EXHIBIT 10.51
Charge, Record And Return To
CONTINENTAL TITLE INSURANCE COMPANY
The Corporate Center At Sagemore
8000 Sagemore Drive, Suite 8202
Marlton, NJ 08053
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SECOND MORTGAGE
from
CAMDEN COGEN L.P.,
Mortgagor
to
PUBLIC SERVICE ELECTRIC AND GAS COMPANY,
Mortgagee
Dated as of February 4, 1992
THIS MORTGAGE ALSO CONSTITUTES A SECURITY
AGREEMENT UNDER THE UNIFORM COMMERCIAL CODE
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After recording return to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Mark J. Eagan
This Instrument Prepared by the Undersigned
in consultation with: Messrs. McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4096
Signature /s/ Mardi R. Merjian
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Mardi R. Merjian
TABLE OF CONTENTS
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Page
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1. Warranty of Title.......................................... 5
2. Payment of Indebtedness.................................... 5
3. Proper Care and Use; Inspection............................ 5
4. Requirements............................................... 6
5. Payment of Impositions..................................... 7
6. Insurance.................................................. 8
7. Condemnation/Eminent Domain................................ 10
8. Limitation on Disposition.................................. 10
9. Estoppel Certificates...................................... 11
10. Expenses................................................... 11
11. Mortgagee's Right to Perform............................... 12
12. Further Assurances......................................... 12
13. Assignment of Rents........................................ 12
14. Events of Default.......................................... 13
15. Remedies................................................... 13
16. Remedies Cumulative and Concurrent......................... 15
17. Discontinuance of Proceedings.............................. 15
18. Application of Proceeds.................................... 15
19. Successor Mortgagor........................................ 16
20. Security Agreement Under Uniform Commercial Code........... 16
21. Indemnification; Waiver of Claim........................... 17
22. No Waivers, Etc............................................ 17
23. Waivers by Mortgagor....................................... 18
24. Trust Funds................................................ 18
25. Notices.................................................... 18
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Page
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26. Taxes on Mortgagee.......................................... 19
27. No Modification; Binding Obligations........................ 19
28. Miscellaneous............................................... 19
29. Captions.................................................... 20
30. Successors and Assigns...................................... 20
31. Enforceability.............................................. 20
32. RECEIPT OF COPY............................................. 21
33. Subordination............................................... 21
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SECOND MORTGAGE
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THIS MORTGAGE dated as of February 4, 1992 from CAMDEN COGEN L.P., a
Delaware limited partnership, ("Mortgagor"), having an office at c/o Cogen
Technologies, 1600 Smith Street, Suite 5000, 50th Floor, Houston, Texas 77002,
to PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a New Jersey corporation
("Mortgagee"), having an office at 80 Park Plaza, Newark, New Jersey 07101.
W I T N E S S E T H :
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WHEREAS, Mortgagor is the owner in fee simple of certain tracts of
land located in Camden, Camden County, New Jersey and more particularly
described in Exhibit A attached hereto and made a part hereof (the "Land");
and
WHEREAS, pursuant to a Mortgage dated as of February 4, 1992 (the
"First Mortgage"), Mortgagor has granted to General Electric Capital
Corporation, a New York corporation ("First Mortgagee") a mortgage lien on,
among other collateral, the Land; and
WHEREAS, pursuant to a Mortgage dated as of February 4, 1992 (the
"Linden Mortgage"), Mortgagor has granted to General Electric Power Funding
Corporation ("Linden Mortgagee") as mortgage lien on, among other collateral,
the Land, which mortgage lien is intended to be released on the Second Capital
Contribution Date (as such term is defined in the Term Loan Agreement, dated as
of February 15, 1990, between Cogen Technologies Linden, Ltd. and the Linden
Mortgagee); and
WHEREAS, pursuant to the Power Purchase and Interconnection Agreement
dated as of April 15, 1988 between Mortgagor and Mortgagee (as the same may be
amended, supplemented or otherwise modified from time to time, the "Purchase
Agreement"), Mortgagor has agreed to grant to Mortgagee a lien on the Mortgaged
Property, an defined below, which shall be subject and subordinate in all
respects to the terms, conditions and lien of the First Mortgage and the Linden
Mortgage, as more particularly described in Section 18, below but shall be
superior to all liens and claims other than Permitted Liens (as such term in
defined in the First Mortgage);
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, Mortgagor hereby agrees as follows:
TO SECURE:
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(a) (i) payment of all amounts due Mortgagee under Section H,
"Security Provision" of the Purchase Agreement (the "Obligations Section")
and (ii) payments of any and all fees, costs and expenses including,
without limitation, attorney's fees, incurred by Mortgagee in enforcing its
rights and remedies hereunder (the "Indebtedness"); and
(b) performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "Obligations") under or pursuant to the
provisions of the Obligations Section;
Mortgagor hereby grants a security interest in, and hereby mortgages, conveys,
assigns, bargains, transfers and sets over to Mortgagee, the following property
and rights and interests in property (collectively, the "Mortgaged Property"):
A. the Land;
B. all right, title and interest of Mortgagor in and to any and all
buildings and improvements now or hereafter erected on the Land (the
"Improvements"; the Land, and the Improvements are hereinafter collectively
referred to as the "Real Estate");
C. all right, title and interest of Mortgagor, now owned or hereafter
acquired, in and to all streets, the land lying in the bed of any streets, roads
or avenues, opened or proposed, in front of, adjoining, or abutting the Real
Estate to the center line thereof and strips and gores within or adjoining the
Real Estate, the air space and right to use said air space above the Real
Estate, all rights of way, privileges, liberties, hereditaments, all easements
now or hereafter affecting or benefitting the Real Estate, all royalties and all
rights appertaining to the use and enjoyment of said Real Estate, including,
without limitation, all alley, vault, drainage, mineral, water, oil and gas
rights;
D. all and singular, the tenements, hereditaments and appurtenances
belonging or in anyway appertaining to the Real Estate, and the reversion or
reversions, remainder or remainders, rents, issues, profits and revenue thereof;
and also all the estate, right, title, interest, dower and right of dower,
curtesy and rights of curtesy, property, possession, claim and demand
whatsoever, both in law and equity, of Mortgagor, of, in and to the Real Estate
and of, in and to every part and parcel thereof, with the appurtenances, at any
time belonging or in anyway appertaining thereto;
E. all of the legal fixtures of every kind and nature whatsoever
currently owned or hereafter acquired by Mortgagor, and all appurtenances and
additions thereto and substitutions or replacements thereof, now or hereafter
attached to, or intended to be attached to (though not attached thereto) the
Real Estate or placed on any part thereof (said legal fixtures of every kind
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and nature whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof, are hereinafter collectively referred to
as the "Equipment"), including, but without limiting the generality of the
foregoing, all fixtures and equipment as defined in the Uniform Commercial Code
and including, but without limiting the generality of the foregoing, all
furnaces, turbines, generators, plumbing, ventilating, air conditioning and air-
cooling apparatus, refrigerating, incinerating, and escalator, elevator, power,
loading and unloading equipment and systems, sprinkler systems and other fire
prevention and extinguishing apparatus and pipes, pumps, tanks, conduits,
fittings and fixtures; it being understood and agreed that all Equipment is
appropriated to the use of the Real Estate and, whether affixed or annexed or
not, for the purposes of this Mortgage shall be deemed conclusively to be Real
Estate and mortgaged hereby; and Mortgagor hereby agrees to execute and deliver,
from time to time, such further instruments (including security agreements), as
may be requested by Mortgagee to confirm the lien of this Mortgage on the
Equipment;
F. all unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by Mortgagor and Mortgagor's
interest in and to all proceeds of the conversion and the interest payable
thereon, voluntary or involuntary, relating to the Mortgaged Property, or any
part thereof, into cash or liquidated claims, including, without limiting the
generality of the foregoing, proceeds of casualty insurance, title insurance or
any other insurance maintained on the Real Estate and the Equipment, and the
right to collect and receive the same, and all awards and/or other compensation
including the interest payable thereon and the right to collect and receive the
same (in the alternative and collectively, "Awards"), heretofore and hereafter
made to the present and all subsequent owners of the Real Estate and the
Equipment by the United States, the State of New Jersey or any political
subdivision thereof, or any agency, department, bureau, board, commission, or
instrumentality of any of them, now existing or hereafter created (collectively,
"Governmental Authority") for the taking by eminent domain, condemnation or
otherwise, of all or any part of the Real Estate and Equipment or any easement
or other right therein, including, without limiting the generality of the
foregoing, awards for any change or changes of grade or the widening of streets,
roads or avenues affecting the Real Estate, to the extent of all amounts which
may be secured by this Mortgage as of the date of receipt, notwithstanding the
fact that the amount thereof may not then be due and payable, and to the extent
of attorneys' fees, costs and disbursements incurred by Mortgagee in connection
with the collection of such Awards. Mortgagor hereby assigns to Mortgagee, and
Mortgagee is hereby authorized to collect and receive such Awards, and to give
proper receipts and acquittance therefor and, subject to the other provisions
hereof and the provisions of the Security Deposit Agreement, to apply the same
toward the Indebtedness, notwithstanding the fact that the full amount thereof
may not
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then be due and payable; Mortgagor hereby agrees, upon demand of Mortgagee, to
make, execute and deliver, from time to time, such further instruments as may be
reasonably requested by Mortgagee to confirm such assignment of said Awards to
Mortgagee, free and clear and discharged of any encumbrances of any kind or
nature whatsoever;
G. all extensions, improvements, betterments, renewals, substitutes
and replacements of, and all additions and appurtenances to, the Real Estate and
the Equipment, hereafter acquired by or released to Mortgagor or constructed,
assembled or placed by Mortgagor on the Real Estate, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, conveyance, assignment or other
act by Mortgagor, shall become subject to the lien of this Mortgage as fully and
completely, and with the same effect, as though now owned by Mortgagor and
specifically described herein;
H. all right, title and interest of Mortgagor in, to and under all
leases, subleases, underlettings, concession agreements and licenses of the Real
Estate and Equipment, or any part thereof, now existing or hereafter entered
into by Mortgagor (collectively, "Leases"), and all rights of Mortgagor in
respect of cash and securities deposited thereunder and the right to receive and
collect the benefits, revenues, income, rents, issues and profits thereof;
I. all right, title and interest of Mortgagor, to the extent
permitted by law, in, to and under (i) all consents, licenses and building
permits required for the construction, completion, occupancy and operation of
the Real Estate; (ii) all plans and specifications for the construction of the
Real Estate, including, without limitation, installations of curbs, sidewalks,
gutters, landscaping, utility connections and all fixtures and equipment
necessary for the construction, operation and occupancy of the Improvements; and
(iii) all contracts from time to time executed by Mortgagor relating to the
ownership, construction, maintenance, operation or occupancy of the Real Estate
together with all rights of Mortgagor to compel performance of the terms of such
contracts;
J. any and all monies now or hereafter on deposit for the payment of
real estate taxes or special assessments against the Real Estate or for the
payment of premiums on policies of fire and other hazard insurance covering the
Mortgaged Property; and
K. all rights of Mortgagor under or arising out of the Contracts
described on Schedule 1 and all additional Contracts (as defined in the Loan
Agreement executed in connection with the First Mortgage, as any of the same may
be amended, supplemented or otherwise modified from time to time.
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L. all proceeds, both cash and noncash, and products of the
foregoing, including, without limitation, all proceeds and products as defined
in the Uniform Commercial Code of the State of New Jersey, which may be realized
upon any sale or other disposition of any of the foregoing or produced
therefrom;
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged or intended to be, unto Mortgagee, its successors
and assigns for the uses and purposes herein set forth, until the Indebtedness
is fully paid and the obligations are fully paid or fully performed, as the case
may be.
Mortgagor represents, warrants, covenants and agrees as follows:
1. Warranty of Title. Mortgagor warrants that it has and owns good
and marketable title to the Real Estate and has the right to mortgage the same;
and Mortgagor warrants that this Mortgage is a valid and enforceable lien on the
Mortgaged Property subject only to the First Mortgage, the Linden Mortgage and
to those other matters described on Exhibit B, if any (the "Permitted Liens").
Mortgagor hereby covenants that it shall preserve such title and the validity
and priority of the lien hereof and shall forever warrant and defend the same to
Mortgagee against the claims of all and every person or persons, corporation or
corporations and parties whomsoever claiming or threatening to claim the same or
any part thereof.
2. Payment of Indebtedness. Mortgagor shall pay the Indebtedness and
shall perform all of the Obligations in accordance with the terms of the
Obligations Section.
3. Proper Care and Use: Inspection. (a) Mortgagor shall:
(i) not abandon the Mortgaged Property,
(ii) maintain the Mortgaged Property in good working order and
condition,
(iii) make all repairs, renewals and replacements to the Mortgaged
Property and additions and betterments thereto which are necessary for the
Mortgaged Property to operate in compliance with all Legal Requirements
affecting the Mortgaged Property and all requirements of the appropriate
Board of Fire Underwriters or other similar body acting in and for the
locality in which the Mortgaged Property is located,
(iv) not commit or suffer waste with respect to the Mortgaged
Property,
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(v) refrain from impairing or diminishing the value or integrity of
the Mortgaged Property or the security value of this Mortgage,
(vi) not remove, demolish or in any material respect alter any of
the Improvements, and
(vii) not make, suffer or permit any nuisance to exist on any of the
Mortgaged Property (the construction and operation of the Improvements
being deemed not to constitute a nuisance).
(b) Mortgagee and any persons authorized by Mortgagee shall have the
right to enter and inspect the Mortgaged Property and the right to inspect all
work done, labor performed and materials furnished in and about the Improvements
and the right to inspect and make copies of all books, contracts and records of
Mortgagor relating to the Mortgaged Property, all at such reasonable times
during business hours and at such intervals as Mortgagee may request. Mortgagor
authorizes Mortgagee to communicate directly with its accountants and with any
other entity keeping its books and records. If an Event of Default (as
hereinafter defined) shall have occurred and be continuing, Mortgagee and any
persons authorized by Mortgagee may (without being obligated to do so) enter or
cause entry to be made upon the Real Estate and inspect, repair and/or maintain
the same as or advisable, and may (without being and outlays of money as
Mortgagee may deem appropriate for the preservation of the Mortgaged Property.
All expenditures and outlays of money made by Mortgagee pursuant hereto shall be
added to the Indebtedness and shall be secured hereby and shall be payable on
demand together with interest at an interest rate equal to the lower of (i) the
highest rate allowed by applicable law and (ii) an interest rate per annum equal
to 2% plus the rate of interest from time to time quoted in the Wall Street
Journal as the "Prime Rate" (such lower rate, the "Default Rate") from the date
of the expenditure or outlay until paid.
4. Requirements. Mortgagor, at Mortgagor's sole cost and expense,
shall promptly comply with, or cause to be complied with, and conform to all
present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations and requirements pertaining to the
Mortgaged Property, including any applicable environmental, zoning or building,
use and land use laws, ordinances, rules or regulations and all covenants,
restrictions and conditions now or hereafter of record which may be applicable
to it or to any of the Mortgaged Property, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the Mortgaged Property (collectively, the "Legal
Requirements"), except any Legal Requirements, the non-compliance with which
could not reasonably be expected to have a material adverse effect on the
business, operations, property, condition (financial or other) or prospects of
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Mortgagor or the rights or interests of Mortgagee or (ii) materially adversely
affect Mortgagor's ability to perform its obligations under the Obligations
Section.
5. Payment of Impositions. (a) Mortgagor shall pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or its
income or profit or on any of its property, including the Mortgaged Property,
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a lien upon the property, including the Mortgaged
Property (all of the foregoing are hereinafter collectively referred to as the
"Impositions"). Mortgagor shall have the right, at Mortgagor's sole cost and
expense, to contest in good faith the amount or validity of any such Imposition
by proper proceedings timely instituted, and may permit the Impositions so
contested to remain unpaid during the period of such contest. Mortgagor will
promptly pay or cause to be paid any valid, final judgment enforcing any such
Imposition and cause the same to be satisfied or record. Subject to the
foregoing right of Mortgagor to contest any Imposition, within thirty (30) days
after the date when an Imposition is due and payable, Mortgagor shall deliver to
Mortgagee evidence acceptable to Mortgagee showing payment of such Imposition.
If by law any Imposition at Mortgagor's option may be paid in installments
(whether or not interest shall accrue on the unpaid balance of such Imposition),
Mortgagor may elect to pay such Imposition in such installments and shall be
responsible for the payment of such installments with interest, if any.
(b) Except for the foregoing right of Mortgagor to contest any
Imposition, nothing herein otherwise shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become due and to add to the Indebtedness the amount so paid, together with
interest thereon from the date of such payment at the Default Rate. Any sums
paid by Mortgagee in discharge of any Imposition shall be (i) a lien on the Real
Estate secured hereby prior to any right or title to, interest in, or claim upon
the Real Estate subordinate to the lien of this Mortgage, and (ii) payable on
demand together with interest as set forth above.
(c) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits towards the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and Mortgagor shall not claim any deduction from the taxable value
of the Mortgaged Property by reason of this Mortgage.
(d) Upon the occurrence and during the continuance of an Event of
Default hereunder, Mortgagee shall be entitled upon notice to Mortgagor to
require Mortgagor to pay to Mortgagee on a specified day each month an amount
equal to one-twelfth of the annual Impositions reasonably estimated by Mortgagee
so that Mortgagee shall have sufficient funds to pay the Impositions on
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the first day of the month preceding the month in which they become due. In such
event, Mortgagor agrees to cause all bills, statements or other documents
relating to Impositions to be sent or mailed directly to Mortgagee. Upon receipt
of such bills, statements or other documents, and providing Mortgagor has
deposited sufficient funds with Mortgagee pursuant to this paragraph, Mortgagee
shall pay such amounts as may be due thereunder out of the funds so deposited
with Mortgagee. If at any time and for any reason the funds deposited with
Mortgagee are or will be insufficient to pay such amounts as may then or
subsequently be due, Mortgagee shall notify Mortgagor and Mortgagor shall
immediately deposit an amount equal to such deficiency with Mortgagee.
Notwithstanding the foregoing, nothing contained herein shall cause Mortgagee to
be deemed a trustee of said funds or to be obligated to pay any amounts in
excess of the amount of funds deposited with Mortgagee pursuant to this
paragraph or constitute any limitation on the rights of Mortgagee upon the
occurrence of such Event of Default. Mortgagor shall not be entitled to receive
interest on said funds. If amounts collected by Mortgagee under this paragraph
exceed amounts necessary in order to pay Impositions, Mortgagee may impound or
reserve for future payment of Impositions such portion of such excess payments
as Mortgagee in its absolute discretion may deem proper. Should Mortgagor fail
to deposit with Mortgagee sums sufficient to pay such Impositions in full at
least thirty (30) days before delinquency thereof, Mortgagee may, at Mortgagee's
election, but without any obligation so to do, advance any amounts required to
make up the deficiency, which advances, if any, shall be added to the
Indebtedness and shall be secured hereby and shall be repayable to Mortgagee
with interest at the Default Rate or at the option of Mortgagee the latter may,
without making any advance whatsoever, apply any sums held by it upon any
obligation of Mortgagor secured hereby.
6. Insurance. (a) Mortgagor shall maintain the casualty insurance on
the Mortgaged Property required to be maintained pursuant to the Construction
and Term Loan Agreement dated as of January 2, 1992 between Mortgagor and First
Mortgagee as the same may be amended, supplemented or otherwise modified from
time to time and Mortgagee shall be an additional insured thereunder with
respect to the coverage set forth in Section 7.5(a)(1). In the event the
Mortgaged Property is damaged or destroyed due to casualty loss but (i) the loss
is less than a total or constructive total loss and (ii) Mortgagor has elected
to repair or reconstruct such damaged Mortgaged Property in accordance with the
terms of the loan documentation associated with the First Mortgage, until the
First mortgage is terminated and released, and thereafter in accordance with the
terms of the partnership agreement of Mortgagor, Mortgagee agrees it will
promptly endorse any insurance proceeds check payable with respect to such loss
which includes Mortgagee as additional insured over to Mortgagor or its designee
promptly upon request by Mortgagor.
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(b) If Mortgagor is in default of its obligations to insure or deliver
any prepaid insurance policy or policies, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee such premium or
premiums so paid by Mortgagee with interest from the time of payment at the
Default Rate, on demand, and the same shall be deemed to be secured by this
Mortgage and shall be collectible in the same manner as the Indebtedness secured
by this Mortgage.
(c) Mortgagor promptly shall comply with and conform to (i) all
provisions of each insurance policy, and (ii) all requirements of the insurers
applicable to Mortgagor or to any of the Mortgaged Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use the Mortgaged
Property, or conduct any activities on the Premises, if such use or activities
would permit any insurer to cancel any insurance policy required to be
maintained by Section 6(a), above.
(d) If the Mortgaged Property is damaged or destroyed by fire or any
other cause, Mortgagor shall give prompt notice to Mortgagee and, if the
Mortgaged Property is not rebuilt or restored and the insurance proceeds are
applied to the payment of the First Indebtedness, shall pay over to Mortgagee
the amount of such insurance proceeds remaining after the payment in full of the
First Indebtedness up to the amount of the Indebtedness.
(e) In the event of foreclosure of this Mortgage or other transfer of
title to the Mortgaged Property in extinguishment of the Indebtedness, all
right, title and interest of Mortgagor in and to any insurance policies then in
force shall pass to the purchaser or grantee and Mortgagor hereby appoints
Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all
such policies and proceeds to such purchaser or grantee.
(f) Upon the occurrence and during the continuance of an Event of
Default hereunder, Mortgagee shall be entitled upon notice to Mortgagor to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual premiums due on such insurance. In such event,
Mortgagor shall cause all bills, statements or other documents relating to the
insurance premiums to be sent or mailed directly to Mortgagee. Upon receipt of
such bills, statements or other documents, and providing Mortgagor has deposited
sufficient funds with Mortgagee pursuant to this paragraph, Mortgagee shall pay
such amounts as may be due thereunder out of the funds so deposited with
Mortgagee. If at any time and for any reason the funds deposited with Mortgagee
are or will be insufficient to pay such amounts as may then or subsequently be
due, Mortgagee shall notify Mortgagor and Mortgagor shall immediately deposit an
amount equal to such deficiency with Mortgagee. Notwithstanding the foregoing,
nothing contained herein shall cause Mortgagee to be deemed a trustee of said
funds or to be obligated to pay any
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amounts in excess of the amount of funds deposited with Mortgagee pursuant to
this paragraph or constitute any limitation on the rights of Mortgagee upon the
occurrence of such Event of Default. Mortgagor shall not be entitled to receive
interest on said funds. If amounts collected by Mortgagee under this paragraph
exceed amounts necessary in order to pay such premiums, Mortgagee may impound or
reserve for future payment of insurance premiums such portion of such excess
payments as Mortgagee in its absolute discretion may deem proper. Should
Mortgagor fail to deposit with Mortgagee sums sufficient to pay in full such
insurance premiums at least 30 days before delinquency thereof, Mortgagee may,
at Mortgagee's election, but without any obligation so to do, advance any
amounts required to make up the deficiency, which advances, if any, shall be
payable on demand by Mortgagor with interest thereon at the Default Rate, or at
the option of Mortgagee the latter may, without making any advance whatsoever,
apply any sums held by it upon any obligation of Mortgagor secured hereby.
7. Condemnation/Eminent Domain. Immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the Mortgaged
Property, or any portion thereof, Mortgagor will notify Mortgagee of the
pendency of such proceedings. Mortgagee, at Mortgagee's option and in
Mortgagee's sole discretion, shall have the right to commence, appear in and
prosecute, jointly with Mortgagor, any action or proceeding relating to any
condemnation of the Mortgaged Property, or any portion thereof at its sole cost
and expense. Mortgagor shall not, without Mortgagee's written consent, settle or
compromise any claim in connection with such condemnation. If Mortgagee elects
not to participate in such condemnation proceeding, then Mortgagor shall, at its
expense, diligently prosecute any such proceeding and shall consult with
Mortgagee, its attorneys and experts and cooperate with them in any defense of
any such proceedings.
8. Limitation on Disposition. (a) Except as permitted under the Power
Purchase Agreement, without the prior written consent of Mortgagee in each
instance, Mortgagor shall not sell, assign, convey or otherwise transfer or
dispose of the Mortgaged Property or any part thereof or interest therein, and
Mortgagor shall not contract to do any of the foregoing. Except for Permitted
Liens and except as permitted in Article 5 of this Mortgage and in the next
following sentence, Mortgagor shall not create, consent to or suffer the
creation or existence of any liens, charges or encumbrances (each, a "Prohibited
Lien") on any of the Mortgaged Property, whether or not such Prohibited Lien is
superior or subordinate to this Mortgage. Mortgagor shall pay when due all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of a Prohibited Lien;
provided that Mortgagor shall have the right to contest in good faith any such
Prohibited Lien by proper proceedings timely instituted, and may permit such
Prohibited Lien to exist during the period of such contest subject to the
following conditions (i) Mortgagor diligently
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prosecutes such contest, (ii) during the period of such contest the enforcement
of any contested item and the Prohibited Lien relating thereto is effectively
stayed, and (iii) if, in the reasonable opinion of the Mortgagee, such contest
does not involve any substantial danger of the sale, forfeiture or loss of any
part of the Mortgaged Property, title thereto or any interest therein and does
not interfere with the operation of the Facility. Mortgagor will promptly pay or
cause to be paid any valid, final judgment enforcing any such item, cause the
Prohibited Lien relating thereto to be removed and otherwise cause such item to
be satisfied of record.
(b) Mortgagor shall pay when due all utility charges which are
incurred by it for gas, electricity, water or sewer services and all other
assessments or charges of a similar nature, whether public or private and
whether or not such assessments or charges are liens on the Mortgaged Property.
(c) All Leases of the Mortgaged Property or any part thereof shall be
subordinate to the lien of this Mortgage.
9. Estoppel Certificates. Mortgagor, within ten (10) business days
upon request, shall deliver a written statement, duly acknowledged, setting
forth the amount of the Indebtedness, and whether any offsets, claims,
counterclaims or defenses exist against the Indebtedness secured by this
Mortgage.
10. Expenses. Mortgagor shall pay all out-of-pocket expenses
reasonably incurred by Mortgagee with respect to any and all transactions
contemplated herein and the preparation of any document reasonably required
hereunder including (without limiting the generality of the foregoing) all title
and conveyancing charges, recording and filing fees and taxes, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax stamp expenses,
insurance premiums (including title insurance premiums), brokerage commissions,
finders' fees, placement fees, surveyors', appraisers' and attorneys' fees and
disbursements, and will reimburse to Mortgagee all of the foregoing expenses
paid by Mortgagee which have been or may be reasonably incurred by Mortgagee
with respect to any and all of the transactions contemplated herein. in addition
to the foregoing, if any action or proceeding be commenced (including but not
limited to any action to foreclose this Mortgage or to collect the
Indebtedness), to which action or proceeding Mortgagee is made a party, or in
which it becomes necessary to defend or uphold the lien of this Mortgage, or in
which Mortgagee is served with any legal process, discovery notice or subpoena
relating to Mortgagee's lending to Mortgagor or accepting a guaranty from a
guarantor of the Indebtedness or of any of the Obligations, Mortgagor will
reimburse Mortgagee for all of the foregoing expenses which have been or may be
reasonably incurred by Mortgagee with respect to the foregoing. All sums paid by
Mortgagee for the expense of any litigation to prosecute or defend the rights
and lien created by this Mortgage or to appear or to take action in response to
any such legal process,
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discovery notice or subpoena (including counsel fees and disbursements) shall
be paid by Mortgagor, together with interest thereon at the Default Rate, and
any such sum and the interest thereon shall be a lien on the Mortgaged Property,
prior to any right, or title to, interest in or claim upon the Mortgaged
Property attaching or accruing subsequent to the lien of this Mortgage, and
shall be deemed to be secured by this Mortgage. In any action to foreclose this
Mortgage, or to recover or collect the Indebtedness, the provisions of this
Article with respect to the recovery of costs, disbursements and allowances
shall prevail unaffected by the provisions of any law with respect to the same
to the extent that the provisions of this Article are not inconsistent therewith
or violative thereof.
11. Mortgagee's Right to Perform. Upon the occurrence of an Event of
Default, Mortgagee, without waiving, or releasing Mortgagor from, any Event of
Default under this Mortgage, may (but shall be under no obligation to), at any
time perform any of the covenants or agreements of Mortgagor hereunder, and the
cost thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee, and the same shall be secured by this Mortgage and shall
be a lien on the Mortgaged Property prior to any right, title to, interest in or
claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Article shall
be deemed or construed to cure Mortgagor's default or waive any right or remedy
of Mortgagee hereunder.
12. Further Assurances. Mortgagor agrees, upon demand of Mortgagee,
to do any act or execute any additional documents (including, but not limited
to, security agreements on any personalty included or to be included in the
Mortgaged Property) as may be reasonably required by Mortgagor to confirm the
lien of this Mortgage and to add to the lien of this Mortgage any and all
easements acquired by the Mortgagor and made subject to the lien of the First
Mortgage and the Linden Mortgage.
13. Assignment of Rents. All of the rents, royalties, issues, profits,
revenue, income and other benefits of the Mortgaged property arising from the
use and enjoyment by Mortgagor of all or any portion thereof or from any Lease
(the "Rents and Profits") are hereby absolutely and unconditionally assigned,
transferred, conveyed and set over to Mortgagee, and Mortgagor grants to
Mortgagee the right to enter the Mortgaged Property for the purpose of
collecting the same and to let the Mortgaged Property or any part thereof. The
foregoing assignment and grant shall continue in effect until the Indebtedness
is paid in full, but Mortgagee hereby waives the right to enter the Mortgaged
Property for the purpose of collecting the Rents and Profits and Mortgagor shall
be entitled to collect, receive, use and retain the Rents and Profits until the
occurrence of an Event of Default under this Mortgage; such right of Mortgagor
to collect, receive, use and retain the Rents and Profits may be revoked by
Mortgagee upon the occurrence of any Event of Default by giving not less than
five days' written notice of such
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revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents and
Profits, any lease security deposits (which security deposits shall be held in
trust and not co-mingled with Mortgagee's other funds), and shall pay monthly in
advance to Mortgagee, or to any such receiver, the fair and reasonable rental
value for the use and occupancy of the Mortgaged Property or of such part
thereof as may be in the possession of Mortgagor, and upon default in any such
payment will vacate and surrender the possession of the Mortgaged Property to
Mortgagee or to such receiver, and in default thereof may be evicted by summary
proceedings. Mortgagor shall not accept prepayments of installments of Rent and
Profits to become due for a period of more than one month in advance (except for
security deposits and estimated payments of percentage rent, if any).
14. Events of Default. The following events shall constitute an
"Event of Default" by Mortgagor hereunder (i) Mortgagor shall fail to pay any
amount when due under the Obligations Section or to perform any covenant
contained in the Obligations Section within the applicable grace period, if any,
or (ii) the First Mortgagee or the Linden Mortgagee shall foreclose the First
Mortgage or the Linden Mortgage, as the case may be.
15. Remedies. Upon the occurrence of an Event of Default hereunder,
Mortgagee may take such action, without notice or demand, as it deems advisable
to protect and enforce Mortgagee's rights against Mortgagor in and to the
Mortgaged Property, including, but not limited to, the following actions:
(a) enter upon and take possession of the Mortgaged Property, and
lease and let the Mortgaged Property, or any part thereof, and receive all
the Rents and Profits thereof which are overdue, due or to become due, and
apply the same, after payment of all reasonably necessary charges and
expenses, on account of the amounts hereby secured, and the Mortgagee is
hereby given and granted full power and authority to do any act or thing
which Mortgagor might or could do in connection with the management and
operation of the Mortgaged Property. This covenant becomes effective either
with or without any action brought to foreclose this Mortgage and without
applying at any time for a receiver of such rents;
(b) institute an action of mortgage foreclosure, or take other action
as the law may allow, at law or in equity, for the enforcement of this
mortgage, and proceed thereon to final judgment and execution of the entire
unpaid balance of the Indebtedness including costs of suit, interest and
reasonable attorneys' fees. In case of any sale of the Mortgaged Property
by virtue of judicial proceedings, the Mortgaged Property may be sold in
one parcel and as an
14
entirety or in such parcels, manner or order as the Mortgagee in its sole
discretion may elect;
(c) institute partial foreclosure proceedings with respect to the
portion of the Indebtedness so in default, as if under a full foreclosure,
and without declaring the entire Indebtedness due, provided that if
foreclosure sale is made because of default of a part of the Indebtedness,
such sale may be made subject to the continuing lien of this Mortgage for
the unmatured part of the Indebtedness; and it is agreed that such sale
pursuant to a partial foreclosure, if so made, shall not in any manner
affect the unmatured part of this Mortgage and the lien thereof shall
remain in full force and effect just as though no foreclosure sale had been
made under the provisions of this subsection. Notwithstanding the filing of
any partial foreclosure or entry of a decree of sale therein, Mortgagee may
elect at any time prior to a foreclosure sale pursuant to such decree, to
discontinue such partial foreclosure and to accelerate the Indebtedness by
reason of any uncured default or defaults upon which such partial
foreclosure was predicated or by reason of any other defaults, and proceed
with full foreclosure proceedings. It is further agreed that several
foreclosure sales may be made pursuant to partial foreclosures without
exhausting the right of full or partial foreclosure sale for any unmatured
part of the Indebtedness, it being the purpose to provide for a partial
foreclosure sale of the secured Indebtedness of any matured portion of the
secured Indebtedness without exhausting the power to foreclose and to sell
the Mortgaged Property pursuant to any such partial foreclosure for any
other part of the secured Indebtedness whether matured at the time or
subsequently maturing; and without exhausting any right of acceleration and
full foreclosure;
(d) appoint a receiver of the Rents and Profits of the Mortgaged
Property without the necessity of proving either the depreciation or the
inadequacy of the value of the security or the insolvency of Mortgagor or
any person who may be legally or equitably liable to pay moneys secured
hereby and Mortgagor and each such person waives such proof and hereby
consents to the appointment of a receiver;
(e) institute an action for specific performance of any covenant
contained herein or in aid of the execution of any power herein granted;
(f) if Mortgagor is occupying the Mortgaged Property, or any part
thereof, it is hereby agreed that the said occupants shall pay such
reasonable rental monthly in advance as the Mortgagee shall demand for the
Mortgaged Property, or the part so occupied, and for the use of Equipment
covered by this Mortgage;
15
(g) apply on account of the unpaid Indebtedness and the interest
thereon or on account of any arrearages of interest thereon, or on account
of any balance due to the foreclosure sale of the Mortgaged Property, or
any part thereof, any unexpended moneys still retained by the Mortgagee
that were paid by Mortgagor to the Mortgagee pursuant to Article 6(d)
hereof;
(h) exercise any and all other rights and remedies granted under this
Mortgage or now or hereafter existing in equity, at law, by virtue of
statute or otherwise.
16. Remedies Cumulative and Concurrent. Mortgagee shall be entitled
to enforce payment and performance of any Indebtedness or Obligations secured
hereby and to exercise all rights and powers under this Mortgage or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Indebtedness and Obligations may now or hereafter be otherwise secured,
whether by mortgage, deed of trust, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, whether by court
action or pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect Mortgagee's right to realize upon or enforce
any other securities now or hereafter held by Mortgagee, it being agreed that
Mortgagee shall be entitled to enforce this Mortgage and any other security now
or hereafter held by Mortgagee in such order and manner as Mortgagee may in its
absolute discretion determine. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given to Mortgagee or to which
Mortgagee may be otherwise entitled, may be exercised, concurrently or
independently against each Mortgagor or against the Mortgaged Property, or
either of them, from time to time and as often as may be deemed expedient by
Mortgagee. The failure to exercise any such power or remedy will not be
construed as a waiver or release of that power or remedy.
17. Discontinuance of Proceedings. If Mortgagee has proceeded to
enforce any right under the Obligations Section and such proceedings have been
discontinued or abandoned for any reason, then in every such case, Mortgagor and
Mortgagee will be restored to their former positions and the rights, remedies
powers of Mortgagee will continue as if no such proceedings been taken.
18. Application of Proceeds. The proceeds of any sale of all or any
portion of the Mortgaged Property upon foreclosure and the earnings of any
holding, leasing, operation or other use of the Mortgaged Property following any
Event of Default will be applied as follows:
16
First: To the payment of the costs and expenses of any such sale or of
any such holding, leasing, operation or other use and of any judicial
proceeding wherein any sale may be made, and all expenses, advances,
liabilities and sums made or furnished or incurred by the First Mortgagee,
including, without limitation, receiver's, accountants' and attorneys' fees
and all taxes, assessments or other charges, except any taxes, assessments
or other charges subject to which the Mortgaged Property shall have been
sold.
Second: To the payment of the amount secured by the First Mortgage.
Third: If the Linden Mortgage has not been discharged, to the payment
of the amount secured by the Linden Mortgage.
Fourth: To the payment of the Indebtedness secured hereby.
Fifth: To the payment of any other sums required to be paid pursuant
to any provision of this Mortgage or the Obligations Section.
Sixth: The balance, if any, to whomsoever may be lawfully entitled to
receive the same.
19. Successor Mortgagor. In the event ownership of the Mortgaged
Property or any portion thereof becomes vested in a person other than the
Mortgagor herein named, Mortgagee may, without notice to the Mortgagor herein
named, whether or not Mortgagee has given written consent to such change in
ownership, deal with such successor or successors in interest with reference to
this Mortgage and the indebtedness secured hereby, and in the same manner as
with the Mortgagor herein named, without in any way vitiating or discharging the
Mortgagor's liability hereunder or under the Indebtedness.
20. Security Agreement Under Uniform Commercial Code. Mortgagor and
Mortgagee agree that this Mortgage shall constitute a Security Agreement within
the meaning of the Uniform Commercial Code of the State of New Jersey
(hereinafter in this paragraph referred to as the "Code") with respect to (i)
any and all sums at any time on deposit or held by Mortgagee pursuant to any of
the provisions of this Mortgage ("Deposits") and (ii) with respect to any goods
or property included in the definition of the term "Mortgaged Property", which
goods or property may not be deemed to form a part of the Real Estate described
in Exhibit A hereto or may not constitute a "fixture" (within the meaning of
Section 9-313 of the Code), and all replacements of such property, substitutions
for such property, additions to such property, and the proceeds thereof (all of
said property and the replacements, substitutions, and additions thereto and the
proceeds thereof being sometimes hereinafter collectively referred to as the
"Collateral"), and that a security interest in
17
and to the Collateral is hereby granted to Mortgagee, and the Collateral and
all of Mortgagor's right, title and interest therein are hereby assigned to
Mortgagee, to secure the Indebtedness and Obligations. Upon the occurrence of an
Event of Default under this Mortgage, Mortgagee, pursuant to the appropriate
provisions of the Code, shall have the option of proceeding with respect to the
Collateral as to both real and personal property in accordance with its rights
and remedies with respect to the real property, in which event the default
provisions of the Code shall not apply. The parties agree that, in the event
Mortgagee shall elect to proceed with respect to the Collateral separately from
the real property, ten (10) days, notice of the sale of the Collateral shall be
reasonable notice. The expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and expenses incurred by Mortgagee. Mortgagor agrees that,
without the written consent of Mortgagee, Mortgagor will not remove or permit to
be removed from the Real Estate any of the Collateral. Mortgagor shall, from
time to time, on request of Mortgagee, deliver to Mortgagee an inventory of the
Collateral in reasonable detail. Mortgagor covenants and represents that all
Collateral now is, and that all replacements thereof, substitutions therefor or
additions thereto, will be, free and clear of liens, encumbrances, or the
security interest of others, other than Permitted Liens.
21. Indemnification: Waiver of Claim. (a) If Mortgagee is made a party
defendant to any litigation concerning this Mortgage or the Mortgaged Property
or any part thereof or interest therein, or the occupancy thereof by Mortgagor,
then Mortgagor shall indemnify, defend and hold Mortgagee harmless from all
liability by reason of said litigation (other than that arising solely from
Mortgagee's own willful misconduct or gross negligence), including attorneys'
fees and expenses incurred by Mortgagee in any such litigation, whether or not
any such litigation is prosecuted to judgment. If Mortgagee commences an action
against Mortgagor to enforce any of the terms hereof or because of the breach by
Mortgagor of any of the terms hereof, or for the recovery of any sum secured
hereby, Mortgagor shall pay to Mortgagee attorneys' fees and expenses, together
with interest thereon at the Default Rate from the date the same are paid by
Mortgagee to the date of reimbursement by Mortgagor, and the right to such
attorneys' fees and expenses shall be deemed to have accrued on the commencement
of such action, and shall be enforceable whether or not such action is
prosecuted to judgment. If an Event of Default shall have occurred, Mortgagee
may engage an attorney or attorneys to protect its rights hereunder, and in the
event of such engagement, Mortgagor shall pay Mortgagee attorneys' fees and
expenses incurred by Mortgagee, whether or not an action is actually commenced
against Mortgagor by reason of breach.
(b) Mortgagor waives any and all right to claim or recover against
Mortgagee, its officers, employees, agents and representatives, for loss of or
damage to Mortgagor, the
18
Mortgaged Property, Mortgagor's property or the property of others under
Mortgagor's control from any cause whatsoever, except for the willful misconduct
or gross negligence of Mortgagee, its officers, employees, agents or
representatives.
22. No Waivers, Etc. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor;
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Mortgaged
Property, any part of the security held for the obligations secured by this
Mortgage without, as to the remainder of the security, in anyway impairing or
affecting the lien of this Mortgage or the priority of such lien over any
subordinate lien. Mortgagee may resort for the payment of the Indebtedness
secured by this Mortgage to any other security therefor held by Mortgagee in
such order and manner as Mortgagee may elect.
23. Waivers by Mortgagor. Mortgagor hereby waives, to the fullest
extent permitted by applicable law, all errors and imperfections in any
proceedings instituted by Mortgagee under this Mortgage and all benefit of any
present or future statute of limitations or moratorium law or any other present
or future law, regulation or judicial decision, nor shall Mortgagor at any time
insist upon or plead, or in any manner whatever claim or take any benefit or
advantage of such statute, law, regulation or judicial decision which (a)
exempts any of the Mortgaged Property or any other property, real or personal,
or any part of the proceeds arising from any sale thereof from attachment, levy
or sale under execution, (b) provides for any stay of execution, moratorium,
marshalling of assets, exemption from civil process, redemption, extension of
time for payment or valuation or appraisement of any of the Mortgaged Property,
(c) requires Mortgagee to institute proceedings in mortgage foreclosure against
the Mortgaged Property before exercising any other remedy afforded Mortgagee
hereunder upon the occurrence of an Event of Default, or (d) conflicts with or
may affect, adverse to Mortgagee, any provision, covenant or term of this
Mortgage.
24. Trust Funds. All lease security deposits of the Real Estate shall
be treated as trust funds not to be commingled with any other funds of
Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall furnish
Mortgagee satisfactory evidence of compliance with this paragraph, together with
a statement of all lease security deposits by lessees and copies of all Leases
not theretofore delivered to Mortgagee, which statement shall be certified by
Mortgagor.
25. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in
19
writing,by telecopier or, if available, by telex and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, first class postage prepaid,
or in the case of transmission by telecopier, when confirmation of receipt is
obtained, or in the case of telex notice, when sent, answerback received,
addressed as follows:
Mortgagor: Camden Cogen L.P.
c/o Cogen Technologies, Inc.
1600 Smith Street
Suite 5000, 50th Floor
Houston, Texas 77002
Attention: Robert C. McNair
Telecopy: (713) 951-7747
Mortgagee: Public Service Electric and Gas Company
80 Park Plaza
Mail Code 11A
P.O. Box 570
Newark, New Jersey 07101-0570
Attention: DIRECTOR-COGENERATION
Telecopy: (201) 430-5795
26. Taxes on Mortgagee. In the event of the passage after the date of
this Mortgage of any law of the jurisdiction in which the Real Estate is located
deducting from the value of the Real Estate for the purposes of taxation any
lien thereon or changing in any way the laws for the taxation of mortgages or
debts secured by mortgages for state or local purposes or the manner of the
collection of any such taxes and imposing a tax, either directly or indirectly,
on this Mortgage, Mortgagee shall have the right to declare all sums outstanding
secured by this Mortgage immediately due and payable, provided, however, that
such election shall be ineffective if Mortgagor is exempt from such tax or, if
not exempt from such tax, is permitted by law to pay the whole of such tax (or
to provide funds to Mortgagee to pay such taxes or to reimburse Mortgagee for
payment of such taxes) in addition to all other payments required hereunder and
if Mortgagor pays such tax (or provides funds to Mortgagee to pay such tax or
reimburses Mortgagee for payment of such tax) when the same is due and payable
and agrees in writing to pay such tax when thereafter levied or assessed against
the Real Estate.
27. No Modification: Binding Obligations. This Mortgage is subject to
modification or amendment by a writing executed by Mortgagor and Mortgagee which
shall be recorded in the land records of the County of Camden, New Jersey.
Pursuant to N.J.S.A. 46:9-8.2, such modification or amendment shall not affect
the priority of this Mortgage. The covenants of this Mortgage shall run with the
land and bind Mortgagor, and its distributee, personal representatives,
successors and assigns, and all present and subsequent encumbrancers, lessees
and sublessee of any of the Mortgaged Property, and shall inure to
20
the benefit of Mortgagee and its successors, assigns and endorsees.
28. Miscellaneous. As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including but not
limited to"; (b) "provisions" shall mean "provisions, terms, covenants and/or
conditions"; (c) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage and/or deed of trust"; (d) "obligation" shall mean
"obligation, duty, covenant and/or condition"; and (e) "any of the Mortgaged
Property" shall mean "the Mortgaged Property or any part thereof or interest
therein." Any act which Mortgagee is permitted to perform hereunder may be
performed at any time and from time to time by Mortgagee or any person or entity
designated by Mortgagee. Any act which is prohibited to Mortgagor hereunder is
also prohibited to all lessees of any of the Mortgaged Property. Each
appointment of Mortgagee as attorney-in-fact for Mortgagor under the Mortgage is
irrevocable and coupled with an interest. Mortgagee has the right to reasonably
refuse to grant its consent, approval or acceptance or to indicate its
satisfaction, whenever such consent, approval, acceptance or satisfaction is
required hereunder.
29. Captions. The captions or headings at the beginning of each
Article hereof are for the convenience of the parties and are not a part of this
Mortgage.
30. Successors and Assigns. The covenants contained herein shall run
with the land and bind Mortgagor, its successors and assigns, and all subsequent
owners, encumbrancers and tenants of the Mortgaged Property, and shall inure to
the benefit of the Mortgagee.
31. Enforceability. (a) This Mortgage, the validity and enforceability
of this Mortgage and all transactions and questions arising hereunder, shall be
governed by and construed and interpreted in accordance with the laws of the
State of New Jersey. Whenever possible, each provision of this Mortgage shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Mortgage shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
Mortgage. Nothing in this Mortgage shall require Mortgagor to pay, or Mortgagee
to accept, interest in an amount which would subject Mortgagee to penalty under
applicable law. In the event that the payment of any interest due hereunder
would subject Mortgagee to penalty under applicable law, then ipso facto the
obligation of Mortgagor to make such payment shall be reduced to the highest
rate authorized under applicable law without penalty.
(b) Mortgagor hereby irrevocably agrees that any legal action, suit,
or proceeding against it with respect to its
21
obligations, liabilities or any other matter under or arising out of or in
connection with this Mortgage or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding may be brought in the United
States Courts for the Southern District of New York, or in the courts of the
State of New Jersey, as Mortgagee may elect, and, by execution and delivery of
this Mortgage, Mortgagor hereby irrevocably accepts and submits to the non-
exclusive jurisdiction of each of the aforesaid courts in personam, generally
and unconditionally with respect to any such action, suit or proceeding for
itself and in respect of its property. Mortgagor further agrees that final
judgment against it in any action, suit, or proceeding referred to herein shall
be conclusive and may be enforced in any other jurisdiction, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of its indebtedness. Mortgagor and Mortgagee each
hereby waives trial by jury.
32. RECEIPT OF COPY. MORTGAGOR ACKNOWLEDGES THAT IT HAS RECEIVED
WITHOUT CHARGE A TRUE COPY OF THIS MORTGAGE.
33. Subordination. Notwithstanding anything to the contrary contained
herein:
(a) This Mortgage, the lien and security interest created by this
Mortgage and the Indebtedness are and shall at all times, whether before,
after or during the pendency of any bankruptcy, reorganization or other
insolvency proceeding, continue to be junior, subject to and subordinate in
each and every respect to the lien and security interest created by the
First Mortgage and the Linden Mortgage, and to all sums (the "Prior
Indebtedness") that are secured by the First Mortgage or the Linden
Mortgage, with interest thereon, including, without limitation, any
interest on the Prior Indebtedness accruing subsequent to the commencement
of bankruptcy, insolvency or similar proceedings with respect to the
obligor of the Prior indebtedness, and reasonable costs and charges,
including reasonable attorneys' fees, incurred by First Mortgagee and
Linden Mortgagee in collecting the Prior Indebtedness, less the amounts
paid on the Prior Indebtedness and other credits to the Prior Indebtedness.
(b) No payment on account of the Indebtedness shall be made until
payment-in-full of all amounts of the Prior Indebtedness has been made (it
being understood that reductions in the amount of the Payment Tracking
Account pursuant to Article IV, Section H of the Power Purchase Agreement
shall not constitute payments for purposes of this Section 33(b)).
(c) Mortgagor and First Mortgagee, and Mortgagor and Linden Mortgagee,
may amend, modify and extend the First Mortgage and the Linden Mortgage,
respectively, and this Mortgage shall be subject and subordinate to each
such
22
amendment, modification or extension; provided that such amendment,
modification or extension shall not result in an increase in the amounts
secured by the First Mortgage and the Linden Mortgage by an amount in
excess of 125% of the maximum principal amounts thereof under the First
Mortgage and the Linden Mortgage, as in effect on the date hereof.
(d) All rights and privileges (including any assignment of leases and
rents and any rights regarding insurance proceeds and condemnation awards)
granted in this Mortgage shall be subordinate to the First Mortgage and the
Linden Mortgage and to the rights and privileges of First Mortgagee and
Linden Mortgagee, respectively, thereunder.
(e) Mortgagee shall not acquire by purchase, foreclosure, exercise of
any option to purchase or right of first refusal, subordination or
otherwise any lien, estate, right or other interest in the Mortgaged
Premises that is, or may be, prior in right to the First Mortgage or the
Linden Mortgagee or to any extension, consolidation, modification or
supplement thereto, or to the lien, estate, rights or interests of First
Mortgagee or Linden Mortgagee, respectively, thereunder, including any
right or interest that may arise in respect to real estate taxes,
assessments or other governmental charges.
(f) Mortgagee shall not commence any foreclosure or other action, or
exercise any right or remedy available to it under this Mortgage unless and
until Mortgagor shall be in default under the First Mortgage or the Linden
Mortgage and First Mortgagee or Linden Mortgagee shall have commenced a
foreclosure or other action as it shall elect to enforce its rights under
the First Mortgage or the Linden Mortgage, as applicable. Notwithstanding
any action that Mortgagee takes hereunder or otherwise, Mortgagee shall not
in any way interfere with the rights and remedies of First Mortgagee under
the First Mortgage or Linden Mortgagee under the Linden Mortgage.
(g) Mortgagee shall give First Mortgagee and Linden Mortgagee notice
of any default under this Mortgage and copies of all notices relating to
such default, together with copies of any foreclosure or other documents
relating to this Mortgage. Any such notice or document shall not be
effective unless and until received by First Mortgagee and Linden
Mortgagee. Mortgagee shall also give First Mortgagee and Linden Mortgagee
at least 30 days prior written notice of any action that Mortgagee takes
hereunder.
(h) Mortgagee shall not take any action to have a receiver appointed
for Mortgagor until at least 30 days have elapsed since a default occurred
under this Mortgage. No rents, profits or other income from the Mortgaged
Premises shall be collected by or on behalf of Mortgagee except by a duly
appointed receiver and all such rents, profits and
23
income so collected shall first be paid to First Mortgagee and applied in
accordance with the terms of the First Mortgage and then to Linden
Mortgagee and applied in accordance with the terms of the Linden Mortgage.
(i) If Mortgagee shall commence any foreclosure against the Mortgaged
Premises or other action to enforce its rights under this Mortgage, all
rents, issues and profits received or receivable by Mortgagee shall be paid
to First Mortgagee and applied in accordance with the terms of the First
Mortgage and then to Linden Mortgagee and applied in accordance with the
terms of the Linden Mortgage. In any such foreclosure or other action to
enforce its rights under this Mortgage, no tenant of the Mortgaged Premises
shall be named as a party defendant nor shall any action be taken that
would terminate any lease or other right held by or granted to any third
party with respect to the Mortgaged Premises.
(j) Neither First Mortgagee nor Linden Mortgagee shall be deemed paid
nor shall the First Mortgage nor the Linden Mortgage be deemed in good
standing unless and until all payments received by First Mortgagee and
Linden Mortgagee are no longer subject to recision, restoration or return.
(k) The indebtedness secured by this Mortgage shall not in any event
exceed $45,000,000.
(1) If for any reason the (i) interest and/or lien of First Mortgagee,
Linden Mortgagee or any assignee or designee of First Mortgagee or Linden
Mortgagee (collectively, a "Lender"), as mortgagee under the First Mortgage
or the Linden Mortgage, and (ii) any fee or other interest of a Lender in
the Mortgaged Premises is deemed to merge, as between Mortgagee on the one
hand, and First Mortgagee and Linden Mortgagee on the other hand, it shall
be deemed that First Mortgagee has a first lien on and security interest in
the Mortgaged Premises, Linden Mortgagee a second lien on and security
interest in the Mortgaged Premises and Mortgagee a third lien on and
security interest in the Mortgaged Premises, and First Mortgagee and Linden
Mortgagee, collectively, shall be deemed to have all the rights that
Mortgagee has pursuant to this Mortgage, including, without limitation, all
the rights of Mortgagee at any foreclosure sale of the Mortgaged Premises
(up to the amount of the Prior Indebtedness). In no event, and at no time,
shall Mortgagee assert that any interest or lien of a Lender in or on the
Mortgaged Premises has merged with any fee or other interest of a Lender in
the Mortgaged Premises.
(m) Mortgagee shall assign and release unto First Mortgagee (or,
following the release of the First Mortgage, Linden Mortgagee) all of its
right, title and interest or
24
claim, if any, in and to the proceeds of all policies of insurance covering
the Mortgaged Premises and/or any awards or other compensation made for any
taking of any part of the Mortgaged Premises, for application in accordance
with the provisions of the First Mortgage (or the Linden Mortgage, as
applicable), such assignment and release however, shall not be in
derogation of Mortgagee's rights under Section 6(a) hereof.
(n) Mortgagee shall deliver to First Mortgagee and Linden Mortgagee
such further assurances and undertakings confirming the subordination
hereinabove set forth as First Mortgagee or Linden Mortgagee shall
reasonably require.
(o) No provision of this Section 33 shall be modified or amended
except by written instrument executed by Mortgagor, Mortgagee, First
Mortgagee and Linden Mortgagee.
IN WITNESS WHEREOF, the undersigned has caused this Mortgage to be
duly executed under seal the day and year first above written.
CAMDEN COGEN L.P.
(Corporate Seal) By: Cogen Technologies Camden GP
Limited Partnership, its general
partner
ATTEST: By: Cogen Technologies Camden GP
Inc., its general partner
/s/ Mary Ann McLendon
- ---------------------
Mary Ann McLendon By: /s/ Lawrence Thomas
Assistant Secretary -------------------
Name: Lawrence Thomas
Title: V.P. - Finance
Schedule 1
----------
CONTRACTS
---------
Equipment Supply Contract
Power Purchase Agreement
Steam Supply Agreement
Gas Service Agreement
Turnkey Contract
Operation and Maintenance Agreement
(Capitalized terms used but not defined in this Schedule shall have the
respective meanings given such terms in the Loan Agreement executed in
connection with the First Mortgage)
EXHIBIT A
---------
ALL THAT CERTAIN land or promises situate, lying and being in the City of
Camden, County of Camden and State of New Jersey. The legal description being
more particularly bounded and described as follows:
BEGINNING at a point in the Southeasterly corner of Broadway (66 feet wide)
and Chelton Avenue (60 feet wide); thence
(1) South 88 degrees 33 minutes 00 seconds East along the Southerly line of
Chelton Avenue, a distance of 450 feet to the Westerly line of Sixth Street (50
feet wide); thence
(2) South 01 degrees 20 minutes 45 seconds West along the Westerly line of
Sixth Street, a distance of 400 feet to a point; thence
(3) North 88 degrees 33 minutes 00 seconds West, a distance of 210 feet to
a point in the center line of Fillmore Street (now vacated); thence
(4) North 01 degrees 20 minutes 45 seconds East and along the center line
to Fillmore Street (now vacated) 20 feet to a point; thence
(5) North 88 degrees 33 minutes 00 seconds West, a distance to 115 feet to
a point in the center line of Hedley Street (now vacated); thence
(6) North 01 degrees 20 minutes 45 seconds East along the center line of
Hedley Street (now vacated), a distance of 20 feet to a point; thence
(7) North 88 degrees 33 minutes 00 seconds West, a distance of 125 feet to
a point in the Easterly line of Broadway; thence
(8) North 01 degrees 20 minutes 45 seconds East along the Easterly line of
Broadway, a distance of 360 feet to point and place of beginning.
BEING Lot 1, Block 506, Tax Map.
STATE OF TEXAS )
: ss.:
COUNTY OF HARRIS)
BE IT REMEMBERED, that on this 31st day of January 1992, in the County and
State aforesaid, before me, the subscriber, a Notary Public of Harris County, TX
authorized to take acknowledgments and proofs in said County and State,
personally appeared Lawrence Thomas and Mary Ann McLendon, who I am satisfied,
are the persons who signed the within instrument as V.P. - Finance and Asst.
Sec'y, respectively, of Cogen Technologies Camden, Inc., the corporation named
therein, and they thereupon acknowledged that the within instrument signed by
the corporation and sealed with its corporate seal, was signed, sealed with the
corporate seal and delivered by them as such officers and is the voluntary act
and deed of the corporation, made by virtue of authority from its Board of
Directors, as a general partner on behalf of Cogen Technologies Camden GP
Limited Partnership, a Delaware limited partnership, as a general partner on
behalf of CAMDEN COGEN L.P., a Delaware limited partnership the partnership
which executed the within instrument.
Signature /s/ Elaine A. Campbell
----------------------
Printed
------------------------
Notary Public
My commission expires:
----------
ELAINE A. CAMPBELL
NOTARY PUBLIC, STATE OF TEXAS
MY COMMISSION EXPIRES
JUL 27, 1993
EXHIBIT B
---------
Permitted Exceptions
--------------------
None
ACCOMMODATION
RECORDING ONLY
NO INSURANCE
Charge, Record and Return To
CONTINENTAL TITLE INSURANCE COMPANY
The Corporate Center At Sagemore
8000 Sagemore Drive, Suite 8202
Mariton, NJ 08053
361 552 HO
LJ U
RECORDED-CAMDEN COUNTY
92FEB-4 PM 3:29
/s/ ???
REGISTER