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EXHIBIT 10.17
SERIES B PLEDGE AND SECURITY AGREEMENT
This Series B Pledge and Security Agreement (the "Agreement"),
dated as of November 1, 1985, is made by RADIATION STERILIZERS, INCORPORATED, a
California corporation ("Pledgor"), to XXXXX FARGO BANK, N.A., a national
banking association ("Bank") pursuant to that certain Series B Reimbursement
Agreement (the "Series B Reimbursement Agreement") executed as of even date
herewith between Pledgor and Bank.
WHEREAS, the Trinity River Industrial Development Authority, a
non-profit industrial development corporation ("Issuer") has agreed with
Pledgor to issue its Trinity River Industrial Development Authority Variable
Rate Demand Industrial Development Revenue Bonds (Radiation Sterilizers,
Incorporated Project), Series 1985B (the "Series B Bonds") pursuant to that
certain Trust Indenture dated as of even date herewith (the "Trust Indenture"),
between Issuer and Bank One Trust Company, N.A., a national banking association
(the "Trustee"), which Series B Bonds will be backed by Bank on an unsecured
basis; and
WHEREAS, the Trust Indenture provides for the purchase of
certain Series B Bonds and for their delivery to Bank, or its nominee, in
accordance with Sections 401(j) and 401(k) of the Trust Indenture (defined in
the Series B Reimbursement Agreement, and herein, as the "Series B Drawing
Bonds" and the "Series B Company Bonds"); and
WHEREAS, in connection with the issuance of the Series B
Bonds, Pledgor has requested that Bank issue the Series B Letter of Credit
described in the Series B Reimbursement Agreement (the "Series B Letter of
Credit"), which may be used, inter alia, to purchase some or all of the
outstanding Series B Drawing Bonds from their owners with the proceeds of "C
Drawings" under the Series B Letter of Credit; and
WHEREAS, it is a condition precedent to the obligations of
Bank to issue the Series B Letter of Credit that Pledgor shall have executed
and delivered this Agreement to Bank;
NOW, THEREFORE, in consideration of the premises and in order
to induce Bank to issue the Series B Letter of Credit and for other good and
valuable consideration, receipt of which is hereby acknowledged, Pledgor hereby
agrees with Bank as follows:
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1. Defined Terms. Capitalized terms used and not
otherwise defined herein shall have the same meanings as set forth in the
Series B Reimbursement Agreement.
2. Pledge. Pledgor hereby pledges, assigns,
hypothecates, transfers and delivers to Bank all its right, title and interest,
whether now existing or hereafter acquired, in and to the Series B Drawing
Bonds and the Series B Company Bonds (collectively, the "Pledged Bonds") as the
same may from time to time be delivered to the Remarketing Agent or the Paying
Agent by the owners thereof, and hereby grants to Bank a first lien on, and
security interest in, its right, title and interest in and to the Pledged
Bonds, including without limitation all interest thereon and other proceeds
thereof, and any related due bills, as collateral security for the prompt and
complete payment and performance by Pledgor of all obligations and indebtedness
to Bank under the Series B Reimbursement Agreement and the other Loan
Documents, whether such obligations and indebtedness (i) are now existing or
owing or are hereafter incurred or (ii) are absolute or contingent
(collectively, the "Obligations").
3. Interest on Series B Bonds. If, while this Agreement
is in effect, Pledgor shall become entitled to receive or shall receive any
interest payment in respect of the Pledged Bonds, Pledgor agrees to accept the
same as Bank's agent and to hold the same in trust on behalf of Bank and to
deliver the same forthwith to Bank. All interest payments in respect of the
Series B Drawing Bonds which are received by Bank shall be credited against the
obligation of Pledgor to pay interest to Bank set forth in Article 13 of Series
B Reimbursement Agreement.
4. Collateral. All property at any time pledged with
Bank hereunder (whether described herein or not) and all income therefrom and
proceeds thereof, are herein collectively sometimes called the "Collateral."
Bank shall not acquire a security interest hereunder in any property other than
the Pledged Bonds unless Company shall have afforded to Trustee, for the
benefit of the holders of the Series B Bonds, prior to or simultaneously with
the taking by Bank of such security, rights which shall, at the option of Bank,
be either senior to the rights of Bank or of equal priority with the rights of
Bank in connection with such security.
5. Release of Series B Drawing Bonds. If Pledgor
fulfills its reimbursement obligations with respect to the principal and
interest paid by Bank under the Series B Letter of Credit (and interest thereon
under the Series B
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Reimbursement Agreement) in connection with the repurchase of any Series B Bond
pursuant to Section 401(g) or 401(h) of the Trust Indenture, or if Bank
transfers any Series B Drawing Bond held by Bank to any Person other than
Pledgor in consideration for payment of the principal amount of the Series B
Drawing Bond so purchased, then in either case Bank agrees to release any such
Series B Drawing Bond from the lien of this Agreement. All Series B Bonds so
released shall be delivered, without recourse, representation or warranty,
express or implied, to Pledgor or the purchaser, as applicable.
6. Rights of Bank. Bank shall not be liable for failure
to collect or realize upon the Obligations or any collateral security
(including, but not limited to, the Pledged Bonds) or guaranty therefor, or any
part thereof, or for any delay in so doing, nor shall Bank be under any
obligation to take any action whatsoever with regard thereto. If an Event of
Default has occurred and is continuing, Bank may thereafter, without notice
(except the notice specified in Section 7, below, of time and place of public
or private sale), exercise all rights, privileges or options pertaining to any
Pledged Bonds as if it were the absolute owner thereof, upon such terms and
conditions as it may determine, all without liability except to account for
property actually received by it, but Bank shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.
7. Remedies. In the event that any portion of the
Obligations has been declared due and payable, Bank, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or at any of Bank's offices or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption or any credit risk, with the
right to Bank upon any such sale or sales, public or private, to purchase the
whole or any part of said Collateral so sold, free of any
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right or equity of redemption in Pledgor, which right or equity is hereby
expressly waived or released. Bank shall pay over the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care, safekeeping or otherwise of any and all of the
Collateral or in any way relating to the rights of Bank hereunder, including
reasonable attorney's fees and legal expenses, and the payment in whole or in
part of the Obligations in such order as Bank may elect, Pledgor remaining
liable for any deficiency remaining unpaid after such application, and only
after so paying over such net proceeds and after the payment by Bank of any
other amount required by any provision of the law, including, without
limitation, Section 9- 504(l)(c) of the Uniform Commercial Code, need Bank
account for the surplus, if any, to Pledgor. Pledgor agrees that Bank need not
give more than 10 days' notice of the time and place of any public sale or of
the time after which a private sale or other intended disposition is to take
place and that such notice is reasonable notification of such matters. No
notification need be given to Pledgor if it has signed after default a
statement renoun- cing or modifying any right to notification of sale or other
intended disposition. In addition to the rights and remedies granted to it in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to any of the Obligations, Bank shall have all the rights and remedies
of a secured party under the Uniform Commercial Code of the State of
California. Pledgor further agrees to waive and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of the Uniform
Commercial Code and Pledgor shall be liable for the deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay all
amounts to which Bank is entitled, and the fees of any attorneys employed by
Bank to collect such deficiency.
8. Representations, Warranties and Covenants of Pledgor.
Pledgor represents and warrants that: (a) on the date of delivery to Bank (or
the Trustee on Bank's behalf) of any Pledged Bonds described herein, neither
Issuer, the Remarketing Agent nor the Paying Agent will have any right, title
or interest in or to the Pledged Bonds; (b) it has, and on the date of delivery
to Bank (or the Trustee on Bank's behalf) of any Pledged Bonds will have, full
power, authority and legal right to pledge all of its right, title and interest
in and to the Pledged Bonds pursuant to this Agreement; (c) this Agreement has
been duly authorized, executed and delivered by Pledgor and constitutes a
legal,
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valid and binding obligation of Pledgor enforceable in accordance with its
terms; (d) no consent of any other party (including, without limitation,
stockholders or creditors of Pledgor) and no consent, license, permit, approval
or authorization of, exemption by, notice or report to, or registration, filing
or declaration with, any governmental authority, domestic or foreign, is
required to be obtained by Pledgor in connection with the execution, delivery
and performance of this Agreement; (e) the execution, delivery and performance
of this Agreement will not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the
certificate of incorporation or bylaws of Pledgor or of any securities issued
by Pledgor or any company under common ownership with Pledgor, or of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which Pledgor or any company under common ownership with Pledgor
is a party or which purports to be binding upon Pledgor or any company under
common ownership with Pledgor or upon any of their respective assets and will
not result in the creation or imposition of any lien, charge or encumbrance on
or security interest in any of the assets of Pledgor or any company under
common ownership with Pledgor except as contemplated by this Agreement; and (f)
the pledge, assignment and delivery of such Pledged Bonds pursuant to this
Agreement will create a valid first lien on and a first perfected security
interest in, all right, title or interest of Pledgor in or to such Pledged
Bonds, and the proceeds thereof, subject to no prior pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance or to any
agreement purporting to grant to any third party a security interest in the
property or assets of Pledgor which would include the Pledged Bonds. Pledgor
covenants and agrees that it will defend Bank's right, title and security
interest in and to the Pledged Bonds and the proceeds thereof against the
claims and demands of all persons whomsoever; and covenants and agrees that it
will have like title to and right to pledge any other property at any time
hereafter pledged to Bank as Collateral hereunder and will likewise defend
Bank's right thereto and security interest therein.
9. No Dispositions, Etc. Without the prior written
consent of Bank, Pledgor agrees that it will not sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with respect to, the
Collateral, nor will it create, incur or permit to exist any pledge, lien,
mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral,
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or any interest therein, or any proceeds thereof, except for the lien and
security interest provided for by this Agreement.
10. Sale of Collateral. (a) Pledgor recognizes that Bank
may be unable to effect a public sale of any or all of the Pledged Bonds by
reason of certain prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws, but may be compelled to resort
to one or more private sales thereof to a restricted group of purchasers who
may be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that such
private sale shall be deemed to have been made in a commercially reasonable
manner. Bank shall be under no obligation to delay a sale of any of the
Pledged Bonds for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under applicable Federal
securities laws, or under applicable state securities laws, even if the issuer
would agree to do so.
(b) Pledgor further agrees to do or cause to be
done all such other acts and things as may be necessary to make such sale or
sales of any portion or all of the Pledged Bonds valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at Pledgor's expense. Pledgor further agrees that
a breach of any of the covenants contained in this Section 10 will cause
irreparable injury to Bank, that Bank has no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section shall be specifically enforceable against Pledgor and
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event
of Default has occurred under the Series B Reimbursement Agreement. Pledgor
further acknowledges the impossibility of ascertaining the amount of damages
which would be suffered by Bank by reason of a breach of any of such covenants
and, consequently, agrees that, if Bank shall xxx for damages for breach, it
shall pay, as liquidated damages and not as a penalty, an amount equal to the
par value plus accrued interest on the Pledged Bonds on the date Bank shall
demand compliance with this Section 10(b). Upon
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such payment, Bank will release its interest in such Pledged Bonds.
11. Limitation on Disposition. Notwithstanding the
rights and remedies given to Bank in Section 7 and otherwise herein to dispose
of Pledged Bonds, Pledgor consents that upon an Event of Default under the
Series B Reimbursement Agreement, Bank may tender any Pledged Bonds to the
Trustee for cancellation, and Pledgor agrees that such tender shall not
constitute a disposition of collateral for purposes of UCC Section 9-504, but
shall constitute a simple reduction in the contingent obligations of Pledgor to
Bank.
12. Further Assurances. Pledgor agrees that at any time
and from time to time upon the written request of Bank, Pledgor will execute
and deliver such further documents and do such further acts and things as Bank
may reasonably request in order to effect the purposes of this Agreement.
13. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
14. No Waiver; Cumulative Remedies. Bank shall not, by
any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder and no waiver shall be valid unless in writing,
signed by Bank, and then only to the extent therein set forth. A waiver by
Bank of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Bank would otherwise have on
any future occasion. No failure to exercise nor any delay in exercising on the
part of Bank, any right, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided are cumulative and may be exercised singly or concurrently, and
are not exclusive of any rights or remedies provided by law.
15. Waivers; Amendments; Applicable Law. None of the
terms or provisions of this Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by Bank. This
Agreement and all
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obligations of Pledgor hereunder shall be binding upon the successors and
assigns of Pledgor, and shall, together with the rights and remedies of Bank
hereunder, inure to the benefit of Bank and its respective successors and
assigns. This Agreement shall be governed by, and be construed and interpreted
in accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
duly executed as of the date first written above.
RADIATION STERILIZERS, INCORPORATED,
a California corporation
By /s/ Signature Unreadable
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Its /s/ President
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By /s/ Signature Unreadable
--------------------------------
Its /s/ Secretary
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