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EXHIBIT 4.5
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF
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ACT OF MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT
AND FINANCING STATEMENT
DATED AS OF JUNE 13, 1997
FROM
TRANSAMERICAN REFINING CORPORATION,
a Texas corporation
TIN: 00-0000000
(MORTGAGOR AND DEBTOR)
IN FAVOR OF
TRANSAMERICAN ENERGY CORPORATION,
a Delaware corporation,
TIN: 00-0000000
(MORTGAGEE AND SECURED PARTY)
The mailing address of the above-named Mortgagee and Secured Party is
0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attn:
Xxxxxxx Xxxxxxxx, Esq.; and the mailing address of Mortgagor and Debtor is 0000
Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attn: Xxxxxxx
Xxxxxxxx, Esq.
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, COVERS
FUTURE ADVANCES, AND IS A FIXTURE FILING.
ATTENTION OF RECORDING OFFICERS: This instrument is a Mortgage of both
real and personal property and is, among other things, a Security Agreement and
Financing Statement under the Uniform Commercial Code. This instrument creates
a lien on rights in or relating to lands of Mortgagor which are described in
Exhibit "A" attached hereto.
Recorded counterparts should be returned to:
Firstar Bank of Minnesota, N.A.
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Attn: Corporate Trust Department
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ACT OF MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF LEASES AND RENTS AND FINANCING STATEMENT
BE IT KNOWN, that on this ____ day of June, 1997, before me, the
undersigned Notary Public, duly commissioned and qualified, and in the presence
of the undersigned competent witnesses, personally came and appeared Mortgagor
(as hereinafter defined) who declared as follows:
This Act of Mortgage, Security Agreement, Assignment of Leases and
Rents and Financing Statement (as the same may from time to time be amended or
modified and in effect, this "Mortgage") is from TRANSAMERICAN REFINING
CORPORATION ("Mortgagor"), a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, having its registered
office at 0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
appearing herein through its duly authorized representative pursuant to
resolutions by the unanimous written consent of the directors of TransAmerican
Refining Corporation, a certified copy which is attached hereto and is
expressly made a part hereof, in favor of TRANSAMERICAN ENERGY CORPORATION, a
Delaware corporation (together with its successors or assigns, "Mortgagee").
RECITALS
A. Concurrently herewith, Mortgagee has made a loan to Mortgagor in
the fully accreted principal amount of $920,000,000 (the "Loan"), pursuant to
and on the terms and conditions set forth in that certain Loan Agreement, dated
as of June 13, 1997 (the "Loan Agreement"), by and between Mortgagor and
Mortgagee.
B. Mortgagor is entering into this Mortgage pursuant to its
obligations under the Loan Agreement and for the purpose, among other things,
of securing and providing for the repayment of the Loan and performance in full
of the obligations of Mortgagor under the Loan Agreement.
ARTICLE I
Definitions
Unless the context otherwise requires, as used in this Mortgage and
all amendments, extensions, modifications, renewals, supplements or waivers
hereof or hereto, the following terms shall have the following meanings, which
meanings shall be equally applicable to both the singular and plural form of
such terms. Unless otherwise defined herein or in the Loan Agreement, terms
used in Article 9 of the New York Uniform Commercial Code are used herein as
therein defined.
"365(h) Election" means Mortgagor's election to treat a Property Lease
as terminated under Section 365(h) of Title 11, U.S. Code or any similar
Bankruptcy Law, or any
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comparable right provided under any other Bankruptcy Law, including, without
limitation, the laws of the State of Louisiana, together with all rights,
remedies and privileges related thereto.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Business Interruption Insurance" shall have the meaning ascribed
thereto in Section 4.4 hereof.
"Cash Equivalents" has the meaning ascribed thereto in the Loan
Agreement.
"CATOFIN(R) Unit" means that certain real property more particularly
described on Exhibit "G" attached hereto and made a part hereof.
"Collateral Account" shall have the meaning ascribed thereto in the
Disbursement Agreement.
"Company UCC Collateral" shall have the meaning ascribed thereto in
the Security Agreement.
"Construction Supervisor" shall mean Xxxxx & O'Brien, Inc., in its
capacity as construction supervisor under the Disbursement Agreement, or any
subsequent construction supervisor appointed pursuant to the terms thereof.
"Credit Facility" means a Letter of Credit or Surety Bond in respect
of which the Mortgagor's reimbursement obligation is not secured by the
Mortgaged Property or any part thereof.
"Debtor" shall have the meaning ascribed thereto in Article VIII of
this Mortgage.
"Default Rate" shall mean, on any given day, the rate at which
interest accrues on the Note plus 4%.
"Disbursement Agent" shall mean Firstar Bank of Minnesota, N.A., in
its capacity as disbursement agent under the Disbursement Agreement.
"Disbursement Agreement" shall mean that certain Disbursement
Agreement, of even date herewith, by and among the Construction Supervisor, the
Disbursement Agent, Mortgagor and Mortgagee, as modified or amended and in
effect from time to time.
"Environmental Claim" shall mean any claim, action, cause of action,
investigation or written notice by any person or entity alleging potential
liability (including, without
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limitation, potential liability for investigatory costs, cleanup costs, natural
resource damages, property damages, personal injuries, or penalties) arising
out of, based upon or resulting from (i) the presence, threatened presence,
release or threatened release into the Environment of any Hazardous Substances
from or at the Mortgaged Property or (ii) the violation, or alleged violation,
of any Environmental Law relating to the Mortgaged Property, or (iii) any
threat to the Environment (or human health from Hazardous Substances) that is
related to the Mortgagor's (or the Mortgagor's immediate predecessor in
interest in the Mortgaged Property) management, use, control, ownership or
operation of the Mortgaged Property, whether occurring, existing or arising
prior to, or from or after, the date hereof.
"Environmental Laws" shall mean all present or future federal, state
and local laws, statutes, rules, ordinances, and regulations relating to the
pollution or protection of the environment or the effect of Hazardous
Substances on human health, including, without limitation laws, statutes,
rules, ordinances and regulations relating to emissions, discharges, releases
or threatened releases of Hazardous Substances, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Sections 9601 et seq.; the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Sections 6901 et seq.; the Toxic Substance Control Act,
15 U.S.C. Sections 2601 et seq.; the Water Pollution Control Act (also known as
the Clean Water Act), 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; and the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., as the same may be hereafter amended or modified.
"Event of Default" shall have the meaning ascribed thereto in the Loan
Agreement.
"Final Disbursement Date" shall have the meaning ascribed thereto in
the Disbursement Agreement.
"Fixtures" shall have the meaning ascribed thereto in Article II
hereof.
"Force Majeure" shall mean strikes, lockouts or other labor trouble,
fire or other casualty, governmental preemption in connection with a national
emergency, any rule, order or regulation of any governmental agency or any
department or subdivision thereof, or inability to secure materials or labor
because of any such emergency, rule, order, regulation, war, civil disturbance
or other emergency, cause or event unrelated to the financial capacity of
Mortgagor, beyond the reasonable control of Mortgagor.
"Governmental Authority" shall mean any Federal, state or local
government or any other political subdivision thereof exercising executive,
legislative, judicial, regulatory or administrative functions.
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"Hazardous Substance" shall mean any material, waste or substance
which is (i) included within the definition of "hazardous substances,"
"hazardous materials," "toxic substances," or "solid waste" in or pursuant to
any Environmental Law; (ii) listed in the United States Department of
Transportation Optional Hazardous Materials Table, 49 C.F.R. Section 172.101
enacted as of the date hereof or hereafter amended, or in the United States
Environmental Protection Agency List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302, as enacted as of the date hereof or as
hereafter amended; or (iii) explosive, radioactive, asbestos, polychlorinated
biphenyls, or oil or any petroleum product.
"Highest Lawful Rate" shall have the meaning ascribed thereto in the
Loan Agreement.
"Hydrocarbons" shall mean oil, gas, casinghead gas, condensate,
distillate, sulfur liquid hydrocarbons, gaseous hydrocarbons and all products
separated, settled and dehydrated therefrom and all products refined therefrom,
including, without limitation, gasoline, fuel, kerosene, liquified petroleum
gas, refined lubricating oils, diesel fuel, drip gasoline, natural gasoline
iso-butane, normal butane, propane and ethane and all other minerals.
"Impositions" shall mean all taxes (including, without limitation, all
ad valorem, sales (including those imposed on lease rentals), use, single
business, gross receipts, value added, intangible transactions, privilege or
license or similar taxes), ground rents, assessments (including, without
limitation, all assessments, whether or not for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not commenced or completed within the term of this Mortgage), water
rates, sewer rates, levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other governmental
charges or other similar charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character, in
respect of the Mortgaged Property and/or any Revenues (including all interest
and penalties thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be a lien upon
Mortgagor (including, without limitation, all income, franchise, single
business or other taxes imposed on Mortgagor for the privilege of doing
business in the State of Louisiana) or Mortgagee hereunder as a result of or
with respect to its capacity as Mortgagee, the Mortgaged Property or any other
collateral delivered or pledged to Mortgagee in connection with the
Indebtedness, the Obligations, the Loan Documents or any part thereof, or any
Revenues or any estate right, title or interest therein, or any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Mortgaged Property or the leasing or use of all or any part
thereof. The following shall not constitute Impositions, and nothing in this
Mortgage shall be construed to require Mortgagor to pay: any tax, assessment,
levy or charge imposed on Mortgagee in the nature of a franchise, capital levy,
estate, inheritance, succession, gross receipts, income or net revenue tax.
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"Indebtedness" shall mean all of the indebtedness, monetary
liabilities and obligations set forth in clauses (A) and (B) of Section 2.1
hereof.
"Independent Architect" shall mean an independent architect selected
by Mortgagor, licensed to practice in the State of Louisiana and having at
least five (5) years of relevant experience.
"Insurance Policies" means the Construction Insurance Policies and the
Refinery Insurance Policies (each as defined in Section 4.4 hereof).
"Inventory" shall have the meaning ascribed thereto in the Loan
Agreement.
"Leasehold Estates" shall mean all of the right, title and interest of
Mortgagor in and to the Mortgaged Property pursuant to the Property Leases.
"Legal Requirements" shall mean all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations,
restrictions and requirements.
"Letter of Credit" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit in favor of Mortgagee and
entitling Mortgagee to draw thereon in New York, New York the maturity or
expiration date of which does not exceed three (3) months, issued by an
Eligible Institution (as defined in the Loan Agreement) except that, for
purposes of this definition, an Eligible Institution must have a minimum long
term unsecured rating of AA by S&P and Aa2 by Xxxxx'x.
"Loan Documents" shall mean the Loan Agreement, the Note, this
Mortgage, the Disbursement Agreement or any other document executed in
connection therewith or herewith, as applicable.
"Material Contracts" shall mean all material contracts, leases and
agreements now existing or hereafter entered into with respect to (i) the Real
Property or the use or operation thereof (including, without limitation,
servitudes, rights of use, easements and rights of way and covenants and
restrictive agreements) or the conduct of business thereon or with respect
thereto, (ii) the refining of Hydrocarbons, (iii) the sale or lease of goods,
(iv) the rendering of services, or (v) the supply, output or storage of crude
oil, feedstocks, refined petroleum products or other Hydrocarbons, and (vi) any
other contract or agreement for which the transaction value exceeds Five
Million Dollars ($5,000,000).
"Mortgage" shall have the meaning ascribed thereto in the preamble
hereof.
"Mortgage Collateral" shall have the meaning ascribed thereto in
Article VIII hereof.
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"Mortgaged Property" shall have the meaning ascribed thereto in
Article II hereof.
"Mortgagee" shall have the meaning ascribed thereto in the
introduction to this Mortgage.
"Mortgagor" shall have the meaning ascribed thereto in the
introduction to this Mortgage.
"Mortgagor's Knowledge" shall mean the actual knowledge after due
inquiry of any of the officers of Mortgagor including, without limitation, the
Vice President of Refining and the Vice President of Engineering and
Construction, and the actual knowledge of any employee of Mortgagor who reports
directly to any such officer.
"Note" shall mean that certain Promissory Note dated as of June 13,
1997 in the fully accreted principal amount of $920,000,000 by Mortgagor and
payable to Mortgagee, as amended, modified, supplemented, restated, renewed,
extended or increased in amount from time to time.
"Obligations" shall mean payment of the Indebtedness together with the
performance of all of the covenants, conditions and obligations of Mortgagor
set forth in clauses (A) and (B) of Section 2.1 hereof.
"Permitted Liens" shall have the meaning assigned to that term in the
Loan Agreement.
"Plans" shall mean (a) the plans and specifications prepared by or on
behalf of Mortgagor pursuant to and in accordance with the Disbursement
Agreement, which describe and show the proposed expansion and modification of
Mortgagor's refinery and (b) a budget prepared by or on behalf of Mortgagor.
"Proceeds" shall have the meaning ascribed thereto in Section 4.6(b)
hereof.
"Project" shall mean the expansion and modification of Mortgagor's
refinery pursuant to the Plans.
"Property Leases" shall mean (a) each of the leases and subleases
listed on Exhibit "F" attached hereto, as said leases and subleases may be
amended, restated, renewed or extended from time to time in the future in
compliance with this Mortgage, including, without limitation, any options to
purchase, extend, or renew provided for therein, and (b) any or all other
lease(s) or sublease(s) with respect to the Mortgaged Property, under which
Mortgagor is lessee or sublessee, as such (sub)lease(s) may be amended,
restated, renewed, modified, supplemented, or extended from time to time in the
future in compliance with this
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Mortgage, including any options to purchase, extend or renew provided for in
such (sub)lease(s).
"Property Lease Damage Claims" means all of Mortgagor's claims and
rights to the payment of damages that may arise from the failure of the lessor
under any Property Lease to perform under such Property Lease, or rejection of
any Property Lease by the lessor under such Property Lease under any Bankruptcy
Law.
"Property Proceeds" shall mean all Proceeds other than proceeds of
Business Interruption Insurance.
"Real Property" shall have the meaning ascribed thereto in Article II
of this Mortgage.
"Relevant UCC" shall mean the Uniform Commercial Code in effect in any
state in which any of the Collateral is located.
"Rents" shall have the meaning ascribed thereto in the granting
clauses hereof.
"Secured Party" shall have the meaning set out in Article VIII of this
Mortgage.
"Security Agreement" shall mean that certain Security and Pledge
Agreement, dated as of June 13, 1997, by and between Mortgagor and Mortgagee.
"Taking" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, or, to the extent, if
any, not prohibited by the Loan Agreement, by agreement between Mortgagor and
any Governmental Authority authorized to exercise such rights, provided that
such agreement shall result in Proceeds to Mortgagor in an amount not less than
the fair value of the Mortgaged Property so taken, of all or part of the
Mortgaged Property, or any interest therein or right accruing thereto,
including any right of access, use or possession thereto or any change of grade
affecting the Real Property or any part thereof.
"Violation" shall have the meaning ascribed thereto in Section
4.18(a)(i) hereof.
ARTICLE II
Mortgage, Deed of Trust
1 Grant of Mortgage on Real Property and Security Interest in Personal
Property. FOR THE PURPOSE OF SECURING:
(A) the payment and performance of all covenants, conditions,
liabilities and obligations contained in the Note or under or in connection
with any of the other Loan
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Documents, all out-of-pocket expenses (excluding expenses representing
administrative overhead) at any time and from time to time incurred by
Mortgagee in connection with the administration and/or enforcement of the Loan
Documents (including, without limitation, the reasonable fees, charges and
disbursements of counsel employed by Mortgagee in connection therewith), and
all sums due or to become due at any time and from time to time hereunder or
under the Loan Documents to Mortgagee, and
(B) all principal, accrued interest and any other sums now or
hereafter owing on the Loan Documents,
Mortgagor, for and in consideration of the premises and of the debts and trusts
hereinafter mentioned, has GRANTED, BARGAINED, WARRANTED, MORTGAGED, AFFECTED,
HYPOTHECATED, PLEDGED, ASSIGNED, TRANSFERRED AND CONVEYED A SECURITY INTEREST,
AND BY THESE PRESENTS DOES GRANT, BARGAIN, WARRANT, AFFECT, HYPOTHECATE,
MORTGAGE, PLEDGE, ASSIGN, TRANSFER AND CONVEY AND GRANT A SECURITY INTEREST,
for the use and benefit of Mortgagee all of Mortgagor's rights, titles, and
interests in, to, under, derived from or with respect to all of the following
described real and personal property, including, but not limited to, any
fixtures, accessories, and/or equipment pertaining thereto, whether now owned
or hereafter acquired, namely:
All those plots, pieces or parcels of land more particularly described
in Exhibit "A" annexed hereto and made a part hereof, other than the Catofin(R)
Unit, together with the right, title and interest of Mortgagor, if any, in and
to (i) the land lying in the bed of any streets, roads or avenues, open or
proposed, public or private, in front of, adjoining or abutting said land to
the center line thereof, (ii) the air space and development rights pertaining
to said land and the right to use such air space and development rights, (iii)
all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging or in any way appertaining to said land, (iv) all
easements now or hereafter benefiting said land and (v) all royalties, fruits
and revenues appertaining to the use and enjoyment of said land, including, but
without limiting the generality of the foregoing, all drainage, timber,
mineral, water, oil, coal, gas and other similar rights (all of the foregoing
being hereinafter collectively referred to as the "Land");
TOGETHER with all buildings, structures, component parts, other
constructions and other improvements now or hereafter attached to, or erected
in or upon the Land or any component part, part or parcel thereof, including,
without limitation, the refinery located on the Land (hereinafter collectively
referred to as the "Improvements," and the Land together with the Improvements
and the Fixtures being hereinafter collectively referred to as the "Real
Property");
TOGETHER with all servitudes, rights of use, easements, rights of way
and use now or hereafter affecting the Land and/or the Improvements, including,
but not limited to,
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those set forth on Exhibit "B" annexed hereto and made a part hereof, including
any replacements, modifications, additions or extensions thereto or similar
agreements entered into subsequent to the date hereof (as may be permitted
hereunder) (collectively, the "Easements"), and all rights pertaining to the
use and enjoyment of the Real Property and all Mortgagor's interests in natural
resources and access to natural resources located thereat;
TOGETHER with Mortgagor's right, title and interest in, to and under
all leases, lettings, subleases, underlettings, concession agreements, rentals
agreements, occupancy agreements, permits and licenses now existing or
hereafter entered into affecting the Real Property or any portion thereof
and/or affecting any lands adjacent to or used in connection with Mortgagor's
business and operations now or hereafter conducted at the Real Property,
together with any replacements, modifications or extensions thereto including,
without limitation, the leases described on Exhibit "C" hereto (collectively,
the "Leases") and in, to and under all deposits made or hereafter made as
security under the Leases, subject to the prior legal rights under the Leases
of the lessees making such deposits, and any and all guarantees, and all
modifications, renewals and extensions thereof, together with any and all of
the benefits, revenues, income, rents, issues and profits due or to become due
or to which Mortgagor is now or hereafter may become entitled arising out of
the Leases or the Real Property or any portion thereof (collectively, the
"Rents");
TOGETHER with all of Mortgagor's right, title and interest, whether
now held or hereafter acquired, in and to all component parts, other
constructions, pipeline systems, refinery equipment and systems, fixtures,
corporeal movables, other systems, machinery, apparatus, equipment and fittings
of every kind and nature whatsoever and all appurtenances, additions,
substitutions, and replacements thereof now or hereafter attached or affixed
to, constituting part of or located in or upon the Land, the Improvements or
any part thereof (collectively, the "Fixtures"), including, but without
limiting the generality of the foregoing, all heating, lighting, incinerating,
and power equipment, engines, pumps, tanks, motors, conduits, switchboards,
plumbing, lifting, cleaning, fire-prevention, fire-extinguishing,
refrigerating, ventilating, and communications apparatus, air-cooling and
air-conditioning apparatus, pipelines, storage tanks and other tanks, storage
holders, processing units, catalysts, cokers, crackers, distillation, cracking,
desulphurizing and deasphalting systems, terminals, control houses,
laboratories, experiment stations, platforms, towers, furnaces, elevators,
escalators, ducts and compressors;
TOGETHER with all drainage, mineral, water, oil, gas, timber and sewer
pipes, conduits and wires, and other facilities furnishing utility or other
services and other similar rights now or hereafter benefiting the Real Property
or any portion thereof or appertaining thereto;
TOGETHER with, all right, title and interest of Mortgagor, whether now
owned or held or hereafter acquired, in and to (a) to the extent permitted by
applicable law, the franchises, permits, licenses, certificates, approvals,
consents and rights therein respecting
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the ownership, use, occupancy and/or operation of the Real Property, Easements
and/or Inventory (the "Permits"), (b) the Plans, (c) all contracts and
agreements relating to the Mortgaged Property, including, without limitation,
the Material Contracts, and other documents, books and records related to the
operation of the Mortgaged Property, (d) all consents, licenses, warranties,
guaranties and building and other permits required or useful for the
construction, completion, occupancy and operation of the Mortgaged Property or
any portion thereof, (e) all of Mortgagor's rights under any contracts for the
sale of all or any portion of the Mortgaged Property, and (f) all plans and
specifications, engineering reports, land planning, maps, surveys, and any
other reports, exhibits or plans and specifications used or to be used in
connection with the construction, operation or maintenance of the Mortgaged
Property, together with all amendments and modifications thereof; provided,
however, that notwithstanding the foregoing, the Mortgaged Property shall not
include the Company UCC Collateral;
TOGETHER with, (a) all unearned premiums, accrued, accruing or to
accrue under any insurance policies now or hereafter obtained by Mortgagor in
connection with the Real Property and/or Easements or any portion thereof and
all of Mortgagor's right, title and interest in and to all proceeds which now
or hereafter may be paid under any insurance policies now or hereafter obtained
by Mortgagor or any other person in connection with the loss of, or damage to,
the Real Property and/or Easements or any portion thereof, together with the
interest payable thereon, including, but without limiting the generality of the
foregoing, proceeds of casualty insurance, title insurance, and any other
insurance (other than liability insurance) now or hereafter maintained with
respect to damage to or loss of the Real Property and/or Easements, together
with the right to collect and receive same, and (b) all of Mortgagor's right,
title and interest in and to all claims and demands in respect of, and all
awards, payments and/or other compensation, together with the interest payable
thereon which now or hereafter may be made with respect to the Real Property
and/or Easements as a result of, (i) a taking by eminent domain, condemnation
or otherwise, or (ii) any other injury to or decrease in the value of the Real
Property and/or Easements or any portion thereof, in any of the foregoing
circumstances described in clause (a) or (b) above to the extent of the
entire amount of the Indebtedness and Obligations outstanding as of the date of
Mortgagee's receipt of any such proceeds or awards, notwithstanding that the
entire amount of the Indebtedness and Obligations may not be due and payable,
and also to the extent of reasonable out-of-pocket attorneys' fees, charges and
disbursements incurred by Mortgagee in connection with the collection of any
such proceeds or awards;
TOGETHER with all right, title and interest of Mortgagor in and to all
improvements, betterments and, in the case of the Fixtures, all substitutes and
replacements of, and all additions and appurtenances to, the Real Property and
the Easements, and in each such case, the foregoing shall be deemed a part of
the Real Property and shall become subject to the lien of this Mortgage as
fully and completely, and with the same priority and effect, as though now
owned by Mortgagor and specifically described herein, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
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TOGETHER with any property that may from time to time hereafter, by
delivery or by writing of any kind executed by or on behalf of Mortgagor, be
subjected to the lien and security interest hereof by Mortgagor or by anyone
authorized on Mortgagor's behalf, and Mortgagee is hereby authorized to receive
the same as additional security;
TOGETHER with any and all proceeds, products, increases, profits,
substitutions, replacements, renewals, additions, amendments and accessions of,
to and for all of the foregoing property. All the aforesaid properties, rights
and interests which are hereby subjected to the lien and/or security interest
of this Mortgage, together with any additions thereto which may be subjected to
the lien and/or security interest of this Mortgage by means of supplements
hereto or otherwise, shall hereinafter be referred to as the "Mortgaged
Property."
For purposes of Louisiana Civil Code article 3288, the maximum amount
of Indebtedness secured by this Mortgage is $1,250,000,000.
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee and its
successors and assigns forever.
ARTICLE III
Particular Warranties and Representations of Mortgagor
Mortgagor hereby warrants and represents, as of the date hereof, to
Mortgagee as follows:
1 Title. Except for Permitted Liens, Mortgagor has good and marketable
fee title, and is possessed of, each property, right, interest or estate
constituting the Mortgaged Property other than the Leasehold Estates. Except
for Permitted Liens, Mortgagor has good and marketable title to the Leasehold
Estates and is possessed of each property, right, interest or estate
constituting that portion of the Mortgaged Property comprising the Leasehold
Estates. Except for Permitted Liens, this Mortgage is a valid and enforceable
first lien on the Mortgaged Property. Each of the Property Leases, Leases and
the Material Contracts is free from any material credit, deduction, allowance,
defense, dispute, setoff, or counterclaim (other than current charges provided
for in such instruments but not yet due and payable), and there is no extension
or indulgence with respect thereto. The Permitted Liens do not, individually or
in the aggregate, materially adversely impair Mortgagor's current use and
operation of the Mortgaged Property or Mortgagor's ability to perform the
Obligations now or hereafter in a timely way.
2 Contracts. Mortgagor has delivered to Mortgagee true, correct and
complete copies of all Property Leases, Leases, and Material Contracts,
including all amendments and modifications, existing as of the date hereof.
Mortgagor has not executed or entered into any modifications or amendments of
the Property Leases, the Leases or the Material Contracts,
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either orally or in writing, other than written amendments that have been
disclosed to Mortgagee in writing. Each of the existing Property Leases, Leases
and Material Contracts is valid, binding and enforceable against Mortgagor in
accordance with its respective terms (except as the enforceability thereof may
be limited by Bankruptcy Laws and by general equitable principles (regardless
of whether such enforceability is considered in a proceeding at equity or at
law), and except as rights to indemnity thereunder may be limited by applicable
law) and is in full force and effect, and no material default on the part of
any party thereto exists thereunder. To the best knowledge of Mortgagor, all
amounts due and payable in accordance with the terms of each of the Property
Leases, the Leases and the Material Contracts have been duly paid or provided
for and the obligations to be performed under each Lease and each Material
Contract have been duly performed, in all material respects in accordance with
the terms of such contracts and any related agreements, and in conformity with
all material Legal Requirements applicable thereto. Mortgagor has not accepted
prepayments of installments of Rent under any Leases more than one month in
advance of the date when the same are due, except for security deposits not in
excess of one month's Rent.
3 No Liens. Except for Permitted Liens, the Mortgaged Property is free
of any and all claims, liens, charges, encumbrances, mortgages, security
interests, contracts, agreements, options, preferential purchase rights or
other restrictions or limitations of any nature or kind.
4 Power and Authority. Mortgagor has the full power and legal right to
bargain, grant, warrant, mortgage, affect, hypothecate, pledge, assign,
transfer, convey and grant a security interest in all of the Mortgaged
Property, all in the manner and form herein provided and without obtaining the
waiver, consent or approval of any lessor, sublessor, governmental agency or
entity or party whomsoever or whatsoever, except as already obtained and
identified on Exhibit "D" annexed hereto.
5 No Governmental Approvals. No approval or consent of any regulatory
or administrative commission or authority, or of any other governmental body,
is necessary to authorize the execution and delivery of this Mortgage and no
such approval or consent is necessary to authorize the observance or
performance by Mortgagor of the covenants herein contained.
6 Mortgage Collateral.
(a) Location of Mortgagor; Taxpayer Identification Number. The
principal place of business of Mortgagor and Mortgagor's taxpayer
identification number are accurately reflected on the face page of this
Mortgage.
(b) Ownership of Collateral. Mortgagor is the legal and beneficial
owner of the Mortgage Collateral in which it is granting a security interest
free and clear of any lien, except for liens created hereunder in favor of
Mortgagee and Permitted Liens. No
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effective financing statement or other instrument similar in effect covering
all or any part of the Mortgage Collateral is on file in any recording office,
except such as may have been filed in favor of Mortgagee relating to this
Mortgage or the Security Agreement.
ARTICLE IV
Particular Covenants and Agreements of Mortgagor
Mortgagor hereby covenants to and agrees with Mortgagee as follows:
1 Payment of the Indebtedness. Mortgagor shall duly and punctually pay
the principal of, interest on, and all other amounts payable in respect of the
Indebtedness, including each and every Obligation owing under the terms of the
Note, as the same shall become due and payable under the Note.
2 Performance of Other Obligations. Mortgagor shall duly and
punctually perform and observe all of the Obligations, including each and every
Obligation owing under the Loan Documents.
3 Operation of Mortgaged Property. So long as the Indebtedness or any
part thereof remains unpaid or any of the Obligations have not been performed,
at the expense of Mortgagor:
(a) Mortgagor shall do all things necessary to keep unimpaired
Mortgagor's rights and remedies in or under the Mortgaged Property and, except
as otherwise permitted hereby or in the Loan Agreement, shall not (i) abandon
or forfeit, surrender, release or default under any Property Lease, any Lease
or any Material Contract, unless undertaken in the ordinary course of business
or (ii) abandon, sell, convey, assign, lease or otherwise transfer any right,
title or interest of Mortgagor under the Material Contracts or the Property
Leases, or consent to any of the foregoing, directly or indirectly, without the
express prior written consent of Mortgagee, which consent shall not be
unreasonably withheld.
(b) Subject to the right of Mortgagor to contest a Legal
Requirement as provided in the Loan Agreement, Mortgagor promptly shall comply
with, or cause to be complied with, in all material respects, all Legal
Requirements of every Governmental Authority having jurisdiction over the
Mortgaged Property or the use, manner of use, occupancy, possession, operation,
maintenance, alteration or restoration thereof, without regard to the nature of
the work to be done or the cost of performing the same, whether foreseen or
unforeseen, ordinary or extraordinary, and shall perform, or cause to be
performed, all obligations, agreements, covenants, restrictions and conditions
now or hereafter of record which may be applicable to the Mortgaged Property or
to the use, manner of use, occupancy, possession, operation, maintenance,
alteration or restoration thereof.
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(c) Mortgagor shall (i) maintain the Improvements and Fixtures
and any other portion of the Mortgaged Property necessary for Mortgagor's
business operations in good and effective repair, order and operating condition
(reasonable wear and tear excepted); (ii) promptly make all repairs, renewals,
replacements, additions and improvements to the Mortgaged Property as in
Mortgagor's reasonable judgment may be necessary for the proper and
advantageous conduct of Mortgagor's business operations; (iii) not commit or
suffer waste with respect to the Real Property; (iv) not (other than as
permitted pursuant to the Loan Agreement) demolish or remove from the Land any
of the Improvements or Fixtures; (v) not make, install or permit to be made or
installed, any alterations, additions, or improvements to or in the Real
Property except as expressly permitted pursuant to subparagraph (e) below; (vi)
own, operate, develop and maintain the Mortgaged Property, and conduct its
business operations thereon, in a manner consistent with the standards of
prudent operators of comparable facilities in the State of Louisiana; (vii)
permit Mortgagee at all reasonable times during business hours to enter upon
the Mortgaged Property for the purpose of inspecting and appraising any of the
Mortgaged Property; (viii) not do any other act which would materially impair
the value of the Mortgaged Property or the lien or security interest of, or
title granted by, this Mortgage; (ix) not enter into any new Property Leases or
Leases or any modifications or amendments of existing Property Leases or
Leases, except as permitted under the Loan Agreement; and (x) promptly and
diligently exercise each material right it may have under any Lease, Property
Lease or Material Contract (except the right of termination).
(d) Mortgagor shall use its best efforts to expand and modify its
refinery with diligence and continuity in a good and workmanlike manner in
accordance with the Plans except during the existence of delays caused by Force
Majeure. Mortgagor shall use its best efforts to prevent and minimize any
delays caused by Force Majeure.
(e) Without limiting its obligations under subparagraph (d) above,
Mortgagor shall not authorize, permit or make any demolition, alteration or
improvement of any building included in the Mortgaged Property or any new
construction on any part of the Mortgaged Property, except in conformity with
the terms and conditions of the Loan Agreement, the Disbursement Agreement and
this Paragraph 4.3(e).
Unless an Event of Default shall have occurred and be continuing,
Mortgagor shall have the right at all times to make or permit such alterations,
improvements or new construction, structural or otherwise (collectively,
"Alterations"), of or on the Real Property, to be made in all cases subject to
the following conditions:
(i) no Alteration shall be undertaken or carried out
except in conformity with all Legal Requirements, the Loan Agreement
and the Disbursement Agreement;
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(ii) the Real Property as so improved or altered,
upon completion of the work, shall be of a value not less than the
value of the Real Property immediately prior to the making of such
Alteration;
(iii) all work done in connection with any
Alterations shall be done promptly and in good and workmanlike manner.
The work in connection with any Alteration shall be prosecuted with
reasonable dispatch, delays due to Force Majeure excepted;
(iv) no Alteration of any kind shall be made to the
Mortgaged Property which shall change the use or reduce the value of
the Mortgaged Property in any material respect;
(v) the cost of all Alterations shall be paid
promptly, so that the Mortgaged Property and Mortgagor's interest
therein shall at all times be free from liens for labor or materials
supplied or claimed to have been supplied to the Mortgaged Property or
to Mortgagor (subject, however, to Mortgagor's right to contest in
good faith pursuant to the Loan Agreement); and
(vi) at all times when an Alteration is in progress,
Mortgagor shall maintain or cause to be maintained (A) worker's
compensation insurance covering all persons employed in connection
with the Alteration, in an amount at least equal to the minimum amount
of such insurance required by law (unless a contractor shall
self-insure and deliver to Mortgagor a certificate from the State of
Louisiana stating that such contractor is self-insured); and (B)
provided same is not covered in the Insurance Policies, for the mutual
benefit of Mortgagor and Mortgagee, builder's risk insurance,
completed value form, covering all physical loss.
(f) Except as otherwise permitted in the Loan Agreement, Mortgagor
shall perform or cause to be performed, each and all material covenants,
restrictions, agreements, terms, conditions and limitations imposed upon
Mortgagor or its predecessors under the Leases, the Property Leases, the
Material Contracts, and any instrument or document relating thereto, and all
covenants, restrictions, rights of way and use, privileges, franchises,
servitudes, licenses, Easements or tenements affecting the Mortgaged Property.
Mortgagor shall enforce the obligations of the lessor under each of the
Property Leases so that Mortgagor may enjoy all its rights as lessee under the
Property Leases. Mortgagor shall furnish to Mortgagee all information that
Mortgagee may reasonably request from time to time concerning Mortgagor's
compliance with the Property Leases. If any Property Lease is scheduled to
expire prior to the payment in full of the Indebtedness and the performance in
full of the Obligations and if Mortgagor has the right (including, without
limitation, any option) to extend
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or renew such Property Lease, Mortgagor shall effectively exercise such right
and deliver to Mortgagee proof of such exercise at least thirty (30) days
before expiration of the period during which such right may be exercised.
Mortgagor hereby irrevocably delegates to Mortgagee the nonexclusive authority
to exercise any or all of Mortgagor's rights, including the right to give any
and all notices to the lessor under each Property Lease, whether or not
Mortgagor has failed to exercise any such right. Nothing in the foregoing
delegation of authority shall be deemed to impose any obligation or duty upon
Mortgagee.
(g) Except for Permitted Liens, Mortgagor shall cause the Mortgaged
Property and every part thereof and all Rents, income, issues, revenues,
profits and other income from the Mortgaged Property, or incident to or in
connection with the refining of Hydrocarbons or other minerals thereon, or the
operation or development thereof, to be kept free and clear of all claims,
liens, charges, mortgages, security interests, encumbrances or other
restrictions or limitations of any nature or kind.
(h) Mortgagor shall deliver, or cause to be delivered, to Mortgagee
a copy of any notice, demand or other written communication and shall notify
Mortgagee in writing of any other communication from any other party to any
Material Contract, Lease or Property Lease relating to any alleged, potential
(to the extent the same has been disclosed in writing) or actual material
breach thereunder or material breach of any of the covenants, agreements,
terms, or limitations thereof or purporting to terminate or in any other way
materially adversely affect the rights of Mortgagor thereunder. Mortgagor shall
promptly notify Mortgagee of any request that either party to a Property Lease
makes for arbitration pursuant to such Property Lease and of the institution of
any such arbitration. Mortgagor shall promptly deliver to Mortgagee a copy of
the arbitrators' determination in each such arbitration.
(i) Promptly after the execution of this Mortgage, and again
promptly after execution of any amendment to this Mortgage, Mortgagor shall
notify each of the lessors under the Property Leases of the execution and
delivery of this Mortgage or such amendment, as applicable, and take all such
further action as shall be appropriate to ensure that Mortgagee is entitled to
all rights available to a leasehold mortgagee under each Property Lease.
(j) Mortgagor shall not initiate, join in, or consent to any
change to any provision of any Lease, Property Lease, Material Contract,
covenant, right of way or use, privilege, franchise, license, servitude,
Easement, tenement, zoning ordinance or other public or private restrictions
where such change would materially adversely limit the uses which may be made
of the Mortgaged Property or any part thereof.
(k) Mortgagor shall not subordinate, or consent to the
subordination of, any Property Lease to any mortgage encumbering the estate of
the lessor under such Property Lease in the affected portion of the Mortgaged
Property. Mortgagor's obligations under this Mortgage are independent of and in
addition to Mortgagor's obligations under any Property
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Lease. Nothing in this Mortgage shall be construed to require Mortgagor or
Mortgagee to take or omit to take any action that would cause a default under
any Property Lease. Mortgagor promptly shall notify Mortgagee orally after
learning of the commencement of any proceeding under any Bankruptcy Law
affecting the lessor under any Property Lease. Mortgagor also shall give
written notice of such event to Mortgagee, which shall include any information
available to Mortgagor as to the date of such filing, the court in which such
petition was filed, and the relief sought in such petition. Mortgagor promptly
shall deliver to Mortgagee any and all notices, summonses, pleadings,
applications, and other documents that Mortgagor receives in connection with
any bankruptcy of the lessor under any Property Lease and any related
proceedings.
(l) Treatment of Property Leases in Bankruptcy.
(i) If the lessor under any Property Lease rejects
or disaffirms, or seeks or purports to reject or disaffirm, any
Property Lease pursuant to any Bankruptcy Law, then Mortgagor shall
not exercise the 365(h) Election except as otherwise provided in this
paragraph. To the extent permitted by law, Mortgagor shall not suffer
or permit the termination of any Property Lease by exercise of the
365(h) Election or otherwise without Mortgagee's consent. Mortgagor
acknowledges that because the Property Leases are a primary element of
Mortgagee's security for the Indebtedness and the Obligations, it is
not anticipated that Mortgagee would consent to termination of any
Property Lease. If Mortgagor makes any 365(h) Election in violation of
this Mortgage, then such 365(h) Election shall be void and of no force
or effect.
(ii) Mortgagor hereby collaterally assigns to
Mortgagee the 365(h) Election with respect to each and every Property
Lease. Mortgagor acknowledges and agrees that the foregoing assignment
of the 365(h) Election and related rights is one of the rights that
Mortgagee may use at any time to protect and preserve Mortgagee's
other rights and interests under this Mortgage. Mortgagor further
acknowledges that exercise of the 365(h) Election in favor of
terminating any Property Lease without Mortgagee's written consent
would constitute waste prohibited by this Mortgage. Mortgagor
acknowledges and agrees that the 365(h) Election is in the nature of a
remedy available to Mortgagor under a Property Lease, and is not a
property interest that Mortgagor can separate from the Property Lease
under which it arises. Therefore, Mortgagor agrees and acknowledges
that exercise of the 365(h) Election in favor of preserving the right
to possession under a Property Lease shall not be deemed to constitute
Mortgagee's taking or sale of the Mortgaged Property (or any element
thereof) and shall not
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entitle Mortgagor to any credit against the Indebtedness or the
Obligations or impair Mortgagee's remedies hereunder.
(iii) Mortgagor acknowledges that if the 365(h)
Election is exercised in favor of Mortgagor's remaining in possession
under the affected Property Lease, then Mortgagor's resulting
occupancy rights, as adjusted by the effect of the applicable
provision or provisions of Bankruptcy Law, shall then be part of the
Mortgaged Property and shall be subject to the lien of this Mortgage.
(iv) If the lessor under any Property Lease rejects
or disaffirms such Property Lease or purports or seeks to disaffirm
such Property Lease pursuant to any Bankruptcy Law, then:
(1) Mortgagor shall remain in possession of the premises or property demised
under such Property Lease and shall perform all acts necessary for Mortgagor to
remain in such possession for the unexpired term of such Property Lease
(including all renewals), whether the then existing terms and provisions of
such Property Lease require such acts or otherwise.
(2) All the terms and provisions of this Mortgage and the lien created by this
Mortgage shall remain in full force and effect and shall extend automatically
to all of Mortgagor's rights and remedies arising at any time under, or
pursuant to, Section 365(h) of the Bankruptcy Code or similar provisions of the
laws of the State of Louisiana (including, without limitation, LSA-R.S.
13:3881), including all of Mortgagor's rights to remain in possession of the
Mortgaged Property.
(3) Mortgagor, immediately upon learning that the lessor under any Property
Lease has failed to perform the terms and provisions under such Property Lease
(including by reason of a rejection or disaffirmance or purported rejection or
disaffirmance of such Property Lease pursuant to any Bankruptcy Law), shall
notify Mortgagee of any such failure to perform.
(4) Mortgagor unconditionally assigns, transfers, and sets over to Mortgagee
the Property Lease Damage Claims; provided, however, that, for so long as there
does not exist an Event of Default, Mortgagor shall have the right to pursue,
collect and retain any such Property Lease Damage Claims. Subject to
Mortgagor's rights as set forth above, this assignment constitutes a present,
irrevocable, and unconditional assignment of the Property Lease Damage Claims,
and shall continue in effect until the Indebtedness and the Obligations have
been indefeasibly satisfied in full.
(5) If Mortgagor acquires the fee or any other interest in any of the Real
Property and/or personal property covered by the Property Leases, such acquired
interest shall immediately become subject to the lien of this Mortgage as fully
and completely, and with the same effect, as if Mortgagor now owned it and as
if this Mortgage specifically described it, without need
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for the delivery and/or recording of a supplement to this Mortgage or any other
instrument. In the event of any such acquisition, the fee and leasehold
interests in such Real Property and/or personal property (unless Mortgagee
elects otherwise in writing) shall remain separate and distinct and shall not
merge, notwithstanding any principle of law to the contrary.
(6) If any Property Lease is for any reason whatsoever terminated before the
expiration of its term and Mortgagee or its designee shall acquire from the
lessor under such Property Lease a new lease of the property leased under such
Property Lease, then Mortgagor shall have no right, title or interest in or to
such new lease or the estate created thereby. If, however, the Indebtedness
shall have been paid in full (other than by application of proceeds from a
foreclosure sale of the Mortgaged Property) and the Obligations fully
performed, and Mortgagee has no further duty to disburse funds to Mortgagor
under any circumstances, then Mortgagee shall convey (as Mortgagor shall
direct) without warranty its right, title and interest in such new lease or
estate, provided that Mortgagor simultaneously pays any taxes, fees, and
expenses including, without limitation, legal fees and expenses, relating to
such conveyance.
4 Insurance.
(a) Insurance Coverage Prior to Completion of the Project.
Mortgagor shall procure and maintain in full force and effect at all times with
respect to the Project policies of insurance against such perils and hazards,
and in such amounts and with such limits and deductibles as prudent owners and
contractors of construction projects in the State of Louisiana comparable to
the Project (including, without limitation, such policies as Mortgagee may from
time to time reasonably require), and in any event shall continuously maintain
in full force and effect, without cost to Mortgagee, the following described
policies of insurance with respect to the Project (the "Construction Insurance
Policies"), the cost of which may be paid from the Disbursement Account (as
defined in the Disbursement Agreement), if and to the extent permitted under
the terms of the Disbursement Agreement:
(i) Builder's Risk Insurance. A blanket builder's
risk insurance policy or policies (A) on an "all risk" basis (which
insurance shall include coverage for operational testing, removal of
debris, coverage for buildings, structures, boiler, turbine,
machinery, equipment, facilities and other properties constituting a
part of the Mortgaged Property) written on a replacement cost basis,
and transit coverage, and (B) with earthquake and flood insurance
coverage with a $20,000,000 minimum annual aggregate limit. All such
policies may have deductibles of not greater than $10,000,000.
(ii) Worker's Compensation Insurance. A worker's
compensation insurance policy, in such amounts as required by Legal
Requirements, including employer's liability insurance for all
employees of the contractors in the minimum amount of $1,000,000 per
accident and in the aggregate,
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which policy shall include an all states endorsement, and
longshoremen's and harbor workers' compensation act insurance, if
applicable.
(iii) Commercial General and Excess Liability Insurance.
Commercial general and excess liability insurance policies (including
contractual liability) against claims for personal injury (including
bodily injury and death) and property damage. Such insurance shall
provide coverage for products-completed operations and acts of
independent contractors blanket contractual, explosion, collapse and
underground coverage, broad form property damage and personal injury
insurance, with a minimum aggregate limit as follows: (A) from and
after the date hereof to, but not including, the date on which
Hydrocarbons are first introduced into the xxxxx unit, $75,000,000;
and (B) from and after the date on which Hydrocarbons are first
introduced into the xxxxx unit, $100,000,000.
(iv) Comprehensive Automobile Liability Insurance. A
comprehensive automobile liability insurance policy against claims of
personal injury (including bodily injury and death) and property
damage covering all owned, leased, non-owned and hired vehicles used
in the performance of the contractor's obligations under the
construction contracts (including automobile contractual liability
coverage) with a $1,000,000, minimum limit per occurrence and with an
excess liability policy with a minimum limit per occurrence of
$4,000,000, for combined bodily injury and property damage.
(v) Delay-in-Start-Up Insurance. Delay-in-start-up
insurance on an annual basis, in amounts not less than the projected
earnings for the applicable year for those units (and only those
units) coming on line during such year, before interest, income taxes,
depreciation and amortization, but in no event less than an amount
equal to the product of (A) the quotient of projected earnings
applicable to any such unit divided by the total projected earnings
for such year multiplied by (B) the amount necessary to pay the sum of
(1) all principal and interest due and owing under the Loan Agreement
for such year plus (2) fixed charges and other expenses (including,
without limitation, ordinary payroll expenses) of owning, operating
and maintaining the Mortgaged Property for the same period.
(b) Insurance with respect to the Mortgaged Property. Mortgagor shall
maintain in full force and effect at all times insurance against such perils
and hazards, and in such amounts and with such limits and deductibles as
prudent operators of like properties in the State of Louisiana maintain
(including, without limitation, such policies as Mortgagee may from
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time to time reasonably require), and in any event shall continuously maintain
in full force and effect, without cost to Mortgagee, from and after the date
hereof (except as expressly set forth below) the following described policies
of insurance (the "Refinery Insurance Policies", the cost of which may be paid
from the Disbursement Account (as defined in the Disbursement Agreement), if
and to the extent permitted under the terms of the Disbursement Agreement.
(i) Workers Compensation Insurance. A worker's compensation
insurance policy, in such amounts as required by Legal Requirements,
including employer's liability insurance for all employees of
Mortgagor, with a $1,000,000 minimum limit per accident and in the
aggregate where applicable (the policies with respect to which shall
include an all states endorsement), and longshoremen's and harbor
workers' compensation act insurance, if applicable.
(ii) Commercial General and Excess Liability Insurance.
Commercial general and excess liability insurance policies (including
contractual liability) against claims for personal injury (including
bodily injury and death) and property damage. Such insurance shall
provide coverage for products-completed operations and acts of
independent contractors, blanket contractual, explosion, collapse and
underground coverage, broad form property damage and personal injury
insurance with a minimum aggregate limit as follows: (A) from and
after the date hereof to, but not including, the date on which
Hydrocarbons are first introduced into the xxxxx unit, $75,000,000;
and (B) from and after the date on which Hydrocarbons are first
introduced into the xxxxx unit, $100,000,000; provided that aggregate
limits of liability if written under a policy covering more than the
Mortgaged Property shall apply solely to claims occurring with
respect to the Mortgaged Property.
(iii) Comprehensive Automobile Liability Insurance. A
comprehensive automobile liability insurance policy against claims
for personal injury (including bodily injury and death) and property
damage covering all owned, leased, non-owned and hired motor
vehicles, including loading and unloading, with a $1,000,000 minimum
limit per occurrence and with an excess liability policy with a
minimum limit per occurrence of $4,000,000, for combined bodily
injury and property damage and in the aggregate where applicable.
(iv) Property Insurance. "All-Risk" property coverage
insuring Mortgagor's real and personal property against direct
physical loss or damage, which shall include coverage for collapse,
flood and earthmovement as a result
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of perils not otherwise excluded. Such insurance policy or policies
will also be extended to include Mortgagor's property while in
transit, at the locations of all newly acquired property or
equipment, debris removal, demolition and increased cost of
construction. The insurance for direct damage shall be the
replacement value, except Mortgagor shall have the option to insure
the non-operating Mortgaged Property on an "actual cash value" or a
"stipulated value" basis in accordance with normal industry practice.
The insurance policy may have a deductible of no greater than
$10,000,000 per occurrence for direct damage; except that the
deductible will not be more than $20,000,000 per occurrence for
flood, earthmovement and windstorm. All deductibles shall be the sole
responsibility of, and for the account of, Mortgagor.
(v) Boiler and Machinery Insurance. Comprehensive Boiler and
Machinery insurance to cover the sudden and accidental breakdown of
equipment as well as any loss of revenue that may ensue, and/or any
extra expenses incurred to reduce or avert losses with respect
thereto. The limit of Boiler and Machinery insurance shall be the
cost to repair or replace damaged equipment in cases of property
damage. The insurance policy may have a deductible of not greater
than $10,000,000 per occurrence.
(vi) Business Interruption. Business interruption insurance
("Business Interruption Insurance") (including extra expense
insurance), on an annual basis, in amounts not less than projected
gross profit generated by the refinery located on the Mortgaged
Property for those units that are operational (and only those units
that are operational) during the applicable twelve-month period but
in no event less than the amount (the "Fixed Coverage Amount")
necessary to pay the sum of (A) all principal and interest due and
owing under the Loan Agreement for such year plus (B) fixed charges
and other expenses (including, without limitation, ordinary payroll
expenses) of owning, operating and maintaining the Mortgaged Property
for the same period, less the amount (the "Delay-in-Start-Up Coverage
Amount") of insurance coverage provided for such year pursuant to
Section 4.4(a)(v) hereof; provided, however, that in no event shall
the sum of the Delay-in-Start-Up Coverage Amount plus the amount of
insurance coverage provided for pursuant to this Section 4.4(b)(vi)
be less than the Fixed Coverage Amount.
(vii) Performance by Mortgagee. If Mortgagor fails to
procure any of the Insurance Policies, or if any renewal policy is
not delivered to Mortgagee as
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provided in Section 4.4(c) hereof, or if any Insurance Policy is
cancelled for any reason and not replaced on or prior to the date
which is twenty (20) days before the last day on which coverage will
be afforded under such Insurance Policy, Mortgagee may, but shall not
be obligated to, procure such other policies of insurance in such
amounts, and carried with such companies as it may elect, and in such
event, those policies of insurance shall be included within the
definition of "Insurance Policies" set forth herein. Any monies
advanced by Mortgagee for insurance pursuant to this Section 4.4
shall be included in the Obligations and shall become immediately due
and payable, without notice and with interest thereon, at the Default
Rate until paid; provided, however, that in no event shall such
interest rate ever exceed the Highest Lawful Rate. No such advance
shall be deemed to relieve Mortgagor from any default hereunder.
(c) Insurance Policies. (i) All Insurance Policies shall be
in form and maintained with companies and in amounts to be consented to by
Mortgagee, such consent not to be unreasonably withheld or delayed. Without
limiting Mortgagee's ability to approve the aforementioned, an insurance
company shall not be reasonably satisfactory unless such insurance company (y)
has a minimum claims paying rating of at least B+VIII or better by A.M. Best &
Company or nationally recognized foreign insurance carriers acceptable to
Mortgagee, whose acceptance shall not be unreasonably withheld, and (z) is
licensed in or approved by the State of Louisiana. Each policy shall in
addition (A) provide that there shall be no recourse against Mortgagee for
payment of premiums or other amounts with respect thereto, (B) provide that at
least thirty (30) days' prior written notice of cancellation, termination,
material modification or non-renewal of any policy shall be given to Mortgagee
by the insurer, (C) contain the agreement by Mortgagor that the proceeds of all
policies shall be payable to Mortgagee and Mortgagor as their interests may
appear pursuant to a non-contributing mortgagee endorsement, (D) be payable to
Mortgagee and Mortgagor as their interests may appear (other than with respect
to a loss by a third party) regardless of any breach or violation by Mortgagor
of warranties, declarations or conditions contained in such policies, any
action or inaction of the Mortgagor or others, the use of Mortgaged Property
for purposes more hazardous than permitted by the terms of such policy or any
foreclosure relating to the Mortgaged Property or any change in ownership of
all or any portion of the Mortgaged Property, (E) waive any right of
subrogation of the insurers as against Mortgagor or Mortgagee and their
respective officers, employees and agents, (F) with respect to Sections
4.4(a)(i) and 4.4(b)(iv), waive any right of the insurers to any set-off or
counterclaim or any other deduction, (G) in the case of commercial general and
excess liability insurance policies, include a severability of interest or
cross liability clause, (H) provide that the insurance be primary and not
excess to or contributory to any insurance or self-insurance maintained by
Mortgagor or Mortgagee, (I) name Mortgagee as additional insured on all
general, excess and automobile liability policies, (J) name Mortgagee as
"mortgagee" in a standard mortgagee clause in respect of all property insurance
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policies, and (K) provide that no claims be paid thereunder without twenty (20)
days' advance written notice to Mortgagee.
(ii) If Mortgagor receives from any insurer any written
notification or threat of any actions or proceedings regarding the
non-compliance or non-conformity of the Mortgaged Property with any insurance
requirements, it shall give prompt notice thereof to Mortgagee. Mortgagor shall
not use, maintain, operate or occupy, or allow the use, maintenance, operation
or occupancy of, any portion of the Mortgaged Property in any manner which
would make void, voidable or cancelable, or substantially increase the premium
of, any insurance then in force with respect thereto.
(d) Insurance Certificate. Mortgagor shall deliver to Mortgagee,
within thirty (30) days after the close of each fiscal year, a certificate of a
recognized independent insurance consultant reasonably acceptable to Mortgagee
(i) confirming that all Insurance Policies are in full force and effect and all
requisite premiums have been prepaid on the date thereof, (ii) confirming the
names of the companies issuing such policies, (iii) confirming the amounts and
expiration date or dates of such policies, and (iv) including certificates of
insurance evidencing such policies.
(e) Not less than fifteen (15) days prior to the expiration date of
any Insurance Policy, Mortgagor shall deliver to Mortgagee renewal or
replacement certificates of insurance. The requirements of the preceding
sentence shall apply to any separate policies
of insurance taken out by Mortgagor concurrent in form or contributing in the
event of loss with the Insurance Policies.
(f) Title Insurance Policy. Concurrently herewith, Mortgagor has
caused First American Title Insurance Company (the "Title Company") to deliver
a commitment (the "Commitment") to issue to Mortgagee a 1992 ALTA Loan Policy
of Title Insurance insuring the lien of this Mortgage (the "Title Policy") in
form acceptable to Mortgagee. Mortgagor covenants and agrees to (i) use best
efforts to cause the Title Company to issue the Title Policy in the form of the
Commitment not more than thirty (30) days after the date hereof, (ii) cause the
Title Company to issue an endorsement in the form of Exhibit "E" attached
hereto (the "Datedown Endorsement") in accordance with the terms of the
Disbursement Agreement from and after the date hereof to and including the
Final Disbursement Date and (iii) cause the Title Company to issue a Datedown
Endorsement on the first day of each calendar month from and after the Final
Disbursement Date.
5 Reserves for Impositions and Insurance Premiums.
(a) Mortgage Escrow Accounts. Upon the occurrence and during the
continuance of any Event of Default by Mortgagor hereunder, Mortgagee may at
its sole election, without notice to Mortgagor, establish a segregated account
(the "Mortgage Escrow Account"), into which Mortgagor shall deposit, in
accordance with this Section 4.5, additional
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amounts sufficient to discharge the obligations of Mortgagor under Sections 4.4
and 4.7 hereof as and when they become due (such amounts, the "Mortgage Escrow
Amounts"). Upon Mortgagee's election to so retain Mortgage Escrow Amounts in
accordance with the foregoing, Mortgagor shall deposit in the Mortgage Escrow
Account a sum sufficient to pay accrued insurance premiums (the "Premiums") for
all of the Insurance Policies and Impositions assessed against the Real
Property, for one (1) year or, with respect to Impositions, the tax year then
in effect, as the case may be, for the number of months elapsed as of the date
of such election since the last preceding installment of said Premiums or
Impositions shall have become due and payable, including the month in which
such last preceding installment of Premiums or Impositions became due and
payable and the month in which Mortgagee makes such election. During each month
thereafter, until Mortgagee shall elect that the provisions of this Section 4.5
shall no longer be applicable, Mortgagor shall deposit in the Mortgage Escrow
Account with respect to the Mortgage Escrow Amounts a sum equal to one-twelfth
of such Premiums and Impositions for the then-current insurance period and tax
year, so that as each installment of such Premiums and Impositions shall become
due and payable, Mortgagee shall have accumulated at least thirty (30) days
prior to the due date a sum sufficient to pay the same. If the amount of such
Premiums and Impositions has not been definitely ascertained at the time when
any such monthly deposits are to be retained, Mortgagor shall deposit into the
Mortgage Escrow Account Mortgage Escrow Amounts based upon the amount of such
Premiums and Impositions for the preceding year, subject to adjustment as and
when the amount of such Premiums and Impositions are ascertained.
(b) Application of Amounts Held by Mortgagee. The Mortgage Escrow
Amounts shall be held by Mortgagee and shall be applied by Mortgagee to the
payment of the obligations in respect of which such Mortgage Escrow Amounts
were paid, except upon the occurrence of an Event of Default and the
acceleration of the Indebtedness and the consummation of proceedings to
foreclose on any of the Mortgaged Property or a judgment in an action against
Mortgagor under this Mortgage or any other Loan Document, in which case all or
any portion of such Mortgage Escrow Amounts may be otherwise applied to the
Indebtedness in such order or priority as Mortgagee may elect or Mortgagee may
exercise any of its rights or remedies with respect to same, at law or in
equity. Any Mortgage Escrow Amounts retained by Mortgagee in excess of the
actual obligations for which they were retained, shall be held and applied to
such obligations for the ensuing year. Nothing herein contained shall be deemed
to affect any right or remedy of Mortgagee under this Mortgage or otherwise at
law or in equity to pay any such amount and to add the amount so paid to the
Indebtedness hereby secured.
(c) Payment. If Mortgagee elects to retain Mortgage Escrow Amounts
pursuant to this Section 4.5, Mortgagor shall deliver to Mortgagee all tax
bills, bond and assessment statements, statements of Premiums, and statements
for any other obligations referred to above within ten (10) days of the date
the same are received by Mortgagor, and Mortgagee shall cause same to be paid
when due to the extent Mortgage Escrow Amounts are available therefor.
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6 Condemnation and Insurance Proceeds.
(a) Notice. Mortgagor will promptly notify Mortgagee and, on or
before the Final Disbursement Date, the Disbursement Agent and the Construction
Supervisor in writing upon obtaining knowledge of (i) the institution of any
proceedings relating to any Taking of, or (ii) the occurrence of any casualty,
damage or injury to, the Mortgaged Property or any portion thereof, the
restoration of which is estimated by Mortgagor in good faith to cost more than
One Million Dollars ($1,000,000). In addition, notice of any casualty, damage
or loss, the restoration of which is estimated by Mortgagor in good faith to
cost in excess of One Million Dollars ($1,000,000), shall set forth Mortgagor's
good faith estimate of the cost of repairing or restoring such damage or
destruction in reasonable detail.
(b) Proceeds. In the event of any Taking of, or casualty or other
damage or injury to, the Mortgaged Property or any portion thereof, Mortgagor's
right, title and interest in and to all compensation, awards, proceeds,
damages, claims, insurance recoveries, causes and rights of action (whether
accrued prior to or after the date hereof) and payments which Mortgagor may
receive or to which Mortgagor may become entitled with respect to the Mortgaged
Property or any part thereof, in excess of Mortgagor's reasonable costs of
collection (collectively, "Proceeds"), in connection with any such Taking,
casualty or other damage or injury to the Mortgaged Property, or any part
thereof, are hereby assigned to and shall be paid to Mortgagee and (i) from and
after the date hereof to, but not including, the Final Disbursement Date,
Mortgagee shall deposit such proceeds in the Collateral Account for
disbursement in accordance with the terms of the Disbursement Agreement and
(ii) from and after the Final Disbursement Date, such proceeds shall be held by
Mortgagee and disbursed in accordance with the terms hereof. Except to the
extent that any Proceeds are applied to the cost of the repair, restoration and
rebuilding of the Mortgaged Property, such Proceeds shall be deemed to be "Net
Cash Proceeds" pursuant to Section 4.16 of the Indenture. Notwithstanding
anything to the contrary set forth in this Mortgage, from and after the Final
Disbursement Date, so long as no Event of Default has occurred and is
continuing (i) to the extent Property Proceeds are not in excess of One Million
Dollars ($1,000,000) in the aggregate (the "Threshold Restoration Amount"),
then Mortgagee hereby consents to and agrees that such Property Proceeds are to
be paid directly to Mortgagor to be applied to restoration of the Mortgaged
Property in accordance with the terms hereof and (ii) with respect to Proceeds
of Business Interruption Insurance, all amounts in excess of the amount
necessary to comply with Section 2.3, Section 2.4 and Section 3.1 of the Loan
Agreement shall be paid to Mortgagor. Mortgagor shall not adjust, compromise or
settle any claim for insurance or Taking Proceeds in connection with a single
event or series of events which is reasonably expected to be in excess of the
Threshold Restoration Amount without the prior written consent of Mortgagee
and, on or before the Final Disbursement Date, the Construction Supervisor. If
any insurance or Taking Proceeds are received by Mortgagor, such Proceeds shall
be received in trust for Mortgagee and shall be segregated from other funds of
Mortgagor. From and after the Final
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Disbursement Date, in the event that any Property Proceeds are in excess of the
Threshold Restoration Amount, or if an Event of Default pursuant to Section
8.1(a) or Section 8.1(b) of the Loan Agreement has occurred and is continuing,
then all Proceeds shall be paid over to Mortgagee to be held by Mortgagee in a
segregated account, in each case to be applied or disbursed in accordance with
the provisions hereof.
(c) Restoration. Promptly after the occurrence of
any damage or destruction to any portion of the Mortgaged Property or a Taking
of a portion of the Mortgaged Property, Mortgagor shall be obligated, at its
expense (whether or not Property Proceeds are sufficient for such purpose,
provided Mortgagee shall make the Property Proceeds available to Mortgagor) to
effect the repair, restoration and rebuilding of the Mortgaged Property to
substantially the same condition such Mortgaged Property was in prior to the
casualty (or in the case of a Taking, to the extent it is capable of being
restored) (such repair, restoration and rebuilding are sometimes hereinafter
collectively referred to as the "Work") so damaged, destroyed or remaining
after such Taking in compliance with all applicable Legal Requirements,
insurance requirements and any applicable Property Lease (which non-compliance
could or would have a material adverse effect upon the Mortgaged Property or
any material portion thereof, or the utility or operation thereof), and free
and clear of any and all liens except Permitted Liens, and Mortgagee shall (to
the extent provided by Section 4.6(c)(2) below and, prior to the Final
Disbursement Date, pursuant to the terms of the Disbursement Agreement) make
the net Property Proceeds available to Mortgagor with respect to such casualty
or Taking for such Work in accordance with the provisions of this Mortgage.
(1) If, pursuant to the terms of this Section 4.6, Proceeds are not deemed to
be "Net Cash Proceeds" under the Loan Agreement, then Mortgagee shall make the
Property Proceeds which it is holding pursuant to the terms hereof available to
Mortgagor for payment of or reimbursement of Mortgagor's expenses incurred with
respect to the Work, upon receipt of a certificate signed by an officer of
Mortgagor stating that:
(A) there exists no continuing Event of Default which would not be cured by the
Work;
(B) the estimated cost of the Work (as estimated by the Construction
Supervisor, if such estimate is performed on or before the Final Disbursement
Date, or by an Independent Architect, if such estimate is performed after the
Final Disbursement Date) does or does not exceed the Proceeds available; and
(C) the plans and specifications require that the Work be done in a first-class
workmanlike manner at least equivalent to the quality and character of the
original work in the Improvements, so that upon completion thereof, the
Mortgaged Property shall be of reasonably equivalent value and general utility
to the Mortgaged Property prior to the damage or destruction; provided,
however, that in the case of a Taking the restoration of the Mortgaged Property
shall be done to the extent reasonably practicable after taking into account
the consequences of such Taking.
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If the estimated cost of the Work exceeds the Property
Proceeds, Mortgagor shall (within a reasonable period of time after receipt of
such estimate) deposit with or deliver to Mortgagee either (A) Cash Equivalents
or (B) a Letter of Credit, each in the amount of the excess of the estimated
cost over the Proceeds available. Mortgagor shall notify Mortgagee in the event
of a downgrade in the rating of such issuer of such Letter of Credit within
thirty (30) days of such downgrade, in which event Mortgagee shall be entitled
immediately to draw upon such Letter of Credit, unless Mortgagor shall obtain a
substitute Letter of Credit from an issuer which satisfies the criteria set
forth herein within thirty (30) days after Mortgagor becomes aware of such
downgrade. Mortgagor shall restore all Improvements such that when they are
fully restored and/or repaired such Improvements and their contemplated use
shall comply in all material respects with all applicable Legal Requirements,
including, without limitation, zoning, environmental and building laws, codes,
ordinances and regulations.
(2) Disbursement of the Property Proceeds (if the Proceeds are in excess of the
Threshold Restoration Amount) shall be made from time to time (but not more
frequently than twice in any month) by the Disbursement Agent in accordance
with the Disbursement Agreement, on or before the Final Disbursement Date, or
thereafter, by Mortgagee, as the Work progresses upon receipt by Mortgagee and,
if such disbursement occurs on or before the Final Disbursement Date, the
Construction Supervisor and the Disbursement Agent (in addition to the
certificate referred to in clause (1) hereof) of (i) a certificate from an
officer of Mortgagor dated not more than thirty (30) days prior to the
application for such payment, requesting such payment or reimbursement and
setting forth the Work performed which is the subject of such request,
specifying the parties which performed such Work and the actual cost thereof,
and also certifying that such Work and materials are free and clear of liens
other than Permitted Liens, and that the undisbursed balance of said Property
Proceeds together with all amounts deposited, bonded, guaranteed or otherwise
funded pursuant to clause (1) above, shall be at least sufficient to pay for
the cost of completion of the Work, and (ii) a certificate of performance of
the Work together with an estimate of the cost to complete the Work, which
certificate shall be executed by the Construction Supervisor, if such
certificate is delivered on or before the Final Disbursement Date, or by an
Independent Architect, if such certificate is delivered after the Final
Disbursement Date. No disbursement request for Proceeds shall be made for
payment to any contractor in excess of 90% of the value of the work theretofore
performed by such contractor until the substantial completion of such
contractor's portion of the Work. Property Proceeds shall not be disbursed for
retainage under any contract until such amount is properly payable to the
contractor in question. Upon final completion of the Work final payment shall
be made upon receipt by Mortgagee and, if such disbursement occurs on or before
the Final Disbursement Date, the Disbursement Agent of (x) a certification as
to the completion substantially in accordance with the plans and
specifications, such certification to be executed by the Construction
Supervisor, if such certification is delivered on or before the Final
Disbursement Date, or an Independent Architect, if such certification is
delivered after the Final Disbursement Date, and (y) certificate from an
officer of Mortgagor as to the expiration of the period provided under the law
of the State of Louisiana for the filing of mechanic's
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and materialmen's liens or upon delivery of final lien waivers from all
appropriate parties. Mortgagee may at its option require an endorsement to its
title insurance policy insuring the continued priority of the lien of this
Mortgage (subject to Permitted Liens) as to all sums advanced hereunder, such
endorsement to be paid for by Mortgagor. Any Property Proceeds remaining after
the completion of the Work shall be deemed to be "Net Cash Proceeds" pursuant
to the Loan Agreement.
(3) In the event that the certificate required by Section 4.6(c)(2) above is
not delivered to Mortgagee and, if applicable, the Disbursement Agent, within
twenty (20) days after notice is received by Mortgagor that Mortgagee has
obtained such Property Proceeds, then all Property Proceeds with respect to the
Taking of or damage or injury to the Mortgaged Property in question shall be
deemed to be "Net Cash Proceeds" pursuant to the Loan Agreement.
(4) Notwithstanding anything to the contrary herein, in the event of a casualty
which damages all or substantially all of the Mortgaged Property, or of a
Taking of all or substantially all of the Mortgaged Property, all Proceeds
received in connection with such casualty or Taking shall be applied to the
Indebtedness; provided, however, that if (x) Mortgagor delivers to Mortgagee a
certification that such restoration can be completed within one (1) year, and
in all events, before the date which is eighteen (18) months prior to the
Maturity Date, which certification shall be executed by the Construction
Supervisor, if such certification is delivered on or before the Final
Disbursement Date, or by an Independent Architect, if such certification is
delivered after the Final Disbursement Date, and (y) Mortgagor either (A)
maintains the Business Interruption Insurance in compliance with the conditions
set forth in Section 4.4 or (B) deposits with or delivers to Mortgagee, as
additional security until such restoration is completed, either Cash and Cash
Equivalents or a Letter of Credit in commercially reasonable form, in an amount
required by Mortgagee, then Mortgagor may, at its option, restore the Mortgaged
Property using available Property Proceeds.
(d) In the event of a relocation of Prospect Road
that comports with the terms and provisions of the Loan Agreement, Mortgagee
shall release from the lien of this Mortgage that portion of the Mortgaged
Property that is dedicated to a government authority in connection with such
relocation.
7 Impositions. Subject to Mortgagor's right to contest same
as provided in the Loan Agreement, Mortgagor shall pay or cause to be paid,
before delinquent, all Impositions and, on demand, shall furnish proof of such
payment to Mortgagee.
8 Recording, Etc. Mortgagor shall promptly and at
Mortgagor's expense record, register, deposit and file this Mortgage and every
other instrument in addition or supplemental hereto in such offices and places
and at such times and as often as may be necessary to perfect, preserve,
protect and renew the lien and security interest hereof as a recorded lien on
real property and fixtures and perfected security interest on personal property
and fixtures, as the case may be, and the rights and remedies of Mortgagee
hereunder, and
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otherwise shall do and perform all matters or things necessary or expedient to
be done or observed by reason of any law or regulation of the State of
Louisiana, the Relevant UCC or the laws of the United States or of any other
competent authority, for the purpose of effectively creating, maintaining and
preserving the lien and security interest created by this Mortgage and the
perfection and priority thereof.
(a) In the event of the passage, after the date of
this Mortgage, of any law of the jurisdiction in which the Real Property is
located which shall deduct from the value of the Mortgaged Property, for
purposes of taxation, any lien thereon or shall change in any way the laws for
the taxation of mortgages or debts secured by mortgages or the manner of the
collection of any such taxes and shall impose a tax, either directly or
indirectly, on this Mortgage or any other Loan Document, then (1) Mortgagor
shall deliver an opinion of reputable, independent counsel experienced in such
matters to the effect that (i) Mortgagor and Mortgagee are exempt from payment
of such tax, or (ii) payment of such tax in connection with this Mortgage and
the Indebtedness is not required as a result of an exemption, or (iii) if there
exists no such exemption, that Mortgagor shall be permitted by law to pay the
whole of such tax in addition to all other payments required hereunder and
under the other Loan Documents and, (2) additionally, if the opinion described
in (1)(iii) above shall be received, Mortgagor shall pay such tax when the same
shall be due and payable and shall agree in writing to pay such tax when
thereafter levied or assessed against the Mortgaged Property and the payment of
any such tax by Mortgagor would not be deemed to result in the imposition of
interest under the Loan Documents in excess of the Highest Lawful Rate;
provided further, however, that Mortgagor shall have the right to contest any
such tax in accordance with the terms of the Loan Agreement; provided further,
that in no event shall Mortgagee be obligated to pay any such tax. Mortgagor
hereby agrees to indemnify, save, defend and hold harmless Mortgagee from and
against any and all losses, costs, claims, liabilities, actions or causes of
action, costs, expenses or other damages whatsoever (including, without
limitation, reasonable attorneys' fees, charges and disbursements) incurred by
Mortgagee as a result of or in connection with any such tax.
9 Sale or Mortgage of Mortgaged Property. All properties
described within this Mortgage and affected by this Mortgage are to remain so
specially GRANTED, BARGAINED, WARRANTED, MORTGAGED, AFFECTED, HYPOTHECATED,
PLEDGED, ASSIGNED, TRANSFERRED AND CONVEYED unto and in favor of Mortgagee
until the full and final satisfaction of the Obligations. Except for Permitted
Liens and as otherwise permitted by the Loan Agreement, Mortgagor shall not
sell, convey, mortgage, alienate, affect, hypothecate, pledge, assign, abandon
or otherwise dispose of or encumber the Mortgaged Property nor any portion
thereof, nor any of Mortgagor's rights, titles, interests or estates therein
without first securing the express written consent of Mortgagee, which consent
may be withheld in Mortgagee's sole and absolute discretion.
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10 Records, Statements and Reports. Mortgagor shall keep
proper books of record and account in which complete and correct entries shall
be made of Mortgagor's transactions in accordance with generally accepted
accounting principles.
11 Right of Entry and Inspection of Books. Mortgagee and
the agents of Mortgagee are hereby authorized to (a) enter upon the Real
Property, and all parts thereof, for the purposes of investigating and
inspecting the condition and operation thereof, (b) examine the books of
account, records and files of Mortgagor, and (c) discuss the affairs, finances
or accounts of Mortgagor and be advised as to the same by any officer or
employee of Mortgagor, all at such reasonable times during normal business
hours or intervals as Mortgagee may desire, and so long as it does not
unreasonably interfere with the business operations of Mortgagor.
12 Qualification to Do Business; Maintenance of Existence.
Mortgagor shall (a) continue to be in good standing and duly qualified to
transact business in the State of Louisiana and (b) maintain its corporate
existence, except as otherwise permitted by the Loan Agreement.
13 Expenses. Mortgagor shall promptly upon demand by
Mortgagee pay all reasonable costs and out-of-pocket expenses heretofore or
hereafter incurred by Mortgagee (including, without limitation, reasonable
attorneys' fees, charges and disbursements) in connection with the enforcement
of any of Mortgagee's rights hereunder.
14 Further Assurances. Mortgagor shall execute and deliver
such other and further instruments and shall use its best efforts to do such
other and further acts as in the opinion of Mortgagee may be necessary or
desirable to carry out more effectively the purposes of this instrument,
including, without limiting the generality of the foregoing, (a) prompt
correction of any defect which may hereafter be discovered in the title to the
Mortgaged Property or any part thereof other than Permitted Liens or in the
execution, acknowledgment or notarization of any of the Note, the Loan
Agreement, this Mortgage or any other Loan Document, and (b) obtaining any
necessary governmental approvals, including, without limitation, those of the
State of Louisiana.
15 Adverse Claim. Subject to the Permitted Liens, Mortgagor
shall warrant and forever defend the title to the Mortgaged Property unto
Mortgagee against every person whomsoever lawfully claiming the same or any
part thereof, and Mortgagor shall maintain and preserve as first priority, the
lien and security interest created hereby so long as any of the Indebtedness
remains unpaid or any Obligations remain unperformed. Should an adverse claim
be made against or a cloud develop upon the title to any part of the Mortgaged
Property, other than Permitted Liens, or upon the lien and security interest
created by this Mortgage, Mortgagor agrees that it shall immediately defend
such adverse claim or take appropriate action to remove such cloud at
Mortgagor's expense, and Mortgagor further agrees that, after prior notice to
Mortgagor, Mortgagee may take such other action as Mortgagee deems
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advisable to protect and preserve its interests in the Mortgaged Property, and,
in such event, Mortgagor shall indemnify Mortgagee against any and all costs,
reasonable attorneys' fees, charges and disbursements and other expenses which
it or they may incur in defending against any such adverse claim or taking
action to remove any such cloud.
16 Relocation of Offices. Mortgagor shall not relocate its
principal place of business or chief executive office to a county or state
other than that specified in Section 3.6 of this Mortgage or otherwise relocate
any material portion of the personal property comprising part of the Mortgaged
Property to a county or state other than that where it is presently located
unless, prior to such relocation, Mortgagor (a) gives 30 days' prior written
notice to Mortgagee, which notice shall include, without limitation, the name
of the county and state into which such relocation is to be made and (b) prior
to such relocation, executes and delivers all such additional documents,
including, without limitation, the execution and delivery of appropriate
financing statements, and performs all additional acts (including causing
filings of public record and paying all related fees and costs) as may be
necessary or advisable in order to continue and maintain the existence,
perfection and priority of Mortgagee's security interest in the personal
property comprising part of the Mortgaged Property so relocated.
17 Change in Taxpayer Identification Number. Mortgagor
shall not change its taxpayer identification number to a number other than that
specified in Section 3.6 of this Mortgage unless, prior to such change,
Mortgagor (a) gives 30 days' prior written notice to Mortgagee and (b) prior to
such change in taxpayer identification number, executes and delivers all such
additional documents, including, without limitation, amendments to applicable
financing statements, and performs all additional acts (including causing
filings of public record and paying all related fees and costs) as may be
necessary or advisable in order to continue and maintain the existence,
perfection and priority of Mortgagee's security interest in the Mortgaged
Property.
18 Representations and Covenants Relating to Hazardous
Materials.
(a) Representations and Warranties. Mortgagor hereby
represents and warrants that, except as disclosed in writing by Mortgagor to
Mortgagee prior to the date hereof:
(i) Mortgagor is not in violation of any
Environmental Laws relating to emissions, discharges, releases or
threatened releases of Hazardous Substances, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, which
violation, as defined below would have a material adverse effect on
Mortgagor. "Violation," as used herein, includes, but is not limited
to, noncompliance with any permit or other governmental authorization
required under applicable Environmental Laws and noncompliance with
the terms and conditions of any such permit or authorization.
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(ii) Mortgagor has all material permits,
licenses, approvals, rulings, variances, exemptions or other
authorizations under applicable Environmental Laws to operate the
Mortgaged Property as presently conducted or as reasonably anticipated
to be conducted.
(iii) To Mortgagor's Knowledge, Mortgagor
has not received any communication (written or oral), whether from a
Governmental Authority, citizens' group, employee or otherwise,
alleging that Mortgagor is not in full compliance with any
Environmental Laws or permit or authorization required under
applicable Environmental Laws where such failure to comply fully would
have a material adverse effect on Mortgagor.
(iv) To Mortgagor's Knowledge, there are no
circumstances that could reasonably be expected to prevent or
interfere with such full compliance in the future.
(v) Without in any way limiting the
generality of the foregoing, (A) there are no sites on the Mortgaged
Property in which Mortgagor has stored (except in full compliance with
Environmental Laws), disposed or arranged for the disposal of
Hazardous Substances, (B) there are no underground storage tanks
located on the Mortgaged Property, (C) there is no asbestos requiring
abatement or any other remediation in its present condition contained
in or forming a part of the Improvements, and (D) no polychlorinated
biphenyls (PCBs) are used or stored on the Mortgaged Property.
(vi) To Mortgagor's Knowledge, there is no
Environmental Claim pending or threatened against Mortgagor, except
where such an Environmental Claim would not have a material adverse
effect on Mortgagor.
(vii) To Mortgagor's Knowledge, there are
no past or present actions, activities, circumstances, conditions,
events or incidents, including without limitation, the release,
emission, discharge, presence or disposal or any Hazardous Substances,
that could reasonably be expected to form the basis of any
Environmental Claim against Mortgagor and which Environmental Claim
would have a material adverse effect on Mortgagor.
(b) Environmental Remediation.
(i) If any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of
any kind or nature is required pursuant to an order or directive of
any Governmental Authority or under any applicable Environmental Law
(collectively, the "Remedial Work"),
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Mortgagor shall promptly commence and diligently prosecute to
completion all such Remedial Work. In all events, such Remedial Work
shall be commenced as required under any applicable Environmental Law
or by any Governmental Authority.
(ii) All Remedial Work under Section
4.18(b)(i) hereof shall be performed by contractors and under the
supervision of a consulting engineer that is reputable and experienced
for the work to be performed. If Mortgagor does not timely commence
and diligently prosecute to completion the Remedial Work, Mortgagee
may (but shall not be obligated to) cause such Remedial Work to be
performed. Mortgagor agrees in any event to bear and shall pay or
reimburse Mortgagee on demand for any and all costs and expenses
(including reasonable attorneys' fees, charges and disbursements)
reasonably relating to or incurred by Mortgagee in connection with
performing any Remedial Work.
(c) Environmental Compliance. Mortgagor covenants
and agrees with Mortgagee that it shall comply with all Environmental Laws,
except for such instances of non-compliance which, singly, and in the
aggregate, would not have a material adverse effect on the financial condition
of Mortgagor.
(d) Environmental Indemnification. Mortgagor shall
protect, indemnify, save, defend, and hold harmless the Mortgagee and all
officers, directors, stockholders, partners, employees, successors and assigns
of Mortgagee (collectively, the "Indemnified Environmental Parties") from and
against any and all liability, loss, damage, actions, causes of action, costs
or expenses whatsoever (including, without limitation, reasonable attorneys'
fees, charges and disbursements), except to the extent the same may be caused
by or arise out of the gross negligence or willful misconduct of any of the
Indemnified Environmental Parties, and any and all claims, suits and judgments
which any Indemnified Environmental Party may suffer, as a result of or with
respect to: (i) any Environmental Claim relating to or arising from the
Mortgaged Property or any portion thereof; (ii) the violation of any
Environmental Law in connection with the Mortgaged Property or any portion
thereof; (iii) any release, spill, or the presence of any Hazardous Substances
affecting the Mortgaged Property or any portion thereof; and (iv) the presence
at, in, on or under, or the release, escape, seepage, leakage, discharge or
migration at or from, the Mortgaged Property or any portion thereof of any
Hazardous Substances, whether or not such condition was known or unknown to
Mortgagor provided that in each case, Mortgagor may be relieved of its
obligation under this subsection if it demonstrates, by a preponderance of the
evidence, that any of the matters referred to in clauses (i) through (iv) of
this Section 4.18(d) did not occur (but need not have been discovered) prior to
(x) the foreclosure of this Mortgage, (y) the delivery by Mortgagor to
Mortgagee of a deed-in-lieu of foreclosure with respect to the Mortgaged
Property or (z) Mortgagee's taking actual possession and control of the
Mortgaged Property or any portion thereof after the occurrence of an Event of
Default. Promptly after Mortgagee receives notice of the
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commencement of any Environmental Claim in respect of which indemnification is
sought hereunder, Mortgagee shall notify Mortgagor in writing thereof; but the
omission so to notify Mortgagor shall not relieve Mortgagor from any obligation
hereunder provided that Mortgagor has not been materially prejudiced by such
failure by Mortgagee to notify Mortgagor. In the event that an Indemnified
Environmental Party becomes involved in any action, proceeding or investigation
in connection with any matter which is subject to the indemnification set forth
in this Section 4.18(d), Mortgagor shall periodically reimburse such
Indemnified Environmental Party (upon the presentation of reasonably detailed
invoices, receipts or statements) in an amount equal to its reasonable
attorneys' fees, charges and disbursements and other reasonable costs and
expenses (including the costs of any investigation and preparation) incurred in
connection therewith to the extent such legal or other fees, costs or expenses
are the subject of indemnification hereunder. Notwithstanding anything to the
contrary provided in this Mortgage or the other Loan Documents, the
indemnification provided in this Section 4.18(d) shall be fully recourse to
Mortgagor and shall be independent of, and shall survive, the discharge of the
Indebtedness and the performance of the Obligations, the release of the lien
created under this Mortgage, and/or the conveyance of title to the Mortgaged
Property or any portion thereof to Mortgagee or any purchaser or designee in
connection with a foreclosure of this Mortgage or conveyance in lieu of
foreclosure.
(e) Environmental Matters; Inspection.
(i) In the event that Mortgagee has
reasonable grounds to believe that there exists an Environmental
Event, that a Hazardous Substance is migrating to or from property
adjoining the Mortgaged Property, except under conditions permitted by
applicable Environmental Laws and not prohibited by this Mortgage or
any other Loan Document, or that a Default exists relating to any
representation, covenant or other obligation pertaining to Hazardous
Substances, Environmental Laws or any other environmental matter, and
upon reasonable prior notice, Mortgagee shall have the right at all
reasonable times to enter upon and inspect all or any portion of the
Mortgaged Property, provided that such inspections shall not
unreasonably interfere with the operation of such Mortgaged Property.
Mortgagee may select a consulting engineer to conduct and prepare
reports of such inspections. Mortgagor shall be given a reasonable
opportunity to review any reports, data and other documents or
materials reviewed or prepared by the engineer, and to submit comments
and suggested revisions or rebuttals to same. The inspection rights
granted to Mortgagee in this Section 4.18(e) shall be in addition to,
and not in limitation of, any other inspection rights granted to
Mortgagee under this Mortgage, and shall expressly include the right
to conduct soil borings and other environmental tests or sampling,
assessments and audits, subject to the prior approval of Mortgagor,
which approval shall not be unreasonably withheld.
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(ii) Mortgagor agrees to bear and shall
pay or reimburse Mortgagee on demand for all out-of-pocket costs and
expenses (including reasonable attorneys' fees, charges and
disbursements) reasonably relating to or incurred by Mortgagee in
connection with the inspections and reports described in this Section
4.18(e) in the event that:
(x) Mortgagee has delivered to Mortgagor written
notice requesting an inspection and Mortgagor fails to
thereafter diligently cause such inspections to be made and
either (1) Mortgagee had reasonable grounds to believe, at
the time any such inspection is ordered by Mortgagee, that
there exists an Environmental Event or that a Hazardous
Substance is migrating to or from property adjoining the
Mortgaged Property, except under conditions permitted by
applicable Environmental Laws and not prohibited by this
Mortgage or any other Loan Document or (2) the inspections
ordered by Mortgagee reveal an Environmental Event or that a
Hazardous Substance (other than oil and petroleum products
existing or used (A) in the ordinary course of business of
the Mortgaged Property and (B) under conditions permitted by
applicable Environmental Laws and not prohibited by this
Mortgage or any other Loan Document) is present on, under or
emanating from the Mortgaged Property or any portion thereof
or is migrating to or from adjoining property; or
(y) an Event of Default exists at the time any such
inspection is ordered, and such Event of Default relates to
any representation, covenant or other obligation pertaining
to Hazardous Substances, Environmental Laws or any other
environmental matter.
(f) Copies of Notices. Mortgagor shall promptly
provide written notice to Mortgagee of:
(i) any proceeding, investigation or
inquiry commenced by any Governmental Authority with respect to the
presence of any Hazardous Substance on, under or emanating from the
Mortgaged Property or any portion thereof, which might impair the
value of Mortgagee's security interests under this Mortgage or any
other Loan Document, or could have a material adverse affect on the
condition (financial or otherwise) of Mortgagor;
(ii) any proceeding, investigation or
inquiry commenced or threatened by any Governmental Authority, against
Mortgagor, with respect to the presence, suspected presence, release
or threatened release of Hazardous Substances from any property not
owned by Mortgagor, including without limitation, proceedings under
the Federal Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq., which might materially
impair the value of Mortgagee's security interests hereunder, or could
have a material adverse affect on the condition (financial or
otherwise) of Mortgagor;
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(iii) all claims made or threatened by any
person or entity against Mortgagor, or against any other party
occupying the Mortgaged Property or any portion thereof, which claims
become known to any of the officers of Mortgagor or the manager of the
refinery located on the Real Property, relating to any loss or injury
allegedly resulting from any Hazardous Substance or relating to any
Violation or alleged Violation of Environmental Law which might
materially impair the value of Mortgagee's security interests under
this Mortgage or any other Loan Document or could have a material
adverse affect on the condition (financial or otherwise) of Mortgagor;
(iv) the discovery by Mortgagor of any
occurrence or condition on the Mortgaged Property or any portion
thereof or on any real property adjoining or in the vicinity of such
Mortgaged Property which reasonably could be expected to lead to a
material Violation with respect to such Mortgaged Property or any
portion thereof or to subject the Mortgaged Property to any
restriction on ownership, occupancy, transferability or use under any
Environmental Law (collectively, an "Environmental Event") or which
might subject Mortgagor to an Environmental Claim; and
(v) the commencement and completion of any
Remedial Work.
Within (30) thirty days after the occurrence of an Environmental Event,
Mortgagor shall deliver to Mortgagee a certificate signed by an officer of
Mortgagor (an "Environmental Certificate") explaining the Environmental Event
in reasonable detail, setting forth to Mortgagee the estimated cost as
determined at such time of remedying such Environmental Event and the proposed
method of remediation and time to complete such remedy. Mortgagor shall
complete such remedy as promptly as possible in the ordinary course of
business.
Mortgagor will transmit to Mortgagee copies of any citations,
orders, notices or other communications received from any person with respect
to the notices described in this Section 4.18(f).
ARTICLE V
Assignment of Leases and Rents
1 Assignment. (a) Mortgagor hereby absolutely and irrevocably
assigns and pledges to Mortgagee, from and after the date hereof, not as
additional collateral, but so as to create a present and absolute assignment as
further security for the payment of the Indebtedness and the performance of the
Obligations, the Leases and the Rents. Nothing contained in
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this Article V shall be construed to bind Mortgagee to the performance of any
of the terms, covenants, conditions or agreements contained in any Lease or
otherwise impose any obligation on Mortgagee, except that Mortgagee shall be
accountable for any money actually received pursuant to the aforesaid
assignment. Mortgagor hereby further grants to Mortgagee the right, but not the
obligation, after any acceleration of the Indebtedness pursuant to the
provisions of the Loan Agreement or any other Loan Document, to (i) enter upon
and take possession of the Mortgaged Property for the purpose of collecting the
Rents, (ii) terminate, in accordance with applicable law, any lessee defaulting
in making any payment due to Mortgagee under any Lease or defaulting in the
performance of any of its other obligations under its Lease, (iii) enter into
leases affecting the Mortgaged Property or any portion thereof, (iv) apply the
Rents on account of the Indebtedness and (v) perform such other acts as
Mortgagee is entitled to perform pursuant to this Mortgage, the Loan Agreement
or any other Loan Document. Such assignment and grant shall continue in effect
until the entire amount of the Indebtedness shall be paid in full and all of
the Obligations shall be fully performed in accordance with this Mortgage and
the other Loan Documents, the execution of this Mortgage constituting and
evidencing the irrevocable consent of Mortgagor to the entry upon and taking
possession of the Mortgaged Property by Mortgagee after any acceleration of the
Indebtedness pursuant to the provisions of the Loan Documents, pursuant to such
grant, whether or not the Mortgaged Property shall have been sold pursuant to a
foreclosure sale or otherwise and without applying for a receiver. Mortgagee,
however, grants Mortgagor, not as a limitation or condition hereof, but as a
personal covenant available only to Mortgagor and its successors and not to any
lessee or other person, a license, automatically revoked without further action
by Mortgagee upon the occurrence of an Event of Default, to collect all of the
Rents and to retain, use and enjoy the same. If such license is so
automatically revoked upon an Event of Default, such license shall
automatically be reinstated (subject to further revocation as provided above)
at such time as such Event of Default shall have been cured. So long as such
license remains in effect, Mortgagee shall not exercise any of the rights or
powers granted by Mortgagor to Mortgagee pursuant to this Article V. In the
event of any Event of Default, Mortgagor shall pay monthly, in advance, to
Mortgagee, upon Mortgagee's entry into possession pursuant to the foregoing
grant, or to any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of the Real Property and,
upon the failure of Mortgagor to make any such payment, Mortgagor shall vacate
and surrender the possession of the Real Property to Mortgagee or to such
receiver, and upon Mortgagor's failure to so vacate and surrender, Mortgagor
may be evicted by summary proceedings. Mortgagee shall be entitled to all
benefits afforded by La. R.S. 9:4401. The maximum amount of the Obligations
secured hereby is One Billion Two Hundred Fifty Million Dollars
($1,250,000,000), which Obligations may be outstanding at any time, from time
to time.
(b) Upon notice and demand, Mortgagor shall execute,
acknowledge and deliver to Mortgagee, or shall cause to be executed,
acknowledged and delivered to Mortgagee, in form reasonably satisfactory to
Mortgagee, but governed by this Mortgage, an assignment confirmatory of the
general assignment, provided in this Article V of Mortgagor's
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interest in any Lease. Mortgagor shall pay to Mortgagee the reasonable expenses
incurred by Mortgagee in connection with the preparation and recording of any
such instrument.
(c) Mortgagor shall furnish to Mortgagee, within
thirty (30) days after a request by Mortgagee, a written statement containing
the names of all lessees under the Leases, the terms of their respective
Leases, the space occupied and the rentals payable thereunder.
(d) Mortgagor shall deliver to Mortgagee, within
thirty (30) days after a request by Mortgagee, a non-disturbance, attornment
and subordination agreement from all tenants under any Leases now or hereafter
in effect.
2 Application of Proceeds. Any and all Rents, payments and
sale proceeds received by Mortgagee pursuant to Section 5.1 hereof shall be
placed in a segregated cash collateral account with Mortgagee and on the first
day of each month applied as follows:
First: To the payment and satisfaction of all costs and expenses
incurred in connection with the collection of such
proceeds or otherwise due to Mortgagee hereunder; and
Second: then in accordance with the provisions of Section 7.9
below.
3 No Liability of Mortgagee in Collecting. Mortgagee
is hereby absolved from all liability for failure to enforce collection of any
Rents or proceeds so assigned and from all other responsibility in connection
therewith, except the responsibility to account to Mortgagor for funds actually
received. Mortgagee shall have the right, at its election, to prosecute and
defend any and all actions or legal proceedings deemed advisable by Mortgagee
in order to collect such funds and to protect the interests of Mortgagee and/or
Mortgagor, with all reasonable costs, expenses and attorneys' fees, charges and
disbursements incurred in connection therewith being paid by Mortgagor.
4 Assignment Not a Restriction on Mortgagee's Rights.
Nothing herein contained shall detract from or limit the absolute obligation of
Mortgagor to make payment in full of the Indebtedness, regardless of whether
the proceeds assigned by this Article V are sufficient to pay the same, and the
rights under this Article V shall be in addition to all other security now or
hereafter existing to secure the payment of the Indebtedness.
5 Indemnity. Mortgagor agrees to indemnify, defend and hold
Mortgagee harmless from and against all claims, actions, liabilities,
judgments, costs, attorneys' fees, charges and disbursements or other charges
of whatsoever kind or nature (including, without limitation, amounts paid in
settlement, court costs and the fees, charges and disbursements of counsel
incurred in connection with any investigation, litigation or other proceeding)
(all hereinafter in this Section 5.5 called "Claims") made against or incurred
by Mortgagee as a
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consequence, either before or after the payment in full of the Indebtedness and
performance in full of the Obligations, provided, however, that Mortgagor shall
not be liable for any of the foregoing to the extent that they are caused by
the gross negligence or willful misconduct of Mortgagee, arising out of or in
connection with the acceptance or administration of the interest created by
this Mortgage or the enforcement of remedies hereunder or under the other Loan
Documents, including, without limitation, the out-of-pocket costs and expenses
of defending against any claim or liability in connection with the exercise or
performance of any of the powers or duties hereunder or under the other Loan
Documents. Mortgagee shall have the right to defend against any such Claims,
employing attorneys therefor, and unless furnished with reasonable indemnity,
Mortgagee shall have the right to pay or compromise and adjust all such Claims.
Mortgagor shall indemnify and pay to Mortgagee any and all such amounts as may
be paid in respect thereof or as may be successfully adjudged against
Mortgagee. The obligations of Mortgagor as hereinabove set forth in this
Section 5.5 shall survive the release of this Mortgage.
ARTICLE VI
Remedies upon Occurrence of an Event of Default
If an Event of Default shall occur and be continuing, then
Mortgagee may proceed to enforce its rights hereunder.
ARTICLE VII
Enforcement of Remedies
1 Remedies. Upon the occurrence of an Event of Default, it
shall be lawful for Mortgagee, and Mortgagee is hereby authorized by Mortgagor,
without making a demand or putting in default (a putting in default being
expressly waived), to cause all and singular the Mortgaged Property to be
seized and sold by executory or ordinary process, at Mortgagee's sole option,
with or without appraisement (appraisement being expressly waived), either as
an entirety or in lots or parcels, all as Mortgagee may determine, to the
highest bidder for cash (or such other terms as Mortgagee may elect), and
otherwise exercise the rights, powers and remedies provided for herein and
under applicable law. Mortgagee is hereby appointed agent and attorney-in-fact
for Mortgagor and is hereby authorized and empowered to carry out and enforce
all incorporeal rights pledged by Mortgagor hereunder. This power, being
coupled with an interest, is irrevocable so long as any of the Indebtedness
remains outstanding.
2 Rights of Mortgagee with Respect to Personal Property
Constituting a Part of the Mortgaged Property. Upon the occurrence of an Event
of Default, Mortgagee shall have all rights and remedies granted by law, and
particularly by the Relevant UCC, including, but not limited to, (i) the right
to proceed as to both the real and the personal property covered hereby in
accordance with Mortgagee's rights and remedies in respect of the Real Property
and (ii) the right to take possession of all personal property constituting a
part of the Mortgaged Property, and for this purpose Mortgagee may enter upon
any premises on which any or all of
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such personal property is situated and take possession of and operate such
personal property (or any portion thereof) or remove it therefrom. Mortgagee
may require Mortgagor to assemble such personal property and make it available
to the Trustee at a place to be designated by Mortgagee which is reasonably
convenient to all parties. Unless such personal property is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Mortgagee will give Mortgagor reasonable notice of the time
and place of any public sale or of the time after which any private sale or
other disposition of such personal property is to be made. This requirement of
sending reasonable notice will be met if the notice is mailed by first class
mail, postage pre-paid, to Mortgagor at the address shown below the signatures
at the end of this Mortgage at least ten (10) business days before the time of
the sale or disposition.
3 Rights of Mortgagee with Respect to Fixtures Constituting
a Part of the Mortgaged Property. Upon the occurrence of an Event of Default,
Mortgagee may, to the extent permitted by applicable law, elect to treat the
Fixtures as either real property collateral or personal property collateral and
proceed to exercise such rights as apply to such type of collateral.
4 Judicial Proceedings. Upon the occurrence of an Event of
Default, Mortgagee, in lieu of or in addition to exercising any power of sale
hereinabove given, may proceed by a suit or suits in equity or at law, whether
for a foreclosure hereunder, or for the sale of the Mortgaged Property, or for
the specific performance of any covenant or agreement herein contained or in
aid of the execution of any power herein granted, or for the appointment of a
receiver pending any foreclosure hereunder or the sale of the Mortgaged
Property, or for the enforcement of any other appropriate legal or equitable
remedy, including, without limitation, the right to (i) proceed on a suit or
suits for a deficiency judgment following a foreclosure under this Mortgage,
and (ii) bring an action on the Notes prior to and/or in the absence of a
foreclosure under this Mortgage.
5 Possession of the Mortgaged Property. It shall not be
necessary for Mortgagee to have physically present or constructively in its
possession at any sale held by Mortgagee or by any court, receiver or public
officer any or all of the Mortgaged Property, and Mortgagor shall deliver to
the purchaser at such sale on the date of sale the Mortgaged Property purchased
by such purchasers at such sale, and, if it should be impossible or
impracticable for any of such purchasers to take actual delivery of the
Mortgaged Property, then the title and right of possession to the Mortgaged
Property shall pass to the purchaser at such sale as completely as if the same
had been actually present and delivered.
(a) If the Indebtedness shall have been declared due
and payable in accordance with the provisions of the Loan Agreement, then the
license granted pursuant to Article V hereof shall be automatically revoked,
without further action by Mortgagee, without releasing Mortgagor from any
Obligations under this Mortgage, and without waiving any Event of Default, and
Mortgagee may enter upon and take possession of the Mortgaged
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Property or any portion thereof, either personally or by its agents, nominees
or attorneys, and dispossess Mortgagor and its agent and servants therefrom
and, thereupon, Mortgagee, through a receiver or otherwise, may (A) use, manage
and operate the Mortgaged Property and (B) exercise any rights and powers
Mortgagor may have with respect to the Mortgaged Property, including, but
without limiting the generality of the foregoing, the right to make, cancel,
enforce or modify Leases, obtain and evict lessee, establish or change the
amount of any Rents and the manner of collection thereof and perform any acts
which Mortgagee deems proper, in its sole discretion, to protect the security
of this Mortgage. After deduction of all reasonable costs and expenses of
operating and managing the Mortgaged Property, including, but without limiting
the generality of the foregoing, attorneys' fees, costs and disbursements,
administration expenses, management fees, brokers' commissions, satisfaction of
liens on any of the Mortgaged Property, payment of Impositions, claims and
insurance premiums, invoices of persons who may have supplied goods and
services to or for the benefit of any of the Mortgaged Property and all costs
and expenses of the maintenance, repair, restoration, Alteration or improvement
of the Mortgaged Property, Mortgagee may apply the Rents received by Mortgagee
to payment of the Indebtedness or performance of the Obligations. Mortgagee may
apply the Rents received by Mortgagee to the payment of any or all of the
foregoing in such order and amounts and Mortgagee, in its sole discretion, may
elect. Mortgagee may, in its sole discretion, determine the method by which,
and extent to which, the Rents will be collected and the obligations of the
lessees enforced and Mortgagee may waive or fail to enforce any right or remedy
of the lessor under any lease.
(b) If the Indebtedness shall have been declared due
and payable in accordance with the provisions of the Loan Agreement, then
Mortgagee may disaffirm and cancel any Lease which is subordinate to the lien
of this Mortgage affecting the Mortgaged Property or any portion thereof at any
time during the period that it is exercising its remedies under this Article
VII even though Mortgagee shall have enforced such Lease, collected Rents
thereunder or taken any action that might be deemed by law to constitute an
affirmance of such Lease. Such disaffirmance shall be made by notice addressed
to the lessee at the address of the lessee as may be set forth in such Lease.
6 Certain Aspects of a Sale. Mortgagee and its agents,
representatives, successors or assigns, shall have the right to become the
purchaser at any sale hereunder, and Mortgagee shall have the right to credit
upon the amount of the bid made therefor the amount payable out of the net
proceeds of such sale to it. Recitals contained in any conveyance made to any
purchaser at any sale made hereunder shall conclusively establish the truth and
accuracy of the matters therein stated, including, without limiting the
generality of the foregoing, nonpayment of the unpaid principal sum of, and the
interest accrued on, the Notes after the same have become due and payable,
advertisement and conduct of such sale in the manner provided herein.
7 Receipt of Purchaser. Upon any sale, whether made under
the Relevant UCC, the power of sale herein granted and conferred or by virtue
of judicial proceedings, the
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receipt of Mortgagee, or of the officer making sale under judicial proceedings,
shall be sufficient discharge to the purchaser or purchasers at any sale for
his, her or their purchase money, and such purchaser or purchasers, his, her or
their assigns or personal representatives shall not, after paying such purchase
money and receiving such receipt of Mortgagee or of such officer therefor, be
obliged to see to the application of such purchase money or be in anywise
answerable for any loss, misapplication or non-application thereof.
8 Effect of Sale. Any sale or sales of the Mortgaged
Property or any part thereof, whether under the Relevant UCC, the power of sale
herein granted and conferred or by virtue of judicial proceedings, shall
operate to divest all right, title, interest, claim and demand whatsoever
either at law or in equity, of Mortgagor of, in and to the Mortgaged Property
sold, and shall be a perpetual bar, both at law and in equity, against
Mortgagor, and Mortgagor's successors or assigns, and against any and all
persons claiming or who shall thereafter claim all or any of the property sold
from, through or under Mortgagor, or Mortgagor's successors or assigns.
Nevertheless, Mortgagor, if requested by Mortgagee so to do, shall join in the
execution and delivery of all proper conveyances, assignments and transfers of
the properties so sold.
9 Application of Proceeds. The proceeds of any sale of the
Mortgaged Property, or any part thereof, whether under the Relevant UCC, the
power of sale herein granted and conferred or by virtue of judicial
proceedings, whose application has not elsewhere herein been specifically
provided for, shall be applied as follows:
First: to the payment of all expenses incurred by Mortgagee
incident to the enforcement of this Mortgage, the
Note or any of the Indebtedness including, without
limiting the generality of the foregoing, all
expenses of any entry or taking of possession, of
any sale, of advertisement thereof, and of
conveyances, and as well, court costs, compensation
of agents and employees and attorneys' fees, charges
and disbursements;
Second: to the payment of all other costs, charges, expenses,
liabilities and advances incurred or made by
Mortgagee under this Mortgage, the Note or any other
Loan Document or in executing any trust or power
hereunder;
Third: to the payment of the Note and any other
Indebtedness (other than Indebtedness described in
"First" and "Second" above), with interest to the
date of such payment, in such order and manner as
set forth in the Loan Agreement; and
Fourth: any surplus thereafter remaining shall be paid to
Mortgagor or Mortgagor's successors or assigns, as
their interests shall appear.
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10 Mortgagor's Waiver of Rights of Marshalling, etc. In
addition to those waivers set forth in Section 7.14 hereof, Mortgagor agrees,
to the full extent that Mortgagor may lawfully so agree, that Mortgagor shall
not at any time insist upon or plead or in any manner whatever claim the
benefit of any stay, extension or redemption law now or hereafter in force, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage or
the absolute sale of the Mortgaged Property or the possession thereof by any
purchaser at any sale made pursuant to any provision hereof, or pursuant to the
decree of any court of competent jurisdiction; but Mortgagor, for Mortgagor and
all who may claim by, through or under Mortgagor, to the maximum extent that
Mortgagor or those claiming by, through or under Mortgagor now or hereafter
lawfully may, hereby waives the benefit of all such laws. Mortgagor, for
Mortgagor and all who may claim through or under Mortgagor, waives, to the
maximum extent that Mortgagor or those claiming by, through or under Mortgagor
now or hereafter lawfully may do so, any and all right to have any of the
Mortgaged Property marshalled upon any foreclosure of the lien hereof, or sold
in inverse order of alienation, and agrees that any court having jurisdiction
to foreclose such lien may sell the Mortgaged Property as an entirety. If any
law in this Section 7.10 referred to and now in force, of which Mortgagor or
Mortgagor's successor or successors might take advantage despite the provisions
hereof, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to constitute any part of this Mortgage or to preclude the
operation or application of the provisions of this Section 7.10.
11 Costs and Expenses. All costs and expenses (including
reasonable attorneys' fees, charges and disbursements) incurred by Mortgagee in
protecting and enforcing its rights hereunder shall constitute a demand
obligation owing by Mortgagor to Mortgagee and shall draw interest at an annual
rate equal to the Default Rate until paid, all of which shall constitute a
portion of the Indebtedness; provided, however, that in no event shall such
interest rate ever exceed the Highest Lawful Rate.
12 Keeper. Upon the occurrence of an Event of Default, in
addition to all other rights herein conferred on Mortgagee, Mortgagor hereby
expressly designates Mortgagee, or any agents, servants, employees or other
person named by Mortgagee at that time, as "Keeper" of each and all the
Mortgaged Property pending the judicial sale thereof, with all the powers set
forth in La. R.S. 9:5131 et seq. (as hereinafter amended). All reasonable
costs, expenses and liabilities of every character incurred by Mortgagee in
connection with managing, operating and maintaining the Mortgaged Property, as
Keeper, shall constitute a demand obligation owing by Mortgagor to Mortgagee.
All such costs, expenses and liabilities shall constitute a portion of the
Indebtedness secured by this Mortgage. The Keeper shall be entitled to receive
as compensation in excess of such costs, expenses and liabilities, a reasonable
amount to be fixed by the court based upon the Keeper's activities any amounts
expended in connection with the management, operation and maintenance of the
Mortgaged Property. The designation of a Keeper made herein shall not be deemed
to require Mortgagee to provoke the appointment of such a Keeper.
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13 Operation of Property by Mortgagee. Upon the occurrence
of an Event of Default and in addition to all other rights herein conferred on
Mortgagee, Mortgagee (or any person, firm or corporation designated by
Mortgagee) shall have the right and power, but shall not be obligated, to enter
upon and take possession of any of the Mortgaged Property, and to exclude
Mortgagor, and Mortgagor's agents or servants, wholly therefrom, and to hold,
use, administer, manage and operate the same to the extent that Mortgagor shall
be at the time entitled and in his place and stead. Mortgagee, or any person,
firm or corporation designated by Mortgagee, may operate the same without any
liability to Mortgagor, its successors or assigns in connection with such
operations, except for its gross negligence or willful misconduct in the
operation of the Mortgaged Property, and Mortgagee or any person, firm or
corporation designated by Mortgagee, shall have the right and power, but shall
not be obligated, to collect, receive and issue a receipt for all Revenues,
Proceeds or Inventory produced and sold from the Mortgaged Property, to make
repairs, purchase machinery and equipment, conduit and power, to enter work
over operations, make repairs Alterations and improvements, and to exercise
every power, right and privilege of Mortgagor with respect to the Mortgaged
Property. When and if the expenses of such operation and development have been
paid and the Indebtedness paid and the Obligations performed, the Mortgaged
Property shall, if there has been no sale or foreclosure, be returned to
Mortgagor.
14 Confession of Judgment; Waivers; Executory Process.
Mortgagor does hereby confess judgment for the full amount of the Indebtedness,
and does hereby agree that in the event the Indebtedness is not punctually paid
at maturity, or upon the occurrence of an Event of Default it shall be lawful
for and Mortgagor does hereby authorize the Mortgagee, without making a demand
or putting Mortgagor in default, demand for payment pursuant to Article 2639 of
the Louisiana Code of Civil Procedure and of putting in default being expressly
waived, to cause all and singular of the Mortgaged Property to be seized and
sold under executory process or any other legal process at the option of
Mortgagee. Mortgagor further waives to the fullest extent permitted by law: (a)
the benefit of appraisement provided for in Louisiana Code of Civil Procedure
articles 2332, 2336, 2723, and 2724, and all other laws conferring the same;
(b) the demand and three days delay provided for in Louisiana Code of Civil
Procedure articles 2639 and 2721; (c) the notice of seizure provided for in
Louisiana Code of Civil Procedure articles 2293 and 2721; (d) the three days
delay provided for in Louisiana Code of Civil Procedures articles 2331 and
2722; and (e) the other benefits provided in Louisiana Code of Civil Procedure
articles 2331, 2722 and 2723. Mortgagor hereby further agrees that in the event
any proceedings are taken under this Mortgage by way of executory process or
otherwise, any and all declarations of fact made by authentic act before a
Notary Public and in the presence of two witnesses by a person declaring that
such facts lie within his knowledge, shall constitute authentic evidence of
such facts for the purpose of executory process.
15 Limitation on Mortgagee's Obligation to Exercise Remedies.
Notwithstanding the foregoing, Mortgagee shall have (i) no obligation to
exercise any right or remedy hereunder except as required pursuant to the terms
of the Loan Agreement and (ii) the right, in
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its sole and absolute discretion, to elect not to exercise any right or remedy
hereunder pursuant to which Mortgagee shall acquire title to all or any portion
of the Mortgaged Property, as a result or in lieu of foreclosure or otherwise,
and shall not otherwise acquire possession of, or take other action with
respect to, the Mortgaged Property, if, as a result of any such action,
Mortgagee could be considered to hold title to, to be a "mortgagee-
in-possession" of, or to be an "owner" or "operator" of such Mortgaged Property
within the meaning of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended from time to time, or any applicable
comparable federal, state or local law, and the regulations promulgated
thereunder or a "potentially responsible party" or similar such term as defined
thereunder, or if the Mortgaged Property or any portion thereof is in violation
of any Environmental Law or any order or directive of any Governmental
Authority, whether as a result of contamination or non-compliance with
Environmental Laws or otherwise.
ARTICLE VIII
Security Agreement
Without limiting any of the provisions of this Mortgage, to
secure payment of the Indebtedness and the performance of the Obligations,
Mortgagor, as Debtor (referred to in this Article VIII as "Debtor"), hereby
expressly GRANTS, ASSIGNS, PLEDGES, TRANSFERS and SETS OVER unto Mortgagee, as
Secured Party (referred to in this Article VIII as "Secured Party"), a lien
upon and a continuing security interest in all the Mortgaged Property, together
with any and all proceeds, products, increases, profits, substitutions,
replacements, renewals, additions, fruits, revenues, amendments and accessions
of, to and for the Mortgaged Property, insofar as such property consists of
equipment, contract agreements comprising a part of or which are used in
connection with the Property or the operation, use, repair or maintenance
thereof (including, without limitation, the Material Contracts), Permits, the
Plans, Hydrocarbons, helium and/or other minerals, Fixtures and any and all
other personal property of any kind or character (including both those now and
those hereafter existing) excluding, however, the Company UCC Collateral, and
all proceeds of any and all of the foregoing collateral including, without
limitation, proceeds that constitute property of the types described in the
foregoing collateral and, to the extent not otherwise included, cash, to the
full extent that such property may be subject to the Relevant UCC of the state
or states where such property is located (said Mortgaged Property, fixtures,
contract rights, general intangibles, Hydrocarbons, helium and/or other
minerals, and equipment, together with any and all proceeds, products,
increases, profits, substitutions, replacements, renewals, additions,
amendments and accessions of, to and for the foregoing property, being
hereinafter collectively referred to as the "Mortgage Collateral" for the
purposes of this Article VIII). The lien and security interest created by this
Mortgage attaches upon the execution and delivery hereof. Debtor covenants and
agrees with Secured Party that:
(a) In addition to and cumulative of any other
remedies granted in this Mortgage to Secured Party, Secured Party may, upon the
occurrence of an Event of Default, proceed under the Relevant UCC as to all or
any part of the Mortgage Collateral and shall
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have and may exercise with respect to the Mortgage Collateral all the rights,
remedies and powers of a secured party after default under the Relevant UCC,
including, without limitation, the right and power to sell, at public or
private sale or sales, or otherwise dispose of, lease or utilize the Mortgage
Collateral and any part or parts thereof in any manner authorized or permitted
under the Relevant UCC after default by a debtor, and to apply the proceeds
thereof toward payment of any costs and expenses and attorneys' fees, charges
and disbursements and legal expenses thereby incurred by Secured Party, and
toward payment of the Indebtedness in such order or manner as Secured Party may
elect.
(b) Upon the occurrence of any Event of Default,
Secured Party shall have the right (without limitation) to take possession of
the Mortgage Collateral and to enter upon any premises where same may be
situated for such purpose without being deemed guilty of trespass and without
liability for damages thereby occasioned and to take any action deemed
necessary or appropriate or desirable by Secured Party, at its option and in
its discretion, to repair, refurbish or otherwise prepare the Mortgage
Collateral for sale, lease or other use or disposition as herein authorized.
(c) To the maximum extent permitted by law, Debtor
expressly waives any notice of sale or other disposition of the Mortgage
Collateral and any other right or remedies of a debtor or formalities
prescribed by law relative to sale or disposition of the Mortgage Collateral or
exercise of any other right or remedy of Secured Party existing after default
hereunder; and to the extent any such notice is mailed, postage prepaid, to
Debtor at least ten (10) business days before the time of the sale or
disposition, such notice shall be deemed reasonable and shall fully satisfy any
requirement for giving of said notice. Such notice, in case of a public sale or
disposition, shall state the time and place fixed for such sale or disposition
and, in case of a private sale or disposition, shall state the date after which
such sale or disposition is to be made.
(d) Any public sale of the Mortgage Collateral shall
be held at such time or times within ordinary business hours at such places as
Secured Party may fix in the notice of such sale. At any such sale, the
Mortgage Collateral may be sold in one lot as an entirety or in separate
parcels, as Secured Party may determine.
(e) Secured Party shall not be obligated to make any
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same shall be
so adjourned.
(f) In case of any sale of all or any part of the
Mortgage Collateral on credit or for future delivery, the Mortgage Collateral
so sold may be retained by Secured Party until the selling price is paid by the
purchaser thereof, but Secured Party shall not incur any liability in case of
the failure of such purchaser to take up and pay for the Mortgage Collateral so
sold and, in case of any such failure, such Mortgage Collateral may again be
sold upon like notice.
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(g) Upon the occurrence of an Event of Default,
Secured Party is expressly granted the right, at its option, to transfer at any
time to itself or to its nominee the Mortgage Collateral, or any part thereof
and to hold the same as security for the Indebtedness, and to receive the
monies, income, proceeds or benefits attributable or accruing thereto and to
apply the same toward payment of the Indebtedness, whether or not then due, in
such order or manner as Secured Party may elect. All rights to marshalling of
assets of Debtor, including any such right with respect to the Mortgage
Collateral, are hereby waived.
(h) All recitals in any instrument of assignment or
any other instrument executed by Secured Party incident to sale, transfer,
assignment, lease or other disposition or utilization of the Mortgage
Collateral or any part thereof hereunder shall be full proof of the matter
stated therein, no other proof shall be required to establish full legal
propriety of the sale or other action or of any fact, condition or thing
incident thereto, and all prerequisites of such sale or other action and of any
fact, condition or thing incident thereto shall be presumed conclusively to
have been performed or to have occurred.
(i) Upon the occurrence of an Event of Default,
Secured Party may require Debtor to assemble the Mortgage Collateral and make
it available to Secured Party at a place to be designated by Secured Party that
is reasonably convenient to both parties. All expenses of retaking, holding,
preparing for sale, lease or other use or disposition, selling, leasing or
otherwise using or disposing of the Mortgage Collateral and the like which are
incurred or paid by Secured Party as authorized or permitted hereunder,
including also all attorneys' fees, legal expenses and costs, shall be added to
the Indebtedness.
(j) Should Secured Party elect to exercise its
rights under the Relevant UCC as to part of the Mortgage Collateral, this
election shall not preclude Secured Party or Mortgagee from exercising the
rights and remedies granted by the preceding paragraphs of this instrument as
to the remaining Mortgage Collateral.
(k) Secured Party may, at its election, at any time
after delivery of this Mortgage, sign one or more photocopies hereof in order
that such photocopies may be used as a financing statement under the Relevant
UCC. Such signature by Secured Party may be placed between the last sentence of
this instrument and Exhibit "A" attached hereto. Secured Party's signature is
not necessary to the effectiveness hereof as a mortgage, assignment, pledge or
security agreement.
(l) So long as any amount remains unpaid on the
Indebtedness, Debtor shall not execute nor file in any public office any
financing statement or statements affecting the Mortgage Collateral other than
financing statements in favor of Secured Party hereunder, unless the prior
written specific consent and approval of Secured Party shall have first been
obtained.
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(m) Secured Party is authorized to file, in any
jurisdiction where Secured Party deems it necessary, a financing or
continuation statement or statements, and at the request of Secured Party,
Debtor shall join Secured Party in executing one or more financing statements
pursuant to the Relevant UCC in form satisfactory to Secured Party, and will
pay the cost of filing or recording this Mortgage or any other instrument, as a
financing statement, in all public offices at any time and from time to time
whenever filing or recording of any financing statement or of this instrument
as may be necessary or reasonably desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby. The addresses of Debtor and
Secured Party are those addresses set forth for Mortgagor and Mortgagee,
respectively, on the face page of this Mortgage.
(n) Without in any manner limiting the generality of
any of the other provisions of this Mortgage: (i) some portions of the goods
described or to which reference is made herein are or are to become fixtures on
the Lands; (ii) the security interests created hereby under applicable
provisions of the Relevant UCC of one or more of the jurisdictions in which the
Mortgaged Property is situated will attach to Hydrocarbons or the accounts
resulting from the sale thereof at the wellhead or minehead located on the
Lands; and (iii) this instrument is to be filed of record in the real estate
records as a financing statement.
(o) Debtor hereby irrevocably designates and
appoints Secured Party as its attorney-in-fact, with full power of
substitution, for the purposes of carrying out the provisions of this Mortgage
and taking any action and executing any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is effective without further action of Mortgagor or Mortgagee
upon the occurrence of an Event of Default (but the determination of an Event
of Default by Secured Party shall as to all parties for the purposes hereof be
conclusive as to the occurrence of an Event of Default) and is irrevocable and
coupled with an interest.
(p) Without limiting the generality of the
foregoing, Debtor hereby irrevocably authorizes and empowers Secured Party,
upon the occurrence of an Event of Default, at the expense of Debtor, at any
time and from time to time to (a) ask, demand, receive, receipt, give
acquittance for, settle and compromise any and all monies which may be or
become due or payable or remain unpaid at any time or times to Debtor under or
with respect to the Mortgage Collateral; (b) endorse any drafts, checks, orders
or other instruments for the payment of money payable to Debtor on account of
the Mortgage Collateral (including any such draft, check, order or instrument
issued by an insurance company payable jointly to Debtor and Secured Party);
and (c) in the discretion of Secured Party, settle, compromise, prosecute or
defend any action, claim or proceeding, or take any other action, all either in
its own name or in the name of Debtor or otherwise, which Secured Party may
deem to be
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necessary or advisable for the purpose of exercising and enforcing its powers
and rights under this Mortgage or in furtherance of the purposes hereof,
including any action which by the terms of this Mortgage is to be taken by
Debtor. Nothing in this Mortgage shall be construed as requiring or obligating
Secured Party to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
notice, or to take any action with respect to any of the Mortgage Collateral or
the amounts due or to become due under any thereof, or to collect or enforce
the payment of any amounts assigned to it or to which it may otherwise be
entitled hereunder at any time or times.
(q) Secured Party shall incur no liability as a
result of the sale of Mortgage Collateral, or any part thereof, at any private
sale. Debtor hereby waives, to the extent permitted by applicable law, any
claims against Secured Party arising by reason of the fact that the price at
which the Mortgage Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale or was less
than the aggregate amount of the Indebtedness, even if Secured Party accepts
the first offer received and does not offer such Mortgage Collateral to more
than one offeree.
(r) Without precluding any other methods of sale,
Debtor acknowledges that the sale of the Mortgage Collateral shall have been
made in a commercially reasonable manner if conducted in conformity with
reasonable commercial practices of banks disposing of similar property. Secured
Party shall not be liable for any depreciation in the value of the Mortgage
Collateral.
ARTICLE IX
Miscellaneous
1 Advances by Mortgagee. Each and every Obligation herein
contained shall be performed and kept by Mortgagor solely at Mortgagor's
expense. If Mortgagor shall fail to perform or keep any of the Obligations of
whatsoever kind or nature contained in this Mortgage, then, if such failure is
not remedied by Mortgagor within thirty (30) days following notice thereof by
Mortgagee, Mortgagee or any receiver appointed hereunder may, but shall not be
obligated to, make advances to perform the same in Mortgagor's behalf, and
Mortgagor hereby agrees to repay such sums upon demand plus interest at an
annual rate equal to the Default Rate; provided, however, that in no event
shall such interest rate ever exceed the Highest Lawful Rate. No such advance
shall be deemed to relieve Mortgagor from any default hereunder; all such
advances are secured by this Mortgage.
2 Defense of Claims. Mortgagor shall notify Mortgagee, in
writing, promptly of the commencement of any legal proceedings affecting the
lien hereof or the Mortgaged Property, or any part thereof, and shall take such
action as may be necessary to preserve Mortgagor's and Mortgagee's rights
affected thereby, and should Mortgagor fail or refuse to take any such action,
Mortgagee may, upon giving prior written notice thereof to Mortgagor, take such
action on behalf of and in the name of Mortgagor and at Mortgagor's expense.
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Moreover, Mortgagee may take such independent action in connection therewith as
it may in its discretion deem proper, Mortgagor hereby agreeing that all sums
advanced or all expenses incurred in such actions plus interest at the Default
Rate will, on demand, be reimbursed to Mortgagee or any receiver appointed
hereunder; provided, however, that in no event shall such interest rate ever
exceed the Highest Lawful Rate.
3 Survival of Covenants and Liens. All of the covenants and
agreements of Mortgagor set forth herein shall survive the execution and
delivery of this Mortgage and shall continue in force until the Indebtedness is
paid in full. If Mortgagor shall perform faithfully each and all of the
covenants and agreements herein contained, or if the Notes are defeased in
accordance with the Loan Agreement and no Event of Default then exists
hereunder, then, and then only, this Mortgage shall become null and void and
shall be released in due form, upon Mortgagor's written request and at
Mortgagor's expense; otherwise, it shall remain in full force and effect. No
release of this Mortgage or the lien hereof shall be valid unless executed by
Mortgagee. The indemnifications contained herein shall survive the execution
and delivery of this Mortgage and shall continue in full force and effect,
notwithstanding the release of this Mortgage, for the maximum period permitted
by the applicable and relevant statute of limitations.
4 Renewals and Other Security. Renewals and extensions of
the Indebtedness or the Obligations may be given at any time, and Mortgagee may
take or may now hold other security for the Indebtedness and/or the Obligations
without notice to or consent of Mortgagor. Mortgagee may resort first to such
other security or any part thereof or first to the security herein given or any
part thereof, or from time to time to either or both, even to the partial or
complete abandonment of either security, and such action shall not be a waiver
of any rights conferred by this Mortgage, which shall continue as a perfected
lien upon the Mortgaged Property not expressly released until the Indebtedness
is fully paid and the Obligations are fully performed.
5 Mortgage an Assignment, Etc. This Mortgage shall be
deemed to be and may be enforced from time to time as an assignment, chattel
mortgage, hypothecation, contract, deed of trust, mortgage, conveyance,
financing statement, mineral interest filing, fixture filing, real estate
mortgage, pledge or security agreement, and from time to time as any one or
more thereof.
6 No Usury Intended. It is the intention of the parties
hereto to comply strictly with applicable usury laws; accordingly,
notwithstanding any provision to the contrary contained herein, in the Note or
any other Loan Document, in no event shall this Mortgage, the Note, or other
Loan Documents require or permit the payment, charging, taking, reserving, or
receiving of any sums constituting interest under applicable laws which exceed
the maximum amount permitted by such laws. If any such excess interest is
contracted for, charged, taken, reserved, or received in connection with this
Mortgage, the Notes or any other Loan Document, or in any communication by
Mortgagee or any other person to Mortgagor or
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any other person, or in the event all or part of the Indebtedness shall be
prepaid or accelerated, so that under any of such circumstances or under any
other circumstance whatsoever the amount of interest contracted for, charged,
taken, reserved, or received on the amount of principal actually outstanding
from time to time under this Mortgage, the Notes or any other Loan Document,
shall exceed the maximum amount of interest permitted by applicable usury laws,
then in any such event it is agreed as follows: (i) the provisions of this
Section 9.6 shall govern and control, (ii) any such excess shall be deemed an
accidental and bona fide error and canceled automatically to the extent of such
excess, and shall not be collected or collectible, (iii) any such excess which
is or has been paid or received notwithstanding this Section 9.6 shall be
credited in the first instance against the then unpaid principal balance hereof
with the excess thereof, if any, refunded to Mortgagor, and (iv) the effective
rate of interest shall be automatically reduced to the maximum lawful rate
allowed under applicable laws as construed by courts having jurisdiction hereof
or thereof. Without limiting the foregoing, all calculations of the rate of
interest contracted for, charged, taken, reserved, or received in connection
herewith which are made for the purpose of determining whether such rate
exceeds the maximum lawful rate shall be made to the extent permitted by
applicable laws by amortizing, prorating, allocating and spreading during the
period of the full term of the Indebtedness, including all prior and subsequent
renewals and extensions, all interest at any time contracted for, charged,
taken, reserved, or received. The terms of this Section 9.6 shall be deemed to
be incorporated in every Loan Document. The term "applicable usury laws" shall
mean such laws of the states of Louisiana, New York or the laws of the United
States, whichever laws allow the higher rate of interest, as such laws now
exist; provided, however, that if such laws shall hereafter allow higher rates
of interest, then the applicable usury laws shall be the laws allowing the
higher rates, to be effective as of the effective date of such laws.
7 Separability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction, and the remaining provisions hereof
shall be liberally construed in favor of Mortgagee in order to effectuate the
provisions hereof, and the invalidity of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of any such
provision in any other jurisdiction.
8 Rights Cumulative. Each and every right, power and remedy
herein given to Mortgagee shall be cumulative and not exclusive, and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and so often and in such order as may be
deemed expedient by Mortgagee, as the case may be, and the exercise, or the
beginning of the exercise, of any such right, power or remedy shall not be
deemed a waiver of the right to exercise, at the same time or thereafter, any
other right, power or remedy. No delay or omission by Mortgagee in the exercise
of any right, power or remedy shall impair any such right, power or remedy or
operate as a waiver thereof or of any other right, power or remedy then or
thereafter existing.
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9 Binding Effect. This Mortgage is binding upon Mortgagor
and Mortgagor's successors and assigns, and shall inure to the benefit of
Mortgagee and its successors and assigns, and the provisions hereof shall
likewise constitute covenants running with the Real Property and the Easements.
10 Article and Section Headings. The article and section
headings in this Mortgage are inserted for convenience and shall not be
considered a part of this Mortgage or used in its interpretation.
11 Counterparts. This Mortgage may be executed in any number
of counterparts, each of which shall for all purposes be deemed to be an
original and all of which are identical.
12 Notices. Any notices or other communications to Mortgagor
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested and addressed to
Mortgagor at the applicable address shown on page one of this Mortgage or to
such different address as Mortgagor shall have designated by written notice
received by Mortgagee.
13 Amendments, Modifications and Waivers, Etc. This Mortgage
may be amended, modified, revised, discharged, released or terminated only by a
written instrument or instruments executed by Mortgagor and Mortgagee. Any
alleged amendment, revision, discharge, release or termination which is not so
documented shall not be effective as to any party. No waiver of any provision
of this Mortgage nor consent to any departure by Mortgagor therefrom shall in
any event be effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
14 Survival of Agreements. All representations and warranties
of Mortgagor herein and all covenants and agreements herein not fully and
finally performed before the effective date or dates of this Mortgage shall
survive such date or dates. All covenants and obligations in this Mortgage are
intended by the parties to be, and shall be construed as, covenants running
with the Real Property.
15 Governing Law. This Mortgage shall be construed in
accordance with, and this Mortgage and the transactions described herein shall
be governed by, the laws of the State of New York as to all issues, including
(without limitation) issues of validity, interpretation, effect, performance
and remedies, except to the extent that the validity and perfection of the
security interest hereunder, or remedies hereunder, in respect of any portion
of the Mortgaged Property or the Mortgage Collateral is governed by the laws of
a jurisdiction other than the State of New York and except that the laws of the
State of Louisiana shall govern the validity and perfection of the security
interest of Mortgagee in the Mortgaged Property and the Mortgage Collateral
located in the State of Louisiana, including, without limitation, Fixtures,
Easements and Leases.
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16 Date. This Mortgage has been executed on the date set
forth below; nevertheless, for convenience purposes this Mortgage may be
referred to as dated as of June 13, 1997.
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IN WITNESS WHEREOF, Mortgagor has executed or caused to be
executed this Mortgage, Security Agreement, Assignment of Leases and Rents and
Financing Statement as of the 12th day of June, 1997, in the presence of the
undersigned Notary Public and the undersigned competent witnesses, who hereunto
sign their names with Mortgagor after reading of the whole.
WITNESSES: MORTGAGOR:
TRANSAMERICAN REFINING CORPORATION,
------------------------ a Texas corporation
Print Name:
By:
--------------------------------
Name:
------------------------ Title:
Print Name:
---------------------
Notary Public
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Exhibit "A"
LEGAL DESCRIPTION
[See Attached]
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Exhibit "B"
EASEMENTS
[See Attached]
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Exhibit "C"
LEASES
[See Attached]
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Exhibit "D"
CONSENTS
[See Attached]
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Exhibit "E"
DATEDOWN ENDORSEMENT
[See Attached]
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Exhibit "F"
PROPERTY LEASES
[See Attached]
61
