Indenture Event of Default which is also an Event of Default) shall
have occurred and be continuing, the Owner Trustee shall have the
right, as Lessor, but not to the exclusion of the Indenture Trustee to
enforce the performance of the covenants of the Lessee under the
Lease, to declare the Lease in default pursuant to Section 17 thereof
and to exercise the remedies of the Lessor pursuant to Section
17(a)(3)(iii) of the Lease;
(f) so long as no Indenture Event of Default (other than an
Indenture Event of Default which is also an Event of Default) shall
have occurred and be continuing, the Owner Trustee shall exercise all
rights, elections and options of the Lessor but not to the exclusion
of the Indenture Trustee to make any decision or determination and to
give any notice, consent or approval with respect to the Lease or any
Granting Clause Document; and
(g) at all times, the Owner Trustee shall have the right, to
the exclusion of the Indenture Trustee, to receive and enforce the
payment of Excepted Payments due and payable to it.
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ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. COVENANTS OF OWNER TRUSTEE. The Owner Trustee
hereby covenants and agrees as follows:
(a) it will duly and punctually pay the principal of and
interest on and other amounts due under the Notes and hereunder in
accordance with the terms of the Notes and this Indenture;
(b) in the event an officer in the Department of the Owner
Trustee shall have actual knowledge of an Indenture Event of Default,
an Indenture Default or an Event of Loss, the Owner Trustee will give
prompt written notice of such Indenture Event of Default, Indenture
Default or Event of Loss to the Indenture Trustee, the Lessee and the
Owner Participant;
(c) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and
other instruments furnished to the Owner Trustee under the Lease, to
the extent that the same shall not have been furnished to the
Indenture Trustee pursuant to the Lease;
(d) except with the consent of the Indenture Trustee or in
connection with any Refunding, and except as provided in Section 2.15
hereof or as is necessarily incidental to the administration of the
Trust Estate, it will not contract for, create, incur, assume or
suffer to exist any Debt on behalf of the Trust Estate, and will not
on behalf of the Trust Estate guarantee (directly or indirectly or by
an instrument having the effect of assuring another's payment or
performance of any obligation or capability of so doing, or
otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other
Person;
(e) it will not, on behalf of the Trust Estate, enter into
any business or other activity other than the business of owning the
Undivided Interest, the leasing thereof to the Lessee and the carrying
out of the transactions contemplated hereby and by the Lease, the
Participation Agreement, and the Trust Agreement and the other
Transaction Documents; and
(f) it will execute and deliver Indenture Supplements and
related Uniform Commercial Code financing statements and fixture
filings (and cause
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the filing thereof) promptly upon it acquiring title to any
Modification, all of which Indenture Supplements and statements and
filings shall be in appropriate form to subject such Modification to
the Lien of this Indenture and the Deed of Trust.
(g) The Owner Trustee agrees to pay over to the Indenture
Trustee for distribution in accordance with Section 3.04(b) hereof any
and all amounts actually received by the Owner Trustee in respect of
indemnity amounts paid by the Lessee in respect of its obligations to
the Indenture Trustee in its individual capacity or the Holders
pursuant to Section 13 of the Participation Agreement.
SECTION 6.02. ACCEPTANCE OF TRUSTS AND DUTIES. The Indenture
Trustee accepts the duties hereby created and applicable to it and agrees to
perform the same but only upon the terms of this Indenture and agrees to
receive and disburse all monies constituting part of the Indenture Estate in
accordance with the terms hereof. The Owner Trustee and the Indenture Trustee
shall not be answerable or accountable under any circumstances, except (a) for
their own willful misconduct or gross negligence, (b) in the case of the
Indenture Trustee, as provided in Section 2.04 hereof or in the last sentence
of Section 5.04 hereof, or in respect of the first sentence of Section 5.01
hereof or Section 7.03(b) hereof, or (c) for liabilities that may result, in
the case of the Owner Trustee, from the inaccuracy of any representation or
warranty or breach of any covenant of Shawmut Bank Connecticut, National
Association made in its individual capacity in the Participation Agreement or
this Indenture or, in the case of the Indenture Trustee, from the inaccuracy of
any representation or warranty of the Indenture Trustee in the Participation
Agreement or any other document relating hereto. Neither the Owner Trustees
nor the Indenture Trustee shall be liable for any action or inaction of any
other one of such parties.
SECTION 6.03. ABSENCE OF DUTIES. In the case of the
Indenture Trustee, except in accordance with written instructions furnished
pursuant to Section 5.01 or 5.02 hereof, and except as provided in, and without
limiting the generality of, Sections 2.04, 2.15, 5.01, 5.02, 5.03, 5.04 and
5.06 hereof and, in case of the Owner Trustee, except as provided in Sections
2.15 and 6.01 hereof and in Section 8(b) of the Participation Agreement, the
Owner Trustee and the Indenture Trustee shall have no duty (i) to see to any
recording or filing of the Lease or this Indenture or any other document, or to
see to the maintenance of any such registration, recording or filing, (ii) to
see to any insurance on the Facility or to effect or maintain any such
insurance, (iii) to see to the payment or discharge of any lien or encumbrance
of any kind against any part of the Trust Estate or the Indenture Estate, (iv)
to confirm, verify or inquire into the failure to receive any financial
statements of the Lessee or (v) to inspect the Facility at any time or
ascertain or inquire as to the performance or observance of any of the
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Lessee's covenants under the Lease with respect to the Facility.
Notwithstanding any provision hereof or of any other Transaction Document,
neither the Owner Participant nor the Lessee shall have any duty or
responsibility under this Indenture, including, without limitation, any of the
duties referred to in clauses (i) through (v) of the preceding sentence.
SECTION 6.04. NO REPRESENTATIONS OR WARRANTIES AS TO FACILITY
OR DOCUMENTS. NEITHER THE INDENTURE TRUSTEE OR THE OWNER TRUSTEE MAKES OR
SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE TITLE, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OR
PURPOSE OF THE FACILITY OR ANY COMPONENT THEREOF, AS TO ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK, OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR
WARRANTY WITH RESPECT TO THE FACILITY OR ANY COMPONENT THEREOF WHATSOEVER,
except for the representations and warranties of the Owner Trustee or Shawmut
Bank Connecticut, National Association, contained in Section 8(b)(i) of the
Participation Agreement. Neither the Owner Trustee nor the Indenture Trustee
makes or shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Indenture, the Deed of Trust, the
Trust Agreement, the Participation Agreement, the Notes, the Lease or any
Purchase Document or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of Shawmut Bank
Connecticut, National Association made in its individual capacities in this
Indenture or the Participation Agreement. Neither the Owner Participant nor
the Lessee makes, or shall be deemed to have made, any representation or
warranty hereunder whatsoever.
SECTION 6.05. NO SEGREGATION OF MONIES; NO INTEREST.
Subject to Sections 3.07 and 10.01 hereof, any monies paid to or retained by
the Indenture Trustee pursuant to any provision hereof and not then required to
be distributed to the Holders of the Notes, the Lessee or the Owner Trustee as
provided in Article III hereof 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 Indenture Trustee shall not be liable for
any interest thereon; provided, however, 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; and provided, further, however, that any
moneys held by the Indenture Trustee under Sections 3.07 or 10.01 hereof
(including
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the proceeds of Permitted Investments, in the case of Section 3.07 hereof)
shall be segregated and separately accounted for, held upon the trusts therein
set forth and otherwise applied as contemplated thereby.
SECTION 6.06. RELIANCE; AGENTS; ADVICE OF COUNSEL. Neither
the Owner Trustee or the Indenture Trustee shall incur any liability to anyone
in acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Owner Trustee and the Indenture Trustee may accept a copy of a
resolution of the Board of Directors of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary 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 the aggregate unpaid principal amount of Notes outstanding as of any
date, the Owner Trustee may for all purposes hereof rely on a certificate
signed by any Vice President or other authorized corporate trust officer of the
Indenture Trustee. 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 may for all purposes hereof rely on an
Officers' Certificate of the Lessee, as to such fact or matter, and such
Certificate shall constitute full protection to the Owner Trustee and the
Indenture Trustee for any action taken or omitted to be taken by them 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
them pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the administration
of the trust hereunder, the Owner Trustee and the Indenture Trustee each may
execute any of the trusts or powers hereof and perform its powers and duties
hereunder directly or through agents or attorneys and may, at the expense of
the Indenture Estate, consult with counsel, accountants and other skilled
persons to be selected and retained by them, and the Owner Trustee and the
Indenture Trustee shall not, except as otherwise expressly provided herein or
in the Participation Agreement, be liable for anything done, suffered or
omitted in good faith by them in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.
SECTION 6.07. CAPACITY IN WHICH ACTING. Each of the Owner
Trustee and the Indenture Trustee acts hereunder solely as trustees as provided
herein, and, in the case of the Owner Trustee, as provided in the Trust
Agreement, and not in their respective individual capacities, except as
otherwise specified herein or therein.
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SECTION 6.08. COMPENSATION. The Indenture Trustee shall be
entitled to reasonable compensation, including expenses and disbursements
(including reasonable attorneys' fees and expenses), for all services rendered
hereunder and shall have a priority claim on the Indenture Estate for the
payment of such compensation, to the extent that such compensation shall not be
paid by the Lessee, and shall have the right to use or apply any monies held by
it hereunder in the Indenture Estate toward such payments. The Indenture
Trustee agrees that it shall have no right against the Holders of the Notes or
the Owner Participant for any fee as compensation for its services as trustee
under this Indenture.
ARTICLE VII
SUCCESSOR TRUSTEES
SECTION 7.01. NOTICE OF SUCCESSOR OWNER TRUSTEE. In the case
of any appointment of a successor to the Owner Trustee pursuant to the Trust
Agreement or upon any merger, conversion, consolidation or sale of
substantially all of the corporate trust business of the Owner Trustee pursuant
to the Trust Agreement, the successor Owner Trustee shall give prompt written
notice thereof to the Lessee, the Indenture Trustee and to the Holders of all
Notes at the time Outstanding.
SECTION 7.02. 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 30 calendar days' prior written
notice to the Lessee, the Owner Trustee, the Owner Participant and each Holder
of a Note, such resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, a Majority in
Interest of Holders of the Notes may, subject to the written approval of the
Lessee, at any time remove the Indenture Trustee without cause by an instrument
in writing delivered to the Lessee, the Owner Trustee, the Owner Participant,
and the Indenture Trustee, and the Owner Trustee shall promptly notify each
Holder of a Note thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case of
the resignation or removal of the Indenture Trustee, a Majority in Interest of
Holders of the Notes may, subject to the written approval of the Lessee,
appoint a successor Indenture Trustee by an instrument signed by such Holders.
If a successor Indenture Trustee shall not have been appointed within 30
calendar days after such notice of resignation or removal, the then current
Indenture Trustee, the Lessee or any Holder of a Note may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act until
such time, if any, as a successor shall have been appointed as above provided.
The successor Indenture Trustee so appointed by such court shall
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immediately and without further act be superseded by any successor Indenture
Trustee appointed as above provided within one year from the date of the
appointment by such court.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the Owner Participant, the Lessee and
the predecessor Indenture Trustee an instrument accepting such appointment, and
thereupon such successor Indenture Trustee, without further act, shall become
vested with all the estates, properties, rights, powers and duties of the
predecessor Indenture Trustee hereunder and in the trusts created hereunder
applicable to it with like effect as if originally named the Indenture Trustee
herein; but nevertheless upon the written request of such successor Indenture
Trustee, such predecessor Indenture Trustee shall execute and deliver to the
Owner Trustee, the Owner Participant, the Lessee and the successor Indenture
Trustee 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 monies or other property then held by such
predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, 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 and shall be authorized under
such laws to exercise corporate trust powers, and shall have its principal
place of business in the State of New York, the State of Illinois or the State
of Connecticut and have a combined capital and surplus of at least $100,000,000
(or have a combined capital and surplus in excess of $10,000,000 and its
obligations, whether now in existence or hereafter incurred, fully and
unconditionally guaranteed by a corporation organized and doing business under
the laws of the United States of America, any State or Territory thereof or of
the District of Columbia and having a combined capital and surplus of at least
$100,000,000), if there be such an institution willing, able and legally
qualified to perform the duties of the Indenture Trustee hereunder upon
reasonable or customary terms. If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 8.02, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions 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 of the
corporate trust business of the
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Indenture Trustee may be transferred, shall, subject to the terms of paragraph
(c) of this Section, be the Indenture Trustee under this Indenture without
further act.
(e) In case at any time the Indenture Trustee shall cease to
meet the criteria for a successor Indenture Trustee specified in paragraph (c)
above, the Indenture Trustee shall resign immediately in the manner and with
the effect specified herein.
SECTION 7.03. APPOINTMENT OF ADDITIONAL AND SEPARATE
INDENTURE TRUSTEES. (a) Whenever: (i) the Indenture Trustee shall deem it
necessary or prudent in order to conform to any law of any jurisdiction in
which all or any part of the Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the Indenture
Estate, this Indenture, the Notes or any of the transactions contemplated under
the other Transaction Documents, or (ii) the Indenture Trustee shall be advised
by counsel satisfactory to it that it is so necessary or prudent in the
interests of the Holders, or (iii) the Indenture Trustee and the Owner Trustee
shall have been requested to do so by a Majority in Interest of Holders of the
Notes, the Indenture Trustee and the Owner Trustee shall execute and deliver an
indenture supplemental hereto or such other instruments as may from time to
time be necessary or advisable either (1) to constitute one or more bank or
trust companies or one or more natural persons approved by the Indenture
Trustee as additional trustee or trustees of all or any part of the Indenture
Estate, or to act as separate trustee or trustees of all or any part of the
Indenture Estate, in each case with such rights, powers, duties and obligations
as may be provided in such supplemental indenture or other instruments as the
Indenture Trustee or a Majority in Interest of Holders of the Notes may deem
necessary or advisable, or (2) 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 7.03. If the Owner Trustee shall not have taken any action requested
of it under this Section 7.03(a) that is permitted or required by its terms
within 30 days after the receipt of a written request from the Indenture
Trustee so to do, or if the Notes have been accelerated as provided in Section
4.03(a), the Indenture Trustee may act under the foregoing provisions of this
Section 7.03(a) without the concurrence of the 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 7.03(a) in either of
such contingencies, subject, however, to the remaining provisions of this
Section 7.03. 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 additional or separate trustee or for
the clarification of, addition to or subtraction from the rights, powers,
duties or obligations theretofore granted to any such additional or separate
trustee. In case any additional or separate trustee appointed under this
Section 7.03(a) shall die, become incapable of acting, resign or be removed,
all the assets, property,
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rights, powers, trusts, duties and obligations of such additional or separate
trustee shall revert to the Indenture Trustee until a successor additional or
separate trustee is appointed as provided in this Section 7.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon the
Indenture Trustee in respect of the custody, investment and payment of monies
and all monies received by any such additional or separate trustee from or
constituting part of the Indenture Estate or otherwise payable under any
Transaction Document to the Indenture Trustee shall be promptly paid over by it
to the Indenture Trustee. All other rights, powers, duties and obligations
conferred or imposed upon any additional or separate trustee shall be exercised
or performed by the Indenture Trustee except to the extent that applicable law
of any jurisdiction in which any particular act is to be performed renders the
Indenture Trustee incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations (including the holding of
title to all or part of the Indenture Estate in any such jurisdiction) shall be
exercised and performed by such additional or separate trustee. No additional
or separate trustee shall take any discretionary action except on the
instructions of the Indenture Trustee or a Majority in Interest of Holders of
Notes. No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder, except that the Indenture Trustee
shall be liable for the consequences of its lack of reasonable care in
selecting any additional or separate trustee which is a natural person. Each
additional or separate trustee appointed pursuant to this Section 7.03 shall be
subject to, and shall have the benefit of, Articles IV through X hereof insofar
as they apply to the Indenture Trustee. The powers of any additional or
separate trustee appointed pursuant to this Section 7.03 shall not in any case
exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or prudent in order to conform to any such law or take any
such action or shall be advised by such counsel that it is no longer so
necessary or prudent in the interests of the Holders, or in the event that the
Indenture Trustee shall have been requested to do so in writing by a Majority
in Interest of Holders of Notes, the Indenture Trustee and the Owner Trustee
shall execute and deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to remove any additional or
separate trustee. The Indenture Trustee may act on behalf of the Owner Trustee
under this Section 7.03(c) when and to the extent it could so act under Section
7.03(a).
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ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND
OTHER TRANSACTION DOCUMENTS
SECTION 8.01. AMENDMENTS, WAIVERS, ETC. OF TRANSACTION
DOCUMENTS (OTHER THAN THIS INDENTURE). (a) Subject to the provisions of
paragraph (b) of this Section 8.01 and Section 8.01A hereof, the respective
parties to the Participation Agreement and the Granting Clause Documents may,
at any time and from time to time, without the consent of the Indenture Trustee
or any Holder, amend, waive or modify any of the provisions of such agreements;
provided that without the consent of a Majority in Interest of Holders of the
Notes no such amendment, waiver or modification shall amend or modify the
following Sections of the Lease: Section 16 and Section 17.
(b) Notwithstanding the provisions of paragraph (a) of this
Section 8.01 or any other provision of this Indenture or any other Transaction
Document to the contrary, no modification or amendment with respect to the
Participation Agreement or any Granting Clause Document shall, without the
consent of the Holder of each outstanding Note affected thereby,
(1) modify or amend the Lease in such a way as to extend the
time of payment of Basic Rent, Stipulated Loss Value (or any other
amounts payable upon the occurrence of an Event of Loss), Termination
Value, the Early Buy-Out Price, or any other amounts payable under, or
as provided in, the Lease which would be required to be paid to the
Holders of the Notes pursuant to the terms hereof (including, without
limitation, the amount payable under Section 8(h) of the Lease); or
reduce the amount of any installment of Basic Rent so that the sum of
the same is less than the payment of principal of and interest on the
Notes to be made from such installment of Basic Rent; or reduce the
aggregate amount of Stipulated Loss Value or Termination Value or
amounts payable in respect of the Early Buy-Out Price or any other
amounts payable under, or as provided in, the Lease upon the
occurrence of an Event of Loss, on the Termination Date on the Early
Buy-Out Date or in respect of any other termination of the Lease
(including, without limitation, in Section 8(h) of the Lease) so that
the same is less, together with any other amounts payable under, or as
provided in, the Lease, than the Redemption Price payable as at the
applicable Redemption Date; or
(2) modify or amend the Lease in such a way as to release the
Lessee from its obligations in respect of the payment of Basic Rent,
Stipulated Loss
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Value (and any other amounts payable upon the occurrence of an Event
of Loss), Termination Value, the Early Buy-Out Price or any amounts
payable in respect of any other termination of the Lease (including,
without limitation, in Section 8(h) of the Lease).
SECTION 8.01A. AMENDMENTS TO THIS INDENTURE WITH AND WITHOUT
CONSENT OF HOLDERS. Subject to Section 12(b) of the Participation Agreement,
with the written consent of a Majority in Interest of Holders of the Notes, the
Owner Trustee and the Indenture Trustee may enter into an Indenture Supplement
to add any provisions to or to change or eliminate any provisions of this
Indenture or to modify the rights of the Holders; provided, however, that,
without the consent of each Holder affected thereby, no amendment to this
Indenture or any other Transaction Document may:
(1) reduce the principal amount of any Note or the amount of
any payment of principal, premium or interest due on any Note or
extend the time of payment of any amount owing or payable in respect
of such Note; or
(2) change the dates on which any principal, premium, if any,
or interest is due on any Note; or
(3) create any Lien on the Indenture Estate prior to or pari
passu with the Lien thereon under this Indenture, except such as are
permitted or contemplated by this Indenture, or deprive any Holder of
the benefit of the Lien on the Indenture Estate created by this
Indenture; or
(4) reduce the percentage in principal amount of the Notes,
the consent of whose Holders is required for any such Indenture
Supplement, or the consent of whose Holders is required for any waiver
of compliance with the provisions of this Indenture or of or in
respect of any Indenture Default or Indenture Event of Default or of
any receipt of payment; or
(5) make any change in this Section 8.01A.
SECTION 8.02. INDENTURE SUPPLEMENT WITHOUT CONSENT. Subject
to Section 12(b) of the Participation Agreement, without the consent of any of
the Holders of the Notes then outstanding but subject to the provisions of
Section 8.03 hereof, the Indenture Trustee and the Owner Trustee may enter into
any indenture or indentures supplemental hereto for one or more of the
following purposes:
(a) (i) to evidence the appointment of a successor Owner
Trustee in accordance with the terms of the Trust Agreement, or (ii)
to evidence the
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appointment of a successor Indenture Trustee hereunder if done
pursuant to the provisions of Article VII hereof;
(b) to subject to the lien of this Indenture and the Deed of
Trust, Lessor's Share of Components or Modifications to the Facility,
which become part of the Facility;
(c) to make such modifications requested by the Owner Trustee
as are appropriate in the event more than one Person becomes an Owner
Participant pursuant to the terms of the Trust Agreement;
(d) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or to make any other provisions with respect to matters arising
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided that such action shall not
adversely affect the interests of the Holders of any of the Notes then
outstanding or the rights or obligations of the Lessee under the Lease
or the other Transaction Documents;
(e) to provide for the issuance of Supplemental Financing
Notes as contemplated by Section 2.15 hereof or of Refunding Notes; or
(f) to add to the rights of the Holders or the Indenture
Trustee.
SECTION 8.03. TRUSTEES AND REPRESENTATIVE PROTECTED. If, in
the opinion of the institution acting as Owner Trustee under the Trust
Agreement or the institution acting as Indenture Trustee hereunder, any
document required to be executed pursuant to the terms of Section 8.01 or 8.02
hereof adversely affects any right, duty, immunity or indemnity with respect to
such institution under this Indenture, the Lease or the other Transaction
Documents, such institution may in its discretion decline to execute such
document unless the Person or Persons requesting any related action shall
provide an indemnity that is reasonably satisfactory to such institution.
SECTION 8.04. DOCUMENTS MAILED TO HOLDER. Promptly after the
execution by the Owner Trustee or the Indenture Trustee of any document entered
into pursuant to Section 8.01 or 8.02 hereof, the Indenture Trustee shall mail,
by certified mail, postage prepaid, a conformed copy thereof to each Holder of
a Note at its address last known to the Indenture Trustee, but the failure of
the Indenture Trustee to mail such conformed copies shall not impair or affect
the validity of such document.
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SECTION 8.05. FORM OF AMENDMENTS AND OTHER DOCUMENTS. It
shall not be necessary for any written request furnished to the Holders
pursuant to this Article VIII to specify the particular form of the proposed
documents to be executed, but it shall be sufficient if such request shall
indicate the substance thereof.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. TERMINATION OF INDENTURE. Upon payment in full
of the principal of and interest on and all other amounts due under all Notes,
the Indenture Trustee shall execute and deliver, to or as directed in writing
by the Owner Trustee or, in the case of a purchase by the Lessee of the
Undivided Interest following an Event of Loss or in the case of a purchase of
the Undivided Interest in accordance with Section 8(h) of the Lease, by the
Lessee, an appropriate instrument or instruments (in recordable form), in form
and substance satisfactory to the Owner Trustee or the Lessee, as the case may
be, releasing from the Lien of this Indenture and the assignment and pledge
hereunder and from the Lien of the Deed of Trust the Undivided Interest, the
Facility Agreements and the remainder of the Indenture Estate; provided,
however, that this Indenture and the trust created hereby shall earlier
terminate and this Indenture shall be of no further force or effect upon any
sale or other final disposition by the Indenture Trustee of all property that
is part of the Indenture Estate and the final distribution by the Indenture
Trustee of all monies or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Except as otherwise
provided above, this Indenture and the trusts created hereby shall continue in
full force and effect in accordance with the terms hereof. The parties intend
that this Indenture be exempt from registration under any applicable Probate
Code and similar laws.
SECTION 9.02. NO LEGAL TITLE TO INDENTURE ESTATE IN HOLDERS.
No Holder of a Note shall have legal title to any part of the Indenture Estate.
No transfer, by operation of law or otherwise, of any Note or other right,
title and interest of any Holder of a Note 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 legal title to any part of the Indenture Estate.
SECTION 9.03. SALE OF UNDIVIDED INTEREST BY INDENTURE TRUSTEE
IS BINDING. Any sale or other conveyance of the Undivided Interest or any
other part of the Indenture Estate by the Indenture Trustee made pursuant to
the terms of this Indenture or of the Lease shall bind the Holders of the Notes
and shall be effective to
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transfer or convey all right, title and interest of the Indenture Trustee, and
such Holders in and to the Undivided Interest or any other part of the
Indenture Estate. No purchaser or other grantee shall be required to inquire
as to the authorization, necessity, expediency or regularity of such sale or
conveyance or as to the application of any sale or other proceeds with respect
thereto by the Indenture Trustee.
SECTION 9.04. INDENTURE FOR BENEFIT OF OWNER TRUSTEE,
INDENTURE TRUSTEE, OWNER PARTICIPANT, LESSEE AND HOLDERS. Nothing in this
Indenture, whether express or implied, shall be construed to give to any Person
other than the Owner Trustee, the Indenture Trustee, the Holders of the Notes,
the Owner Participant and the Lessee, any legal or equitable right, remedy or
claim under or in respect of this Indenture.
SECTION 9.05. NO ACTION CONTRARY TO LESSEE'S RIGHTS UNDER THE
LEASE. Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, neither the Indenture Trustee nor the Owner Trustee
will take any action contrary to the Lessee's rights under the Lease, including
the rights of the Lessee under Section 6 thereof, except in accordance with the
provisions of the Lease.
SECTION 9.06. NOTICES, ETC. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Indenture to be made, given, furnished or filed shall be made
in the manner provided for communications under the Participation Agreement
pursuant to Section 19 thereof.
(b) Any notice or communication to Holders shall be mailed by
first-class mail to the addresses for Holders shown on the Note Register kept
by the Registrar. Failure so to mail a notice or communication or any defect
in such notice or communication shall not affect its sufficiency with respect
to other Holders.
(c) If a notice or communication is mailed in the manner
provided above within the time prescribed, it shall be conclusively presumed to
have been duly given, whether or not the addressee receives it.
(d) The Indenture Trustee shall promptly furnish the Lessee
with a copy of any demand, notice or written communication received by the
Indenture Trustee hereunder from any Holder, the Owner Trustee or the Owner
Participant.
SECTION 9.07. SEVERABILITY. Any provision of this Indenture
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the
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remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 9.08. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS.
Subject to Article VIII hereof, no terms or provisions of this Indenture or the
Notes may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party or other person against whom
enforcement of the change, waiver, discharge or termination is sought, and any
waiver of the terms hereof or of any Note shall be effective only in the
specific purpose given.
SECTION 9.09. SUCCESSORS AND ASSIGNS. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the parties hereto and the successors and permitted assigns of each,
all as herein provided. Any request, notice, direction, consent, waiver or
other instrument or action by any Holder of a Note 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 to the
extent that the same is expressly contemplated by and taken in accordance with
the Transaction Documents. Each Holder by its acceptance of a Note agrees to
be bound by this Indenture and all provisions of the Participation Agreement
and other Transaction Documents applicable to it.
SECTION 9.10. HEADINGS; REFERENCES TO SECTIONS, ETC. The
headings of the various Articles and Sections herein and in the table of
contents hereto are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof. All references herein to any
Section, Article, provision, Exhibit, Annex, Appendix or other attachment
shall, unless otherwise indicated, be deemed references to a Section, Article,
provisions, Exhibit, Annex, Appendix or other attachment hereof or hereto, and
all such Exhibits, Annexes, Appendices and other attachments are hereby
incorporated herein by reference with the same effect as if set forth herein in
their entirety.
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SECTION 9.11. NORMAL COMMERCIAL RELATIONS. Anything
contained in this Indenture to the contrary notwithstanding, any of the parties
to the Participation Agreement or any bank or other affiliate of such parties
may conduct any banking or other financial transactions, and have banking or
other commercial relationships, with the Lessee fully to the same extent as if
this Indenture were not in effect, including without limitation the making of
loans or other extensions of credit to the Lessee, for any purpose whatsoever,
whether related to any of the transactions contemplated hereby or otherwise.
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SECTION 9.12. GOVERNING LAW: COUNTERPART FORM. THIS
INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAWS. This Indenture 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year below provided.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except
as specified herein, but solely as
Owner Trustee under a Trust Agreement
No. 1 dated as of July 15, 1994 with
the Owner Participant named therein
By: /s/ Robert L. Reynolds
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, except
as specified herein, but solely as
Indenture Trustee hereunder
By: /s/ Melissa C. Weisman
Title: Assistant Vice President
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STATE OF ________)
): ss. _________
COUNTY OF _______)
Personally appeared before me, the undersigned authority in
and for the said County and State, on this ___ day of __ ________, 1994, within
my jurisdiction, the within named _______, who acknowledged that he is the
_____________ of Shawmut Bank Connecticut, National Association, a national
banking association, as Owner Trustee under the above and foregoing instrument,
and that for and on behalf of said corporation, and as its act and deed in said
capacity as Owner Trustee and its having been duly authorized to do so, he
executed the above and foregoing instrument after first having been duly
authorized by said corporation to do so.
__________________________
My Commission Expires:
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<PAGE> 69
STATE OF ________)
): ss. _________
COUNTY OF _______)
Personally appeared before me, the undersigned authority in
and for the said County and State, on this day of July, 1994, within my
jurisdiction, the within named _______________ who acknowledged that he is the
_________________ of First Chicago a national banking association, as Indenture
Trustee under the above and foregoing instrument, and that for and on behalf of
said corporation, and as its act and deed in said capacity as Indenture Trustee
and its having been duly authorized to do so, he executed the above and
foregoing instrument after first having been duly authorized by said
corporation to do so.
__________________________
My Commission Expires:
________________________
<PAGE> 70
SCHEDULE 1
(SEE APPENDIX A TO PARTICIPATION AGREEMENT)
<PAGE> 1
EXHIBIT 11
Page 1 of 2
NEWMONT MINING CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share)
PRIMARY EARNINGS PER SHARE CALCULATIONS
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1994 1993 1994 1993
------- ------- -------- --------
<S> <C> <C> <C> <C>
INCOME DATA:
Income before cumulative
effect of change in
accounting principle $ 20,424 $ 25,658 $ 59,337 $ 77,749
Preferred stock dividends (3,953) (3,953) (11,859) (11,913)
-------- -------- -------- --------
Income before cumulative
effect of change in
accounting principle
applicable to common shares 16,471 21,705 47,478 65,836
Cumulative effect of change
in accounting principle - - - 38,470
-------- -------- -------- --------
Net income applicable to
common shares $ 16,471 $ 21,705 $ 47,478 $104,306
======== ======== ======== ========
COMMON AND COMMON EQUIVALENT SHARES:
Weighted average common
shares 85,971 85,322 85,916 85,186
Equivalent common shares
from stock options 219 356 226 233
-------- ------- -------- --------
Common and common equivalent
shares 86,190 85,678 86,142 85,419
======== ======== ======== ========
EARNINGS PER COMMON SHARE:
Income before cumulative
effect of change in
accounting principle $ 0.19 $ 0.25 $ 0.55 $ 0.77
Cumulative effect of change
in accounting principle - - - 0.45
------- ------- -------- --------
Net income per common and
common equivalent shares $ 0.19 $ 0.25 $ 0.55 $ 1.22
======== ======== ======== ========
</TABLE>
<PAGE> 2
EXHIBIT 11
Page 2 of 2
NEWMONT MINING CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share)
FULLY DILUTED EARNINGS PER SHARE CALCULATIONS
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------ ------------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
INCOME DATA:
Income before cumulative
effect of change in
accounting principle $20,424 $25,658 $59,337 $ 77,749
Cumulative effect of change
in accounting principle - - - 38,470
------- ------- ------- --------
Net income applicable to
common shares $20,424 $25,658 $59,337 $116,219
======= ======= ======= ========
COMMON AND COMMON EQUIVALENT SHARES:
Weighted average common shares 85,971 85,322 85,916 85,186
Equivalent common shares from
stock options 311 356 301 261
Equivalent common shares from
conversion of preferred stock 7,899 7,899 7,899 7,899
------- ------- ------- --------
Common and common equivalent
shares 94,181 93,577 94,116 93,346
======= ======= ======= ========
EARNINGS PER COMMON SHARE:
Income before cumulative
effect of change in
accounting principle $ 0.22 $ 0.27 $ 0.63 $ 0.83
Cumulative effect of change
in accounting principle - - - 0.41
------- ------- ------- --------
Net income per common and
common equivalent shares $ 0.22 $ 0.27 $ 0.63 $ 1.24
======= ======= ======= ========
</TABLE>
<PAGE> 1
EXHIBIT 12.1
NEWMONT MINING CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, 1994
------------------
<S> <C>
Earnings:
Income before income taxes $ 37,993
Adjustments:
Net interest expense (1) 905
Amortization of capitalized
interest 1,445
Portion of rental expense
representative of interest 589
Undistributed income of less
than 50% owned entities (11,409)
--------
$ 29,523
========
Fixed Charges:
Net interest expense (1) $ 905
Capitalized interest 16,890
Portion of rental expense
representative of interest 589
--------
$ 18,384
========
Ratio of earnings to fixed charges 1.6
========
</TABLE>
(1) Includes interest expense of majority-owned subsidiaries and amortization
of debt issuance costs.
<PAGE> 1
EXHIBIT 12.2
NEWMONT MINING CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(In thousands, except ratios)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, 1994
------------------
<S> <C>
Earnings:
Income before income taxes $ 37,993
Adjustments:
Net interest expense (1) 905
Amortization of capitalized
interest 1,445
Portion of rental expense
representative of interest 589
Undistributed income of less
than 50% owned entities (11,409)
--------
$ 29,523
========
Fixed Charges:
Net interest expense (1) 905
Preferred stock dividends (2) 11,859
Capitalized interest 16,890
Portion of rental expense
representative of interest 589
--------
$ 30,243
========
Ratio of earnings to combined fixed
charges and preferred stock dividends (3) 0.98
========
</TABLE>
(1) Includes interest expense of majority-owned subsidiaries and amortization
of debt issuance costs.
(2) Reflects actual preferred stock dividends without an adjustment for
pretax earnings which would be required to cover such dividend
requirements due to a tax benefit recognized in the period.
(3) The ratio is less than 1.0:1 due to the $27.1 million of non-cash charges
related to environmental obligations discussed in Note 5 of Item 1. The
amount of the coverage deficiency is $0.7 million.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ART. 5 FDS FOR 3RD QUARTER 10-Q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 239,782
<SECURITIES> 13,991
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 112,515
<CURRENT-ASSETS> 407,588
<PP&E> 1,629,743
<DEPRECIATION> 582,117
<TOTAL-ASSETS> 1,624,380
<CURRENT-LIABILITIES> 131,284
<BONDS> 593,634
<COMMON> 439,122
0
14,375
<OTHER-SE> 215,159
<TOTAL-LIABILITY-AND-EQUITY> 1,624,380
<SALES> 439,168
<TOTAL-REVENUES> 449,569
<CGS> 238,777
<TOTAL-COSTS> 307,061
<OTHER-EXPENSES> 114,703
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 905
<INCOME-PRETAX> 37,993
<INCOME-TAX> (27,069)
<INCOME-CONTINUING> 59,337
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,337
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.63
</TABLE>
