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Section 4.02. SUBSTITUTION OF EQUIPMENT. Neither the
Trustee nor the Issuer shall be under any obligation to renew,
repair or replace any inadequate, obsolete, wornout, unsuitable,
undesirable or unnecessary equipment. In any instance where
the Company in its discretion determines that any items of
equipment included as part of the Project or the Mortgaged Property
have become inadequate, obsolete, wornout, unsuitable undesirable
or uruiecessary, the Company may remove and dispose of.such items
of equipment from the Project and the Mortgaged Property and
sell, trade-in, exchange or otherwise dispose of them (as a
whole or in part) without any responsibility or accountability
to the Issuer or the Trustee therefore, except as herein provided, .
but if the aggregate amourit of such removals or dispositions
during thQ term of this Agreement exceeds $500,000 the Company
may remove or dispose of such iter?s only if the Company:
(A) Substitutes and installs anywhere in the Project
or the Mortgaged Property other machinery or equipment having
equal or greater utility (but not necessarily having the same
function or value) in the operation of the Mortgaged Property
as a modern industrial plant (provided such removal and substi-
tution shall not impair operating unity), all of which substituted
machinery or equipment shall be free of all liens and encumbrances
and shall become a part of the Mortgaged Property; or
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(B) Pays into the Bond Fund, within thirty (30) days
after the end of any calendar quarter, (1) in the case of the
sale of any such equipment to anyone other than itself, or in
the case of .the scrapping thereof, the proceeds from such sale -
or the proceeds, if any, from such scrapping, as the case may be,
(2) in the case of the trade-in of such equipment for other
equipment not installed in the Project, the amount of the
credit received by it in such trade-in, and (3) in the case
of any disposition other than as provided in clauses (B) (1)
or (B) (2) an amount equal to the original cost thereof less
depreciatiori at rates calculated in accordance with generally
accepted accounting practices.followed by the Company; or
(C) In the event that the Company has acquired and
installed, prior to such ~removal and disposal of items of
equipment fror.i the Project or the Mortgaged Property other
than under preceeding subsection (A) of this Section, an
additional item or items of machinery or equipment or made
additions, modifications, or improvements to the Project or
the Mortgaged Property ~?ith its own funds, free of all liens
and encumbrances, which have become part of the Project or the
Mortgaged Property, either by virtue of the first paragraph
of Section 4.01 or by virtue of not being tagged or suitably
identified pursuant to the second paragraph of_ Section 4.01,
the Company may take credit to the extent of the amount so
spent by it against the requirement that it either substitute
and install other machinery and equipment having equal or
greater utility or that it make payment into the Bond Fund. ~
Provided, however, that the Company may take such credit only ~
so lona as the fair market value of the Project is not less
than the outstanding principal balance of all Bonds and Concurrent
Parity Bonds. '
The removal from the Project or the Mortgaged Property of
any portion of the equipment made a part of the Project or the
Mortgaged Property and the substitution, payment or credit therefor
pursuant to the provisions of this Section shall not entitle the
Company to any delay, abatement or diminution of the installments
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