1
$9,148,000
REIMBURSEMENT AGREEMENT
By and Between
STERIGENICS INTERNATIONAL,
a California corporation
and
COMERICA BANK-CALIFORNIA
Dated as of March 1, 1996
Relating to:
The Mecklenburg County Industrial Facilities
and Pollution Control Financing Authority
Industrial Development Revenue Bonds (SteriGenics International Project),
Series 1996
2
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of March 1, 1996 (this
"Agreement"), by and between STERIGENICS INTERNATIONAL, a California corporation
duly organized and existing under the laws of the State of California
("Company"), and COMERICA BANK-CALIFORNIA, a California banking corporation (the
"Credit Bank").
WITNESSETH
WHEREAS, Company proposes to finance the acquisition of an
approximately 5.5 acre site at 00000 Xxxxxxx Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx, the acquisition, construction and equipping of an approximately 64,000
square foot contract radiation sterilization processing facility and the
acquisition and installation of machinery, equipment and other personal property
to be used in connection therewith, to be used primarily for the sterilization
of health care, laboratory, pharmaceutical and packaging products located in
Mecklenburg County, North Carolina (collectively, the "Project");
WHEREAS, in order to finance the Project, Company has requested the
assistance of The Mecklenburg County Industrial Facilities and Pollution Control
Financing Authority, a public body organized and existing under laws of the
State of North Carolina (the "Authority"), to issue The Mecklenburg County
Industrial Facilities and Pollution Control Financing Authority Industrial
Development Revenue Bonds (SteriGenics International Project), Series 1996 (the
"Bonds"), in the principal amount of $9,000,000;
WHEREAS, in order to provide for the authentication and delivery of
the Bonds, to establish and declare the terms and conditions upon which the
Bonds are to be issued and secured and to secure the payment of the principal
thereof and of the interest and premium, if any, thereon, the Authority has
entered into an Indenture of Trust (the "Indenture"), dated as of March 1, 1996,
by and between the Authority and Bank One, Columbus, N.A. as trustee (the
"Trustee");
WHEREAS, pursuant to the Indenture, Trustee will make certain
disbursements for the acquisition, construction and equipping of the Project
according to the terms more specifically set forth in the Indenture and the Loan
Agreement (the "Loan Agreement"), by and between the Authority and the Company;
WHEREAS, the Company has requested that the Credit Bank issue in
favor of the Trustee, for the account of the Company, a direct-pay letter of
credit ("Letter of Credit") in an initial stated amount of $9,148,000, which
Letter of Credit is to be available to be drawn upon to provide funds for the
payment of principal and interest on the Bonds when due and payable; and
1
3
WHEREAS, any Bonds purchased by the Credit Bank by application of
amounts drawn under the Letter of Credit pursuant to a Principal Drawing or
Interest Drawing (as defined herein) shall be transferred to and registered in
the name of the Company and held by the Tender Agent until the Credit Bank shall
have been reimbursed for the amount so drawn and interest accrued thereon in
accordance with this Agreement, which reimbursement may be satisfied by the
payment of the principal and interest represented by the Bonds so held by or for
the account of the Credit Bank, as provided herein and in such Bonds, or the
payment to the Credit Bank pursuant to the terms of that certain Placement and
Remarketing Agreement dated as of March 1, 1996 (the "Remarketing Agreement"),
among the Authority, Company and Wheat, First Securities, Inc. following the
remarketing of the Bonds;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS.
For purposes of this Agreement, capitalized terms used herein which
are not defined herein shall have the meanings set forth in the Indenture. In
addition, the following terms shall have the following meanings:
"Authority" shall mean The Mecklenburg County Industrial Facilities
and Pollution Control Financing Authority.
"Agreement" shall mean this Reimbursement Agreement, including any
Exhibits hereto, as the same may be supplemented and amended in accordance with
its terms.
"Base Rate" shall mean the rate of interest publicly announced from
time to time by the Credit Bank as its "reference rate" or "prime rate."
"Bonds" shall mean The Mecklenburg County Industrial Facilities and
Pollution Control Financing Authority Industrial Development Revenue Bonds
(SteriGenics International Project), Series 1996.
"Bond Documents" shall mean, at any time, each of the following as
in effect or as outstanding, as the case may be, at such time: (i) the Bonds;
(ii) the Indenture; (iii) the Loan Agreement; (iv) the Remarketing Agreement;
(v) the Security Agreement; (vi) the Deed of Trust; (vii) the Guaranty; (viii)
the Environmental Indemnity; (ix) this Agreement; and (x) any other agreements,
instruments, certificates or other documents executed in connection with the
foregoing.
2
4
"Business Day" shall mean a day other than (i) a day on which the
banking institutions in (a) New York, New York or (b) the City of San Jose,
California or (c) Detroit, Michigan or (d) the cities in which the Trustee or
the Paying Agent (as defined in the Indenture) or the Remarketing Agent have
their respective principal offices are authorized to close or (ii) a day on
which the New York Stock Exchange is closed.
"Company" shall mean SteriGenics International, a California
corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations, rulings and proclamations promulgated or issued thereunder.
"Credit Bank" shall mean Comerica Bank-California, a California
banking corporation and its successors and assigns, as issuer of the Letter of
Credit, or any issuer of a substitute Letter of Credit.
"Credit Provider Rate" shall mean one and one-half percent (1 1/2%)
in excess of the rate of interest established by Credit Bank from time to time
as its base rate during any period that interest shall accrue at such rate
pursuant to the terms of this Agreement, each change in such Base Rate to become
effective on the date such change is announced by Credit Bank, such rate to be
calculated on the basis of actual number of days elapsed and a 360-day year. In
each case, the Credit Provider Rate shall change when and as the Base Rate
changes.
"Date of Issuance" has the meaning set forth in Section 2.1 hereof.
"Deed of Trust" shall mean the Deed of Trust, Security Agreement and
Fixture Filing with Assignment of Rents, dated as of March 1, 1996, by and
between the Company and L. Xxxxxx Xxxxxxx, Xx., as trustee for the benefit of
the Credit Bank.
"Drawing" shall mean a drawing under the Letter of Credit in
accordance with its terms, and shall include a "Purchase Drawing," "Principal
Drawing," and "Interest Drawing."
"Drawing Fee" shall mean the fee described in Section 2.4 hereof.
"ERISA" means the Employment Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" shall have the meaning set forth in Article 9
hereof.
"Expiration Date" shall have the meaning assigned to that term in
the Letter of Credit.
3
5
"Environmental Indemnity" shall mean the unsecured environmental
indemnity agreement executed in favor of the Credit Bank as required by Section
3. 1 (h) hereof.
"Guaranty" shall mean the Guaranty, dated as of March 1, 1996, from
the Guarantors for the benefit of the Credit Bank, as the same may be
supplemented and amended in accordance with its terms.
"Guarantors" shall mean Xxxxxxx Xxxx, Jr. and The Xxxxxxx X. Xxxx,
Xx. Trust as guarantors under the Guaranty.
"Indenture" shall have the meaning set forth in the third WHEREAS
clause hereof, as the same may be supplemented and amended in accordance with
its terms.
"Interest Drawing" shall mean a Drawing under the Letter of Credit
to pay interest on the Bonds (other than Bonds registered in the name of the
Company) when due and payable by Company pursuant to Loan Agreement.
"Letter of Credit" shall mean the Letter of Credit issued by the
Credit Bank pursuant to this Agreement, and shall include any amended Letter of
Credit or any substitute Letter of Credit issued by the another bank.
"Letter of Credit Fee" shall mean the fee described in Section 2.2
hereof.
"Loan Agreement" shall mean that certain Loan Agreement, dated as of
March 1, 1996, by and between the Authority and the Company and relating to the
Bonds, as the same may be supplemented and amended in accordance with its terms.
"Official Statement" shall mean the official statement, dated March
8, 1996, relating to the delivery and sale of the Bonds, including any
supplement to such Official Statement.
"Permitted Encumbrances" shall mean, as of any particular time (i)
the Deed of Trust, (ii) liens for taxes and assessments not then delinquent or
which are being contested in good faith and for which adequate reserves have
been created, (iii) utility, access and other easements and rights of way
restrictions and exceptions that an authorized officer of Company certifies will
not interfere with or impair the use intended to be made of the Property and the
Project and as to the existence of which the Credit Bank has consented in
writing, (iv) covenants, conditions or restrictions or liens of record relating
to the Property and the Project and existing on the date of sale and delivery of
the Bonds as set forth in the ALTA Title Insurance Policy delivered pursuant to
Section 3. 1 (f) hereof, (v) covenants, conditions, restrictions or liens
relating to the Property or the Project over which Commonwealth Land Title
Insurance Company provides affirmative coverage, (vi) materialmen's, mechanic's
and similar liens securing amounts not yet past due or which are
4
6
being contested in good faith and for which adequate reserves have been created
and (vii) such minor defects, irregularities, encumbrances and clouds on title
as normally exist with respect to property similar in character to the Property
and as do not materially impair the use intended to be made of property affected
thereby.
"PBGC" shall mean Pension Benefit Guaranty Corporation.
"Person" shall mean an individual, association, unincorporated
organization, corporation, partnership, joint venture, trust, government or any
governmental agency or political subdivision or any other entity or
organization.
"Plan" shall mean an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (i) maintained by Company for employees of Company
or (ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Company is then making or accruing an obligation to make contributions or has
within the preceding five years of such plan made contributions.
"Principal Drawing" shall mean a Drawing under the Letter of Credit
to pay the principal of the Bonds (other than Bonds registered in name of the
Company) required to be made by Company upon the maturity thereof or upon the
optional or mandatory redemption thereof, all pursuant to the Bonds and the
Indenture.
"Project" shall mean the additions, extensions, alterations and
improvements to the Property to be financed with the proceeds of the Bonds,
including the acquisition of an approximately 5.5 acre site at 00000 Xxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, the acquisition, construction and
equipping of an approximately 64,000 square foot contract radiation
sterilization processing facility and the acquisition and installation of
machinery, equipment and other personal property to be used in connection
therewith, to be used primarily for the sterilization of health care,
laboratory, pharmaceutical and packaging products located in Mecklenburg County,
North Carolina;
"Property" means the real property, and any buildings, structures
and fixtures thereon, described in Exhibit A to the Deed of Trust.
"Purchase Drawing" shall mean a Drawing under the Letter of Credit
to pay the purchase price of the Bonds following the failure to remarket any
Bonds as set forth in Section 3.02 of the Indenture.
"Remarketing Agent" shall mean Wheat, First Securities, Inc., as
Remarketing Agent under the Remarketing Agreement, or any successor to it as
remarketing agent
5
7
"Remarketing Agreement" shall mean that certain Placement and
Remarketing Agreement dated as of March 1, 1996 by and among the Authority,
Company and the Remarketing Agent, and any successor remarketing agreement
entered into by the Authority, Company and a successor remarketing agent in
accordance with the provisions of the Indenture.
"Restrictions" shall have the meaning set forth in Section 6.4
hereof.
"Security Agreement" shall mean that certain Pledge and Security
Agreement dated as of March 1, 1996 from the Company to the Credit Bank, as the
same may be supplemented and amended in accordance with its terms.
"Special Counsel" shall mean Manatt, Xxxxxx & Xxxxxxxx, LLP.
"Stated Amount" shall mean the amount set forth in the Letter of
Credit as the "Stated Amount", as such amount is reduced and reinstated from
time to time in accordance with the Letter of Credit.
"Stated Expiration Date" shall have the meaning assigned to that
term in the Letter of Credit.
"Transfer Certificate" shall have the meaning assigned to that term
in the Letter of Credit.
"Transfer Fee" shall mean the fee described in Section 2.4 hereof.
"Trustee" shall mean Bank One, Columbus, N.A., in its capacity as
trustee under the Indenture, and any other bank or trust company at any time
substituted in its place pursuant to and in accordance with the Indenture.
"Uniform Customs and Practice" means the Uniform Customs and
Practice for Documentary Credits approved by the International Chamber of
Commerce and in effect and adhered to by the Credit Bank as of the date of
issuance of the Letter of Credit.
ARTICLE 2. LETTER OF CREDIT; FEES; REIMBURSEMENT.
SECTION 2.1. Amount and Terms of Letter of Credit. The Credit Bank
agrees, upon at least 24 hours' prior notice from Company to the Credit Bank and
on the terms and subject to the conditions hereinafter set forth, including,
without limitation, the conditions set forth in Article 3 hereof, to issue the
Letter of Credit on the date of delivery specified herein (the "Date of
Issuance"), provided such date of delivery is not later than March 10, 1996,
effective upon such delivery date and expiring on the Expiration Date. The
Letter of Credit will be issued in an initial Stated Amount of $9,148,000,
representing the
6
8
aggregate principal amount represented by the Bonds as of the Date of Issuance,
plus interest on such principal amount for a period of 50 days at a rate not to
exceed twelve percent (12%) per annum. The Letter of Credit shall be issued to
the Trustee for the account of Company, and shall be substantially in the form
of Exhibit A hereto, with such changes to the form set forth in Exhibit A as
Company and the Credit Bank shall agree in writing are necessary or advisable.
SECTION 2.2. Letter of Credit Fee. Company shall pay to the Credit
Bank a nonrefundable letter of credit fee (the "Letter of Credit Fee") in an
amount equal to 1.375% of the Stated Amount per each 12-month period for the
period from and including the Date of Issuance until but excluding the
Expiration Date on the Stated Amount available under the Letter of Credit in
advance of the first 12-month period to be paid on the Date of Issuance and in
equal monthly installments thereafter. The Letter of Credit Fee shall be
calculated on the basis of a 360-day year and shall be payable in respect of
each 12-month period in advance; provided, however, commencing on the one year
anniversary of the issuance of the Letter of Credit, in the event there is no
default hereunder and the Letter of Credit has terminated before the end of a
12-month period for which the Letter of Credit Fee has been paid, Credit Bank
shall refund that portion of the Letter of Credit Fee relating to the period in
which the Letter of Credit is no longer in effect.
SECTION 2.3. Drawing Fee. Company shall pay to the Credit Bank for
each drawing on the date thereof a nonrefundable drawing fee (the "Drawing Fee")
in an amount equal to the usual and customary fee charged by the Credit Bank to
its customers for a draw under a letter of credit.
SECTION 2.4. Letter of Credit Transfer Fee. Any transfer of the
Letter of Credit by the Trustee or issuance of a substitute Letter of Credit
shall be made by, and be only effective upon, (a) in the case of such a
transfer, the Trustee providing the Credit Bank with a Transfer Certificate (as
defined in the Letter of Credit) in accordance with the Letter of Credit and (b)
in the case of such a transfer or such an issuance, payment to the Credit Bank
by Company of a transfer fee (the "Transfer Fee") of $500 for each transfer or
issuance and of the costs payable to the Credit Bank in respect of each such
transfer or issuance. No Transfer Fee shall be due in the event of a transfer or
substitution due to: (a) non-renewal of the Letter of Credit; (b) a downgrading
of the Letter of Credit; or (c) an increase in costs associated with the Letter
of Credit.
SECTION 2.5. Reduction and Reinstatement of Stated Amount. The
Stated Amount shall be automatically reduced and reinstated as specified in the
Letter of Credit.
SECTION 2.6. Interest. Company hereby agrees to pay interest at the
Credit Provider Rate on any and all amounts required to be paid by Company under
this Agreement from and after the due date thereof until paid in full, whether
before or after the expiration of the Letter of Credit and this Agreement, at
the Stated Expiration Date or otherwise, such
7
9
interest to be payable on demand. Notwithstanding anything herein to the
contrary, to the extent permitted by law, if at any time the Credit Provider
Rate exceeds any statutory or constitutional interest rate limitation or
restriction and the Credit Bank shall not receive payment at the Credit Provider
Rate, any subsequent reduction in the Credit Provider Rate shall not reduce the
rate of interest utilized for the calculation of amounts payable to the Credit
Bank hereunder until the total amount due if the Credit Provider Rate had at all
times been utilized, has been paid to the Credit Bank.
SECTION 2.7. Increased Costs. If any change in any law or regulation
or in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit, capitalization or
similar requirement against letters of credit issued by the Credit Bank or (ii)
impose on the Credit Bank any other condition relating, directly or indirectly,
to this Agreement or the Letter of Credit or the holding or owning of any Bonds
by the Credit Bank or the purchasing thereof, and the result of any event
referred to in (i) or (ii) above shall be to increase the cost to the Credit
Bank of issuing or maintaining the Letter of Credit, or of purchasing the Bonds,
then, upon demand by the Credit Bank, Company shall, upon not less than 10 days'
prior notice from the Credit Bank (which notice shall specify in reasonable
detail the circumstances giving rise to the increase and the method of
calculating the increase), pay to the Credit Bank, from time to time as
specified by the Credit Bank, such additional amounts as shall be demanded by
the Credit Bank as sufficient to compensate the Credit Bank for such increased
cost, together with interest at the Credit Provider Rate on amounts required to
be paid under this Section 2.7 from the due date of such payment following not
less than 10 days' prior notice until payment in full thereof.
SECTION 2.8. Net Payments. All payments under this Agreement shall
be made without set-off or counterclaim and in such amounts as may be necessary
in order that all such payments (after deduction or withholding for or on
account of a proportionate share attributable to the transactions contemplated
by this Agreement or any future taxes, levies, imposts, duties or other charges
of whatsoever nature imposed by any government, any political subdivision or any
taxing authority other than any tax on or measured by the overall net income of
the Credit Bank pursuant to the income tax laws of the United States or the
jurisdiction where the Credit Bank's principal office is located (collectively,
the "Taxes")) shall not be less than the amounts otherwise specified to be paid
under this Agreement. A certificate as to any additional amounts payable to the
Credit Bank under this Section 2.8 submitted to Company by the Credit Bank shall
show in reasonable detail the amount payable and the calculations used to
determine in good faith such amount and shall be conclusive absent manifest
error. Any amounts payable by Company under this Section 2.8 with respect to
past payments shall be due within ten days following receipt by Company of such
certificate from the Credit Bank; any such amounts payable with respect to
future payments shall be due concurrently with such future payments. With
respect to each deduction or withholding for or on account of any Taxes, Company
shall promptly furnish to the Credit Bank such certificates, receipts and other
documents as may be required (in the reasonable
8
10
judgment of the Credit Bank) to establish any tax credit to which the Credit
Bank may be entitled. Without in any way affecting any of its rights under this
Section 2.8, the Credit Bank agrees that, upon its becoming aware that any of
the present or future payments due it under this Agreement would be subject to
deduction for Taxes, it will notify Company in writing and the Credit Bank
further agrees that it will use reasonable efforts not disadvantageous to it (in
its sole determination) in order to avoid or minimize, as the case may be, the
payment by Company of any additional amounts for Taxes pursuant to this Section
2.8.
SECTION 2.9. Reimbursement of Principal Drawings and Interest
Drawings. (a) If a Principal Drawing or Interest Drawing is repaid at or prior
to 1:00 p.m. (Pacific time) on the same day on which it is made, no interest
shall be payable on such Drawing. Company hereby agrees to pay to the Credit
Bank the amount of each Principal Drawing and each Interest Drawing no later
than 1:00 p.m. (Pacific time) on the first Business Day following the date of
payment by the Credit Bank of such Drawing, plus interest at the Credit Provider
Rate on such amounts from and including the date such amounts are paid by the
Credit Bank until payment in full by Company (as determined by the Credit Bank).
If Company shall not have paid to the Credit Bank such amounts (and such
interest, if any) before 1:00 p.m. on the second Business Day following the date
of the Credit Bank's payment of such Drawing, Company shall pay interest on such
amounts from and including such second Business Day until payment in full by
Company at such fluctuating interest rate per annum as shall be in effect from
time to time, which rate per annum for each day shall be equal to the Credit
Provider Rate in effect on such day, but in no event higher than the maximum
rate permitted by applicable law. Unless otherwise waived by the Credit Bank,
Company shall be obligated, without notice of a Principal Drawing or Interest
Drawing or demand for reimbursement from the Credit Bank (which notice is hereby
waived by Company), to reimburse the Credit Bank for all Principal Drawings and
Interest Drawings (with interest as provided in the first sentence of this
Section 2.9) on or before 1:00 p.m. (Pacific time) on the second Business Day
following the day on which the Credit Bank honored such Drawings. If a Principal
Drawing or Interest Drawing is repaid after 1:00 p.m. (Pacific time) on any
Business Day, it shall be treated as having been repaid on the following
Business Day.
(b) The Credit Bank shall maintain in accordance with sound banking
practices an account or accounts evidencing the indebtedness of Company
resulting from each Principal Drawing and each Interest Drawing and the interest
accruing thereon, and in any legal action or proceeding in respect of this
Agreement, the entries made in such account or accounts shall, in the absence of
manifest error, be conclusive evidence of the existence and amounts of the
obligations of Company therein recorded.
SECTION 2.10. Reimbursement of Purchase Drawings. (a) Company's
obligation to reimburse the Credit Bank for any unreinbursed amounts drawn under
the Letter of Credit in respect of any Purchase Drawing shall be secured in part
by the delivery
9
11
to Credit Bank of the purchased Bonds. The obligation of Company under this
Agreement and under the Indenture in respect of such Bonds purchased with the
proceeds of a Purchase Drawing shall be satisfied by the payment of such Bonds
in accordance with their terms and the terms of the Indenture and the subsequent
payment to Credit Bank of all such payments, or the reimbursement of the Credit
Bank pursuant to the terms of the Remarketing Agreement following the
remarketing of the Bonds.
(b) In the event that any Bonds are registered in the name of
Company, on the date on which the Letter of Credit expires for any reason, the
principal amount of such Bonds and the interest accrued thereon shall thereupon
be paid by Company immediately to the Credit Bank; provided that nothing herein
contained shall affect any right which the Credit Bank may have hereunder or
under the Indenture or the Bonds upon the occurrence of an Event of Default
hereunder or thereunder.
SECTION 2.11. Security. Company, in order to secure its obligation
to make payments to the Credit Bank pursuant to the terms of this Agreement and
to perform all of its other covenants and agreements under this Agreement, has
pledged, assigned and granted to the Credit Bank, a lien on and security
interest in the revenues of the Project subordinate only to the lien granted
under the Indenture to the owners of the Bonds and to the Trustee for its
reasonable compensation, expenses, charges, counsel fees and other disbursements
incurred in the performance of its powers and duties under the Indenture, and
has executed the Deed of Trust and caused to be delivered to Credit Bank the
Guaranty and the Security Agreement for the benefit of the Credit Bank.
SECTION 2.12. Place and Manner of Payment; Computation of Interest.
All payments by Company to the Credit Bank hereunder, except reimbursement of
Principal Drawings and Interest Drawings pursuant to Section 2.9 hereof and
reimbursement of Purchase Drawings pursuant to Section 2.10 hereof, shall be
made to the Credit Bank at 000 Xxxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 in lawful currency of the United States in immediately
available funds not later than 1:00 p.m. (Pacific time) on the date due, without
set-off, counterclaim or deduction of any kind. In the event that the date
specified for any such payment hereunder is not a Business Day, such payment
shall be made not later than the next following Business Day. Company shall pay
interest on any such payment not made on the due date, at the Credit Provider
Rate, to the Business Day on which such payment is made. Computations of
interest hereunder shall be made by the Credit Bank and Company on the basis of
actual days elapsed and a 360-day year.
ARTICLE 3. CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT.
SECTION 3.1. Documents to be Received. The Credit Bank's obligation
to issue the Letter of Credit as set forth in Section 2.1 hereof is subject to
the conditions precedent that, on or prior to the Date of Issuance, the Credit
Bank shall receive the
10
12
following documents, all in form and substance satisfactory to the Credit Bank
and its Special Counsel:
(a) a copy of the resolution or resolutions of Company, certified as
of the date of the delivery of the Bonds by an authorized officer of Company,
authorizing, among other things, the execution, delivery and performance by
Company of this Agreement and the Bond Documents to which Company is a party and
authorizing Company to obtain the issuance of the Letter of Credit and certified
copies of all other documents evidencing any other action of Company taken with
respect thereto;
(b) a certificate, signed by a duly authorized officer of Company,
dated the date of the delivery of the Bonds, to the effect that:
(i) The representations and agreements of Company contained in
this Agreement and each of the Bond Documents to which it is a party
are true, complete and correct in all material respects as of the
Date of Issuance;
(ii) To such official's knowledge, Company has complied with
all agreements, covenants and conditions to be complied with by
Company at or prior to the Date of Issuance under this Agreement and
each of the Bond Documents to which it is a party;
(iii) To such official's knowledge, no event affecting Company
has occurred since the date of the Official Statement which either
makes untrue or incorrect in any material respect, as of the Date of
Issuance, the statements or information contained in the Official
Statement concerning Company or is not reflected in the Official
Statement but should be reflected therein in order to make the
statements and information therein concerning Company not misleading
in any material respect;
(iv) The information concerning Company and the Project
contained in the Official Statement and the appendices thereto does
not contain any untrue statement of a material fact or omit to state
any fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading in any material respect; and
(v) No Event of Default has occurred and is continuing, or
would result from the issuance of the Letter of Credit, the making
of this Agreement or any of the other Bond Documents to which
Company is a party, and no event has occurred and is continuing
which would constitute an Event of Default but for the requirement
that notice be given or time elapse or both;
11
13
(c) a certificate of a duly authorized officer of Company certifying
the names and true signatures of the officers of Company authorized to sign this
Agreement and the Bond Documents to which Company is a party;
(d) evidence of the status of Company as a California corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of California and fully authorized to operate the Project in North
Carolina and a copy of the Articles of Incorporation, certified by the Secretary
of State;
(e) a certified copy of the Bylaws of Company;
(f) an ALTA Tide Insurance Policy for the benefit of the Credit
Bank, insuring the Deed of Trust as a valid and enforceable first-priority lien
on the Property in the original Stated Amount, subject only to Permitted
Encumbrances;
(g) this Agreement, the Deed of Trust and the Environmental
Indemnity, duly executed by Company;
(h) the Security Agreement and Guaranty duly executed by the
Guarantors;
(i) all Bond Documents and other documents, certificates, opinions,
approvals or filings with respect to the Bond Documents, this Agreement or the
transactions contemplated thereby or hereby as the Credit Bank or its Special
Counsel shall reasonably request, in form and substance satisfactory to the
Credit Bank.
SECTION 3.2. Other Conditions Precedent to Issuance of the Letter of
Credit. The Credit Bank's obligation to issue the Letter of Credit as set forth
in Section 2.1 hereof shall be subject to the additional conditions precedent
that on or before the Date of Issuance:
(a) Company shall pay to the Credit Bank the Letter of Credit Fee,
for the first 12-month period in immediately available funds;
(b) no change shall have occurred in any law, regulation, ruling or
other action of the United States, or the State of North Carolina or the State
of California or any political subdivision or authority therein or thereof
which, in the opinion of Special Counsel for the Credit Bank would make it
illegal or inadvisable for the Credit Bank to issue the Letter of Credit as
provided therein; and
(c) all legal requirements provided herein incident to such issuance
shall be reasonably satisfactory to the Credit Bank and its Special Counsel.
12
14
ARTICLE 4. INDEMNIFICATION.
In addition to any other amounts payable by Company under this
Agreement, Company hereby, agrees to release, protect, indemnify, pay and save
the Credit Bank and its officers, directors, employees, attorneys and agents
(each, an "indemnified person") harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
attorneys' fees) which any indemnified person may, other than as a result of its
gross negligence or willful misconduct, incur or be subject to as a consequence,
direct or indirect, of (i) the execution and delivery or transfer of, or payment
or failure to pay, under the Letter of Credit, (ii) any breach by any party
hereto of any representation or warranty, covenant, term or condition in, or the
occurrence of any default under, this Agreement or any of the Bond Documents,
including all fees or expenses resulting from the settlement or defense of any
claims or liabilities arising as a result of any such breach or default, (iii)
the holding or owning by the Credit Bank or its nominee of any Bond, (iv) the
issuance, sale or delivery of the Bonds, (v) the use of the proceeds of the
Bonds or any Drawing, or (vi) involvement of any indemnified person in any legal
suit, investigation, proceeding, inquiry or action as a consequence, direct or
indirect, of the Credit Bank's issuance of the Letter of Credit, the Credit
Bank's holding or owning of any Bond, the holding or owning of any Bond by the
Credit Bank's nominee, the Credit Bank's execution of this Agreement, or any
other event or transaction contemplated by any of the foregoing.
Promptly after receipt by an indemnified person of notice of the
commencement of any action in respect of which indemnity may be sought against
Company under this Article 4, such indemnified person will notify Company in
writing of the commencement thereof, and, subject to the provisions hereinafter
stated, Company may assume the defense of such action (including the employment
of counsel, who shall be satisfactory to the indemnified person, but at
Company's expense) insofar as such action shall relate to any alleged liability
in respect of which indemnification may be sought from Company.
An indemnified person shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, and the
fees and expenses of such counsel shall be at the expense of Company.
ARTICLE 5. OBLIGATIONS ABSOLUTE.
To the fullest extent permitted by applicable law, the obligations
of Company under this Agreement shall be unconditional and irrevocable, and
shall be paid or performed strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
13
15
(a) any lack of validity or enforceability of the Letter of Credit,
this Agreement or any of the other Bond Documents;
(b) any amendment or waiver of or any consent to depart from the
terms of this Agreement (other than the provisions of this Agreement
specifically amended or waived) or any of the other Bond Documents;
(c) the existence of any claim, set-off, defense or other right
which Company may have at any time against the Trustee, any beneficiary or any
transferee of the Letter of Credit (or any persons or entities for whom the
Trustee, any such beneficiary or any such transferee may be acting), the Credit
Bank or any other person or entity, whether in connection with this Agreement,
any if the other Bond Documents or the transactions contemplated hereby or
thereby or any unrelated transaction;
(d) any statement or any other document presented under the Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(e) any nonapplication or misapplication by the Trustee or otherwise
of the proceeds of any Drawing;
(f) payment by the Credit Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
the Letter of Credit;
(g) the failure by the Credit Bank to honor any Drawing under the
Letter of Credit or to make any payment demanded under the Letter of Credit on
the grounds that the demand for such payment does not conform to the terms and
conditions of the Letter of Credit; or
(h) any other circumstances or happening similar to any of the
foregoing.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF COMPANY.
To induce the Credit Bank to enter into this Agreement and issue the
Letter of Credit, Company makes the representations and warranties to the Credit
Bank set forth in this Article 6 on and as of the date hereof.
SECTION 6.1. Organization: Powers. Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California and has the power and authority to carry on its business as
presently conducted including, without limitation, the operation of the Project,
to own its assets and to enter into and
14
16
perform its obligations under this Agreement and the other Bond Documents to
which it is a party.
SECTION 6.2. Corporate Authority, etc. The execution, delivery and
performance by Company of this Agreement and the other Bond Documents to which
Company is a party have been duly authorized by all necessary action of Company
and this Agreement and such other Bond Documents constitute legal, valid and
binding obligations of Company enforceable in accordance with their terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, by general equitable principles which may limit the
right to obtain equitable remedies and by provisions of applicable California or
North Carolina law.
SECTION 6.3. Compliance with Laws and Contracts. The execution,
delivery and performance by Company of this Agreement and the other Bond
Documents to which Company is a party do not and will not (a) violate any
provision of any order, writ, judgment, injunction, decree, determination or
award as currently in effect to which Company is subject or of the Articles of
Incorporation or by-laws of Company or, to the best of Company's knowledge, any
law, rule or regulation to which Company is subject; (b) result in a breach of
or constitute a default under the provisions of any material indenture, loan or
credit agreement or any other agreement, lease or instrument to which Company
may be or is subject or by which it, or its property, is bound; or (c) result
in, or require, the creation or imposition of any mortgage, deed of trust,
assignment, pledge, lien, security interest or other charge or encumbrance of
any nature or with respect to any of the Property other than as provided
therein; and Company is not in default under any such order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument or any law, rule or regulation to which Company is subject.
SECTION 6.4. Approvals. Company has obtained all authorizations,
consents, approvals, licenses, exemptions of or filings or registrations with
all commissions, boards, bureaus, agencies, instrumentalities, trustees, holders
of any indebtedness of Company or any other Person, domestic or foreign,
necessary to the valid execution, delivery and performance by Company of this
Agreement and the other Bond Documents to which Company is a party which are
capable of being obtained on or prior to the Date of Issuance, except as such
may be required under the state securities or Blue Sky laws in connection with
the distribution of the Bonds by the Remarketing Agent. Company is familiar with
all conditions, restrictions, reservations, whether or not of record, statutes,
regulations and ordinances affecting the Property, including, without
limitation, all pollution control, environmental protection, zoning and land use
regulations, building codes and all restrictions and requirements imposed by the
City of Charlotte, North Carolina and all other governmental entities
(collectively, the "Restrictions"), with respect to the Property, the Project
and the construction of the Project and the existing and contemplated use of the
Property. Company has obtained or will timely obtain all permits, approvals,
consents and
15
17
other authorizations necessary under the Restrictions for such construction and
use. As of the date hereof, Company is not aware of any violation or asserted
violation of any Restrictions concerning the Property or the existing or
contemplated use thereof, and further, Company is not aware of any action or
proceeding pending before any court or governmental agency with respect to the
validity of any such Restrictions or any of such authorizations or permit.
SECTION 6.5. Financial Statements. The audited financial statements
of Company for the fiscal years ended in 1993 and 1994, and for the nine months
ending September 30, 1995 and the unaudited financial statements of Company for
the period from October 1, 1995 to December 31, 1995, copies of which have
heretofore been delivered to the Credit Bank, were prepared in accordance with
generally accepted accounting principles consistently applied, are true,
complete and correct in all material respects and fairly the financial position
of Company as of their respective dates, and there have been no material adverse
change in the financial position or operations of Company since the financial
statements were prepared.
SECTION 6.6. Litigation. There is no action, suit, proceeding,
inquiry or investigation at law or in equity or before or by any court, public
board or body pending against or affecting Company or the properties, assets or
operations of Company (a) wherein an unfavorable decision, ruling or finding
could have a materially adverse affect upon: (i) the transactions contemplated
by, or the validity of, this Agreement, the other Bond Documents, or any
agreement or instrument to which Company is a party and which is used or
contemplated for use in the consummation of the transactions contemplated by
this Agreement and the other Bond Documents, (ii) the tax-exempt status of the
interest on the Bonds, or (iii) Company's property, assets, operations or
condition, financial or otherwise, or its ability to perform its obligations in
respect of the Indenture or this Agreement; or (b) which in any way contests the
existence, organization or powers of Company or the titles of the officers of
Company to their respective offices.
SECTION 6.7. Employee Benefit Plans. Company is in compliance in all
material respects with ERISA to the extent applicable to it and has received no
notice to the contrary from the PBGC or any other governmental entity or agency
and no reportable event (as defined in ERISA) which could result in a material
accumulated deficiency under ERISA or a material liability to the PBGC has
occurred and is continuing.
SECTION 6.8. Defaults. No Event of Default or event which with the
passage of time, the giving of notice or both could become an Event of Default
has occurred and is continuing.
SECTION 6.9. Disclosure. The information contained in the Official
Statement under the captions "The Company," "The Project" and "Litigation" is
true and correct, and such information does not contain any untrue statement of
a material fact.
16
18
There are no facts that Company has failed to disclose to the Credit Bank that,
individually or in the aggregate, materially adversely affect, or so far as
Company can foresee, will materially adversely affect, the operations, affairs,
properties, condition (financial or otherwise) or prospects of Company or its
ability to operate the Project and perform under this Agreement and the other
Bond Documents to which it is a party.
SECTION 6.10. Title. The Company holds fee simple title to the
Property.
SECTION 6.11. Reports. All reports and forms required to be filed
with the Internal Revenue Service by Company have been so filed.
SECTION 6.12. Utilities. All utility services necessary for the
construction and operation of the Project are either available within or at the
boundaries of the Property or all necessary steps have been or shall be taken by
Company to assure the complete construction thereof, including, without
limitation, all electrical and telephone facilities, water supply, gas, and
storm and sanitary sewer facilities.
SECTION 6.13. Condemnation. No taking of the Property or any part
thereof through eminent domain, conveyance in lieu thereof, condemnation or
similar proceeding is pending or, to Company's knowledge, threatened by any
governmental agency.
SECTION 6.14. Roads. All roads necessary for the full utilization of
the Project for their intended purpose have been completed.
SECTION 6.15. Brokers. Company has not dealt with any person, firm
or corporation who is or may be entitled to any finder's fee, brokerage
commission, loan commission or other sum in connection with the issuance of the
Letter of Credit pursuant to this Agreement nor the entering into of this
Agreement. Company hereby agrees to indemnify and defend the Credit Bank and
hold the Credit Bank harmless against any and all loss, liability, cost or
expense, including reasonable attorneys' fees, which the Credit Bank may suffer
or sustain should such warranty or representation prove inaccurate in whole or
in part.
SECTION 6.16. Mechanics' Liens. Company shall take whatever actions
may be necessary such that the title insurance policy required to be delivered
to the Credit Bank pursuant to Section 3.1(f) hereof not contain any exceptions
for any mechanics', materialmen's, carriers', warehousemen's or similar liens.
SECTION 6.17. Hazardous Materials. Company is not in violation of
any federal, state or local law, ordinance or regulation relating to
environmental conditions on, under or about the Property, including, but not
limited to, soil and groundwater conditions. Neither Company, nor to Company's
knowledge, any third party, has used, generated, manufactured, refined,
produced, processed, stored or disposed of on, under or about the
17
19
Property or transported to or from the Property any "Hazardous Materials" except
in compliance with applicable law nor does Company intend to use the Property in
the future for the purpose of generating, manufacturing, refining, producing,
storing, handling, transferring, processing or transporting of Hazardous
Materials except cobalt 60. For the purposes hereof, "Hazardous Materials" shall
mean any flammable explosives, radioactive materials, asbestos, organic
compounds known as polychlorinated biphenyls, chemicals known to cause cancer or
reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or related materials, including, without limitation, any substances
defined as or included in the definition of "hazardous substances," "hazardous
materials," or "toxic substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seg.; or the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq.; or any applicable law relating to radioactive and/or nuclear materials or
substances or any applicable North Carolina law; and in the regulations adopted,
published and/or promulgated pursuant to said laws.
ARTICLE 7. AFFIRMATIVE COVENANTS OF COMPANY.
Until the termination of this Agreement and the payment in full to
the Credit Bank of all amounts payable to the Credit Bank hereunder, Company
hereby covenants and agrees that it will:
SECTION 7.1. Reporting Requirements. Furnish to the Credit Bank:
(a) on request, notices of filing of all reports material to the
Project that Company may be required to file with any governmental commission,
department, board, bureau or agency of the Federal, State or local government
relating to the transactions contemplated by the Indenture; and
(b) upon receipt, copies of all Nuclear Regulatory Commission and
Food and Drug Administration reports relating to the Project;
SECTION 7.2. Notices.
(a) Give prompt notice in writing to the Credit Bank of a known
occurrence of an Event of Default or event which with the passage of time, the
giving of notice or both could become an Event of Default, and of any known
development, financial or otherwise, which may be reasonably expected to
adversely affect the ability of Company to perform its obligations as set forth
hereunder or under any of the other Bond Documents, setting forth the details of
and the action Company proposes to take with respect to such event or
development; and
18
20
(b) Give prompt notice in writing to the Credit Bank of any known
pending action, suit or proceeding, relating to the operations or the condition
(financial or otherwise) of the Project or the ability of Company to repay any
debt incurred under this Agreement or the Indenture or which questions the
validity of the Bond Documents.
SECTION 7.3. Payment of Taxes and Other Obligations. From time to
time pay and discharge, or cause to be paid and discharged, all payments in lieu
of taxes, service charges, assessments or other governmental charges which may
lawfully be imposed upon the revenues and income from the Project and will pay
all lawful claims for labor, material and supplies which if unpaid might become
a lien or charge upon the Project, revenues or income or which might impair the
security of the Bonds or the use of the Project revenues or other funds to pay
the principal of and interest thereon, all to the end that the priority and
security of the Bonds and of the Credit Bank shall be preserved; provided that
nothing in this Section 7.3 shall require Company to make any such paymet so
long as it in good faith shall contest the validity thereof and shall have
established adequate reserves with respect thereto.
SECTION 7.4. Preservation of Existence, etc. Preserve and maintain
its existence as a corporation duly incorporated, validly existing and in good
standing in the State of California and duly admitted to conduct business and
operate the Project in North Carolina and its rights, franchises and privileges
material to the conduct of its business and to the performance of in obligations
under this Agreement and the Bond Documents to which it is a party, and will not
dissolve.
SECTION 7.5. Compliance with Laws, etc. Comply with the requirements
of all applicable laws, rules, regulations and orders of any governmental
authority, noncompliance with which would, singly or in the aggregate,
materially and adversely affect its ability to complete or operate the Project
or perform under this Agreement or any other Bond Documents to which Company is
a party, unless the same shall be contested by it in good faith and by
appropriate proceedings which shall operate to stay the enforcement thereof.
SECTION 7.6. Inspection Rights. At any reasonable time and from time
to time upon three (3) days' prior written notice, permit the Credit Bank or any
agents or representatives thereof to examine and make copies of the records and
books of account related to the transactions contemplated by this Agreement, and
at any reasonable time to visit the Project and to discuss its affairs, finances
and accounts with Company and its independent accountants.
SECTION 7.7. Keeping of Records and Books of Account. Keep or cause
to be kept proper and current books and accounts (separate from all other
records and accounts) in which complete and accurate entries shall be made of
all transactions relating to the Project and the Revenues and other funds
provided for in the Loan Agreement, and will prepare and furnish to the Credit
Bank the financial statements required under Section 7. 1.
19
21
SECTION 7.8. Maintenance of Approvals, Filings and Registrations. At
all times maintain in effect, renew and comply with all the terms and conditions
of all consents, licenses, approvals and authorizations as may be necessary or
appropriate under any applicable law or regulation for the execution, delivery
and performance of this Agreement and the other Bond Documents to which Company
is a party, and to make this Agreement and such other Bond Documents its legal,
valid, binding and enforceable obligations, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally, to general equitable principles which may limit the right
to obtain equitable remedies and to provisions of applicable California or North
Carolina law.
SECTION 7.9. Maintenance and Operation of the Project.
(a) Subject to applicable requirements and restrictions imposed, and
to the extent permitted, by law, operate or cause to operate the Project in the
manner described in the Official Statement.
(b) To the extent material to the transactions contemplated herein
or in the Bond Documents, operate and maintain or cause to operate and maintain
the Project in accordance with all applicable governmental laws, ordinances,
approvals, rules, regulations and requirements including, without limitation,
such zoning, sanitary, pollution and safety ordinances and laws and such rules
and regulations thereunder as may be binding upon Company. Company further
covenants and agrees that it will cause to be maintained and operated all
engines, boilers, pumps, machinery, apparatus, fixtures, fittings and equipment
of any kind in, or that shall be placed in any building or structure now or
hereafter at any time constituting part of the Project in good repair, working
order and condition, except such property or equipment as is no longer being
utilized by Company, and that it will from time to time make or cause to be made
all necessary and proper replacements, repairs, renewals and improvements so
that the efficiency and value of the Project shall not be impaired.
SECTION 7.10. Insurance and Performance Bonds Required. Maintain, in
accordance with the provisions hereof and of the Deed of Trust, insurance on the
Project with responsible and reputable insurance companies and associations
which are acceptable to the Credit Bank, including, without limitation, public
liability, property damage, hurricane, fire and extended coverage insurance,
title insurance, business and rental interruption insurance including
interruption due to earthquake; provided that such property damage, fire and
extended coverage and earthquake insurance and title insurance shall each be
maintained in an amount not less than the greater of the aggregate principal
amount of the Bonds or the full insurable replacement value of the Project (the
term "full insurable replacement value" as used herein shall mean the cost to
repair or replace the Project and any portion thereof with property of like kind
and quality, without deduction for depreciation). All such policies shall name
Company, the Credit Bank and the Trustee as insured parties, beneficiaries or
loss payees as their interest may appear. Each policy shall contain a provision
to the effect that the insurer shall not cancel or substantially modify the
policy provisions without first
20
22
giving 30 days' advance written notice thereof to Company, the Trustee and the
Credit Bank. At least once during each 12-month period, commencing on the Date
of Issuance, Company shall file with the Trustee and the Credit Bank a
certificate setting forth the policies of insurance maintained pursuant to this
Agreement and the Deed of Trust, the names of the insurers and insured parties,
the amounts of such insurance and applicable deductibles, the risks covered
thereby and the expiration dates thereof.
SECTION 7.11. ERISA. Promptly pay and discharge all obligations and
liabilities, applicable to Company, arising under ERISA of a character which if
unpaid or unperformed might result in the imposition of a lien against any of
its properties or assets and promptly notify the Credit Bank of the occurrence
of any reportable event (as defined in ERISA) which might result in the
termination by the PBGC of any Plan or of receipt of any notice from PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor.
Company will notify the Credit Bank of its intention to terminate or withdraw
from any Plan and will not terminate any such Plan or withdraw therefrom unless
it shall be in compliance with all of the terms and conditions of this Agreement
after giving effect to any liability to PBGC resulting from such termination or
withdrawal.
SECTION 7.12. Bond Proceeds, Additional Funds. Cause the proceeds of
the Bonds to be used for the purposes set forth in the Indenture and the Loan
Agreement and make any necessary deposit into the funds and accounts established
under and referred to in the Indenture and the Loan Agreement.
SECTION 7.13. Further Assurances. Execute and deliver to the Credit
Bank all such documents and instruments and do all such other acts and things as
may be necessary or required by the Credit Bank to enable the Credit Bank to
exercise and enforce its rights under this Agreement and to realize thereon, and
record and file and re-record and re-file all such documents and instruments, at
such time or times, in such manner and at such place or places, all as may be
necessary or required by the Credit Bank to validate, preserve and protect the
position of the Credit Bank under this Agreement.
ARTICLE 8. NEGATIVE COVENANTS OF COMPANY.
Until the termination of this Agreement and the payment in full to
the Credit Bank of all amounts payable to the Credit Bank hereunder, Company
hereby covenants and agrees that, without the prior written consent of the
Credit Bank, Company will not directly or indirectly:
SECTION 8.1. Additional Indebtedness. Issue any other obligations
payable, with respect to principal or interest, from the revenues of the Project
which have, or purport to have, any lien upon the revenues of the Project
superior to or on a parity with the lien of the Credit Bank and the Trustee for
the Bonds; provided, however, that nothing in this covenant shall prevent
Company from issuing and selling pursuant to law refunding bonds or
21
23
other refunding obligations payable from and having a first lien upon the
revenues of the Project if such refunding certificates or other refunding
obligations are issued for the purpose of, and are sufficient for the purpose
of, prepaying all of the Bonds authorized by the Indenture and then outstanding.
SECTION 8.2. Limitation on Encumbrances on the Project. Create,
assume or suffer to exist any mortgage, deed of trust, pledge, security
interest, encumbrance, lien or charge of any kind (including the charge upon
property purchased under conditional sales or other title retention agreements)
(a "security interest") upon the Project, unless the obligations of Company
under this Agreement shall be secured prior to any indebtedness or other
obligation secured by such security interest and Company further covenants and
agrees that if such a security interest is created or assumed by Company, it
will make or cause to be made effective a provision whereby the obligation of
Company under this Agreement will be secured prior to such indebtedness or other
obligation secured by such security interest; provided, however, that
notwithstanding the foregoing provisions and without securing obligations of
Company under this Agreement, Company may create, suffer or assume Permitted
Encumbrances.
SECTION 8.3. Amendments. Amend, modify, terminate, grant or waive,
or permit the amendment, modification, termination or grant of, or any waiver
under (or consent to, or permit or suffer to occur any action or omission which
results in, or is equivalent to, an amendment, modification, or grant of a
waiver under) the Bond Documents or the resolutions adopted by Company on
February 23, 1996 authorizing the delivery of the agreements to be entered into
by Company relating to the issuance of the Letter of Credit and the Bonds.
SECTION 8.4. Official Statement. Make any changes in reference to
the Credit Bank in any revision or amendment of the Official Statement.
SECTION 8.5. Arbitrage. Use, or permit the use of, the proceeds of
any Bond in any manner that would have caused the Bonds, at the time of issuance
thereof, to be "arbitrage bonds" within the meaning of Section 148 of the Code.
SECTION 8.6. Prohibited Uses. Use any of the properties financed or
refinanced out of any proceeds of the Bonds or suffer or permit such properties,
to be used in any manner or take any action or omit to take any action which
would adversely affect the tax exempt status of interest on the Bonds.
SECTION 8.7. Prohibition on Sale of Assets. Sell, lease, assign,
transfer or otherwise dispose of any of the Project property or assets whether
now owned or acquired in the future, except (a) obsolete or worn out property or
equipment no longer necessary in the ordinary course of the Project's business,
or (b) property disposed of in the ordinary course of the Project's business for
adequate consideration.
22
24
ARTICLE 9. DEFAULT AND REMEDIES.
SECTION 9.1. Events of Default. Each of the following events shall,
at the option of the Credit Bank, constitute an "Event of Default" under this
Agreement:
(a) the occurrence of any event which constitutes an "Event of
Default" under the Indenture, the Security Agreement, the Guaranty, the
Environmental Indemnity or the Deed of Trust; or
(b) the failure by Company to pay any amount payable hereunder
within three (3) Business Days following the due date of such amount; or
(c) the failure by Company to perform or observe any other term,
covenant or agreement contained in this Agreement, provided that the failure of
Company to perform such covenants (other than as provided in subsections (a) and
(b) of this Section 9.1 and other than the covenants set forth in Article 8
hereof) shall not be deemed an Event of Default if Company is diligently
proceeding to cure such nonperformance; provided, however, that such cure shall
have been achieved, in any event, no later than thirty (30) days after written
notice given to Company by the Credit Bank; or
(d) any warranty, representation or other written statement made by
or on behalf of Company contained in this Agreement, or in any Bond Document or
in any instrument furnished in compliance with or in reference to any of the
foregoing, is false or misleading in any material respect on any date as of
which made, and such falsity or misleading statement materially and adversely
affects the Project, the Property or Company, or its ability to or perform under
this Agreement, the Environmental Indemnity, the Deed of Trust or any other Bond
Documents to which Company is a party; or
(e) Company makes an assignment for the benefit of creditors, files
a petition in bankruptcy, is unable generally to pay its debts as they come due,
is adjudicated insolvent or bankrupt or there is entered any order or decree
granting relief in any involuntary case commenced against Company under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or if Company petitions or applies to any tribunal for any receiver,
trustee, liquidator, assignee, custodian, sequestrator or other similar official
of Company or of any substantial part of its properties, or commences any
proceeding in a court of law for a reorganization, readjustment of debt,
dissolution, liquidation or other similar procedure under the law or statutes of
any jurisdiction, whether now or hereafter in effect, or if there is commenced
against Company any such proceeding in a court of law which remains undismissed
or shall not be discharged, vacated or stayed, or such jurisdiction shall not be
relinquished, within sixty (60) days after commencement; or
(f) Company by any act, indicates its consent to, approval of, or
acquiescence in any such proceeding in a court of law, or to an order for relief
in an
23
25
involuntary case commenced against Company under any such law, or to the
appointment of any receiver, trustee, liquidator, assignee, custodian,
sequestrator or other similar official for Company, or if Company suffers any
such receivership, trusteeship, liquidation, assignment, custodianship,
sequestration or other similar procedure to continue undischarged for a period
of sixty (60) days after commencement or if Company takes any action for the
purposes of effecting the foregoing; or
(g) any material provision of this Agreement, the Security
Agreement, the Deed of Trust, the Guaranty, the Environmental Indemnity or of
any of the Bond Documents shall cease to be valid and binding, or Company or any
governmental authority shall contest any such provision, or Company, or any
agent or trustee on behalf of Company, shall deny that it has any or further
liability under this Agreement, the Environmental Indemnity, the Deed of Trust,
or any of the Bond Documents; or
(h) final judgment for the payment of money in excess of an
aggregate of $100,000 related to the Project and not fully covered by insurance
shall be rendered against Company and the same shall remain undischarged for a
period of thirty (30) consecutive days during which execution shall not be
effectively stayed or for the payment of which a surety bond or other adequate
security has not been obtained in the judgment of the Credit Bank; or
(i) any reportable event (as defined in ERISA) which the Credit Bank
determines in good faith constitutes grounds for the termination of any Plan of
Company or for the appointment by the appropriate United States District Court
of a trustee to administer or liquidate any such Plan, shall have occurred and
be continuing thirty (30) days after written notice to such effect shall have
been given to Company by the Credit Bank; or any such Plan shall be terminated;
or a trustee shall be appointed by the appropriate United States District Court
to administer any such Plan; or the PBGC shall institute proceedings to
administer or terminate any such Plan; and in the case of any such event the
aggregate amount of vested unfunded liabilities under such Plan shall exceed
(either singly or in the aggregate in the case of any such liability arising
under more than one such Plan) 5% of the total assets of Company; or
(j) the failure of any Bonds to be remarketed within 60 days of the
date of a Purchase Drawing.
SECTION 9.2. Remedies. Upon the occurrence of an Event of Default
pursuant to Section 9.1(e) or (f), all amounts payable by Company under this
Agreement shall become due and payable, in each case automatically and
immediately without any presentment, demand, protest or other notice or
formality of any kind (all of which are expressly waived). Upon the occurrence
of an Event of Default (other than pursuant to Section 9.1(e) or (f)) the Credit
Bank may, by notice to Company, declare all amounts payable by Company under
this Agreement to be immediately due and payable (and the same shall upon such
notice become immediately due and payable), in each case without any
24
26
presentment, demand, protest or other notice or formality of any kind. Upon any
such occurrence, the Credit Bank may, in addition, (a) exercise of all of its
rights and remedies under any other Bond Document or applicable law or (b)
exercise all or any combination of the remedies provided for in this Section
9.2.
ARTICLE 10. CONTINUING OBLIGATION.
This Agreement is a continuing obligation of Company and shall,
until the later of the Expiration Date or the date upon which all amounts due
and owing to the Credit Bank hereunder shall have been fully and finally paid,
be binding upon Company, its successors and assigns, and inure to the benefit of
and be enforceable by the Credit Bank and its successors, transferees and
assigns; provided, that Company may not assign all or any part of this Agreement
without the prior written consent of the Credit Bank.
ARTICLE 11. LIMITED LIABILITY OF THE CREDIT BANK.
Company hereby assumes all risks of the acts, omissions or misuse of
the Letter of Credit by the Trustee or any successor thereto. Neither the Credit
Bank nor any of its officers, directors or agents shall be liable or
responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of, or the making of a Drawing under, the Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign the Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the Trustee to comply fully
with the conditions required in order to effect a Drawing; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; (v) for any loss or delay in the
transmission or otherwise of any Bond, document or draft required in order to
make a Drawing; or (vi) for any consequences arising from causes beyond the
control of the Credit Bank; provided, however, that Company shall have a claim
against the Credit Bank, and the Credit Bank shall be liable to Company, to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by Company which Company proves were proximately caused by (x)
the Credit Bank's willful misconduct or gross negligence in determining whether
documents presented under the Letter of Credit comply with the terms of the
Letter of Credit or (y) the Credit Bank's willful failure to pay under the
Letter of Credit after the presentation to it by the Trustee of a draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. None of the above shall affect, impair, or prevent the vesting of any of
the Credit Bank's rights or powers hereunder.
In furtherance and extension, and not in limitation, of the specific
provisions hereinabove set forth, any action taken or omitted by the Credit Bank
under or in connection
25
27
with the Letter of Credit or any related Bond Documents or other documents, if
taken or omitted in good faith, shall be binding upon Company and shall not put
the Credit Bank under any resulting liability to Company.
ARTICLE 12. MISCELLANEOUS.
SECTION 12.1. Amendments, Nonwaiver and Remedies. This Agreement may
be amended only upon the written agreement of Company and the Credit Bank, and
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if Company shall first obtain the written
consent of the Credit Bank. No course of dealing between Company and the Credit
Bank, nor any delay in exercising any rights hereunder, shall operate as a
waiver of any rights of the Credit Bank hereunder. No single or partial exercise
of any right under this Agreement shall preclude any other further exercise of
such right or the exercise of any other right. The Credit Bank may remedy any
default by Company hereunder or with respect to any other person, firm or
corporation in a reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by Company. The remedies
provided in this Agreement are cumulative and not exclusive of any remedies
provided by law.
SECTION 12.2. Survival of Representations and Warranties. All
agreements, representations and warranties of Company contained in this
Agreement and in any Bond Documents delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the issuance of the Letter of
Credit hereunder, and the agreements contained in Article 4 and Section 12.3
hereof shall survive payment of the Bonds, the reimbursement to the Credit Bank
of any payments or disbursements under the Letter of Credit and the termination
of this Agreement.
SECTION 12.3. Expenses. Whether or not the transactions contemplated
by this Agreement are consummated or the Letter of Credit is issued, Company
agrees to pay on demand, all reasonable costs and expenses of the Credit Bank
including, without limitation, the fees and expenses of Special Counsel in
connection with the preparation, issuance or delivery, as the case may be, of
the Letter of Credit, this Agreement, the other Bond Documents and any other
documents which may be delivered in connection with any of the foregoing. In
addition, Company agrees to pay on demand all costs and expenses of the Credit
Bank (including reasonable counsel fees and expenses) in connection with (i) the
filing, recording, administration, transfer, amendment, maintenance, renewal or
cancellation of the Letter of Credit, this Agreement or the other Bond
Documents, (ii) any payment by the Credit Bank under the Letter of Credit, or
(iii) any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of the
Letter of Credit, this Agreement or the other Bond Documents, and any other
documents which may be delivered in connection with this Agreement. In addition,
Company agrees to pay promptly all costs and expenses of the Credit Bank for (i)
any and all amounts which the Credit Bank has paid relating to the Credit Bank's
curing of any Event of
26
28
Default under this Agreement or any of the other Bond Documents, (ii) the
enforcement of this Agreement or any of the other Bond Documents, or (iii) any
action or proceeding relating to a court order, injunction, or other process or
decree restraining or seeking to restrain the Credit Bank from paying any amount
under the Letter of Credit on the presentation of drafts and other documents in
connection with the same. Company agrees to save the Credit Bank harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay any taxes and fees to the extent Company is
obligated to pay the same under this Section 12.3.
SECTION 12.4. Waiver of Right of Set-off and Limitation on Credit
Bank Collateral.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Credit Bank is hereby authorized at any time and from time to time,
without notice to Company (any such notice being expressly waived by Company)
and to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Credit Bank to or for the
credit of the account of Company against any and all of the obligations of
Company now or hereafter existing under this Agreement, irrespective of whether
or not the Credit Bank shall have made any demand hereunder.
(b) The Credit Bank agrees promptly to notify Company after any such
set-off and application; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Credit
Bank under this Section 12.4 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Credit Bank
may have.
SECTION 12.5. Notices. All notices, requests and other
communications hereunder shall be in written form (including bank wire,
telegram, facsimile, telex or similar writing) and shall be given to the party
to whom addressed, at its address, facsimile or telex number set forth below, or
such other address, facsimile or telex number as such party may hereafter
specify for the purpose by notice to the other parties listed below. Each such
notice, request or communication shall be effective (i) if given by telex,
facsimile or other electronic means, when such communication is transmitted to
the address specified below and the appropriate answer back is received, (ii) if
given by mail, three days after such communication is deposited in the United
States mail with postage prepaid by registered or certified mail, return receipt
requested, addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified below. All notices given by telex, facsimile
or other electronic means shall be confirmed in writing as promptly as
practicable.
27
29
If to Company:
SteriGenics International
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President-Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to counsel:
Xxxx, Xxxx, Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Credit Bank:
Comerica Bank-California
000 Xxxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Commercial Real Estate Loan
Operations- Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to counsel:
Manatt, Xxxxxx & Xxxxxxxx
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 12.6. Participation. The Credit Bank may at any time arrange
for other banking institutions of the Credit Bank's choosing ("Participants") to
participate in all or any portion of the Credit Bank's obligations, under the
Letter of Credit, of the obligations of Company evidenced hereby and by the
Bonds which may be held by the Credit Bank or its nominee ("Participations").
Without in any way limiting the right of the Participants hereunder, Company
agrees that the Participants shall be entitled to (i) receive copies of all
documents furnished to the Credit Bank pursuant to Section 7.1 hereof (at such
addresses as
28
30
the Credit Bank shall designate from time to time to Company) and (ii) receive
the benefits of Sections 2.7 and 2.8 hereof to the extent of their respective
Participations. Notwithstanding the Credit Bank's granting of any
Participations, Company shall have the right to continue dealing solely with the
Credit Bank and agents of the Credit Bank which have been appointed in writing
(as to the appointment of which Company has received written notice). No
Participant shall enter into any reimbursement or other similar agreement with
Company with respect to the Letter of Credit, this Agreement or the Bonds.
SECTION 12.7. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to the Credit Bank, the
determination of such satisfaction shall be made by the Credit Bank in its sole
and exclusive judgment exercised in good faith.
SECTION 12.8. Uniform Customs and Practices. This Agreement and the
Letter of Credit shall be subject to the Uniform Customs and Practice (a copy of
which is available upon request), and, in the event any provision of the Uniform
Customs and Practice is or is construed to vary from or be in conflict with any
provision of the California Uniform
29
31
Commercial Code, as from time to time amended and in force (the "Commercial
Code"), the Uniform Customs and Practice shall prevail. In addition to other
rights of the Credit Bank hereunder or under application for the Letter of
Credit, any action, inaction or omission taken or suffered by the Credit Bank,
or by any of its correspondents, under or in connection with the Letter of
Credit or the relative instruments, documents, or property, if in good faith and
in conformity with such foreign or domestic laws, regulation, or customs as the
Credit Bank or any of its correspondents may deem to be applicable thereto,
shall be binding upon the Company and shall not place the Credit Bank or any of
its correspondents under any liability to the Company.
SECTION 12.9. Governing Law. This Agreement and the Letter of Credit
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of California, without giving
effect to conflicts of law principles. The parties hereby waive, to the fullest
extent permitted by law, any rights they may have to a jury trial.
SECTION 12.10. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
SECTION 12.11. Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and year first above written.
STERIGENICS INTERNATIONAL
By /s/ Xxxxxx X. Xxxxxx Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
------------------------------
Title: Vice President Finance
-----------------------------
30
32
COMERICA BANK-CALIFORNIA
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
31
