EXHIBIT 10.11
_______________________________________________________________________________
_______________________________________________________________________________
OPEN-END
MORTGAGE AND SECURITY AGREEMENT
from
ENVIRONMENTAL PURIFICATION INDUSTRIES COMPANY
to
SOCIETY BANK & TRUST, Trustee
_________________________
$5,745,000
Xxxxxx-Xxxxx County Port Authority
Development Revenue Bonds
(Northwest Ohio Bond Fund)
Series 1989D
_________________________
Dated
as of
December 15, 1989
_______________________________________________________________________________
_______________________________________________________________________________
Recorded in Xxxxx County, Ohio
No. 3975
2-14, 1990 12:43 p.m.
Squire, Xxxxxxx & Xxxxxxx
Xxxx Counsel
INDEX
(The Index is not a part of this Series 1989D Mortgage
and is only for convenience of reference.)
Page
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Preambles and Granting Clauses ......................................... 1
ARTICLE I
DEFINITIONS
Section 1.1 Use of Defined Terms ................................... 4
Section 1.2 Definitions ............................................ 4
Section 1.3 Interpretation ......................................... 7
ARTICLE II
PRESERVATION OF SECURITY
Section 2.1 Representations and Warranties ......................... 8
Section 2.2 Recordation ............................................ 8
Section 2.3 After-Acquired Property ................................ 8
Section 2.4 Liens and Encumbrances ................................. 9
Section 2.5 Security Agreement and Financing Statement ............. 9
Section 2.6 No Claims Against Mortgagee ............................ 9
Section 2.7 Security for Loan Advances ............................. 10
Section 2.8 Construction Mortgage .................................. 10
ARTICLE III
TAXES, MECHANICS' LIENS AND INSURANCE
Section 3.1 Payment of Taxes and Other Governmental
Charges .............................................. 11
Section 3.2 Mechanics' and Other Liens ............................. 11
Section 3.3 Insurance .............................................. 12
Section 3.4 Workers' Compensation Coverage ......................... 13
ARTICLE IV
MAINTENANCE AND USE OF SERIES 1989D MORTGAGED PROPERTY
Section 4.1 Compliance with Legal and Insurance
Requirements ......................................... 14
Section 4.2 Maintenance and Use of Series 1989D
Mortgaged Property ................................... 14
Section 4.3 Additions, Modifications and Improvements .............. 15
Section 4.4 Substitutions and Removals ............................. 15
Section 4.5 Indemnification ........................................ 16
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Page
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ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1 Damage to or Destruction of Series 1989D
Project Facilities ................................... 18
Section 5.2 Use of Insurance Proceeds .............................. 18
Section 5.3 Eminent Domain ......................................... 18
Section 5.4 Investment and Disbursement of Net Proceeds ............ 19
ARTICLE VI
REMEDIES
Section 6.1 Right to Perform Covenants ............................ 21
Section 6.2 Events of Default ..................................... 21
Section 6.3 Remedies .............................................. 23
Section 6.4 Waiver of Appraisement; Valuation ..................... 23
Section 6.5 Appointment of Receiver ............................... 23
Section 6.6 Possession, Management and Income; Assignment ......... 23
Section 6.7 Remedies Cumulative ................................... 24
Section 6.8 Provisions Subject to Applicable Law .................. 24
Section 6.9 No Waiver by Mortgagee ................................ 24
Section 6.10 Discontinuance of Proceedings and Restoration
of Status Quo ....................................... 24
ARTICLE VII
MISCELLANEOUS
Section 7.1 Additional Security ................................... 25
Section 7.2 Release of Series 1989D Mortgaged
Property and Easements .............................. 25
Section 7.3 Release and Discharge ................................. 25
Section 7.4 Inspection ............................................ 25
Section 7.5 Expenses .............................................. 26
Section 7.6 Books, Records and Accounts ........................... 26
Section 7.7 Estoppel Affidavits ................................... 26
Section 7.8 Subrogation ........................................... 26
Section 7.9 No Merger ............................................. 26
Section 7.10 General Provisions .................................... 27
Section 7.11 Amendments, Changes and Modifications ................. 27
Section 7.12 Delivery and Assignment of Leases ..................... 27
Signatures ............................................................ 29
Acknowledgments ....................................................... 30
Exhibit A - Series 1989D Project Site
Exhibit B - Permitted Encumbrances
Exhibit C - Series 1989D Note
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OPEN-END
MORTGAGE AND SECURITY AGREEMENT
Maximum Indebtedness Not to Exceed $5,845,000
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (the "Series 1989D
Mortgage"), dated as of December 15, 1989, is executed and delivered by
ENVIRONMENTAL PURIFICATION INDUSTRIES COMPANY, a general partnership duly
organized and existing under the laws of the State (the "Mortgagor"), to SOCIETY
BANK & TRUST, a bank duly organized and validly existing under the laws of the
State of Ohio (the "Mortgagee"), under the circumstances summarized in the
following recitals (the capitalized terms used in the recitals being used
therein as defined in Article I hereof):
A. Pursuant to Section 13, Article VIII, Ohio Constitution and
Sections 4582.01 to 4582.20, both inclusive, Ohio Revised Code, the
Xxxxxx-Xxxxx County Port Authority (the "Issuer") has issued, sold and
delivered its Series 1989D Bonds to Xxxxxx & Xxxxxxxxx Financial, Inc.,
Columbus, Ohio (the "Original Purchaser") in the principal amount of
$5,745,000. The Series 1989D Bonds have been issued pursuant to the
Indenture between the Mortgagee and the Issuer. Reference is hereby made to
the Indenture, a counterpart of which is on file and available for inspection
at the Notice Address of the Mortgagee.
B. Pursuant to the Series 1989D Agreement to which reference is
hereby made and a counterpart of which is on file and available for inspection
at the Notice Address of the Mortgagee, the Mortgagee has loaned to the
Mortgagor the proceeds received from the sale of the Series 1989D Bonds.
C. By the Series 1989D Agreement and as further evidenced by the
Series 1989D Note, the Mortgagor is required to repay such loan by making
Financing Payments, as defined in the Series 1989D Agreement, to the Mortgagee
at such times and in such amounts as shall be sufficient to pay Bond Service
Charges on the Series 1989D Bonds as and when due and payable. The final
principal payment on the Series 1989D Bonds, if not earlier redeemed, is due and
payable on November 15, 2000.
D. By the Indenture, the Issuer has, with the consent of the
Mortgagor, assigned to the Mortgagee, as Trustee under the Indenture (the
"Trustee"), as security for the payment of the Bond Service Charges (i) all of
its rights and interest under, in and to the Series 1989D Agreement except for
the Unassigned Issuer's Rights as therein defined and (ii) the Pledged Revenues
as defined in the Indenture.
NOW THEREFORE, as an inducement to and in consideration of the loan of
the proceeds of the sale of the Series 1989D Bonds by the Issuer pursuant to the
Series 1989D Agreement, and for other valuable consideration, the receipt of
which is hereby acknowledged, and for the purpose of securing: (i) all payments
to be made by the Mortgagor under the Series 1989D Agreement, the Series 1989D
Note and this Series 1989D Mortgage, including, without limitation, all
Financing Payments, (ii) any amounts advanced or costs incurred by the
Mortgagee for the protection of the Series 1989D Note, the Series 1989D
Bonds or the Series 1989D Mortgaged Property, as hereinafter defined, or in
connection with the enforcement of this Series 1989D Mortgage, the Series 1989D
Note or the Series 1989D Agreement and (iii) the performance and observance of
each covenant and agreement of the Mortgagor contained in this Series 1989D
Mortgage, the Series 1989D Note and the Series 1989D Agreement, the Mortgagor
does hereby grant, bargain, sell, convey, mortgage, assign, grant a security
interest in and transfer unto the Mortgagee, its successors and assigns, the
following property (the "Series 1989D Mortgaged Property"):
(a) The real estate described in Exhibit A attached hereto, together with
all other real properties now or hereafter made subject to the lien of
this Series 1989D Mortgage by supplemental mortgage or otherwise (the
"Series 1989D Project Site");
(b) All buildings, structures, additions, improvements, facilities,
fixtures, fittings, machinery, apparatus, Installations, furniture,
equipment and other property, now or hereafter located in, upon or
under, or based at the Series 1989D Project Site (other than Personal
Property installed pursuant to Section 4.3 hereof) (the "Series 1989D
Project Facilities");
(c) All rentals, revenues, payments, repayments, income, charges and
moneys derived by the Mortgagor from the lease, sale or other
disposition of the Series 1989D Project Site or Series 1989D Project
Facilities and the proceeds from any Insurance or condemnation award
pertaining thereto and payments made under warranties and in the
repurchase of certain of the Series 1989D Project Facilities pursuant
to the Equipment Sale Agreement and all other rights granted to the
Mortgagor in the Equipment Sale Agreement, including without
limitation all licenses granted to the Mortgagor in the Equipment
Sale Agreement; and
(d) All easements, rights of way or use, licenses, privileges, franchises,
servitudes, tenements, hereditaments and all appurtenances now or
hereafter belonging to or anywise appertaining to the Series 1989D
Project Site or the Series 1989D Project Facilities including,
without limitation, all right, title and interest in any street,
open or proposed.
(Balance of page intentionally left blank.)
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TO HAVE AND TO HOLD the Series 1989D Mortgaged Property unto the
Mortgagee, its successors and assigns, forever;
AND, IT IS HEREBY COVENANTED that this Series 1989D Mortgage is given
and the Series 1989D Mortgaged Froperty is to be held upon the terms herein set
forth.
(Balance of page intentionally left blank.)
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ARTICLE I
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. In addition to the words and terms
elsewhere defined in this Series 1989D Mortgage or by reference to another
document, the words and terms set forth in Section 1.2 hereof shall have the
meanings therein set forth unless the context or use expressly indicates
different meaning or intent. Such definitions shall be equally applicable to
both the singular and plural forms of any of the words and terms therein
defined.
Section 1.2. DEFINITIONS. As used herein:
"Additional Series 1989D Bonds" means the Additional Series 1989D
Bonds as defined in the Series 1989D Supplemental Indenture.
"Basic Indenture" means the Trust Indenture dated as of August 15,
1988, constituting a trust agreement between the Issuer and the Mortgagee, as
Trustee, as supplemented from to time to time pursuant to the paragraphs of
Section 8.02 of the Basic Indenture exclusive of paragraph (g) thereof.
"Bond Fund" means the Bond Fund created by the Basic Indenture.
"Bond Legislation" means (a) when used with reference to the Series
1989D Bonds, the resolution providing for their issuance and approving the
Series 1989D Agreement, the Series 1989D Supplemental Indenture and related
matters; (b) when used with reference to an issue of Additional Series 1989D
Bonds, the resolution providing for the issuance of the Series 1989D Bonds, to
the extent applicable, and the legislation providing for the issuance of the
Additional Series 1989D Bonds and approving any amendment to the Series 1989D
Agreement, any Supplemental Indenture and related matters; and (c) when used
with reference to Bonds when Additional Series 1989D Bonds are outstanding, the
resolution providing for the issuance of the Series 1989D Bonds and the
legislation providing for the issuance of the then outstanding Additional Series
1989D Bonds; in each case as amended or supplemented from time to time.
"Bonds" means the Series 1989D Bonds and any Additional Series 1989D
Bonds issued pursuant to Section 2.02 of the Basic Indenture.
"Bond Service Charges" means, for any period of time, the principal of
and premium, if any, and interest required to be paid by the Mortgagee on the
Series 1989D Bonds for such time period whether due at maturity or upon
acceleration or redemption.
"Commercial Code" means the Uniform Commercial Code as enacted in the
State, as from time to time duly amended or supplemented.
"Engineer" means an individual or firm acceptable to the Mortgagee and
qualified to practice the profession of engineering or architecture under
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the laws of the State and who is not an officer, employer or owner of an
interest in the Mortgagor.
"Equipment Sale Agreement" means, collectively, the Xxxxx
Environmental Corporation Proposal for Sale, Proposal No. 00-000-00, dated
September 25, 1989, and the Mortgagor's acceptance of that Proposal dated
September 27, 1989.
"Event of Default" means any of the events described as an Event of
Default in Section 6.2 hereof.
"Financing Payments" means the amounts required to be paid by the
Mortgagor in repayment of the Loan pursuant to the Series 1989D Note and
Section 4.1 of the Series 1989D Agreement.
"Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 6.2 hereof.
"Holder" or "Holder of a Bond" means the Person in whose name a bond
is registered on the Register.
"Indenture" means the Basic Indenture, as amended or supplemented from
time to time, including supplemented by the Series 1989D Supplemental Indenture.
"Independent Counsel" means an attorney or firm of attorneys
acceptable to the Mortgagor and duly admitted to practice law before the
highest court of the State and who is not an officer, employer or owner of an
interest in the Mortgagor.
"Insurance Requirements" means those insurance requirements described
in Section 4.1 hereof.
"Interest Rate for Advances" means the rate of 12% per annum or the
rate per annum which is 2% plus that interest rate announced by the Trustee in
its lending capacity as a bank as its "Prime Rate" or its "Base Rate," whichever
is greater and lawfully chargeable, in whole or in part.
"Issuer" means Xxxxxx-Xxxxx County Port Authority, a port authority
and political subdivision of the State.
"Legal Requirements" means those legal requirements described in
Section 4.1 hereof.
"Loan" means the loan by the Issuer to the Mortgagor of the proceeds
received from the sale of the Series 1989D Bonds.
"Net Proceeds," when used with respect to any insurance proceeds or
condemnation award, means the gross proceeds thereof less the payment of all
expenses, including attorneys' fees incurred in connection with the
collection of such gross proceeds.
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"Notes" means the Series 1989D Note and any Additional Series 1989D
Notes delivered pursuant to the Series 1989D Agreement as amended and
supplemented from time to time.
"Notice Address" means as to the Mortgagor, Environmental Purification
Industries Company, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, and as to the
Mortgagee, Society Xxxx & Xxxxx, Xxxxx XxxXxxx, Xxxxxx, Xxxx 00000, Attention:
Corporate Trust Department, and as to the Issuer, Xxxxxx-Xxxxx County Port
Authority, Xxx Xxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: President, or
such different or additional address of which notice is given pursuant to
Section 8.2 of the Series 1989D Agreement.
"Outstanding" means Outstanding as defined in the Basic Indenture.
"Permitted Encumbrances" means the exceptions, restrictions,
easements and encumbrances set forth in Exhibit B hereto.
"Prepayment Account" means the Prepayment Account in the Bond Fund
created in Section 5.04 of the Basic Indenture.
"Project Fund" means the Project Fund created by Section 5.01 of the
Basic Indenture.
"Required Property Insurance Coverage" means insurance insuring the
Series 1989D Project Facilities against (i) loss or damage by fire,
lightning, vandalism and malicious mischief and all other perils covered by
standard "extended coverage" or "all risks" policies in the State, (ii) by
appropriate endorsement, against loss of revenues from interruption of the
operation of the Series 1989D Project Facilities as a result of damage or
destruction thereof covering a period of interruption of not less than 12
months and in an amount not less than the Financing Payments required to be
made during the next ensuing 12 calendar months, and (iii) against such
other perils as the Mortgagee may require, in an amount equal to 100% of the
replacement cost of the Series 1989D Project Facilities, without deduction
for depreciation, and containing a "replacement cost endorsement," provided
that such insurance may provide for a loss deductible of not to exceed
$10,000.
"Required Public Liability Insurance Coverage" means comprehensive
general accident and public liability insurance in the minimum amounts of
$3,000,000 for death or bodily injury resulting from each occurrence in
connection with the Series 1989D Project Site or the Series 1989D Project
Facilities and other property and operations of the Mortgagor and $1,000,000
for property damages for any occurrence in connection with the Series 1989D
Project Site or Series 1989D Project Facilities and other properties and
operations of the Mortgagor, provided that such insurance may provide for a
loss deductible of not to exceed $10,000.
"Series 1989D Agreement" means the Loan Agreement dated as of even
date with this Series 1989D Mortgage, between the Issuer and the Mortgagor, as
amended or supplemented from time to time.
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"Series 1989D Bonds" means the $5,745,000 Development Revenue Bonds
(Northwest Ohio Bond Fund), Series 1989D of the Issuer authorized in the Bond
Legislation and the Series 1989D Supplemental Indenture.
"Series 1989D Mortgage" means this Open-End Mortgage and Security
Agreement, as amended or supplemented from time to time.
"Series 1989D Note" means the promissory note of the Mortgagor in the
form attached hereto as Exhibit C and in the principal amount of $5,745,000, of
even date with the Series 1989D Bonds, evidencing the obligation of the
Mortgagor to make Financing Payments and delivered by the Mortgagor to the
Mortgagee pursuant to the Series 1989D Agreement.
"Series 1989D PF Account" means the Series 1989D PF Account created in
Section 6(a) of the Series 1989D Supplemental Indenture.
"Series 1989D Supplemental Indenture" means the Ninth Supplemental
Trust Indenture dated as of even date herewith between the Issuer and the
Mortgagee supplementing the Basic Indenture and entered into in connection with
the issuance of the Series 1989D Bonds.
"State" means the State of Ohio.
Section 1.3. INTERPRETATION. Any reference to a section or provision
of the Constitution of the State, or to a section, provision or chapter of the
Ohio Revised Code or any statute of the United States of America, includes that
section, provision or chapter as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision or chapter shall be
applicable solely by reason of this provision, if it constitutes in any way an
impairment of the rights or obligations of the Holders, the Mortgagee, the
Issuer, the Registrar or the Mortgagor under the Indenture, the Bond
Legislation, the Bonds, the Series 1989D Agreement, the Series 1989D Note, this
Series 1989D Mortgage or any other instrument or document entered into in
connection with any of the foregoing, including without limitation, any
alteration of the obligation to pay Bond Service Charges in the amount and
manner, at the times, and from the sources provided in the Bond Legislation and
the Indenture, except as permitted in the Indenture.
The terms "hereof," "hereby," "herein," "hereto," "hereunder" and
similar terms refer to this Series 1989D Mortgage; and the term "hereafter"
means after, and the term "heretofore" means before, the date of delivery of
this Series 1989D Mortgage. Words of the masculine gender include the
feminine and neuter, and when the sense so indicates words of the neuter
gender may refer to any gender.
(End of Article I)
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ARTICLE II
PRESERVATION OF SECURITY
Section 2.1. REPRESENTATIONS AND WARRANTIES. The Mortgagor represents
and warrants, subject to Permitted Encumbrances, that (i) the Mortgagor is
lawfully seized with good and marketable fee simple title to the Series 1989D
Project Site and has good title to all personal property included in the Series
1989D Mortgaged Property, (ii) it has full right and authority to sell and
convey the Series 1989D Mortgaged Property and (iii) it will warrant and defend
to the Mortgagee such title to the Series 1989D Mortgaged Property and the lien
and interest of the Mortgagee therein and thereon against all claims and demands
whatsoever and will, except as otherwise herein expressly provided, not convey
all or any portion of the Series 1989D Mortgaged Property without the prior
written consent of the Mortgagee and will maintain the priority of the lien of,
and the security interest granted by, this Series 1989D Mortgage upon the
Series 1989D Mortgaged Property until the Mortgagor shall be entitled to
defeasance as provided herein.
Section 2.2. RECORDATION. The Mortgagor, at its expense, shall cause
this Series 1989D Mortgage, any instruments supplemental hereto, financing
statements, including all necessary amendments, supplements and appropriate
continuation statements to be recorded, registered and filed, and to be kept
recorded, registered and filed, in such manner and in such places as may be
required in order to establish, preserve and protect the lien of this Series
1989D Mortgage, subject to Permitted Encumbrances, as a valid, first mortgage
lien on all real property, fixtures and interests therein included in the
Series 1989D Mortgaged Property and a valid, perfected first priority security
interest in all personal property, fixtures and interests therein included in
the Series 1989D Mortgaged Property (including in each such case, without
limitation, any such properties acquired after the execution hereof). If
requested by the Mortgagee but in each case not more than once in each calendar
year, the Mortgagor, at its expense, will furnish to the Mortgagee an opinion of
Independent Counsel, specifying the action required to be taken by the Mortgagor
to comply with this Section 2.2 since the date of this Series 1989D Mortgage or
the date of the most recent such opinion or stating that no such action is
necessary.
Section 2.3. AFTER-ACQUIRED PROPERTY. All property of every kind
acquired by the Mortgagor after the date hereof, which by the terms hereof is
intended to be subject to the lien of this Series 1989D Mortgage, shall
immediately upon the acquisition thereof by the Mortgagor, and without further
mortgage, conveyance or assignment, become subject to the lien of this Series
1989D Mortgage as fully as though now owned by the Mortgagor and specifically
described herein. Nevertheless, the Mortgagor shall take such actions and
execute and deliver such additional instruments as the Mortgagee shall
reasonably require to further evidence or confirm the subjection to the lien of
this Series 1989D Mortgage of any such property.
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Section 2.4. LIENS AND ENCUMBRANCES. Except as otherwise expressly
permitted by this Series 1989D Mortgage or the Series 1989D Agreement, the
Mortgagor shall not, without the prior written consent of the Mortgagee,
directly or indirectly create or permit to remain, and will promptly discharge,
any mortgage, lien, encumbrance or charge on, pledge of, security interest in or
conditional sale or other title retention agreement with respect to the Series
l989D Mortgaged Property or any part thereof or the interest of the Mortgagor or
the Mortgagee therein or any revenues, income or profit or other sums arising
from the Series 1989D Mortgaged Property or any part thereof (including,
without limitation, any lien, encumbrance or charge arising by operation of
law) other than:
(a) the lien of this Series 1989D Mortgage;
(b) liens for taxes, assessments and other governmental charges which are
not at the time required to be paid pursuant to Section 3.1 hereof;
(c) liens of mechanics, materialmen, suppliers or vendors or rights
thereto to the extent permitted by Section 3.2 hereof; and
(d) Permitted Encumbrances.
Section 2.5. SECURITY AGREEMENT AND FINANCING STATEMENT. This Series
1989D Mortgage constitutes a security agreement as to all or any part of the
Series 1989D Mortgaged Property which is of a nature that a security interest
therein can be perfected under the Commercial Code. This Series 1989D Mortgage
also constitutes a financing statement with respect to any and all property
included in the Series 1989D Mortgaged Property which is or may become fixtures.
All rights that the Mortgagor has to enforce the repurchase of
certain of the Series 1989D Project Facilities pursuant to the Equipment Sale
Agreement and the proceeds of a repurchase pursuant to the Equipment Sale
Agreement are hereby pledged, assigned and transferred to the Mortgagee for the
protection of the Series 1989D Bondholders and those proceeds when received
shall be used by the Mortgagee to pay principal of and interest on the Series
1989D Bonds as provided in the Series 1989D Supplemental Indenture.
Section 2.6. NO CLAIMS AGAINST MORTGAGEE. Nothing contained in this
Series 1989D Mortgage shall constitute any request by the Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Series 1989D Mortgaged Property or
any part thereof, or be construed to give the Mortgagor any right, power or
authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
provide the basis for any claim either against the Mortgagee or that any lien
based on the performance of such labor or services or the furnishing of any such
materials or other property is prior to the lien of this Series 1989D Mortgage.
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Section 2.7. SECURITY FOR LOAN ADVANCES. This Series 1989D Mortgage
is intended to secure the unpaid balances of loan advances to be made under the
Series 1989D Agreement after this Series 1989D Mortgage has been delivered to
the Xxxxx County, Ohio Recorder's Office for recordation. The maximum amount
of loan advances, exclusive of interest thereon and advances made for the
payment of taxes, assessments, insurance premiums and costs incurred for the
protection of the Series 1989D Mortgaged Property, which may be outstanding at
any time, is $5,845,000. The Series 1989D Agreement and the Indenture obligate
the Mortgagee to advance definite and certain sums under definite conditions,
by disbursement from the Project Fund, which advances are to be made to pay
certain permitted costs with respect to the Series 1989D Mortgaged Property as
set forth in the Series 1989D Agreement.
Delete Section 2.8. CONSTRUCTION MORTGAGE. This Series 1989D Mortgage secures
an obligation incurred for the construction of improvements on the Series
1989D Project Site, including the acquisition cost of such real property, and,
consequently, is a "construction mortgage" within the meaning of the Commercial
Code.
(End of Article II)
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ARTICLE III
TAXES, MECHANICS' LIENS AND INSURANCE
Section 3.1. PAYMENT OF TAXES AND OTHER GOVERNMENTAL CHARGES. The
Mortgagor shall pay, promptly when due and before penalty or interest accrue
thereon, all taxes, assessments, whether general or special, and other
governmental charges of any kind whatsoever, foreseen or unforeseen, ordinary
or extraordinary, that now or may at any time hereafter be assessed or levied
against or with respect to the Series 1989D Mortgaged Property or any part
thereof (including, without limitation, any taxes levied upon or with respect
to the revenues, income or profits of the Mortgagor from the Series 1989D
Mortgaged Property) which, if not paid, may become or be made a lien on the
Series 1989D Mortgaged Property, or any part thereof, or a charge on such
revenues, income or profits. The Mortgagor shall deliver to the Mortgagee no
later than five days after the due date of any payment required to be made
pursuant to this paragraph written evidence that such payment has been made.
Notwithstanding the preceding paragraph, the Mortgagor may, at its
expense and after prior written notice to the Mortgagee, by appropriate
proceedings diligently prosecuted, contest in good faith the validity or amount
of any such taxes, assessments or other charges and during the period of
contest, need not pay the items so contested. However, if at any time the
Mortgagee shall deliver to the Mortgagor an opinion of Independent Counsel to
the effect that by nonpayment of any such items, the lien or security interest
created by this Series 1989D Mortgage as to any part of the Series 1989D
Mortgaged Property will be materially affected or the Series 1989D Mortgaged
Property or any part thereof will be subject to imminent loss or forfeiture, the
Mortgagor shall promptly pay such taxes, assessments or charges. During the
period when the taxes, assessments or other charges so contested remain unpaid,
the Mortgagor shall set aside on its books adequate reserves with respect
thereto.
Section 3.2. MECHANICS' AND OTHER LIENS. The Mortgagor shall not
permit any mechanics' or other liens to be filed or to exist against the
Series 1989D Mortgaged Property by reason of work, labor, services or
materials supplied or claimed to have been supplied to, for or in connection
with the Series 1989D Mortgaged Property or to the Mortgagor or anyone
holding the Series 1989D Mortgaged Property or any part thereof through or
under the Mortgagor. If any such lien shall at any time be filed, the
Mortgagor shall, within thirty days after notice of the filing thereof but
subject to the right to contest as set forth herein, cause the same to be
discharged of record by payment, deposit, bond, order of a court of competent
jurisdiction or otherwise. Notwithstanding the foregoing, the Mortgagor
shall leave the right, at its own expense and after prior written notice to
the Mortgagee, by appropriate proceedings duly instituted and diligently
prosecuted, to contest in good faith the validity or the amount of any such
lien. However, if the Mortgagee shall deliver to the Mortgagor an opinion of
Independent Counsel to the effect that by nonpayment of any such items, the
lien or security interests created by this Series 1989D Mortgage will be
materially affected or the
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Series 1989D Mortgaged Property or any part thereof will be subject to
imminent loss or forfeiture, the Mortgagor shall promptly cause such lien to
be discharged of record.
Section 3.3. INSURANCE. The Mortgagor shall keep the Series 1989D
Project Facilities continuously insured with Required Property Insurance
Coverage. For purposes of establishing the amount of the Required Property
Insurance Coverage, "replacement cost" of the Series 1989D Project Facilities
shall be determined not less frequently than at two-year intervals by an
Engineer or a competent appraiser, appraisal company or one of the insurers
acceptable to the Mortgagee, which determination, together with written evidence
of the applicable increase or decrease in the Required Property Insurance
Coverage due to a change in "replacement cost" shall be promptly delivered by
the Mortgagor to the Mortgagee upon such determination.
The Mortgagor shall keep and maintain Required Public Liability
Insurance Coverage with reference to the Series 1989D Project Site and the
Series 1989D Project Facilities provided that the Required Public Liability
Insurance Coverage shall be increased to such larger amounts as the Mortgagee
may determine to be appropriate in light of inflationary increases, the
operations conducted by the Mortgagor and the insurance coverage carried by
other entities conducting similar operations.
All insurance shall be obtained and maintained either by means of
policies with generally recognized, responsible insurance companies or in
conjunction with other companies through an insurance trust or other
arrangements satisfactory to the Mortgagee, and all such companies are to be
qualified to do business in the State. The insurance to be provided may be by
blanket policies. Each policy of insurance shall be written so as not to be
subject to cancellation or substantial modification upon less than fifteen
days' advance written notice to the Mortgagee and the Issuer. The Mortgagor
shall deposit annually with the Mortgagee and the Issuer certificates or other
evidence satisfactory to the Mortgagee and the Issuer that (i) the insurance
required hereby has been obtained and is in full force and effect and (ii) all
premiums thereon have been paid in full. Prior to the expiration of any such
insurance, the Mortgagor shall furnish the Mortgagee and the Issuer with
evidence satisfactory to the Mortgagee and the Issuer that such insurance has
been renewed or replaced and that all premiums thereon have been paid in full
and all insurance policies required hereby are in full force and effect. The
Mortgagor shall file with the Mortgagee and the Issuer a copy of any claim it
may make under the Required Property Insurance Coverage which claim is in excess
of $25,000.
All policies providing the Required Property Insurance Coverage shall
contain standard mortgage clauses requiring all proceeds resulting from any
claim for loss or damage in excess of $50,000 to be paid to the Mortgagee and
any Net Proceeds of insurance providing such coverage shall be paid and applied
as provided in Section 5.2 hereof. Any proceeds of policies providing Required
Public Liability Insurance Coverage shall be applied toward the extinguishment
or satisfaction of the liability with respect to which such insurance proceeds
have been paid.
- 12 -
Section 3.4. WORKERS' COMPENSATION COVERAGE. The Mortgagor shall
maintain or cause to be maintained in connection with the Series 1989D Mortgaged
Property any workers' compensation coverage required by the applicable laws of
the State and shall annually deposit with the Mortgagee and the Issuer evidence
of such coverage.
(End of Article III)
- 13 -
ARTICLE IV
MAINTENANCE AND USE OF SERIES 1989D MORTGAGED PROPERTY
Section 4. 1. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS.
The Mortgagor, at its expense, shall promptly comply with all Legal
Requirements and Insurance Requirements, and shall procure, maintain and
comply with all permits, licenses and other authorizations required for any
use being made of the Series 1989D Mortgaged Property or any part thereof
then being made or anticipated to be made, and for the proper construction,
installation, operation and maintenance of the Series 1989D Mortgaged
Property or any part thereof, and will comply with any instruments of record
at the time in force burdening the Series 1989D Mortgaged Property or any
part thereof. As used in this Section, "Legal Requirements" means all laws,
statutes, codes, acts, ordinances, resolutions, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations,
directions and requirements of all governmental entities, departments,
commissions, boards, courts, authorities, agencies, officials and officers,
foreseen or unforeseen, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Series 1989D Mortgaged Property or any
part thereof, any use, anticipated use or condition of the Series l989D
Mortgaged Property or any part thereof. "Insurance Requirements" means all
provisions of any insurance policy covering or applicable to the Series 1989D
Mortgaged Property or any part thereof, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) applicable to or affecting the Series 1989D Mortgaged Property or
any part thereof. The Mortgagor may, at its expense and after prior written
notice to the Mortgagee, by any appropriate proceedings diligently
prosecuted, contest in good faith any Legal Requirement and postpone
compliance therewith pending the resolution or settlement of such contest
provided that such postponement does not, in the opinion of Independent
Counsel, materially affect the lien or security interests created by this
Series 1989D Mortgage as to any part of the Series 1989D Mortgaged Property
or subject the Series 1989D Mortgaged Property, or any part thereof, to
imminent loss or forfeiture.
Section 4.2. MAINTENANCE AND USE OF SERIES 1989D MORTGAGED PROPERTY.
The Mortgagor, at its expense, will keep or cause to be kept the Series 1989D
Mortgaged Property in good order and condition (ordinary wear and tear excepted)
and will make all necessary or appropriate repairs, replacements and renewals
thereof, interior, exterior, structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen. The Mortgagor will not do, or permit to
be done, any act or thing which might materially impair the value or usefulness
of the Series 1989D Mortgaged Property or any part thereof, will not
commit or permit any material waste of the Series 1989D Mortgaged Property or
any part thereof, and will not permit any unlawful occupation, business or
trade to be conducted on the Series 1989D Mortgaged Property or any part
thereof. The Mortgagor shall also, at its expense, promptly comply with all
rights of way or use, privileges, franchises, servitudes, licenses, easements,
tenements, hereditaments and appurtenances forming a part of the Series 1989D
- 14 -
Mortgaged Property and all instruments creating or evidencing the same, in each
case, to the extent compliance therewith is required of the Mortgagor under the
terms thereof.
Section 4.3. ADDITIONS, MODIFICATIONS AND IMPROVEMENTS. The Mortgagor
may, in its discretion and at its expense, make from time to time any
additions, modifications or improvements to the Series 1989D Mortgaged Property
which it may deem desirable for its business purposes provided that no such
additions, modifications or improvements shall, in the opinion of an Engineer,
adversely affect the structural integrity or strength of any improvements
constituting a part of the Series 1989D Mortgaged Property or materially
interfere with the use and operation thereof. All additions, modifications and
improvements so made by the Mortgagor shall become or be deemed to constitute a
part of the Series 1989D Mortgaged Property, except as may be provided herein.
The Mortgagor may from time to time install Personal Property, as
defined below, in addition to the Series 1989D Project Facilities, in or upon
the Series 1989D Mortgaged Property. All such Personal Property shall remain
the sole property of the Mortgagor and shall not be deemed part of the Series
1989D Mortgaged Property. The Personal Property may be removed at any time by
the Mortgagor provided if any such removal will cause damage to any part of the
Series 1989D Mortgaged Property, the Mortgagor shall repair such damage at its
expense.
"Personal Property" as used herein means all equipment, machinery and
furniture and other tangible personal property located at or in the Series 1989D
Mortgaged Prorperty and utilized as a part of or in conjunction with the
Mortgagor's business operations other than equipment, machinery and furniture
and other tangible personal property (i) acquired with the proceeds of the
Series 1989D Bonds or in replacement or restoration of, substitution for, or as
an addition, modification or improvement to the Series 1989D Project Facilities
or (ii) which is necessary in order for the Series 1989D Project Facilities, or
a portion thereof, to be operated.
Section 4.4. SUBSTITUTIONS AND REMOVALS. If the Mortgagor, in its
reasonable discretion, determines that any item of personal property
constituting a part of the Series 1989D Mortgaged Property shall have become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or
should be replaced, the Mortgagor may remove such items provided that such
removal (taking into account any substitutions) shall not impair the
operating unity of the Series 1989D Mortgaged Property and providing that the
Mortgagor shall:
(a) substitute and install as part of the Series 1989D Mortgaged
Property property of equal or greater utility and value (but not
necessarily fulfilling the same function in the operation of the
Series 1989D Mortgaged Property) as the removed property, which such
substituted property shall be free from all liens and encumbrances
(other than Permitted Encumbrances) and shall become part of the
Series 1989D Mortgaged Property; or
- 15 -
(b) in the case of removal of property without substitution,
promptly pay to the Mortgagee for application as provided in Section
4.6 of the Series 1989D Agreement an amount equal to (i) if the
removed property is sold or scrapped, the proceeds of such sale or
the scrap value thereof, (ii) if the removed property is used as a
trade-in for property not to be installed as part of the Series
1989D Mortgaged Property, the trade-in credit received by the
Mortgagor or (iii) in the case of the retention of such removed
property by the Mortgagor for other purposes, the fair market value
of such property, as determined by an Engineer.
If, prior to any such removal, the Mortgagor shall have acquired and installed
personal property with its own funds which have become a part of the Series
l989D Mortgaged Property, the Mortgagor may credit the amount so spent against
the requirement that it either substitute other property or make payment under
this Section on account of such removal, provided that such previously
acquired and installed property meets the requirements for substituted property
under Section 4.4(a) hereof.
The Mortgagor shall promptly report to the Mortgagee each such
removal, substitution, sale or other disposition and shall pay to the
Mortgagee such amounts as are required by the provisions of the preceding
subsection (b) of this Section promptly after the sale, trade-in or other
disposition requiring such payment; provided, however, that no such payment
need be made until the amount to be paid to the Mortgagee on account of all
such sales, trade-ins or other dispositions not previously paid aggregates at
least $10,000.
At the request of the Mortgagee, the Mortgagor shall deliver to the
Mortgagee such instruments, including financing statements and amendments
thereto, that are necessary or advisable to perfect the Mortgagee's lien upon
and security interest in any personal property installed in substitution for
any property removed pursuant to this Section. The Mortgagee may require the
Mortgagor to provide, at the expense of the Mortgagor, an opinion of
Independent Counsel as to the perfection of the Mortgagee's lien and
security interest. Upon the request of the Mortgagor, the Mortgagee shall
execute and deliver to the Mortgagor appropriate instruments releasing any
property removed pursuant to this Section from the liens and security
interests hereunder.
Section 4.5. INDEMNIFICATION. The Mortgagor will protect, indemnify
and save harmless the Mortgagee and the Issuer from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses except
as may be limited by law or judicial order or decision entered in any action
brought to recover moneys under this Section) imposed upon, incurred by or
asserted against the Mortgagee or the Issuer by reason of (a) ownership of any
interest in the Series 1989D Mortgaged Property or any part
- 16 -
thereof, (b) any accident, injury to, loss by or death of persons or loss of or
damage to property occurring on or about the Series 1989D Mortgaged Property or
any part thereof or the adjoining sidewalks, curbs, vaults and vault space, if
any, streets or ways, (c) any use, disuse or condition of the Series 1989D
Series 1989D Mortgaged Property or any part thereof, or the adjoining
sidewalks, curbs, vaults and vault space, if any, streets or ways, (d) any
failure on the part of the Mortgagor to perform or comply with any of the terms
hereof, (e) any necessity to defend any of the rights, title or interests
conveyed by this Series 1989D Mortgage or (f) the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Series 1989D Mortgaged Property or any part thereof. The Mortgagor further
covenants and agrees with the Issuer and the Mortgagee that neiLher the
Mortgagor nor any of its agents, employees, independent contractors, invitees,
licensees, successors, assignees or subtenants will store, release or dispose
of, or permit the storage, release or disposal of any hazardous substances on
the Series 1989D Mortgaged Property at any time from and after the effective
date of this Series 1989D Mortgage other than in accordance with applicable
federal, state and local law and regulation. In the event that the Mortgagor
receives a notification or clean up requirement under 42 U.S.C. 9601 et seq. or
comparable state or local statute, ordinance or regulation, the Mortgagor shall
promptly notify the Issuer and the Mortgagee of such receipt. On receipt of
any such notification or clean up requirement the Mortgagor shall either proceed
with appropriate diligence to comply with such notification or clean up
requirement or shall commence and continue negotiation concerning or contest the
liability of the Mortgagor with respect to such notification or clean up
requirement. The Mortgagor shall indemnify and hold the Issuer and the
Mortgagee harmless from and against any and all liabilities and all reasonable
costs and expenses, including reasonable attorneys' fees, arising out of any
federal, state or local environmental laws, regulations or ordinances, incurred
by the Issuer or the Mortgagee as a result of any breach of this covenant.
In case any action, suit or proceeding is brought against the
Mortgagee for any such reason, the Mortgagor, upon the request of the Mortgagee
or the Issuer, will at the Mortgagor's expense, cause such action, suit or
proceeding to be resisted and defended by Independent Counsel. Any amounts
payable to the Mortgagee or the Issuer under this Section which are not paid
within ten days after written demand therefor shall bear interest at the
Interest Rate for Advances from the date of such demand, and such amounts,
together with such interest, shall be indebtedness secured by this Series 1989D
Mortgage. The obligations of the Mortgagor under this Section shall survive any
defeasance of this Series 1989D Mortgage.
Nothing in this Series 1989D Mortgage is meant to release, extinguish
or otherwise alter or interfere with any rights which the Issuer and the
Mortgagee may now or hereafter have against the Mortgagor for any environmental
liabilities as a result of the Mortgagor's former, present or future ownership
or occupancy of any real property in the vicinity of the Series 1989D Project
Site.
(End of Article IV)
- 17 -
ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1. DAMAGE TO OR DESTRUCTION OF SERIES 1989D PROJECT
FACILITIES. In case of any damage to or destruction of the Series 1989D Project
Facilities or any part thereof, the Mortgagor will promptly give or cause to be
given written notice thereof to the Mortgagee and the Issuer generally
describing the nature and extent of such damage or destruction. Unless the
Series 1989D Agreement is to be terminated pursuant to Section 6.5 thereof, the
Mortgagor shall, whether or not the Net Proceeds of insurance, if any, received
on account of such damage or destruction shall be sufficient for such purpose,
promptly commence and complete, or cause to be commenced and completed, the
repair or restoration of the Series 1989D Project Facilities as nearly as
practicable to the value, condition and character thereof existing immediately
prior to such damage or destruction, with such changes or alterations, however,
as the Mortgagor may deem necessary for proper operation of the Series 1989D
Mortgaged Property.
Section 5.2. USE OF INSURANCE PROCEEDS. In connection with the repair
or restoration of the Series 1989D Project Facilities pursuant to Section 5.1
hereof, Net Proceeds of Required Property Insurance Coverage not in excess of
$50,000 shall be paid to the Mortgagor for application of as much as may be
necessary for such repair and restoration. Any such Net Proceeds, if in excess
of $50,000, shall be paid to and held by the Mortgagee in the Awards Account In
the Project Fund established by Section 5.04(b) of the Basic Indenture, for
application of as much as may be necessary for the payment of the costs of
repair or restoration, either on completion thereof or as the work progresses,
as directed by the Mortgagor. The Mortgagee may, prior to making payment from
the Awards Account, require the Mortgagor to provide evidence that, or deposit
with the Mortgagee moneys to be placed in such Account so that, there will be
adequate moneys available for such repair and restoration. The Mortgagee shall
not be obligated to make any payment from such Account if there exists a
material Event of Default hereunder. Any balance of the Net Proceeds (together
with any investment income therefrom) held by the Mortgagee remaining after
payment of all costs of such repair or restoration shall be paid to the
Mortgagee for deposit into the Prepayment Account for application as provided in
the Basic Indenture.
If, in lieu of repair or restoration, the Series 1989D Agreement is to
be terminated, an amount equal to any Net Proceeds received by the Mortgagee
prior to the prepayment effecting such termination shall (together with any
investment income therefrom and any further amount required to effect such
termination) be deemed to be a prepayment of Financial Payments and deposited
by the Mortgagee in the Prepayment Account and used as provided in the Basic
Indenture.
Section 5.3. EMINENT DOMAIN. If title to or the temporary use of the
Series 1989D Mortgaged Property, or any part thereof, shall be taken under the
exercise of the power of eminent domain by any governmental body or by any
- 18 -
person, firm or corporation acting under governmental authority, the
Mortgagor will promptly give written notice thereof to the Mortgagee and the
Issuer describing the nature and extent of such taking. Any Net Proceeds
received from any award made in such eminent domain proceedings shall, if
received prior to the release and discharge of this Series 1989D Mortgage, be
paid to and held by the Mortgagee in the Awards Account for application to
one or more of the following purposes:
(a) The restoration of the Series 1989D Project Facilities as
nearly as practicable to the same condition or character thereof existing
immediately prior to the exercise of the power of eminent domain with such
changes or alterations, however, as the Mortgagor may deem necessary for proper
operation of the Series 1989D Mortgaged Property.
(b) The acquisition or construction by the Mortgagor of other
improvements suitable for the Mortgagor's operations on the Series 1989D Project
Site (which improvements shall be deemed a part of the Series 1989D Mortgaged
Property); provided, that such improvements shall be subject to no liens or
encumbrances (other than the lien hereof and Permitted Encumbrances).
(c) If the Series 1989D Agreement is terminated, payment into the
Prepayment Account and used as provided in the Basic Indenture.
Within ninety days from the date of entry of a final order in any eminent domain
proceeding, the Mortgagor shall direct the Mortgagee in writing to which purpose
or combination of purposes above specified the Net Proceeds of the condemnation
award (together with any investment income therefrom) shall be applied. Any
balance of the Net Proceeds (together with any investment income therefrom and
any further amount required to effect such termination) not required for the
purpose or purposes so directed shall be deemed to be a prepayment of Financing
Payments and deposited by the Mortgagee in the Prepayment Account and used as
provided in the Basic Indenture.
Section 5.4. INVESTMENT AND DISBURSEMENT OF NET PROCEEDS. All moneys
received by the Mortgagee or its designee constituting Net Proceeds shall,
pending application, be invested at the direction of the Mortgagor (for the
account of and at the risk of the Mortgagor) and shall (together with any
investment income therefrom), to the extent to be used for repair, rebuilding,
restoration, acquisition or construction, be disbursed for such purpose, as
provided in the Series 1989D Agreement and the Indenture for the investment and
disbursement of moneys in the Series 1989D PF Account and, to the extent held in
the Prepayment Account, as provided in the Indenture for the investment and
disbursement of moneys in the Bond Fund. Any balance of Net Proceeds (together
with any investment income therefrom) held by the Mortgagee or its designee upon
the release and discharge of this Series 1989D Mortgage pursuant
- 19 -
to Section 7.3 hereof and not required to effect such release and discharge,
or any Net Proceeds thereafter received by the Mortgagee, shall be paid to the
Mortgagor.
(End of Article V)
- 20 -
ARTICLE VI
REMEDIES
Section 6.1. RIGHT TO PERFORM COVENANTS. If the Mortgagor shall fail
to make any payment or perform any act required to be made or performed
hereunder (including, without limitation, the payments described in Article III
hereof) or under the Series 1989D Agreement or the Series 1989D Note, the
Mortgagee, without demand upon the Mortgagor and without waiving or releasing
any obligation or default, may (but shall be under no obligation to) upon ten
days' written notice to the Mortgagor (except under emergency conditions), make
such payment or perform such act for the account and at the expense of the
Mortgagor and may enter upon the Series 1989D Mortgaged Property or any part
thereof for such purpose and take all such action thereon as, in its opinion,
may be necessary or appropriate therefor. All payments so made by the Mortgagee
and all costs, fees and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred in connection therewith or in connection
with the performance by the Mortgagee of any such act, together with interest
thereon at the Interest Rate for Advances from the date of payment or
incurrence, shall, together with such interest, be additional indebtedness
secured by this Series 1989D Mortgage, to the extent permitted by law, shall be
paid by the Mortgagor to the Mortgagee on demand. In any action brought to
collect such indebtedness, or to foreclose this Series 1989D mortgage, the
Mortgagee shall be entitled to the recovery of such expenses in such action
except as limited by law or judicial order or decision entered in such
proceedings.
Section 6.2. EVENTS OF DEFAULT. Any one or more of the following
events shall be an Event of Default under this Series 1989D Mortgage:
(a) Failure by the Mortgagor to pay in full when due any installment of
principal, interest or premium under the Series 1989D Note.
(b) An Event of Default as defined in the Series 1989D Agreement.
(c) Failure by the Mortgagor to pay to the Mortgagee (within 10 days of
receipt of notice from the Mortgagee of the sum owing) any amounts due
under Section 6.1 hereof.
(d) Failure by the Mortgagor to observe or perform any other term,
covenant or agreement on the Mortgagor's part to be observed or
performed under this Series 1989D Mortgage, and continuation of that
failure for 30 days after written notice thereof shall have been
given to the Mortgagor by the Mortgagee, or for such longer period as
the Mortgagee may agree to in writing; provided that if the failure is
other than
- 21 -
the payment of money and is of such nature that it cannot
he corrected within the applicable period, that failure
shall not constitute an Event of Default so long as the
Mortgagor Institutes curative action within the applicable
period and diligently pursues that action to completion.
(e) The Mortgagor shall: (i) admit in writing its inability to pay its
debts generally as they become due; (ii) have an order for relief
entered in any case commenced by or against it under the federal
bankruptcy laws, as now or hereafter in effect; (iii) commence
a proceeding under any other federal or state bankruptcy,
insolvency, reorganization or similar law, or have such a
proceeding commenced against it and either have an order of
insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for 90 days; (iv) make an assignment
for the benefit of creditors; or (v) have a receiver or trustee
appointed for it or for the whole or any substantial part of its
property.
Notwithstanding the foregoing, if, by reason of Force Majeure, the
Mortgagor is unable to perform or observe any agreement, term or condition
hereof, other than any obligation to make payments required hereunder, the
Mortgagor shall not be deemed in default during the continuance of such
inability. However, the Mortgagor shall promptly give notice to the Mortgagee
and the Issuer of the existence of an event of Force Majeure and shall use its
best efforts to remove the effects thereof; provided that the settlement of
strikes or other industrial disturbances shall be entirely within its
discretion.
The term Force Majeure shall mean, without limitation, the following:
(i) acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America or of the State or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, malfunction or accident to facilities, machinery, transmission pipes
or canals; partial or entire failure of utilities; shortages of labor,
materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably within the
control of the Mortgagor.
- 22 -
The declaration of an Event of Default under subsection (e) above,
and the exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding
such declaration or exercise during the pendency of or immediately following
any bankruptcy, liquidation or reorganization proceedings.
Section 6.3. REMEDIES. If an Event of Default shall have occurred and
be continuing, the Mortgagee, at any time, at its election, may exercise any or
all or any combination of the remedies conferred upon or reserved to it under
this Series 1989D Mortgage, the Series 1989D Agreement, the Guaranty, the Series
1989D Note or any instrument collateral thereto, or now or hereafter existing
at law, in equity or by statute. Without limitation, the Mortgagee may (a)
declare the entire unpaid principal balance of the indebtedness secured hereby
immediately due and payable, without notice or demand, the same being
expressly waived by the Mortgagor; (b) proceed at law or in equity to collect
all indebtedness secured by this Series 1989D Mortgage due hereunder, whether at
maturity or by acceleration; (c) foreclose the lien of this Series 1989D
Mortgage as against all or any part of the Series 1989D Mortgaged Property; and
(d) exercise any rights, powers and remedies it may have as a secured party
under the Commercial Code, or other similar laws in effect including, without
limitation, the option of proceeding as to both personal property and fixtures
in accordance with the Mortgagee's rights with respect to real property. Any
moneys received by the Mortgagee pursuant to the exercise of remedies provided
in this Series 1989D Mortgage or by law shall be applied as provided in
Sections 5.04 and 7.06 of the Basic Indenture.
Section 6.4. WAIVER OF APPRAISEMENT; VALUATION. The Mortgagor does
hereby waive to the full extent it may lawfully do so, the benefit of all
appraisement, valuation, stay and extension laws now or hereafter in force and
all rights of marshaling of assets in the event of any sale of the Series 1989D
Mortgaged Property, any part thereof or any interest therein and any court
having jurisdiction to foreclose the lien hereof may sell the Series 1989D
Mortgaged Property in part or as an entirety.
Section 6.5. APPOINTMENT OF RECEIVER. If an Event of Default shall
have occurred and be continuing, the Mortgagee shall, as a matter of right and
to the extent permitted by applicable law and without regard to the adequacy of
the Series 1989D Mortgaged Property as security, be entitled to the appointment
of a receiver for all or any part of the Series 1989D Mortgaged Property,
whether such receivership is incidental to a proposed sale of the Series 1989D
Mortgaged Property or otherwise, and the Mortgagor hereby consents to the
appointment of such a receiver and covenants not to oppose any such
appointment.
Section 6.6. POSSESSION, MANAGEMENT AND INCOME; ASSIGNMENT. If an
Event of Default shall have occurred and is continuing, the Mortgagee, to the
extent permitted under applicable law, ex parte and without notice may enter
upon and take possession of the Series 1989D Mortgaged Property or any part
thereof by force, summary proceedings, ejectment or otherwise, and may remove
the Mortgagor and all other persons and any and all property therefrom and may
hold, operate and manage the same and receive all revenues, income or profits
- 23 -
accruing with respect thereto or any part thereof. The Mortgagee shall be
under no liability for or by reason of any such taking of possession, entry,
removal, holding, operation or management.
Section 6.7. REMEDIES CUMULATIVE. Each right, power and remedy of the
Mortgagee, provided for in this Series 1989D Mortgage, in the Series 1989D
Agreement, in the Series 1989D Note or now or hereafter existing at law or in
equity or by statute or otherwise, shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this Series
1989D Mortgage, in the Series 1989D Agreement, in the Series 1989D Note or now
or hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise or partial exercise by the Mortgagee of
any one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise by the Mortgagee of any or all such other rights,
powers or remedies.
Section 6.8. PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate any applicable law, and are intended to be
limited to the extent necessary so that they will not render this Series 1989D
Mortgage invalid, unenforceable or not entitled to be recorded, registered or
filed under any applicable law.
Section 6.9. NO WAIVER BY MORTGAGEE. No failure by the Mortgagee to
insist upon the strict performance of any term hereof or to exercise any right,
power or remedy consequent upon a breach thereof, shall constitute a waiver of
any such term or of any such breach. No waiver of any breach shall affect or
alter this Series 1989D Mortgage, which shall continue in full force and effect
with respect to any other then existing or subsequent breach.
Section 6.10. DISCONTINUANCE OF PROCEEDINGS AND RESTORATION OF STATUS
QUO. In case the Mortgagee shall have proceeded to enforce any right, power or
remedy under this Series 1989D Mortgage by foreclosure, entry or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Mortgagee, then and in every case
the Mortgagor and the Mortgagee shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of the Mortgagee shall
continue as if no such proceeding had been taken.
(End of Article VI)
- 24 -
ARTICLE VII
MISCELLANEGUS
Section 7.1. ADDITIONAL SECURITY. Without notice to or consent of
the Mortgagor and without impairment of the lien and rights created by this
Series 1989D Mortgage, the Mortgagee may accept from the Mortgagor or from any
other person or persons, additional security for the indebtedness secured by
this Series 1989D Mortgage. Neither the giving of this Series 1989D Mortgage
nor the acceptance of any such additional security shall prevent the Mortgagee
from resorting, first, to such additional security, or first, to the security
created by this Series 1989D Mortgage, in either case without affecting the
lien hereof and the rights conferred hereunder.
Section 7.2. RELEASE OF SERIES 1989D MORTGAGED PROPERTY AND EASEMENTS.
At the request of the Mortgagor, the Mortgagee may, at any time and from time to
time, consent to, join in or permit a release of any part of the Series 1989D
Mortgaged Property or the granting of any easements, licenses, party wall rights
and rights of lateral support with respect to the Series 1989D Project Site or
the Series 1989D Project Facilities; provided, that the Mortgagee shall have
determined that any of the foregoing is not prejudicial to the Holders of the
Bonds and does not impair the value of the Series 1989D Mortgaged Property as
security under this Series 1989D Mortgage. None of the foregoing shall impair
in any manner the validity, or except as specifically provided therein the
priority, of this Series 1989D Mortgage. Any moneys received by the Mortgagee
pursuant to this Section shall be applied as provided in Section 4.6 of the
Series 1989D Agreement.
Section 7.3. RELEASE AND DISCHARGE. If all of the Financing Payments
under the Series 1989D Agreement shall have been paid and all other sums payable
under this Series 1989D Mortgage, the Series 1989D Note and the Series 1989D
Agreement by the Mortgagor shall have been paid and the Mortgagor shall have
complied with all the terms, conditions and requirements hereof, of the Series
1989D Agreement and of the Series 1989D Note, then this Series 1989D Mortgage
shall be null and void and of no further force and effect. Upon the written
request and at the expense of the Mortgagor, the Mortgagee will execute and
deliver such proper instruments of release and discharge as may reasonably be
requested to evidence such defeasance, release and discharge.
Notwithstanding any termination of this Series 1989D Mortgage, any
payment of any or all of the Series 1989D Bonds or any discharge of the Series
1989D Supplemental Indenture, if a Determination of Taxability (as defined in
the Series 1989D Supplemental Indenture) shall occur with respect to the Series
1989D Bonds, the Mortgagor shall pay all additional amounts it is required to
pay under the Series 1989D Supplemental Indenture at the time provided by the
Series 1989D Supplemental Indenture.
Section 7.4. INSPECTION. The Mortgagee and its representatives are
hereby authorized to enter upon and inspect the Series 1989D Mortgaged Property
at any time during normal business hours during the term of this Series 1989D
Mortgage.
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Section 7.5. EXPENSES. The Mortgagor will, to the extent permitted
by law, immediately upon demand pay or reimburse the Mortgagee for all
attorneys' fees, costs and expenses incurred by the Mortgagee in any
proceedings involving an insolvent or a debtor under federal bankruptcy law,
or in any action, proceeding or dispute of any kind in which the Mortgagee is
made a party, or appears as an intervenor or party plaintiff or defendant,
affecting or relating to the Series 1989D Note secured hereby, this Series
1989D Mortgage or the Series 1989D Agreement, the Mortgagor or any of the
Series 1989D Mortgaged Property, including, but not limited to, the
foreclosure of this Series 1989D Mortgage, any condemnation action involving
the Series 1989D Mortgaged Property, or any action to protect the security
hereof, and any such amounts paid by the Mortgagee shall, except as may be
limited by law or judicial order or decision entered in any action to
foreclose this Series 1989D Mortgage, be added to the indebtedness secured
hereby and secured by the lien and security interest of this Series 1989D
Mortgage and shall bear interest at the Interest Rate for Advances.
Section 7.6. BOOKS, RECORDS AND ACCOUNTS. The Mortgagor will keep and
maintain or will cause to be kept and maintained proper and accurate books,
records and accounts reflecting all items of income and expense in connection
with the operation of the Series 1989D Mortgaged Property or in connection
with any services, equipment or furnishings provided in connection with the
operation of the Series 1989D Mortgaged Property, whether such income or
expenses be realized by the Mortgagor or by any other person or entity
whatsoever excepting sublessors unrelated to and unaffiliated with the
Mortgagor and who leased from the Mortgagor portions of the Series 1989D
Mortgaged Property for the purposes of occupying same. The Mortgagee and its
designee shall have the right from time to time at all times during normal
business hours to examine such books, records and accounts at the office of
the Mortgagor or other person or entity maintaining such books, records and
accounts and to make copies or extracts thereof as the Mortgagee shall desire.
Section 7.7. ESTOPPEL AFFIDAVITS. The Mortgagor, within ten days
after written request from the Mortgagee, shall furnish a written statement,
duly acknowledged, setting forth the unpaid principal of and interest on the
indebtedness secured hereby and whether or not any offsets or defenses exist
against such principal and interest.
Section 7.8. SUBROGATION. The Mortgagee shall be subrogated to the
claims and liens of all parties whose claims or liens are discharged or paid
with the proceeds of the indebtedness secured hereby.
Section 7.9. NO MERGER. It being the desire and intention of the
parties hereto that this Series 1989D Mortgage and the lien thereof do not merge
in fee simple title to the Series 1989D Mortgaged Property, it is hereby
understood and agreed that should the Mortgagee acquire any additional or other
interests in or to the Series 1989D Mortgaged Property or the ownership thereof,
then, unless a contrary intent is manifested by the Mortgagee as evidenced by an
appropriate document duly recorded, this Series 1989D Mortgage
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and the lien thereof shall not merge in the fee simple title, that this Series
1989D Mortgage may be foreclosed as if owned by a stranger to the fee simple
title.
Section 7.10. GENERAL PROVISIONS. This Series 1989D Mortgage shall
be deemed to be made under the laws of the State and for all purposes shall be
governed by and construed in accordance with the laws of the State and shall
inure to the benefit of and be binding upon the Mortgagor, the Mortgagee and
their respective permitted successors and assigns. If any term or provision of
this Series 1989D Mortgage shall be held to be invalid, illegal or
unenforceable, the validity of the remaining provisions hereof shall in no way
be affected thereby. The captions or headings herein shall be solely for
convenience.
In the event of the issuance of Additional Series 1989D Bonds, this
Series 1989D Mortgage may not be effectively cancelled, changed, modified or
altered without written title evidence that the Trustee, as holder of the
Series 1989D Mortgage and of any amendments or supplements thereto relating to
those Additional Series 1989D Bonds, will have a valid, direct first mortgage
upon the Series 1989D Mortgaged Property constituting real property subject only
to (i) taxes and assessments which are not delinquent, and (ii) liens and
encumbrances permitted by the terms and provisions of this Series 1989D
Mortgage, as so supplemented or amended. The title evidence shall consist of an
American Land Title Association form of loan policy of title insurance, or a
commitment therefor, in usual and customary form in a face amount acceptable to
the Mortgagee. The policy or the commitment therefor shall be issued by a title
company authorized to transact business in the State, selected by the Mortgagor
and approved by the Mortgagee.
Section 7.11. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as
otherwise provided herein, this Series 1989D Mortgage may not be effectively
amended, changed, modified, altered or terminated without the prior written
consent of the Mortgagee.
Section 7.12. DELIVERY AND ASSIGNMENT OF LEASES. The Mortgagor shall
execute and deliver to the Mortgagee, concurrently with the execution and
delivery of any lease of any portion of the Series 1989D Project, a collateral
assignment of its interest as lessor with respect to that lease and, as
executed, any further such leases, in form and substance satisfactory to the
Mortgagee, pursuant to which the Mortgagor assigns its interest in the
respective lease and all said leases, and to the rents and profits thereunder,
as additional collateral for the indebtedness hereby secured.
The Mortgagor will perform, fulfill, comply with and observe, each and
every covenant, agreement and condition to be performed, fulfilled, complied
with and observed by the Mortgagor, as lessor under any such leases, and will
not suffer or permit any default of the Mortgagor as lessor thereunder to occur
(except defaults which are duly cured within the time provided in such lease for
the curing thereof).
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The Mortgagor shall not accept prepayment of installments of rent or
other sums due or to become due thereunder without the consent of the
Mortgagee.
(End of Article VII - next page is execution page)
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IN WITNESS WHEREOF, the Mortgagor has executed this Series 1989D
Mortgage as of the date hereof.
Signed and acknowledged ENVIRONMENTAL PURIFICATION
in the presence of: INDUSTRIES COMPANY
By National Purification, Inc.,
General Partner
/s/ /s/
------------------------------ -----------------------------------
Vice President
and
By Xxxxx Purification, Inc.,
General Partner
/s/ /s/
------------------------------ -----------------------------------
Witnesses as to Mortgagor Secretary-Treasurer
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