EXHIBIT 10.16
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of the 1st day of August, 2002, by
and between ANGIODYNAMICS, INC., a corporation organized and existing under the
laws of the State of Delaware, having a place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (the "Company") and KEYBANK NATIONAL
ASSOCIATION, a national banking association, having an office at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "Bank").
WHEREAS, the Counties of Xxxxxx and Washington Industrial Development
Agency (the "Agency") intends to issue its Tax-Exempt Multi-Mode Variable Rate
Industrial Development Revenue Bonds (Angiodynamics, Inc. Project-Letter of
Credit Secured) Series 2002 in the amount of $3,500,000.00 (the "Bonds"), and
make available the proceeds of the Bonds to the Company as agent of the Agency
to finance costs of the Project, (as defined in the Indenture [as hereinafter
defined]); and
WHEREAS, the Bonds are to be issued pursuant to an Indenture of Trust,
dated as of August 1, 2002, by and between Agency and The Huntington National
Bank, Cleveland, Ohio, as Trustee (the "Trustee") (as amended or supplemented
from time to time, the "Indenture"); and
WHEREAS, in connection therewith Bank is about to issue its irrevocable
transferable direct pay letter of credit (the "Letter of Credit") in favor of
Trustee; and
WHEREAS, the proceeds of the Bonds are to be advanced pursuant to a certain
Building Loan Agreement, dated as of August 1, 2002, by and among the Agency,
the Trustee, the Bank and Company (as amended or supplemented from time to time,
the "Building Loan Agreement; and
WHEREAS, the Premises (as hereinafter defined) are to be sold to Company on
an installment sale basis pursuant to an Installment Sale Agreement, dated as of
August 1, 2002, by and between the Agency and Company (as amended or
supplemented from time to time, the "Installment Sale Agreement"); and
WHEREAS, it is the purpose of this Reimbursement Agreement to set forth the
Bank's commitment to issue the Letter of Credit and Company's agreement to
reimburse Bank for any and all payments made by Bank pursuant to the Letter of
Credit and to otherwise set forth Bank's and Company's respective duties,
covenants and agreements in respect of the Letter of Credit.
NOW THEREFORE, in consideration of the mutual agreements made herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
SECTION ONE
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DEFINITIONS
Section 1.1. Terms Defined. As used in this Reimbursement Agreement, the
following terms have the following respective meanings. Any accounting term used
but not specifically defined herein shall be construed in accordance with GAAP
(as hereinafter defined). The definition of each agreement, document, and
instrument set forth in this Section 1.1 shall be deemed to mean and include
such agreement, document, or instrument as amended, restated, or modified from
time to time:
"Agency" shall mean the Counties of Xxxxxx and Washington Industrial
Development Agency, a corporate governmental agency constituting a body
corporate and politic and a public benefit corporation duly organized and
existing under the laws of the state of New York, and it successors or assigns.
"Affiliate" shall mean, with respect to any Person, any other Person
directly controlling, controlled by or under direct or indirect common control
with such Person. A Person shall be deemed to control a second Person if such
first Person possesses, directly or indirectly, the power to (i) vote 10% or
more of the securities having ordinary voting power for the directors or
managers of such second Person or (ii) direct or cause the direction of the
management and policies of such second Person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the foregoing, (x)
a director, officer, or employee of a Person shall not, solely by reason of such
status, be considered an Affiliate of such Person and (y) the Bank shall not be
considered an Affiliate of the Company.
"Amortization Expense" shall mean, for any period, all amortization
expenses of the Company, calculated in accordance with GAAP.
"Architect" shall mean, whether individually or collectively, any and all
architects performing architectural services in connection with the Project.
"Assignment of Contracts" shall mean the assignment of contracts, dated as
of August 1, 2002, by Company in favor of Bank, as said assignment of contracts
may be amended or supplemented from time to time.
"Bond Counsel" shall mean Bond, Xxxxxxxxx & Xxxx, PLLC, or any other
nationally recognized Bond Counsel reasonably acceptable to Bank.
"Bond Documents" shall mean the Indenture and any other document executed
by Company in connection with the issuance and sale of the Bonds (other than the
Credit Documents).
"Bonds" shall mean, whether individually or collectively, the $3,500,000.00
in aggregate principal amount of Tax Exempt Multi-Mode Variable Rate Industrial
Development Revenue Bonds (Angiodynamics, Inc. Project-Letter of Credit
Secured), Series 2002.
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"Bond Pledge" shall mean the pledge and security agreement, dated as of
August 1, 2002, by and among Company, the Trustee and Bank, as said pledge and
security agreement may be amended or supplemented from time to time.
"Building Loan Agreement" shall mean the building loan agreement, dated as
of August 1, 2002, by and between the Company and the Bank, as said building
loan agreement may be amended or supplemented from time to time.
"Business Day" shall mean any day of the year other than (i) a Saturday or
Sunday, (ii) any day on which commercial banks located in Cleveland, Ohio, or
the city or cities in which are located the corporate trust offices of the
Trustee and the Tender Agent and the office of Bank at which demands for payment
under the Letter of Credit are to be presented are authorized by law to close,
or (iii) any day on which the New York Stock Exchange is closed.
"Cash Interest Expense" shall mean for any period, Interest Expense,
reduced by any amount included therein which is "paid-in-kind" through an
increase to principal or the issuance of an additional debt security in a
principal amount equal to such interest.
"Closing Date" shall mean August 29, 2002, or such other date agreed upon
by Company and Bank.
"Change Order Amount" means $15,000.00.
"Completion Date" shall have the meaning set forth in the Indenture.
"Construction Contract" shall mean, whether individually or collectively,
any and all contracts, whether now existing or hereafter entered into, for the
construction of the Facility between Company and Contractor, as approved, in
writing, by Bank.
Construction Inspector" shall mean, at Bank's option, either an officer or
employee of Bank or consulting architects, engineers or inspectors appointed by
Bank.
"Contractor" shall mean, whether individually or collectively, any and all
contractors performing work at the Project pursuant to the Construction
Contract, all as approved, in writing, by Bank.
"Credit" shall have the meaning set forth in Section 8.1(b) hereof.
"Credit Documents" shall mean, whether individually or collectively, this
Reimbursement Agreement, the Mortgage, the Building Loan Agreement, any
agreement between Company and Bank, or any affiliate of Bank, with regard to the
interest payable upon any obligation, whether direct or contingent, of Company
to Bank, or any affiliate of Bank (whether individually or collectively, the
"Swap Documentation"), the Bond Pledge, the Security Agreement, the Assignment
of Contracts, the Indemnity Agreement and any other document now or hereafter
executed by Company in favor of Bank or any affiliate thereof which affects the
rights of Bank in or to the Project, in whole or in part, or which evidences,
secures or guarantees any sum due under any Credit Document or any other
obligation arising pursuant to any Credit Document.
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"Date of Issuance" shall mean the date of issuance of the Letter of Credit.
"Default Rate" shall mean an interest rate per annum equal to five percent
(5%) in excess of the Prime Rate, with each change in the Prime Rate
automatically changing the Default Rate.
"Depreciation Expense' shall mean, for any period, all depreciation
expenses of the Company, calculated in accordance with GAAP.
"Determination of Taxability" shall have the meaning assigned thereto in
the Indenture.
"EBIT" shall mean, for any period, Net Income for such period, plus the sum
of the amounts for such period included in determining such Net Income of (i)
Interest Expense and (ii) Income Tax Expense, calculated in accordance with
GAAP.
"EBITDA" shall mean, for any period, EBIT for such period, plus the sum
(without duplication) of the amounts for such period included in determining
EBIT of (i) Depreciation Expense, and (ii) Amortization Expense, calculated in
accordance with GAAP.
"Environmental Law" shall mean any federal, state, or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability upon a Person in connection with the use, release or disposal
of any hazardous toxic or dangerous substance, waste or material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, and all regulations
thereunder.
"Event of Default" shall have the meaning assigned thereto in Section 7
hereof.
"Expiration Date" shall mean August 22, 2005, subject to extension as
provided in Section 2.5 herein.
"Facility" shall have the meaning assigned to such term in the Indenture.
"Fee Calculation Amount" shall have the meaning set forth in Section
2.2(b).
"Fixed Charge Ratio" shall mean the ratio of the Company's (i) EBITDA plus
lease expense less other income less Unfunded Capital Expenditures less cash
taxes paid less dividends and distributions to (ii) current maturities of long
term debt plus current portion of long term leases plus Cash Interest Expense
paid on loans and leases plus lease expense, calculated in accordance with GAAP.
"Funded Debt Ratio" shall mean the ratio of the Company's (i) total funded
Indebtedness to (ii) EBITDA less Unfunded Capital Expenditures, calculated in
accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied.
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"Income Tax Expense" shall mean, for any period, all provisions for taxes
based upon Net Income (including, without limitation, any additions to such
taxes, any penalties and interest with respect thereto), calculated in
accordance with GAAP.
"Indebtedness" shall mean, at a particular date, all indebtedness for money
borrowed or for the deferred purchase price of property and lease obligations of
Company which have been, or which in accordance with Statement of Financial
Accounting Standards No. 13, as from time to time amended, should be,
capitalized.
"Indemnity Agreement" shall mean the environmental compliance and
indemnification agreement, dated as of August 1, 2002, by Company in favor of
Bank, as said environmental compliance and indemnification agreement may be
amended or supplemented from time to time.
"Indenture" shall mean the indenture of trust, dated as of August 1, 2002,
between the Agency and the Trustee, as said indenture of trust may be amended or
supplemented from time to time.
"Indenture Default" shall mean an Event of Default under and pursuant to
the Indenture.
"Interest Commitment" shall have the respective meaning set forth in the
Letter of Credit.
"Interest Coverage Ratio" shall mean the ratio of the Company's (i) EBIT to
(ii) Cash Interest Expense, calculated in accordance with GAAP.
"Interest Coverage Requirement" shall mean an amount equal to (i) ninety
eight (98) days' accrued interest at the Maximum Rate on the outstanding
principal amount of the Bonds to enable the Trustee to pay the interest on the
Bonds when due and (ii) an amount equal to the interest portion, if any, of the
purchase price of any Bonds tendered for purchase by the holder thereof to the
extent remarketing proceeds are not available for such purposes.
"Interest Drawing" shall have the respective meaning set forth in the
Letter of Credit.
"Interest Expense" shall mean, for any period, total interest expense
(including that which is capitalized, that which is attributable to capital
leases and the pre-tax equivalent of dividends payable on redeemable stock) with
respect to all outstanding Indebtedness including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under any hedging agreements.
"Letter of Credit" shall mean the Letter of Credit to be issued by Bank on
the Closing Date pursuant to this Reimbursement Agreement, the Letter of Credit
to be substantially in the forms of Exhibit A hereto.
"Letter of Credit Commitment" shall have the respective meaning set forth
in the Letter of Credit.
"Maximum Rate" shall mean, as applicable, the interest rate per annum of
eight percent (8.00%).
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"Mortgage" shall mean the mortgage and security agreement dated as of
August 1, 2002 from the Agency and the Company in favor of the Bank, as said
mortgage and security agreement may be amended or supplemented from time to
time.
"Net Income" shall mean, for any period, the net income (or loss), without
deduction for minority interests, for such period taken as a single accounting
period and calculated in accordance with GAAP.
"Permitted Encumbrances" shall mean, with respect to the Pledged
Collateral, as of any particular time, (a) liens for ad valorem taxes and
special assessments not then delinquent, (b) this Reimbursement Agreement, the
Mortgage, the Bond Pledge, the Security Agreement and any security interest or
other lien created thereby, (c) any Permitted Encumbrances defined in any of the
Credit Documents, (d) any liens permitted by Section 6.8 hereof, and (e) such
minor defects, irregularities, encumbrances, clouds on title and to-be-created
utility easements necessary for operation of the Project Facility as normally
exist with respect to property similar in character to the Pledged Collateral
and as do not materially interfere with or impair the use or value of the
property affected thereby.
"Person" shall mean any natural person, corporation (which shall be deemed
to include business trust), association, partnership, political entity, or
political subdivision thereof.
"Plan" shall mean any plan defined in Section 4021(a) of ERISA in respect
of which Company or any Subsidiary of Company is an "employer" or a "substantial
employer" as defined in Sections 3(5) and 4001(a)(2) of ERISA, respectively.
"Plans and Specifications" shall mean the plans and specifications for the
Project approved by Bank.
"Pledged Collateral" shall mean the collateral in which Company has given
Bank a lien or security interest pursuant to the Mortgage, the Security
Agreement, the Assignment of Contracts and/or the Bond Pledge and/or any other
Credit Document.
"Premises" shall mean the real property located in the Town of Queensbury,
Xxxxxx County, New York made subject to, and more fully described in the
Mortgage.
"Prime Rate" shall mean that interest rate established from time to time by
Bank as Bank's Prime Rate, whether or not such rate is publicly announced. The
Prime Rate may not be the lowest rate charged by Bank for commercial or other
extensions of credit.
"Principal Commitment" shall have the meaning set forth in the Letter of
Credit.
"Principal Drawing" shall have the meaning set forth in the Letter of
Credit.
"Project" shall have the meaning assigned to such term in the Indenture.
"Project Facility" shall have the meaning assigned to such term in the
Indenture.
"Project Fund" shall have the meaning assigned thereto in the Indenture.
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"Purchaser" shall mean the original purchaser or purchasers of the Bonds.
"Qualified Investments" shall have the meaning assigned thereto in the
Indenture.
"Remarketing Agent" shall mean McDonald Investments Inc., Cleveland, Ohio,
and such other Person hereafter performing the duties of the Remarketing Agent
pursuant to the Indenture.
"Remarketing Drawing" shall have the meaning set forth in the Letter of
Credit.
"Reportable Event" shall mean any reportable event as that term is defined
in ERISA.
"Security Agreement" shall mean the security agreement, dated as of August
1, 2002, by Company to Bank, as said security agreement may be amended or
supplemented from time to time.
"Subsidiary" or "Subsidiaries" shall mean (i) any corporation more than
fifty percent (50%) of the capital stock of which is owned or controlled,
directly or indirectly, by Company or any Subsidiary and whose accounts are
required to be consolidated with those of Company in accordance with GAAP,
consistently applied; and (ii) any non-profit corporation which is controlled,
directly or indirectly, by Company.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policy" shall mean the title policy to be issued by the Title
Company, with respect to the Mortgage.
"Total Debt" shall mean the total of all items of Indebtedness or liability
which in accordance with GAAP would be included in determining total liabilities
on the liability side of the balance sheet as of the date of determination.
"Trustee" shall mean The Huntington National Bank, or any successor Trustee
under the Indenture.
"Unfunded Capital Expenditures" shall mean total capital expenditures minus
any corresponding increase in long-term debt or leases, calculated in accordance
with GAAP.
SECTION TWO
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ISSUANCE OF LETTER OF CREDIT
Section 2.1. Issuance of Letter of Credit. Subject to the terms and
conditions hereof, Bank agrees to execute and deliver the Letter of Credit. The
obligations of Bank under the Letter of Credit shall be absolute and irrevocable
and shall be performed strictly in accordance with the terms of the Letter of
Credit and this Reimbursement Agreement.
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Section 2.2. Fees and Reimbursement.
(a) Company hereby agrees to pay to Bank:
(i) Before 2:00 p.m., New York time, on each date that any amount
is drawn under the Letter of Credit pursuant to a Principal
Drawing or an Interest Drawing, Company shall pay a sum equal
to the amount so drawn under the Letter of Credit plus (x)
interest accrued, if any, on the amount so drawn under the
Letter of Credit as determined by clause (iv) of this
subsection (a) of this Section 2.2, plus (y) any and all
charges and expenses which Bank may pay or incur relative to
such drawing under the Letter of Credit, plus (z) a fee in the
amount of Two Hundred Dollars ($200.00) for that drawing under
the Letter of Credit;
(ii) Upon a Remarketing Drawing under the Letter of Credit, provided
there is then no uncured Event of Default, Company shall have
until the Expiration Date to reimburse Bank for the amount of
the Remarketing Drawing, subject to the right of Bank to
require redemption of the Bonds pursuant to Section 7.2 hereof.
Any amounts received by Bank from the remarketing of Bonds
purchased out of a Remarketing Drawing and registered to Bank
or, at the direction of Bank, to Company, shall be applied pro
rata against Company's obligation to reimburse Bank for the
amount of the Remarketing Drawing. The amount of any
unreimbursed Remarketing Drawing shall bear interest from the
date of the Remarketing Drawing at a rate per annum equal to
the Prime Rate plus one percent (1.0%). Such interest shall be
payable on each Interest Payment Date for so long as such
Remarketing Drawing or any portion thereof is unreimbursed. The
payments of interest hereunder shall be credited pro rata
against the interest accrued on the Bonds pledged to Bank under
the Bond Pledge. Interest hereunder shall be calculated based
on a 360-day year but calculated for the actual number of days
elapsed;
(iii) Upon each transfer of the Letter of Credit in accordance with
its terms and as a condition thereto, a transfer fee of Five
Hundred Dollars ($500.00) and such additional amounts as shall
be necessary to cover the reasonable costs and expenses to Bank
incurred in connection with such transfer;
(iv) Company shall pay interest at the Default Rate, payable on
demand, on any and all amounts of any Principal Drawing,
Interest Drawing and/or Remarketing Drawing not paid by Company
when due under any section of this Reimbursement Agreement from
the date such amounts become due until payment in full;
(v) For any payment of principal and/or interest not paid within
ten (10) Business Days after such payment is due, Company shall
pay a late charge of an amount equal to the greater of five
percent (5%) of the amount of the payment or $50.00;
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(vi) On demand, reasonable costs, fees and expenses incurred by Bank
in connection with the issuance of the Letter of Credit or the
preparation or execution of any documents or opinions related
thereto;
(vii) On demand, any and all reasonable expenses incurred by Bank in
enforcing any of its rights under this Reimbursement Agreement,
or any of the Credit Documents;
(viii) On or prior to the Closing Date, any and all appraisal fees
relating to the appraisal of the Premises; and
(ix) On or prior to Closing Date, a one-time origination fee in the
amount of $35,751.79.
(b) Company hereby agrees to pay to Bank commissions (whether individually
or collectively, the "Letter of Credit Fee") equal to an amount
calculated at the percentage rate of the maximum respective "Fee
Calculation Amount" as hereinafter defined, available on each date of
payment of the Letter of Credit Fee, as set forth in the following
table based upon the Company's Funded Debt Ratio as reflected in the
financial information for each fiscal year end of the Company (using a
360-day year but calculated on the number of actual days elapsed):
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Level Funded Debt Ratio Annual Letter of
Credit Fee (as a
percentage of the Fee
Calculation Amount)
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I greater than or equal to 2.0 to 1.0 1.90%
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II greater than or equal to 1.0 to less than 1.0 2.0 to 1.0 1.35%
--------------------------------------------------------------------------------
III less than 1.0 to 1.0 1.00%
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From the Closing Date until receipt of the audited financial
statements for the Company for fiscal year end 2003, the annual Letter
of Credit Fee shall be set at "Level II" as described in the above
table.
The Letter of Credit Fee shall be payable in annual installments in
advance on each anniversary of the Date of Issuance until the
Expiration Date of such Letter Credit; provided, however, that upon
the Date of Issuance of the Letter of Credit, Company shall pay an
installment of the Letter of Credit Fee for the period from the Date
of Issuance to and including the day before the anniversary of the
Date of Issuance in 2003. The "Fee Calculation Amount" shall be the
sum of (i) the maximum amount then available to be drawn under the
Letter of Credit with respect to the Principal Commitment plus (ii)
the maximum amount then available
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to be drawn under the Letter of Credit with respect to the Interest
Commitment. If the Letter of Credit is terminated prior to the
Expiration Date, the Letter of Credit Fee shall be refunded to Company
for any calendar quarter that the Letter of Credit will not be
outstanding provided that Company returns or causes the return of the
Letter of Credit to Bank prior to the start of such calendar quarter.;
(c) Company shall pay to Bank all reasonable legal, documentation, search
and recording fees, and construction monitoring costs associated with
closing and funding this transaction;
(d) If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authorities
charged with the administration thereof shall impose, modify or deem
applicable any reserve, special deposit or similar requirement which
would impose on Bank any reasonable additional costs (i) generally
upon the issuance or maintenance of letters of credit by Bank; (ii)
specifically in respect of this Reimbursement Agreement or the Letter
of Credit; or (iii) in respect of any capital adequacy requirement
(including, without limitation, a requirement which affects the manner
in which Bank allocates capital resources to its commitments), and the
result of such imposition of additional costs as described in clause
(i), (ii), or (iii) above shall be to increase the cost to Bank of
issuing or maintaining the Letter of Credit (which increase in cost
shall be the result of Bank's reasonable allocation of the aggregate
of such cost increases resulting from such events), then (x) within
thirty (30) days of Bank's obtaining knowledge of such change in law,
regulations or interpretation thereof, Bank shall so notify Company,
and (y) upon receipt of such notice from Bank, accompanied by a
certificate as to such increased cost, Company shall pay as of the
effective date of such change or interpretation all reasonable
additional amounts which are necessary to compensate Bank for such
increased cost incurred by Bank. The certificate of Bank as to such
increased costs shall show the manner of calculation and shall be
conclusive (absent manifest error) as to the amount thereof; and
(e) Company's obligations to make payments to Bank under this Section 2
shall be deemed satisfied to the extent of payments made by the
Trustee to Bank from funds on deposit with and held by the Trustee
pursuant to the Indenture.
Section 2.3. Company's Obligations Unconditional. The payment obligations
of Company under this Reimbursement Agreement shall be absolute, unconditional
and irrevocable and shall be satisfied strictly in accordance with the terms of
this Reimbursement Agreement, under all circumstances whatsoever, including,
without limitation, the following circumstances:
(a) Any lack of validity or enforceability of the Credit Documents, the
Bond Documents or any other agreement or instrument relating thereto;
(b) Any amendment or waiver of or any consent to departure from the terms
of the Letter of Credit, the Credit Documents, the Bond Documents or
any other agreement or instrument relating thereto;
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(c) The existence of any claim, setoff, defense or right which Company may
have at any time against any beneficiary or any transferee of the
Letter of Credit (or any persons or entities for whom any such
beneficiary or any such transferee may be acting), Bank or any other
person or entity, whether in connection with this Reimbursement
Agreement, the transactions contemplated by the Credit Documents or
the Bond Documents, 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 whatsoever;
(e) Payment by Bank under the Letter of Credit against presentation of a
request which on its face appears to be in accordance with the terms
of the Letter of Credit; or
(f) Any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
Section 2.4. Payments. The payments and amounts due Bank under Section 2.2
above shall be made by Bank's debiting Company's operating account with Bank
(the "Operating Account"). Company covenants and agrees that on the date any
payment or other amount is due under Section 2.2 above, Company will have
unrestricted funds in the Operating Account in an amount no less than the amount
then due. Subject to the foregoing provisions of this Section, all payments by
Company hereunder to Bank shall be made in lawful currency of the United States
and in immediately available funds to the Bank's Standby Letter of Credit
Processing and Service Center, 0000 Xxxxxxxx Xxxx - XX00000000, Xxxxxxxxx, Xxxx
00000-0000.
Section 2.5. Letter of Credit Extension. Bank may in writing extend the
Expiration Date of the Letter of Credit; provided, however, that such extension
shall be, in each instance, made in the sole discretion of Bank and Bank may at
any time, upon written notice delivered to Company and Trustee, elect not to
extend the Expiration Date. Bank shall notify Company and Trustee of its
decision of whether the Expiration Date shall be extended no later than ninety
(90) days prior to the Expiration Date, provided that the failure of Bank to
deliver such notice, or to deliver any notice, shall not mean that Bank has
elected to extend the Expiration Date. If Bank extends the Expiration Date, it
shall do so in the form of an amendment to the Letter of Credit, which it shall
promptly deliver to Trustee.
SECTION THREE
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REPRESENTATIONS, WARRANTIES AND COVENANTS
Company expressly represents, warrants and covenants that:
Section 3.1. Existence and Legal Authority. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own its property and to
carry on its business as now being conducted, to enter into the Credit Documents
and the other agreements referred to herein and transactions contemplated
thereby, and to carry out the provisions and conditions of the Credit
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Documents. Company is duly qualified to do business and is in good standing in
the State of New York and in every jurisdiction where the failure to so qualify
would have a material adverse effect on the business of Company.
Section 3.2. Due Execution and Delivery. Company and/or Agency has full
power, authority and legal right to incur the obligations provided for in, and
to execute and deliver and to perform and observe the terms and provisions of,
the Credit Documents, and each of them has been duly executed and delivered by
Company by all required action, and Company has obtained all requisite consents
to the transactions contemplated thereby under any instrument to which it is a
party, and the Credit Documents constitute the legal, valid and binding
obligations of Company enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency or other similar laws affecting creditors' rights generally.
Section 3.3. No Breach of Other Instruments. Neither the execution and
delivery of the Credit Documents, nor the compliance by Company with the terms
and conditions of the Credit Documents, nor the consummation of the transactions
contemplated thereby, will conflict with or result in a breach of Company's
Certificate of Incorporation or By-Laws, or any of the terms, conditions or
provisions of any agreement or instrument or any other restriction or law,
regulation, rule or order of any governmental body or agency to which Company is
now a party or is subject, or imposition of a lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Company pursuant to the
terms of any such agreement or instrument.
Section 3.4. Government Authorization. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
consummation by Company of the transactions contemplated by the Credit
Documents.
Section 3.5. Pledged Collateral. Company has good fee simple title to the
Premises, free and clear of all liens, pledges, mortgages, security interests,
charges, claims and other encumbrances, except the Permitted Encumbrances.
Company has good title to the Pledged Collateral, free and clear of all liens,
pledges, mortgages, security interests, charges, claims and other encumbrances,
except Permitted Encumbrances. The Mortgage, the Security Agreement, the
Assignment of Contracts and/or Bond Pledge create a valid and prior lien or
security interest in favor of Bank in the Pledged Collateral, subject to no
other liens or encumbrances arising by, through or under Company or any other
person, except for Permitted Encumbrances.
Section 3.6. Absence of Defaults, etc. Company is not (i) in material
default under any indenture or contract or agreement to which it is a party or
by which it is bound; (ii) in violation of its Certificate of Incorporation or
By-Laws, each as amended to date; (iii) in default with respect to any order,
writ, injunction or decree of any court; or (iv) in default under any order or
license of any federal or state governmental department, which default or
violation in any of the aforesaid cases materially and adversely affects its
business or property. There exists no condition, event or act which constitutes,
or after notice or lapse of time or both would constitute, an Event of Default.
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Section 3.7. Indebtedness of Company. Company does not have outstanding on
the date hereof any Indebtedness for borrowed money, except for such
Indebtedness reflected on the financial statements referred to in Section 3.9
hereof, except in connection with the Bonds.
Section 3.8. Subsidiaries. Company has no Subsidiaries other than Leocor
Corporation, a Delaware corporation.
Section 3.9. Financial Statements. All financial statements of Company
furnished to Bank on or prior to the date hereof are correct and complete in all
material respects and fairly present the financial position of Company at the
dates thereof and the results of Company's operations for the periods covered
thereby, and such financial statements, including any notes and comments
contained therein, have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved.
Section 3.10. No Adverse Change. Subsequent to the date of the financial
statements referred to in Section 3.9 hereof, Company has not incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business, and there has not been any increase in the aggregate amount of
Indebtedness of Company (except in connection with the issuance of the Bonds),
or any change in the business, properties or condition, financial or otherwise,
of Company, except for changes arising in the ordinary course of business or in
connection with the issuance and sale of the Bonds or as may be otherwise
disclosed in writing to Bank prior to the date hereof.
Section 3.11. Taxes. Company has filed, or secured a lawful extension to
file, all tax returns which are to be filed and has paid, or has made adequate
provision for the payment of, all taxes which have or may become due pursuant to
said returns or to assessments received by them. Company knows of no deficiency
assessment or proposed deficiency assessment of taxes against Company, except as
may be otherwise disclosed in writing to Bank prior to the date hereof.
Section 3.12. ERISA. No Reportable Event or Prohibited Transaction (as
defined in Section 4975 of the Internal Revenue Code) has occurred and is
continuing with respect to any Plan and Company has not incurred any
"accumulated funding deficiency" as such term is defined in Section 302 of
ERISA.
Section 3.13. Litigation. Except as otherwise disclosed in writing to Bank
prior to the date hereof, there are no actions, suits or proceedings pending, or
to the knowledge of Company, threatened against Company or its property in any
court, or before or by any federal, state or municipal or other governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, which could result in any adverse change in the business, property
or assets, or in the condition, financial or otherwise, of Company, except for
actions, suits or proceedings of a character normally incident to the kind of
business conducted by Company, none of which, either individually or in the
aggregate, if adversely determined, would materially impair Company's right or
ability to carry on its business substantially as now conducted or materially
adversely affect the financial position or operations of Company.
13
Section 3.14. Ownership of Property. Company has good and marketable fee
title to, or valid leasehold interests in its real properties in accordance with
the laws of the jurisdiction where located, and good and marketable title to
substantially all its other property and assets, subject, however, in the case
of real property, to title defects and restrictions which do not materially
interfere with the operations conducted thereon by Company. Except for (i) liens
in favor of Bank and/or (ii) liens in favor of other lenders which affect or
constitute a lien upon property other than any portion of the Project, the real
property and all other property and assets of Company are free from any liens or
encumbrances securing Indebtedness and from any other liens, encumbrances,
charges or security interests of any kind. Each lease to which Company is a
party is in full force and effect, no material default on the part of any party
thereto exists, and, as to each of such leases to which Company is party as
lessee, Company enjoys peaceful and undisturbed possession of the property
affected thereby.
Section 3.15. No Burdensome Restrictions. Company is not a party to any
instrument or agreement or subject to any charter or other corporate restriction
which would to a material extent adversely affect the business, property,
assets, operations or condition, financial or otherwise, of Company.
Section 3.16. Environmental Matters. Company is in compliance with all
Environmental Laws and all applicable federal, state and local health and safety
laws, regulations, ordinances or rules, except to the extent that any
non-compliance will not, in the aggregate, have a materially adverse effect on
Company or the ability of Company to fulfill its obligations under this
Reimbursement Agreement.
SECTION FOUR
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CLOSING CONDITIONS
The obligation of Bank to issue the Letter of Credit on the Closing Date
shall be subject to the following conditions precedent:
Section 4.1. Execution and Delivery of the Credit Documents and the Bond
Documents. Company shall have delivered to Bank fully executed copies of each of
the Credit Documents, and the Agency, the Trustee and Company shall have duly
authorized, executed and delivered the Bond Documents, transcript of
proceedings, authorizing resolutions and incumbency certificates.
Section 4.2. Delivery of Documents Relating to the Pledged Collateral.
Company shall have duly and validly executed and delivered the Mortgage, the
Security Agreement, the Assignment of Contracts, the Indemnity Agreement, the
Bond Pledge and UCC financing statements; the Mortgage, and UCC financing
statements shall have been duly filed in favor of Bank. In addition, Company
shall have delivered to Bank:
(a) Evidence that the Premises are not located in a special flood hazard
area as identified by HUD;
(b) Certificates of insurance and evidence of payment of premiums therefor
with respect to the insurance required by Bank with respect to the
Premises as set forth
14
in Section 6.2 below, including but not limited to, general liability
insurance and hazard insurance, and flood insurance if applicable;
(c) A current certified survey of the Premises prepared by a registered
surveyor satisfactory to Bank, and containing on the face thereof the
completed certificate of the surveyor in the form of the surveyor's
certificate required by Bank, dated not more than ninety (90) days
prior to the Date of Issuance, and in compliance with the Minimum
Standard Detail Requirements for ALTA/ASCM Class A land title surveys,
as adopted by the American Land Title Association and American
Congress on Surveying and Mapping in 1992, or such earlier dated
surveys as Bank may deem acceptable;
(d) Environmental data with respect of the Premises, satisfactory to Bank
in its sole discretion;
(e) A Commitment to issue the Title Policy in the form of an ALTA Form
B-1970 (Additional Coverage Form) Loan Policy of Title Insurance
issued by the Title Company in the amount of the Letter of Credit (i)
insuring that the Mortgage, as of the time of its filing for record,
is a first and best lien upon the Premises, and that the title to the
Premises is free, clear and unencumbered, subject only to the
Permitted Encumbrances.
(f) Evidence satisfactory to Bank that the Project, when completed, and
the Premises, and the proposed and actual use thereof, will comply
with all applicable laws, statutes, codes, ordinances, rules and
regulations, including, but not limited to, zoning and Environmental
Laws, of all governmental authorities having jurisdiction over the
same, and that there is no action or proceeding pending (or any time
for an appeal of any decision rendered) before any court,
quasi-judicial body or administrative agency at the Date of Issuance
relating to the validity of this Reimbursement Agreement or the
transactions contemplated hereby or the proposed or actual use or
operation of the Premises; and
(g) A written appraisal (the "Appraisal") satisfactory to Bank in all
respects, prepared on both an "as is" and "as completed" value basis
by an appraiser selected and directly engaged by Bank pursuant to an
engagement letter issued by Bank, the cost of which Appraisal and
review thereof will be charged to Company at Closing Date, and which
Appraisal shall be prepared in accordance with the Uniform Standards
of Professional Appraisal Practice applicable to Federally Related
Transactions as set out in Appendix A to the real estate appraisal
regulations adopted by the Office of the Comptroller of the Currency
pursuant to the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") (Sub-part C of 12 C.F.R. 34) and
which Appraisal shall be updated, at Company's cost, upon the
occurrence of an Event of Default under any of the Credit Documents.
Section 4.3. Issuance and Sale of the Bonds. The Bonds shall have been
duly issued and sold to the Purchaser pursuant to the Bond Documents.
15
Section 4.4. Representations and Warranties True as of Closing and No
Event of Default. The representations and warranties contained in this
Reimbursement Agreement and the other Credit Documents shall be true in all
material respects on the Closing Date with the same effect as though made on and
as of that date and no condition, event or act shall have occurred which
constitutes an Event of Default or, with notice or lapse of time, or both, would
constitute an Event of Default.
Section 4.5. Opinion of Company's Counsel. Bank shall have received from
Bond, Xxxxxxxxx & Xxxx, LLP, counsel for Company, a closing opinion or opinions
with respect to (i) the matters described in Sections 3.1 and 3.2 of this
Reimbursement Agreement; (ii) the matters described in Sections 3.3, 3.4, 3.6
and 3.13 of this Reimbursement Agreement, to the best of such counsel's
knowledge and belief after inquiry; and (iii) such other matters incident to the
transactions contemplated hereby as Bank may reasonably request.
Section 4.6. Opinion of Other Counsel. Bank shall have received from Bond
Counsel an opinion with respect to the tax-exempt status of the Bonds, and from
counsel acceptable to Bank, an opinion with respect to the absence of any
securities registration requirements with respect to the Bonds under the
Securities Act of 1933, as amended.
Section 4.7. Proceedings Satisfactory. All proceedings taken in connection
with the execution and delivery of this Reimbursement Agreement and the other
Credit Documents shall be satisfactory to Bank, and Bank shall have received
copies of such certificates, documents and papers as reasonably requested in
connection therewith, all in form and substance satisfactory to Bank.
Section 4.8 Additional Deliveries. Except as provided below, Company
shall furnish the following documentation to Bank at least ten (10) Business
Days prior to the Closing Date unless such date shall be extended in writing by
Bank, all in form, substance and execution satisfactory to Bank:
(a) Invoices for work to be performed or materials to be supplied in
connection with the Project, in each case approved by Bank;
(b) A cost breakdown and itemization of all hard and soft costs for the
Project shall be provided, in form satisfactory to Bank.
(c) A final construction budget, acceptable to Bank;
(d) Certified copy of Company's resolutions authorizing the action
required of Company;
(e) Project development schedule provided by Company and development
supervisor setting forth the approximate start and finish dates of all
major stages of the Project; such schedule shall provide that the
development of the Project shall commence not later than thirty (30)
days after the Closing Date;
(f) Evidence of such building permits as may be required;
16
(g) The Construction Contract, in form and substance acceptable to Bank;
(h) A completion bond issued on behalf of the Contractor in an amount not
less than the fixed amount due and payable under the Construction
Contract in form and substance acceptable to the Bank and containing a
dual obligee rider identifying the Bank as a beneficiary thereof
(i) Company's federal tax identification number; and
(j) Such other documents which may be required by Bank to assure
compliance with this Reimbursement Agreement and other Credit
Documents.
SECTION FIVE
------------
DISBURSEMENTS FROM PROJECT FUND
Company shall not request or receive any disbursement of funds from the
Project Fund unless Bank shall have approved such disbursement in writing to the
Trustee and the following conditions have been met:
Section 5.1. Conditions Precedent to First Disbursement. The following
conditions must be satisfied prior to the first disbursement of funds from the
Project Fund:
(a) The proceeds of the Bonds shall have been deposited into the Project
Fund, and Bank and the Trustee shall have been granted a perfected
security interest in the Project Fund;
(b) Company shall have provided evidence that all insurance requirements
set forth herein have been satisfied;
(c) Company shall have delivered to Bank a schedule of all Contractors, by
trade, to be engaged in the construction and installation of the
Project Facility, together with copies of the Construction Contract;
and
(d) Company shall have delivered to Bank copies of the consent of each of
the Project Architect and Contractor, to the Assignment of Contracts,
if known, as provided therein.
Section 5.2. Bank's Inspections; Construction Inspector. Prior to each
disbursement, if required by Bank, Bank, or an agent engaged by Bank at
Company's expense, may inspect the property to verify that the request for
disbursement accurately indicates the amount of construction completed to said
date. Bank shall engage the Construction Inspector with regard to the
renovations/construction at the Premises. The Construction Inspector, at the
cost of Company, shall, at Bank's option, perform and or all of the following
services on behalf of Bank:
(a) To make an initial pre-cost analysis verifying that the
Improvements can be completed for the amount available for construction
from the Project Budget;
17
(b) To review and advise Bank whether, in the opinion of the
Construction Inspector, the Plans and Specifications are satisfactory;
(c) To review Draw Requests and change orders;
(d) To make periodic inspections (approximately at the date of each
Draw Request) for the purpose of assuring that construction of the Facility
to date is in accordance with the Plans and Specifications and to approve
Company's then current Draw Request as being consistent with Company's
obligations under this Agreement, including inter alia, an opinion as to
Company's continued compliance with the provisions of Section 6.1 (g) (4)
hereof.
The fees of the Construction Inspector shall be paid by Company forthwith
upon billing therefor and expenses incurred by Bank on account thereof shall be
reimbursed to Bank forthwith upon request therefor, but neither Bank nor the
Construction Inspector shall have any liability to Company on account of (i) the
services performed by the Construction Inspector, (ii) any neglect or failure on
the part of the Construction Inspector to properly perform its services, or
(iii) any approval by the Construction Inspector of construction of the
Facility. Neither Bank nor the Construction Inspector assumes any obligation to
Company or any other person concerning the quality of construction of the
Facility or the absence therefrom of defects.
Section 5.3. No Liens. Bank shall have received evidence satisfactory to
Bank that since the last preceding disbursement from the Project Fund there has
been no change in the state of title to the Premises. Company shall pay the cost
of each title update required by Bank from the Title Company in connection with
each request for approval of disbursement and each endorsement to the Title
Policy.
Section 5.4. Request for Approval of Disbursement. In addition to
satisfaction of any procedures required by the terms of the Bond Documents, not
later than ten (10) business days before the date on which Company desires a
disbursement from the Project Fund, Company shall submit to Bank (i) a written
request for approval of the disbursement from the Project Fund (each a "draw
request"); (ii) a certification of Company that, among other things, Company has
paid or actually incurred the costs for which the request is being made; (iii) a
revised Project Budget showing the balance of each category of Project costs;
and (iv) a requisition in form satisfactory to Bank. Draw requests should not be
made more frequently than once per month. Bank will authorize disbursements of
amounts as approved by Bank for the cost of materials stored on site if and only
if such materials are (i) stored on site, (ii) physically secured against loss
or damage, including, but not limited to, theft and/or vandalism, (iii) clearly
identified as property of the Project and Company, and (iv) insured against loss
or damage in an amount equal to the full replacement cost of the stored
materials by an insurance company acceptable to Bank. No disbursements will be
made for materials not stored on site. Bank's "Use of Proceeds" form shall be
submitted for Bank's use to approve all draw requests submitted to the Trustee
for disbursements to be made from the Trust Estate (as defined in the Bond
Documents). All requests for disbursement with respect to construction costs
shall be accompanied by executed AIA Forms G-702 and G-703. Bank shall not be
required to approve disbursement of funds for any line item in excess of the
amount shown on Bank's Use of Proceeds form; however,
18
Company may request an increase in a line item by reducing a budgeted line item.
Any such reallocation shall not cause a deficiency with respect to the
"Company's Equity" category, and must be substantiated by a cost saving in the
line item being reduced. All authorizations of draw requests shall be made
within ten (10) days after receipt of all information required by Bank to
approve the draw requests.
Section 5.5. Timing. Company will submit draw requests not more often than
once a month. Each disbursement shall not be more than ninety (90%) of the value
of construction work which has been completed and which is covered by such
disbursement until the Project is fully completed, and the balance will be paid
upon completion based on requirements set forth below. Retainage will be held on
a subcontract by subcontract basis, and released in connection with a particular
subcontract upon the expiration of the time for filing of any mechanic's lien
with respect to such subcontract provided all work thereunder has been completed
to the satisfaction of Bank and its inspector and a mechanic's lien waiver has
been received from the subcontractor for all their work done on the property.
There are no retainage requirements for "soft costs" on the Project. "Soft
costs" are defined as expenses which have no mechanic's lien rights on the
subject security (this does not include the contingency line item under the
Construction Contract). Upon completion of all work and prior to disbursement of
the retainage, Company shall submit evidence of substantial completion of the
Project, consisting of a certificate of the Project Architect and a certificate
of occupancy for the Facility. Notwithstanding the foregoing, Bank, in its sole
discretion, may elect to release the retainage prior to completion of the
Project.
Section 5.6. Supporting Documentation. Company shall furnish Bank with an
affidavit of Company identifying all subcontractors and materialmen who have
performed work or furnished materials in connection with the Project, together
with lien waivers from the Contractor and from all subcontractors and
materialmen who have provided notices of furnishing or who have performed work
or furnished materials in connection with the Project, current through the end
of the period covered by Company's most recent request, and such other evidence
or affidavits required by Bank at the time of each request to ensure that all
bills then due and payable for labor and materials used in constructing the
Facility and all bills due and payable to the Contractor, subcontractors,
materialmen and their respective subcontractors, laborers, and material
suppliers have been paid in full, except those bills to be paid with the
proceeds of such disbursement, and except for retainages. Bank shall be provided
with an update to the Title Policy as of the date of the draw request, showing
no additional liens or encumbrances upon the Premises.
Section 5.7. Material Damage. Notwithstanding any provision of this
Reimbursement Agreement to the contrary, if the Premises shall have suffered any
material damage or destruction prior to any disbursement from the Project Fund,
such damaged or destroyed portion shall be restored or replaced in a manner
acceptable to Bank without cost to Bank prior to the approval by Bank of any
further disbursement from the Project Fund.
Section 5.8. Other Disbursement Approval Conditions. Bank shall not be
obligated to approve any disbursement from the Project Fund if, at the time of a
proposed disbursement, (i) an Event of Default or an event which, with the
passage of time or service of notice, or both, would be an Event of Default
under any of the Credit Documents has occurred, or (ii) any representation or
warranty made by Company in any of the Credit Documents proves to be
19
untrue in any material respect, or (iii) Bank determines, at any time, that the
Project will not be approved by the appropriate governmental regulatory
authorities.
Section 5.9. Permits. Company shall have delivered to Bank building,
zoning, and other required permits covering construction of the Facility
together with evidence satisfactory to Bank that all approvals required with
respect to the Premises from third parties or any governmental or
quasi-governmental authorities have been obtained or, in the case of approvals
relating to the operation of the Facility which cannot be obtained until
completion of construction, evidence satisfactory to Bank that such approvals
are obtainable.
Section 5.10. Utilities. [Intentionally Omitted]
Section 5.11. Conditions for Final Disbursement. Company will, on or prior
to the date of the final disbursement from the Project Fund, deliver or cause to
be delivered to Bank the following:
(a) If required by Bank, an additional endorsement to the Title Policy
insuring the priority of the Mortgage in the full amount of the Letter
of Credit against mechanic's and materialmen's liens (including
inchoate liens) arising by reason of unpaid labor and materials
supplied in connection with the construction and development of the
Facility;
(b) An affidavit of Company stating that each person providing any
material or performing any work in connection with the Premises has
been (or will be, with the proceeds of and immediately following
receipt by Company of such final disbursement) paid in full or bonded
or insured to the reasonable satisfaction of Bank;
(c) Notification from the Construction Inspector to the effect that the
improvements to the Premises have been completed in a good and
workmanlike manner in accordance with the applicable Plans and
Specifications;
(d) An as-built survey certified to the Bank and the Title Company showing
the location of the completed improvements to the Premises; and
(e) A certificate of occupancy with respect to the completed improvements
to the Premises.
Section 5.12. Sufficiency of Project Fund to Complete Construction.
Notwithstanding anything contained in this Reimbursement Agreement to the
contrary, it is expressly understood and agreed that the Project Fund and equity
to be received from Company during construction (collectively, the "Construction
Proceeds") shall at all times be "in balance." The Construction Proceeds shall
be deemed to be "in balance" only at such time and from time to time, as Bank
may determine in Bank's sole discretion based on the certification of Bank's
Inspector that the then undisbursed portion of the Construction Proceeds equals
or exceeds the amount necessary for the timely and full payment of (i) all work
done and not theretofore paid for or to be done in connection with the
completion of the construction of the Facility in accordance with the Plans and
Specifications, including the installation of all fixtures and
20
equipment required for operation of the Facility and the Premises, and (ii) all
other costs and expenses incurred and not theretofore paid for, or to be
incurred in connection with the Project and the Premises (to the extent revenues
will not, in Bank's sole judgment, be sufficient for the timely and full payment
of such costs and expenses). Company agrees that if the Construction Proceeds
are deemed not to be "in balance," Company shall, within thirty (30) days after
written request by Bank, deposit the deficiency with Bank (the "Deficiency
Deposit"), which Deficiency Deposit shall first be exhausted before any further
disbursement from the Construction Proceeds is made. Bank shall not be obligated
to make any disbursement if the Construction Proceeds are not in balance.
Section 5.13. Contractors May Be Paid Directly. Bank reserves the right to
direct that the Trustee pay individual contractors directly upon the occurrence
of any Event of Default under the Credit Documents.
SECTION SIX
-----------
COVENANTS
Company covenants and agrees that, except as otherwise waived by Bank in
writing, from the date of this Reimbursement Agreement and until the obligations
of Company to Bank hereunder are satisfied in full, it will comply with the
following provisions:
Section 6.1. Accounting; Financial Statements and Other Information.
Company will maintain a standard system of accounting, established and
administered in accordance with GAAP consistently followed throughout the
periods involved, and will set aside on its books for each fiscal year the
proper amounts for depreciation, obsolescence, amortization, bad debts, current
and deferred taxes, and other purposes as shall be required by GAAP. Company
will deliver to Bank all in form and substance satisfactory to the Bank:
(a) As soon as practicable after the end of each fiscal quarter in each
fiscal year, except the last, commencing with the fiscal quarter ended
August 31, 2002 and in any event within forty five (45) days
thereafter, financial statements of Company for such quarter,
certified as complete and correct by the principal financial officer
of Company, subject to changes resulting from year-end adjustments;
(b) Not later than August 15/th/ of each calendar year, a certificate on
behalf of the Company of the chief financial officer to the effect
that, to the best knowledge of the Company, no Default or Event of
Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof and the actions the Company
proposes to take with respect thereto, which certificate shall set
forth the calculation of the Funded Debt Ratio as well as the
calculations required to establish compliance with the provisions of
Section 6.25 hereof;
(c) As soon as practicable after the end of each fiscal year, commencing
with the fiscal year ending on or about May 31, 2003 and in any event
within one hundred twenty (120) days thereafter, (i) annual revenue
and expense budget for the current fiscal year including the
assumptions underlying the forecasts forming the basis thereof, and
accounts receivable aging report, each prepared by Company,
21
together with copies of filed federal income tax returns including all
schedules and (ii) annual statement of condition of Company as of the
end of such year, and statements of cash flows and changes in
financial position and/or changes in fund balances as applicable of
Company for such year, setting forth in each case in comparative form
the figures for the previous fiscal year, all in reasonable detail and
certified as complete and correct by the principal financial officer
of Company, accompanied by a report and an unqualified opinion of
independent certified public accountants of recognized standing,
selected by Company and satisfactory to Bank, which report and opinion
shall be audited and prepared in accordance with generally accepted
accounting principles;
(d) Promptly upon receipt thereof, copies of all other written reports
submitted to Company by independent accountants in connection with any
annual or interim audit of the corporate books of Company; and
(e) With reasonable promptness, such other data and information as from
time to time may be reasonably requested by Bank, including Company's
annual tax return.
Section 6.2. Insurance and Maintenance of Properties and Business. Company
will maintain, with financially sound and reputable insurers, insurance to
protect its properties and business against losses or damages of the kind
customarily insured against by corporations of established favorable reputation
engaged in the same or a similar business and similarly situated, including, but
not limited to, (a) adequate fire and extended coverage insurance in amounts and
issued by insurers acceptable to Bank, (b) necessary workers' compensation
insurance, (c) adequate public liability insurance, and (d) such other insurance
as may be required by law or as may be reasonably required in writing by Bank.
Company will, upon request, furnish to Bank a schedule of all insurance carried
by it, setting forth in detail the amount and type of such insurance. Company
will maintain, in good repair, working order and condition, all properties used
or useful in the business of Company.
Section 6.3. Payment of Indebtedness and Taxes. Company will pay (a) all
of its Indebtedness (not required to be subordinated hereunder) and other
obligations in accordance with normal terms or any applicable grace periods and
(b) all taxes, assessments, and other governmental charges levied upon any of
its respective properties or assets or in respect of its respective franchises,
business, income, or profits before the same become delinquent, except that no
such Indebtedness, obligations, taxes, assessments, or other charges need be
paid if contested by Company in good faith and by appropriate proceedings
promptly initiated and diligently conducted and if appropriate provision, if
any, as shall be required by GAAP, shall have been made therefor.
Section 6.4. Litigation; Adverse Changes. Company will promptly notify
Bank in writing of (a) any event which, if existing at the date hereof, would
require qualification of the representations and warranties set forth in
Sections 3.10 and 3.13 and (b) any material adverse change in the condition,
business, or prospects, financial or otherwise, of Company.
Section 6.5. Inspection. Company will make available for inspection during
regular business hours by duly authorized representatives of Bank, its books,
records, and properties
22
when reasonably requested to do so, and will furnish Bank such information
regarding its respective business affairs and financial condition within a
reasonable time after written request therefor.
Section 6.6. Environmental Matters. Company:
(a) Shall comply with all Environmental Laws; and
(b) Shall deliver promptly to Bank (i) copies of any documents received
from the United States Environmental Protection Agency or any state,
county or municipal environmental or health agency, and (ii) copies of
any documents submitted by Company or any of its Subsidiaries to the
United States Environmental Protection Agency or any state, county or
municipal environmental or health agency concerning its operations.
Section 6.7. Sale, Purchase of Assets. Company will not, directly or
indirectly, (a) purchase, lease, or otherwise acquire any assets except in the
ordinary course of business or as otherwise permitted in this Reimbursement
Agreement or (b) sell, lease, transfer, or otherwise dispose of any plant or any
manufacturing facility or other tangible assets, except for (i) tangible assets
sold for full and adequate consideration which an executive officer of Company
has determined to be worn out, obsolete, or no longer needed or useful in its
business, (ii) tangible assets sold in the ordinary course of business provided
that Company receives full and adequate consideration in exchange for such
assets sold. Notwithstanding anything to the contrary stated above, in any
instance when Company determines in good faith that any asset shall have become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or should
otherwise be replaced, Company may remove such items, provided that Company, in
connection therewith:
(a) may remove, without substitution or payment, and without Bank's prior
written consent, assets not in excess of $10,000.00 annually in the
aggregate; or
(b) may substitute and install other assets having equal or greater value
(but not necessarily the same function) in the operation of Company's
business.
Section 6.8. Mortgage, Security Interests, and Liens. Company will not,
directly or indirectly, create, incur, assume, or permit to exist any mortgage,
security interest, lien, charge, encumbrance on, pledge or deposit of, or
conditional sale or other title retention agreement with respect to, any of the
Facility or the Pledged Collateral (herein called "Liens") other than:
(a) Liens for taxes, assessments, or governmental charges or levies the
payment of which is not at the time required by law;
(b) Liens imposed by law, such as Liens of landlords, carriers,
warehousemen, mechanics, and materialmen arising in the ordinary
course of business for sums not yet due or being contested by
appropriate proceedings promptly initiated and diligently conducted,
provided other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;
23
(c) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance, and
other types of social security, or to secure the performance of
tenders, statutory obligations, and surety and appeal bonds, or to
secure the performance and return of money bonds and other similar
obligations, excluding obligations for the payment of borrowed money;
(d) Any judgment Lien, unless the judgment it secures shall, within thirty
(30) days after the entry thereof, have been discharged or execution
therefor stayed pending appeal, or shall have been discharged within
thirty (30) days after the expiration of any such stay;
(e) Other Liens (other than mechanic's liens relating to the Project)
incidental to the conduct of Company's business or ownership of
properties and assets, which are not incurred nor granted in
connection with the borrowing of money or the obtaining of advances or
credits, and which do not in the aggregate materially detract from the
value of its property or assets or materially impair the use thereof
in the ordinary course of business; provided the aggregate amount of
all such Liens by Company shall not exceed $10,000.00;
(f) Liens evidenced by the Security Agreement or the Bond Pledge, as well
as any other Liens in favor of Bank or any affiliate of Bank.
Section 6.9. Borrowed Money. Company will not, directly or indirectly,
create, incur, or assume Indebtedness, or otherwise become, be, or remain liable
with respect to, any Indebtedness in excess of $100,000.00 in the aggregate
during any fiscal year, provided that the foregoing restrictions shall not apply
to:
(a) The Indebtedness evidenced hereunder and any other Indebtedness now or
hereafter payable by Company to Bank or any affiliate of Bank;
(b) Existing Indebtedness which is reflected on Company's financial
statements referred to in Section 3.9 hereof; or
(c) Indebtedness of Company evidenced by the Bonds.
Section 6.10. Assumptions; Guaranties. Company will not assume, guarantee,
endorse, or otherwise become directly or contingently liable for (including,
without limitation, liable by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to, or otherwise invest
in any debtor or otherwise to assure the creditor against loss) any financial
obligation or Indebtedness of any other Person, except guaranties by endorsement
of negotiable instruments for deposit, collection, or similar transactions in
the ordinary course of business.
Section 6.11. Mergers; Consolidation. Company will not merge or consolidate
with any Person, dissolve, wind up its affairs, or sell, assign, lease, or
otherwise dispose of (whether in one transaction or in a series of
transactions), all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person.
24
Section 6.12. INTENTIONALLY OMITTED.
Section 6.13. Evidence of Payment of Costs. Company will furnish to Bank
copies of all affidavits, lien waivers, releases or other evidence reasonably
requested by Bank from time to time to establish that all bills for labor and
materials performed or furnished in connection with the Project and all bills of
the Contractor have been paid in full. Company will comply with Section 13 of
the New York Lien Law, as amended, regarding improvements on the Premises and
Company shall indemnify and hold Bank harmless from any and all claims for
unpaid amounts due for work or labor performed, or materials furnished, to the
Premises. Bank shall not be required to make any disbursements after the filing
or service upon Bank of any notice of mechanic's, materialman's or laborer's
lien until such lien is bonded or released.
Section 6.14. Changes to Plans and Specifications, Construction Contract.
Company will not make or permit to be made (a) any material change in the Plans
and Specifications; (b) any changes in any line item of the Project budget, (c)
any material change in the terms and conditions of the Construction Contract or
(d) any change in the identity of the Contractor.
Section 6.15. Construction and installation of Project Facility.
(a) Company will cause construction and installation of the Project
Facility to be carried on continuously in phases and to be one hundred
percent (100%) completed, lien free and ready for occupancy not later
than the Completion Date, time being of the essence of this
Reimbursement Agreement. The Project Facility will be constructed and
installed substantially in accordance with the Plans and
Specifications, and strictly in accordance with all applicable legal
requirements. The Facility will be constructed entirely on the
Premises and will not encroach upon or overhang any easement, building
line or right of way and, when erected, will not violate applicable
use or other restrictions of record. If, in Bank's judgment, the
Project is not in conformity with the foregoing requirements, Bank
shall notify Company in writing of any deficiencies and if such
deficiencies are not corrected within thirty (30) days after the
giving of such notice, Bank shall have the right to stop the work and
order repair or reconstruction in accordance therewith and to withhold
its consent to all further disbursements until the work is in
satisfactory compliance with the Plans and Specifications and all
legal requirements as required herein. Upon notice from Bank to
Company, or Company's discovery irrespective of such notice, that the
work is not in substantial conformity with the Plans and
Specifications and/or in strict compliance with all legal
requirements, Company shall commence correcting the deviation, as
promptly as is practicable, and in any event within ten (10) days
after the notice or discovery and shall prosecute such work diligently
to completion, which, in no event, shall be later than twenty-five
(25) days after such notice of discovery. No other notice shall be
required to render such deviation an Event of Default (as hereinafter
defined) hereunder;
(b) Company shall not authorize any material changes in the Plans and
Specifications without the prior written consent of Bank except for
change orders which have the
25
effect of increasing the cost of the Project either by itself or when
aggregated with any prior change orders to which the Bank's consent
was not required to be obtained pursuant to the provisions hereof by
an amount not in excess of the Change Order Amount; and
(c) All materials incorporated in such construction will be purchased so
that absolute ownership and title vest in Company upon delivery of
such materials to the Facility.
Section 6.16. Additional Funds. Company will, at any time or times upon
request of Bank, deposit with Bank such additional funds as are determined by
Bank or Bank's Inspector to be necessary (in excess of the proceeds of the
Bonds) to pay for completion of the Project and all costs and expenses related
thereto.
Section 6.17. Evidence of Payment of Costs. Company will furnish to Bank
copies of all affidavits, lien waivers, releases or other evidence requested by
Bank from time to time to establish that all bills for labor and materials
performed or furnished in connection with the Project and all bills of the
Contractor and its subcontractors and material suppliers, have been paid in
full, except for retainages. Company shall indemnify and hold Bank harmless from
any and all claims for unpaid amounts due for work or labor performed, or
materials furnished, to the Premises. Bank shall not be required to make any
disbursements after the filing or service upon Bank of any notice of mechanic's,
materialman's or laborer's lien until such lien is bonded or released.
Section 6.18. Entry; Correction of Defective Work. Company will allow Bank,
and Bank's officers, agents or employees, at all reasonable times, (a) the right
of entry and free access to the Premises to inspect all work done, labor
performed and materials furnished in furtherance of the Project and (b) to
require to be replaced or otherwise corrected any materials or work which fails
to comply with the Plans and Specifications.
(a) Section 6.19. INTENTIONALLY OMITTED.
Section 6.20. Title. Company will keep the title to the Premises free and
clear of all liens, encumbrances, easements, restrictions and claims, except for
(a) the Permitted Encumbrances, (b) any lien, restriction or encumbrance created
in connection with this Reimbursement Agreement or otherwise approved by Bank,
and (c) real estate taxes and installments of special assessments, if any, which
are a lien but not yet due and payable.
Section 6.21. Subsequent Appraisals. Company will immediately upon demand
reimburse Bank for the cost and expense of any appraisal of the Project obtained
by Bank on or after the date hereof if such appraisal is obtained by Bank
pursuant to the requirements of any law, statute, rule, regulation, interpretive
ruling, opinion, or directive of any state or federal governmental agency or
unit governing, regulating, or controlling the activities of Bank, whether now
existing or hereafter enacted.
Section 6.22. Purchase of Materials, Equipment, etc. No materials,
equipment, personal property, or fixtures of any kind will be purchased or
acquired by Company for installation or use in or about the Facility under any
conditional sales contract or security
26
agreement or any lease agreement, and all such materials, equipment, personal
property, and fixtures will be fully paid for before payment therefor becomes
past due or in any event within fifty (50) days after delivery thereof;
provided, however, that the foregoing shall not apply to amounts withheld and
unpaid on account of bona fide disputes with the suppliers.
Section 6.23. Amendment of Contracts. Company will not without the prior
written consent of Bank modify or amend a material term contained in any
contract of Company relating to the development or financing of the Project,
including any such contracts described herein.
Section 6.24. Payment Schedule of Bonds. Company shall cause the original
principal amount of the Bonds to be repaid not later than the scheduled payments
described in Exhibit B attached hereto and made a part hereof.
Section 6.25. Financial Covenants.
(a) The Company shall maintain a minimum Fixed Charge Coverage Ratio of
1.25 to 1.00 calculated as of each May 31st and November 30th/ /based upon
the most recently concluded four fiscal quarters of the Company.
(b) The Company shall maintain a minimum Interest Coverage Ratio of 2.00
to 1.00 calculated as of each May 31st and November 30th/ /based upon the
most recently concluded four fiscal quarters of the Company.
In calculating the foregoing ratios for the periods ending November 30,
2002 and May 31st, 2003, (i) principal shall be determined using the
current maturities of long term debt (in accordance with GAAP) on a
pro-forma basis for the twelve months following the Closing Date, (ii) Cash
Interest Expense shall be calculated as the pro-forma Cash Interest Expense
for the twelve months following the Closing Date (utilizing the appropriate
amortization schedules and interest rates for the Indebtedness, including
the fixed rate achieved under the SWAP Agreement and all Letter of Credit
Fees and related fees) and (iii) thereafter both principal and Cash
Interest Expense shall be calculated on the actual principal and Cash
Interest Expense, respectively, for the period in question.
Section 6.26. Distributions. The Company shall not make any distributions
or payments of dividends.
Section 6.27. Deposit and Cash Management Accounts. Company shall maintain
with the Bank all of its deposit accounts and cash management accounts.
Section 6.28. Payments to Affiliates/other Persons; Debt Subordination.
(a) The Company shall not make any payments of any kind to any other
Person, including any Affiliate of the Company, except for payments in
the ordinary course of business.
(b) Any Indebtedness due and owing E Z-EM, Inc. from the Company
(hereinafter the Subordinated Indebtedness") shall be fully
subordinated to the repayment by the Company of all amounts due and
owing to the Bank hereunder and under the
27
other Credit Documents. Provided that no Event of Default has
occurred, the Company may make payments of principal with respect to
the Subordinated Indebtedness on a semi-annual basis provided that
after giving effect to such payment on a pro-forma basis, the Company
shall be in full compliance with all of the terms, provisions and
conditions set forth herein and in the other Credit Documents.
SECTION SEVEN
-------------
EVENTS OF DEFAULT
Section 7.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default under this Reimbursement
Agreement:
(a) If Company fails to make or cause to be made any payment to Bank
required to be made pursuant to the terms of the Credit Documents,
including, but not limited to the Swap Documentation;
(b) If any representation or warranty made by Company or any officer
thereof herein, in the Credit Documents or in any other written
statement, certificate, report, or financial statement at any time
furnished by or for Company in connection with any of the Credit
Documents, proves to be incorrect in any material respect when made;
or
(c) If Company shall fail to perform or observe any other provision,
covenant, or agreement contained in this Reimbursement Agreement or in
any other of the Credit Documents applicable to Company, and such
failure remains unremedied for thirty (30) calendar days after Bank
shall have given written notice thereof to Company; or
(d) If Company (i) fails to pay any Indebtedness for borrowed money (other
than as arising under this Reimbursement Agreement) owing by Company
when due, whether at maturity, by acceleration, or otherwise
including, but not limited to, any Indebtedness due and owing to the
Bank or any Affiliate thereof; or (ii) fails to perform any term,
covenant, or agreement on its part to be performed under any agreement
or instrument (other than this Reimbursement Agreement) evidencing,
securing or relating to such Indebtedness when required to be
performed, or is otherwise in default thereunder, if the effect of
such failure is to accelerate, or to permit the holder(s) of such
Indebtedness or the trustee(s) under any such agreement or instrument
to accelerate, the maturity of such Indebtedness, unless waived by
such holder(s) or trustee(s); or
(e) If Company discontinues business except as otherwise permitted under
this Reimbursement Agreement; or
(f) If Company at any time hereafter sponsors or establishes any Plan and
Company (i) fails to notify Bank in writing of such occurrence within
the ten (10) days after such Plan is authorized by Company or (ii)
fails to agree within a reasonable time
28
to such amendments to this Reimbursement Agreement regarding
provisions with respect to ERISA that Bank customarily uses at that
time in loan agreements with other borrowers; or
(g) An Indenture Default shall have occurred under the Indenture; or
(h) A Determination of Taxability shall have been made under the
Indenture; or
(i) If Company (i) is adjudicated a debtor or insolvent, or ceases, is
unable, or admits in writing its inability, to pay its debts as they
mature, or makes an assignment for the benefit of creditors; (ii)
applies for, or consents to, the appointment of any receiver, trustee,
or similar officer for it or for all or any substantial part of its
property, or any such receiver, trustee, or similar officer is
appointed without the application or consent of Company; (iii)
institutes, or consents to the institution of, by petition,
application, or otherwise, any bankruptcy reorganization, arrangement,
readjustment of debt, dissolution, liquidation, or similar proceeding
relating to it under the laws of any jurisdiction; (iv) has any such
proceeding described in clause (iii) instituted against it and such
proceeding remains thereafter undismissed for a period of ninety (90)
days; or (v) has any judgment, writ, warrant of attachment or
execution or similar process issued or levied against a substantial
part of its property and such judgment, writ, or similar process is
not released, vacated, or fully bonded within ninety (90) days after
its issue or levy.
(j) Except as otherwise permitted in this Reimbursement Agreement, if at
any time, (i) the sum of the undisbursed portion of the Project Fund
is less than the amount necessary for the timely and full payment of
(a) all work done and not theretofore paid for or to be done in
connection with the completion of the Project in accordance with the
Plans and Specifications, including installation of all fixtures,
furniture and equipment contemplated by the Plans and Specifications,
and (b) all other costs incurred and not theretofore paid for, or to
be incurred in connection with the Project, and (ii) Company fails
within fifteen (15) Business Days after written request by Bank, to
deposit the deficiency with Bank.
Section 7.2. No Waiver; Remedies. If an Event of Default occurs, Bank may
exercise any and all remedies, legal or equitable, to collect the amounts due
from Company, pursuant to this Reimbursement Agreement, and in its sole
discretion, may notify the Trustee that an Event of Default has occurred and may
instruct the Trustee to accelerate the principal amount of the Bonds. Upon
receipt by the Trustee of such instructions from Bank, the Bonds shall be paid
pursuant to the Indenture. No failure on the part of Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right or remedy. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or equity.
29
SECTION EIGHT
-------------
TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT
Section 8.1. Transfer of Letter of Credit; Reduction or Termination of
Letter of Credit and Related Matters.
(a) The Letter of Credit may be transferred in accordance with the
provisions set forth therein;
(b) If Company shall be entitled to a credit against the principal amount
of the Bonds prior to maturity (the "Credit") pursuant to an optional
redemption of a portion of the Bonds or to the purchase of Bonds in
the open market and cancellation of such Bonds in accordance with the
provisions of the Indenture, and such amounts have been paid by or on
behalf of Company other than by Bank, Company shall have the right at
any time thereafter to reduce permanently, without penalty or premium,
the Letter of Credit Commitment in the manner set forth below. The
Letter of Credit Commitment will be reduced by an amount equal to the
sum of the following corresponding reductions in the Principal
Commitment and the Interest Commitment: (a) the respective Principal
Commitment will be reduced pro rata by an amount equal to the amount
of such Credit; and (b) the respective Interest Commitment will be
reduced pro rata by an amount equal to ninety eight (98) days'
interest on the amount of such Credit at the Maximum Rate (using a
365-day divisor). The aforementioned reduction will occur not less
than three (3) Business Days' after written notice to Bank,
accompanied by the original Letter of Credit and the written
certificate of the Trustee and Company stating that Company is
entitled to such Credit and designating the amount of such Credit and
the date upon which such credit shall become effective (which shall be
a Business Day);
(c) If the Letter of Credit Commitment shall be reduced pursuant to
paragraph (b) hereof, and Bank shall have received from the Trustee
the outstanding Letter of Credit then, in substitution for the then
outstanding Letter of Credit, a substitute irrevocable letter of
credit, shall be issued dated such date, for an amount equal to the
amount to which the Letter of Credit Commitment shall have been so
reduced (also less the amount of any drawings upon the Letter of
Credit which have not been reinstated under paragraph (d) hereof) but
otherwise having terms identical to the then outstanding Letter of
Credit;
(d) The obligation of Bank to honor Interest Drawings, under the Letter of
Credit, up to the aggregate amount of the Interest Commitment (as same
may have been reduced pursuant to subsection (b) of this Section 8.1
or in connection with a Principal Drawing)will be automatically
reinstated pro rata to the Interest Coverage Requirement on the date
of payment of each Interest Drawing; and
(e) Bank shall reinstate pro rata amounts drawn under the Letter of Credit
pursuant to a Remarketing Drawing as set forth in the Letter of
Credit.
30
The Letter of Credit shall terminate automatically on the earliest of (i)
the payment by Bank to the Trustee of the final drawing available to be made
under the Letter of Credit; (ii) receipt by Bank of the Letter of Credit and a
certificate signed by an officer of the Trustee and an authorized representative
of Company stating that no Bonds remain outstanding; (iii) receipt by Bank of
the Letter of Credit and a certificate signed by an officer of the Trustee and
an authorized representative of Company stating that "A Substitute Letter of
Credit or a Substitute Credit Facility in substitution for the Letter of Credit
has been accepted by the Trustee and is in effect"; or (iv) the stated
Expiration Date. Notwithstanding the foregoing, the Expiration Date may be
extended at Bank's option pursuant to Section 2.5 hereof.
SECTION NINE
------------
MISCELLANEOUS
Section 9.1. Liability of Bank. Between Company and Bank, Company assumes
all risks of the acts or omissions of the Trustee and any transferee of the
Letter of Credit with respect to its use of the Letter of Credit or its
proceeds. Neither Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or its
proceeds or for any acts or omissions of the Trustee and any transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
inaccuracy of any of the statements or representations contained therein or of
any endorsement(s) thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c) good faith
payment by Bank against presentation of documents which do not strictly comply
with the terms of the Letter of Credit, including any failure of any documents
to bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under the
Letter of Credit. In furtherance and not in limitation of the foregoing, Bank
may accept documents that appear on their face to be in order, and may assume
the genuineness and rightfulness of any signature thereon, without
responsibility for further investigation, regardless of any notice or
information to the contrary unless actually received by Bank; provided, that if
Bank shall receive written notification from both the Trustee and Company that
documents conforming to the terms of the Letter of Credit to be presented to
Bank are not to be honored, Bank agrees that it will not honor such documents
and Company shall indemnify and hold Bank harmless from such failure to honor.
Section 9.2. Right to Set-Off. Upon the occurrence of any Event of Default
hereunder Bank is hereby irrevocably authorized at any time and from time to
time without notice to Company, any such notice being expressly waived by
Company, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect or contingent or matured or unmatured, at any time held or owing by
Bank to or for the credit or the account of Company, or any part thereof in such
amounts as Bank may elect, against and on account of the obligations and
liabilities of Company to Bank hereunder and claims of every nature and
description of Bank against Company, whether arising hereunder or otherwise, as
Bank may elect, whether or not Bank has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. Bank
agrees to notify in writing Company promptly of any such set-off and the
application made by Bank, provided that the failure to give such notice shall
not affect the validity of such set-off and
31
application. The rights of Bank under this subsection are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which Bank may have.
Section 9.3. Additional Collateral. As additional security for this
Reimbursement Agreement, Company agrees that in the event that Trustee shall,
after the occurrence of a continuing Event of Default hereunder and acceleration
of the indebtedness evidenced hereby, draw upon the Letter of Credit to pay all
Bonds, Bank shall be and become the assignee of all rights and interests of the
Agency and the Trustee, all as provided more fully in the Indenture. Company
does hereby consent to such Assignment, and does agree to execute any and all
such documents, instruments and certificates in connection therewith as Bank
shall deem appropriate.
Section 9.4. Optional Redemption. If Company elects to exercise its option
to direct redemption of the Bonds by a prepayment, Company shall give Bank three
(3) days' prior written notice of such intent. Prior to notifying the Trustee of
its election to redeem the Bonds, Company shall deliver moneys (in good and
collected funds) in an amount equal to the amount necessary to effect the
redemption to Bank and Bank shall then inform the Trustee that those moneys are
on deposit and that the Trustee may draw on the Letter of Credit to effect that
redemption of the Bonds.
Section 9.5. Pledge of Bonds. Bonds which are not remarketed shall be held
by the Trustee, as agent for Bank, as security for the obligations of Company
under the Bond Pledge. Company hereby grants a lien on such Bonds while they are
so held by the Trustee.
Section 9.6. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered, or mailed first-class postage prepaid, or receipt by fax,
independently confirmed by other than the Sender's machine:
(a) if to Bank, at:
KeyBank National Association
Standby Letter of Credit Processing and Service Center
0000 Xxxxxxxx Xxxx - XX00000000
Xxxxxxxxx, Xxxx 00000-0000
Fax Number: (000) 000-0000
and a copy to:
KeyBank National Association
00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Fax Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Vice President
and to:
Xxxxxx Xxxxxxxx LLC
32
00 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Fax Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
or at such other address as may have been furnished for such purpose to Company
by Bank in writing; or
(b) if to Company, at:
Angiodynamics, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Fax Number: 000-000-0000
Attention: Xxxxxx X. Xxxxx and Xxxxxx Xxxxxxx
and a copy to:
Bond Xxxxxxxxx & King PLLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Fax Number: 000-000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
or at such other address as may have been furnished for such purpose to Bank by
Company in writing.
Section 9.7. Survival of Representations and Warranties. All agreements,
representations and warranties contained in the Credit Documents shall survive
the execution and delivery of this Reimbursement Agreement, any investigation at
any time made by or on behalf of Bank and the issuance and acceptance of the
Letter of Credit. All statements contained in any certificates or other
instruments delivered by or on behalf of Company pursuant hereto shall
constitute representations and warranties by Company under this Reimbursement
Agreement.
Section 9.8. Payments on Holidays. Whenever any payment to be made
pursuant to this Reimbursement Agreement shall be stated to be due on a public
holiday in the State of New York, Saturday or Sunday, such payment may be made
on the next succeeding Business Day and such extension of time shall in such
case be included in computing interest, if any, in connection with such payment.
Section 9.9. Computation of Interest. Unless specified to the contrary
herein, all computations of interest hereunder shall be made on the basis of a
three hundred sixty (360) day year consisting of twelve (12) thirty (30) day
months.
Section 9.10. Entire Agreement. The Credit Documents and the Letter of
Credit embody the entire agreement and understanding between Bank and Company
and supersede all
33
prior agreements and understandings relating to the subject matter hereof,
provided, however, that in the event of any inconsistency between the Credit
Documents and the Commitment Letter, the Credit Documents shall control.
Section 9.11. Parties in Interest. All the terms and provisions of this
Reimbursement Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto.
Section 9.12. Participations. Bank reserves the right to sell
participations in its obligations evidenced by the Letter of Credit, provided,
however, that Company shall continue to deal solely with Bank in such event, it
being understood and agreed that Company shall have no responsibility to such
participants.
Section 9.13. Expenses. Company agrees, regardless of whether or not the
Bonds are eventually issued and sold and regardless of whether or not the
transactions contemplated hereby shall be consummated, to pay all reasonable
expenses incurred by Bank incident to such transactions in the preparation of
documentation relating thereto, including all fees and disbursement of the
counsel (whether special outside counsel or attorneys in its Law Department) to
Bank, for services to Bank. Company further agrees to pay all like expenses
incurred by Bank in connection with any amendments of or waivers or consents
requested by Company under or with respect to the Credit Documents or the
enforcement from time to time by Bank of its rights under and pursuant to the
Credit Documents.
Section 9.14. Counterparts. This Reimbursement Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Reimbursement
Agreement by signing any such counterpart.
Section 9.15. Governing Law. This Reimbursement Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the State
of New York.
Section 9.16. Waiver of Jury Trial.
(a) Company, to the extent permitted by law, waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort,
or otherwise, between Bank and Company arising out of, in connection with,
related to, or incidental to the relationship established between Company and
Bank in connection with this Reimbursement Agreement or any other agreement,
instrument or document executed or delivered in connection therewith or the
transactions related thereto. This waiver shall not in any way affect, waive,
limit, amend or modify Bank's ability to pursue remedies pursuant to any
confession of judgment or cognovit provision contained in this Reimbursement
Agreement, or any other agreement, instrument or document related thereto;
(b) Company waives demand, presentment for payment, notice of dishonor,
protest and notice of protest, and diligence in the collection and bringing suit
and agrees to the application of any bank balance as payment or part payment of
this Reimbursement Agreement, or as an offset thereto, and that Bank may extend
the time for payment, accept partial payment,
34
take security therefor, or exchange or release any collateral, without
discharging or releasing Company; and
(c) Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the bringing of any suit, action
or proceeding arising out of or relating to this Reimbursement Agreement or any
other document related hereto in any New York state or federal court sitting in
New York. each of the parties hereto hereby waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court. Company confirms that the foregoing
waivers are informed and freely made.
35
IN WITNESS WHEREOF, the undersigned have caused this Reimbursement
Agreement to be executed as of the date first above written.
ANGIODYNAMICS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx,
President and Chief Executive
Officer
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx, V.P.
-------------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
STATE OF NEW YORK )
)ss:
COUNTY OF Albany)
On the 28 day of August in the year 2002 before me, the undersigned, a
notary public in and for said state, personally appeared XXXXXX X. XXXXX,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s) or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Notary Public
STATE OF NEW YORK )
)ss:
COUNTY OF Albany)
On the 28 day of August in the year 2002 before me, the undersigned, a
notary public in and for said state, personally appeared XXXXXX X. XXXXXXXX,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s) or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Notary Public
[Notary Stamp]
36
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
EXHIBIT A
---------
A KeyCorp Bank
KEYBANK NATIONAL ASSOCIATION SWIFT: XXXXXX00XXX
STANDBY LETTER OF CREDIT TELEX: 212525 SNB UR
PROCESSING AND SERVICE CENTER PHONE: 000-000-0000
0000 XXXXXXXX XXXX - XX00000000 FAX: 000-000-0000
XXXXXXXXX, XXXX 00000-0000, XXX
IRREVOCABLE TRANSFERABLE DIRECT PAY LETTER OF CREDIT NO.S305206
DATE: AUGUST 29, 2002
Beneficiary: Company:
THE HUNTINGTON NATIONAL BANK, AS ANGIODYNAMICS, INC.
TRUSTEE 000 Xxxxxxxxxx Xxxxxx
Corporate Trust Department Xxxxxxxxxx, Xxx Xxxx 00000
0 Xxxxxx Xxxx - XX0X00 (CN03/CSG)
Xxxxxxxx, Xxxx 00000
Amount: USD $3,575,179.00
Expiration Date: August 22, 2005
Dear Sirs:
You, as Trustee under the Indenture of Trust, dated as of August 1, 2002
(the "Indenture"), between you and the Counties of Xxxxxx and Washington
Industrial Development Agency (the "Agency"), pursuant to which Three Million
Five Hundred Thousand and 00/100 Dollars ($3,500,000.00) in aggregate principal
amount of the Counties of Xxxxxx and Washington Industrial Development Agency
Multi-Mode Variable Rate Industrial Development Revenue Bonds (Angiodynamics,
Inc. Project-Letter of Credit Secured) Series 2002 (the "Bonds") are being
issued by the Agency, are hereby irrevocably authorized to draw on KeyBank
National Association pursuant to this Irrevocable Transferable Direct Pay Letter
of Credit, for the account of Angiodynamics, Inc., a Delaware corporation (the
"Company"), available by one or more of your drafts at sight, upon the terms and
conditions hereinafter set forth, an amount (subject to reinstatement as
hereinafter set forth) not exceeding Three Million Five Hundred Seventy Five
Thousand One Hundred Seventy Nine and 00/100 Dollars ($3,575,179.00) (the
"Letter of Credit Commitment") of which (a) an amount not exceeding Three
Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00) (the "Principal
Commitment") may be drawn to pay (i) the principal amount of the Bonds as and
when the same become due at maturity or by acceleration or by redemption, or
(ii) the purchase price or a portion of the purchase price equal to the
principal amount of any Bonds tendered for purchase by the Holders thereof, to
the extent remarketing proceeds are not available for
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 1 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
such purpose to pay the portion of the purchase price of any Bonds tendered for
purchase by the Holders thereof; and (b) an amount not exceeding Seventy Five
Thousand One Hundred Seventy Nine and 00/100 Dollars ($75,179.00) (the "Interest
Commitment") may be drawn with respect to the payment of (i) up to 98 days'
interest at a rate per annum of eight percent (8%) (using a 365-day divisor)
(the "Maximum Rate") to pay interest on the Bonds when due, or (ii) a portion of
the purchase price of up to 98 days' interest at a rate per annum equal to the
Maximum Rate for interest accrued, if any, on Bonds tendered for purchase by the
Holders thereof to the extent remarketing proceeds are not available for such
purpose, in each instance effective immediately and expiring at the close of
business on August 22, 2005(the "Expiration Date").
Funds under this Letter of Credit are available to you against your
executed sight draft(s) drawn on us, stating on their face: "Drawn under KeyBank
National Association Irrevocable Transferable Direct Pay Letter of Credit No.
S305206" and accompanied by: (A) if the drawing is being made with respect to
the payment of principal on the Bonds, whether due at maturity, upon mandatory
or optional redemption or upon acceleration (a "Principal Drawing"), a
certificate signed by you in the form of Schedule 1 attached hereto
appropriately completed; (B) if the drawing is being made with respect to a
payment of interest on the Bonds when due (an "Interest Drawing"), a certificate
signed by you in the form of Schedule 2 hereto appropriately completed; and (C)
if a drawing is being made to pay the principal amount of and accrued interest
on any Bonds tendered for purchase by the Holders thereof, to the extent
remarketing proceeds are not available for such purpose (a "Remarketing
Drawing"), a certificate signed by you in the form of Schedule 3 hereto
appropriately completed. Presentation of such draft(s) and certificate(s) shall
be made at our office at Standby Letter of Credit Processing and Service Center,
0000 Xxxxxxxx Xxxx - XX00000000, Xxxxxxxxx, Xxxx 00000-0000, or at any other
office of ours which may be designated by us by written notice delivered to you.
We hereby agree that all drafts drawn under and in compliance with the terms of
this Letter of Credit and presented before 11:00 a.m. (New York City time) on a
Business Day will be duly honored by us by 2:00 p.m. (New York City time) on the
next Business Day after delivery of the draft(s) and certificate(s); provided,
however, if a Remarketing Drawing is presented and if conforming drawing
documentation is presented at or prior to 11:00 a.m. (New York City time) on a
Business Day, payments shall be made to you on such Business Day. Payments under
this Letter of Credit will be made only from our funds. If requested by you,
payment under this Letter of Credit may be made by wire transfer of federal
funds to your account at any Federal Reserve Bank, or by deposit of immediately
available funds into a designated account that you maintain with us. As used
herein, "Business Day" shall mean any day of the year other than (i) a Saturday
or Sunday, (ii) a day on which commercial banks located in Cleveland, Ohio, or
the city or cities in which are located the corporate trust offices of the
Trustee and the Tender Agent, and our office at which demands for payment under
this Letter of Credit are to be presented are authorized by law to close, or
(iii) any day on which the New York Stock Exchange is closed.
Subject to the next succeeding paragraph, drawings hereunder shall not
exceed the Letter of Credit Commitment, as the Letter of Credit Commitment may
be reduced or reinstated pursuant hereto, and, except as hereinafter provided,
each drawing honored by us shall pro tanto reduce the amount available under
this Letter of Credit.
We will reinstate amounts drawn hereunder pursuant to a Remarketing Drawing
hereunder, as to the Principal Commitment and the Interest Commitment, to the
extent that money is received by us (other
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 2 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
than from drawings under this Letter of Credit) from the Tender Agent described
in the Indenture, which proceeds were held by the Trustee or the Tender Agent
for the sole purpose of reimbursing us for all or a portion of the amounts drawn
pertaining to said Remarketing Drawing, or upon the Trustee's certification that
the Trustee or the Tender Agent is holding for our benefit Bonds together with
an amount of money, the aggregate amount of which is equal to or greater than
the principal portion of the Remarketing Drawing
In connection with any Interest Drawing, the Letter of Credit will be
automatically decreased by the amount of such Interest Drawing and will be
automatically reinstated by the amount of such Interest Drawing on the day of
payment of such Interest Drawing. Upon presentation by you and payment by us of
any Principal Drawing, the Principal Commitment shall be automatically decreased
by an amount equal to the amount of such Principal Drawing and the Interest
Commitment shall be automatically reduced by an amount equal to ninety-eight
(98) days' interest at the Maximum Rate (using a 365-day divisor) on the amount
of such Principal Drawing.
If the Company shall be entitled to a credit against the principal amount
of the Bonds prior to maturity (the "Credit") pursuant to an optional redemption
of a portion of the Bonds, or to the purchase of Bonds in the open market and
cancellation thereof in accordance with the provisions of the Indenture, and
such amounts have been paid by or on behalf of the Company other than by us, the
Company shall have the right at any time thereafter to reduce permanently,
without penalty or premium, the Letter of Credit Commitment in the manner set
forth below. The Letter of Credit Commitment will be reduced by an amount equal
to the sum of the following corresponding reductions in the Principal Commitment
and the Interest Commitment: (i) the Principal Commitment will be reduced to an
amount equal to the amount of such Credit, and (ii) the Interest Commitment will
be reduced by an amount equal to ninety eight (98) days' interest at the Maximum
Rate (using a 365-day divisor) on the amount of such Credit. The reduction in
the Letter of Credit Commitment pursuant to such Credit will occur not less than
three (3) Business Days after written notice to us, accompanied by this Letter
of Credit and your written certificate in the form of Schedule 4 attached
hereto, stating that the Company is entitled to such reduction and designating
the amount of such Credit and the date of the Business Day upon which such
reduction shall become effective. Upon such presentation we will either reissue
this Letter of Credit in the maximum amount available hereunder or otherwise
amend this Letter of Credit to reflect such maximum amount then available.
Only you, as Trustee, may make a drawing under this Letter of Credit. Upon
the payment to you or your account of the amount specified in a sight draft
drawn hereunder, we shall be fully discharged of our obligation under this
Letter of Credit with respect to such sight draft, and we shall not thereafter
be obligated to make any further payments under this Letter of Credit in respect
of such sight draft to you or to any other person who may have made to you or
who makes to you a demand for payment of principal of or interest on any of the
Bonds.
Except as otherwise provided herein, this Letter of Credit shall be
governed by and construed in accordance with the Uniform Customs and Practice
for Documentary Credits (1993 Revision), Publication No. 500 of the
International Chamber of Commerce (the "UCP"); provided, however, that
paragraphs d, e, f, g, h, i and j of Article 48 and the second sentence of
Article 17 shall not apply to this Letter of Credit. Furthermore, as provided in
the first sentence of Article 17 of the UCP, we assume no
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 3 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
liability or responsibility for consequences arising out of the interruption of
our business by Acts of God, riots, civil commotions, insurrections, wars or any
other causes beyond our control, or strikes or lockouts. As to matters not
covered by the UCP and to the extent not inconsistent with the UCP or made
inapplicable by this Letter of Credit, this Letter of Credit shall be governed
by the laws of the State of Ohio, including the Uniform Commercial Code as in
effect in the State of Ohio.
This Letter of Credit is transferable in its entirety (but not in part) to
any transferee who has succeeded you as Trustee under the Indenture, and such
transferred Letter of Credit may be successively transferred to any Successor
Trustee or Co-Trustee thereunder, but may not be assigned, transferred or
conveyed under any other circumstance. Transfer of the amount available under
this Letter of Credit to such transferee shall be effected by the presentation
to us of this Letter of Credit accompanied by a transfer fee of $500.00 (to be
paid by the Company) and the transfer form in the form attached hereto as
Schedule 5 and, unless this Letter of Credit is so presented to us, we shall
have no obligation hereunder to any transferee. Upon such transfer, we will
either reissue this Letter of Credit to the transferee in the maximum amount
then available hereunder or endorse the transfer on the reverse of this letter
of credit and forward it directly to the transferee with our customary notice of
transfer.
Upon the earliest of (i) the honoring by us of the final drawing available
to be made hereunder; (ii) our receipt of this outstanding Letter of Credit and
a written certificate signed by your officer and an authorized representative of
the Company, in the form of Schedule 6 hereto appropriately completed, stating
that: (a) no Bonds are Outstanding within the meaning of the Indenture; and (b)
such officer and representative are duly authorized to sign such certificate on
behalf of you and the Company; (iii) our receipt of this Letter of Credit and a
written certificate signed by your officer and an authorized representative of
the Company, in the form of Schedule 7 hereto appropriately completed, stating
that: (a) a Substitute Letter of Credit or a Substitute Credit Facility has been
accepted by you and is in effect; and (b) such officer and representative are
duly authorized to sign such certificate on behalf of you and the Company; or
(iv) the Expiration Date, this Letter of Credit shall automatically terminate
and be delivered to us for cancellation.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds or the Reimbursement Agreement),
except only the certificate(s) and the sight draft(s) referred to herein; and
any such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for such certificate(s) and such sight
draft(s).
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 4 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 1
----------
CERTIFICATE FOR THE PAYMENT OF PRINCIPAL
OF THE COUNTIES OF XXXXXX AND WASHINGTON INDUSTRIAL DEVELOPMENT
AGENCY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BONDS
(ANGIODYNAMICS, INC. PROJECT-LETTER OF CREDIT SECURED) SERIES 2002
(THE "BONDS")
The undersigned, a duly authorized signatory of The Huntington National
Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National
Association (the "Bank"), with reference to Irrevocable Transferable Direct Pay
Letter of Credit No. S305206 (the term "Letter of Credit" and other capitalized
terms used herein and not defined shall have their respective meanings as set
forth in the Letter of Credit) issued by Bank in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. The Trustee is making a drawing under the Letter of Credit with
respect to the payment of principal of the Bonds.
3. The amount of principal of the Bonds which will be due and payable on
_____________________, is $______________________.
4. The amount of the sight draft accompanying this Certificate
($___________________), together with the aggregate of all prior payments made
pursuant to Principal Drawings under this Letter of Credit for the payment of
the Bonds, does not exceed $____________________.
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Letter of Credit,
the Bonds and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the _____ day of _____________________, ________.
THE HUNTINGTON NATIONAL BANK, TRUSTEE,
As Trustee
By:
-------------------------------------
(Name and Title)
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 5 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 2
----------
CERTIFICATE FOR THE PAYMENT OF INTEREST
OF COUNTIES OF XXXXXX AND WASHINGTON INDUSTRIAL DEVELOPMENT AGENCY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BONDS
(ANGIODYNAMICS, INC. PROJECT-LETTER OF CREDIT SECURED) SERIES 2002
(THE "BONDS")
----------
The undersigned, a duly authorized signatory of The Huntington National
Bank, Trustee (the "Trustee"), hereby certifies to KeyBank National Association
(the "Bank"), with reference to Irrevocable Transferable Direct Pay Letter of
Credit No. S305206 (the term "Letter of Credit" and other capitalized terms used
herein and not defined shall have their respective meanings as set forth in the
Letter of Credit) issued by Bank in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. The Trustee is making a drawing under the Letter of Credit with
respect to a payment of interest accrued on the Bonds on or prior to their
stated maturity date.
3. The amount of interest on the Bonds which will be due and payable on
________________, is $__________________.
4. The amount of the sight draft accompanying this Certificate
($_________________) does not exceed the amount available on the date hereof to
be drawn under the Letter of Credit in respect of the payment of interest
accrued on the Bonds on or prior to their stated maturity date.
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Letter of Credit,
the Bonds and the Indenture.
6. The amount of the Interest Commitment available after the draw, if
reinstated pursuant to the Letter of Credit, is $___________________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ____ day of ___________________, _____.
THE HUNTINGTON NATIONAL BANK, TRUSTEE,
As Trustee
By:
-------------------------------------
(Name and Title)
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 6 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 3
----------
CERTIFICATE FOR THE PAYMENT OF PURCHASE PRICE IN REMARKETING
OF COUNTIES OF XXXXXX AND WASHINGTON INDUSTRIAL DEVELOPMENT AGENCY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BONDS
(ANGIODYNAMICS, INC. PROJECT-LETTER OF CREDIT SECURED) SERIES 2002
(THE "BONDS")
The undersigned, a duly authorized signatory of The Huntington National
Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National
Association (the "Bank"), with reference to KeyBank National Association
Irrevocable Transferable Direct Pay Letter of Credit No. S305206 (the term
"Letter of Credit" and other capitalized terms used herein and not defined shall
have their respective meanings as set forth in the Letter of Credit) issued by
Bank in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds. The total amount of Bonds outstanding (as defined in the Indenture) is
$________________.
2. The Trustee is making a drawing under the Letter of Credit at the
written request of the Remarketing Agent (as defined in the Indenture), to pay,
pursuant to the terms of the Indenture, the purchase price equal to the
principal amount of those Bonds which the Remarketing Agent has been unable to
remarket and the interest accrued on such Bonds but not paid.
3. The Trustee: (a) is delivering or causing to be delivered to Bank, or
its designated agent, of the Bonds, registered in the name of the Company as
Company and Bank as pledgee; referred in this second paragraph hereof; (b)
acknowledges the pledge by the Company to Bank of the Bonds delivered pursuant
to subparagraph (a); and (c) agrees that all payments of principal, premium, if
any, and interest made on such Bonds shall be made to Bank, so long as Bank is
the pledgee of such Bonds.
4. The principal amount of the Bonds delivered to the Remarketing Agent
which the Remarketing Agent has been unable to remarket is $____________. The
amount of interest upon such Bonds which has accrued but is unpaid is
$____________. The amount of the draft accompanying this Certificate does not
exceed such amount due as the purchase price of the Bonds corresponding to such
principal amount of, and interest accrued on, such Bonds.
Upon receipt by the Trustee of the amount demanded hereby, (a) the Trustee
will deliver it to Bond holders only for the purpose of payment of the purchase
price of the Bonds referenced in the second paragraph hereof, (b) no portion of
it shall be applied by the Trustee for any other purpose, and (c) no portion of
it shall be commingled with other funds held by the Trustee. This drawing is
made in accordance with the provisions of the Indenture and the Letter of
Credit.
The amount of the draw accompanying this Certificate was computed in
accordance with the terms and conditions of the Bonds and the Indenture.
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 7 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate
as of the _____ day of _____________________, ______.
THE HUNTINGTON NATIONAL BANK, TRUSTEE,
As Trustee
By:
-------------------------------------
(Name and Title)
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 8 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 4
----------
CERTIFICATE AS TO REDUCTION
OF LETTER OF CREDIT COMMITMENT
COUNTIES OF XXXXXX AND WASHINGTON INDUSTRIAL DEVELOPMENT AGENCY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BONDS
(ANGIODYNAMICS, INC. PROJECT-LETTER OF CREDIT SECURED) SERIES 2002
(THE "BONDS")
KeyBank National Association
Standby Letter of Credit
Processing and Service Center
0000 Xxxxxxxx Xxxx -XX00000000
Xxxxxxxxx, Xxxx 00000-0000,
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. S305206
Ladies and Gentlemen:
The undersigned, a duly authorized signatory of The Huntington National
Bank, as Trustee (the "Trustee"), and a duly authorized representative of
Angiodynamics, Inc. (the "Company"), hereby certifies to KeyBank National
Association, with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. S305206 (the term "Letter of
Credit" and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee, that:
A. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
B. The Company is entitled to a reduction in the Letter of Credit
Commitment. The Letter of Credit Commitment shall be reduced,
effective as of _________ ________________, as follows:
1. The Principal Commitment shall be reduced to $______________.
2. The Interest Commitment shall be reduced to $_______________.
C. The undersigned officer and representative are duly authorized to sign
this certificate on behalf of the Trustee and on behalf of the
Company, respectively.
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 9 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
IN WITNESS WHEREOF, the Trustee and the Company have executed and delivered
this Certificate as of the ____ day of __________________, ____.
TRUSTEE: THE HUNTINGTON NATIONAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
COMPANY: ANGIODYNAMICS, INC.
By:
-------------------------------------
Title:
----------------------------------
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 10 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 5
----------
CERTIFICATE OF TRANSFER
-----------------------
KeyBank National Association
Standby Letter of Credit
Processing and Service Center
0000 Xxxxxxxx Xxxx - XX00000000
Xxxxxxxxx, Xxxx 00000-0000
Date:_______________, 20__
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. S305206
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to the following (the "Transferee"):
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the Transferee, and the Transferee shall have the
sole rights as beneficiary thereof, including sole rights relating to any
amendments of the Letter of Credit, whether increases in the amount to be drawn
thereunder, extensions of the Expiration Date thereof, or other amendments, and
whether such amendments now exist or are made after the date hereof. All
amendments of the Letter of Credit are to be advised directly to the Transferee
without necessity of any consent of or notice to the undersigned beneficiary.
The undersigned hereby certifies that the Transferee has become successor
Trustee under the Indenture of Trust dated as of August 1, 2002, between the
undersigned and the Counties of Xxxxxx and Washington Industrial Development
Agency (the "Agency"), relating to the Counties of Xxxxxx and Washington
Industrial Development Agency Multi-Mode Variable Rate Industrial Development
Development Revenue Bonds (Angiodynamics, Inc. Project-Letter of Credit Secured)
Series 2002 and has accepted such appointment in writing.
We enclose the Company's check in the amount of $500.00 representing your
transfer fee.
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 11 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
The original of the Letter of Credit is returned herewith, and in
accordance therewith we ask you to endorse the within transfer on the reverse
thereof and forward it directly to the Transferee with your customary notice of
transfer, or issue a replacement Letter of Credit to the Transferee as provided
therein.
Very truly yours,
THE HUNTINGTON NATIONAL BANK, TRUSTEE,
as Trustee
By:
-------------------------------------
(Authorized Officer)
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 12 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 6
----------
CERTIFICATE THAT NO BONDS ARE OUTSTANDING
KeyBank National Association
Standby Letter of Credit
Processing and Service Center
0000 Xxxxxxxx Xxxx - XX00000000
Xxxxxxxxx, Xxxx 00000-0000,
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. S305206
Ladies and Gentlemen:
The undersigned, a duly authorized signatory of The Huntington National
Bank, as Trustee (the "Trustee"), and ______________________, a duly authorized
representative of Angiodynamics, Inc. (the "Company"), hereby certify to KeyBank
National Association, with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. S305206 (the term "Letter of
Credit" and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. No Bonds are Outstanding within the meaning of the Indenture.
3. The undersigned officers and representatives are duly authorized to
sign this certificate on behalf of the Trustee and on behalf of the Company,
respectively.
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 13 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
IN WITNESS WHEREOF, the Trustee and the Company have executed and delivered
this Certificate as of the _______ day of _________________, ____.
THE HUNTINGTON NATIONAL BANK, TRUSTEE,
as Trustee
By:
-------------------------------------
(Name and Title)
ANGIODYNAMICS, INC.
By:
-------------------------------------
Title:
----------------------------------
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 14 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
SCHEDULE 7
----------
CERTIFICATE OF ACCEPTANCE OF ALTERNATE
LETTER OF CREDIT
KeyBank National Association
Standby Letter of Credit
Processing and Service Center
0000 Xxxxxxxx Xxxx - XX00000000
Xxxxxxxxx, Xxxx 00000-0000,
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. S305206
Ladies and Gentlemen:
The undersigned, a duly authorized signatory of The Huntington National
Bank, as Trustee (the "Trustee"), and ____________________, a duly authorized
representative of Angiodynamics, Inc. (the "Company"), hereby certify to KeyBank
National Association, with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. S305206 (the term "Letter of
Credit" and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. An Substitute Letter of Credit or a Substitute Credit Facility in
substitution for the Letter of Credit has been accepted by the Trustee.
3. The undersigned officer and representative are duly authorized to sign
this certificate on behalf of the Trustee and on behalf of the Company,
respectively.
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 15 of 16
KeyBank National Association Irrevocable Transferable Direct Pay Letter of
Credit No. S305206
IN WITNESS WHEREOF, the Trustee and the Company have executed and delivered
this certificate as of the _____ day of ___________________, ____.
THE HUNTINGTON NATIONAL BANK, as
TRUSTEE, as Trustee
By:
-------------------------------------
(Name and Title)
ANGIODYNAMICS, INC.
By:
-------------------------------------
Title:
----------------------------------
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Page 16 of 16
EXHIBIT "B"
PRINCIPAL REDUCTION SCHEDULE
B-1
