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Mortgage”. The mortgage stated that it “shall be governed by and
construed and interpreted in accordance with” Federal law.
Pledge of ANG Stock
ANRC’s wholly owned subsidiary, ANG Coal Gasification Co.
(ANG), was formed in the early stages of the project to design
and manage construction of the project and to operate the project
after its completion. ANG held certain contractual and other
rights and permits relating to the project. As a precondition
for the loan guarantee agreement, DOE required ANRC to pledge its
ANG stock as additional security for the partnership’s
obligations under the loan guarantee agreement. Pursuant to the
ANG stock pledge agreement, dated January 29, 1982, if the
partnership defaulted on its debt, the DOE secretary was
authorized to take possession of the ANG stock certificates and
sell the ANG stock to such persons, including himself, as he
deemed expedient, applying the sale proceeds against the
partnership’s debt.
ANG Operates the Plant
Under the project administration agreement, dated January
29, 1982, the partnership appointed ANG as the partnership’s
agent to administer the project’s construction, startup, and
operation. As project administrator, ANG was responsible for the
design, construction, and operation of the gasification plant and
coal mine on behalf of the partnership. Pursuant to an agreement
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