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Exhibit 10.9
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This Letter of Credit and Reimbursement Agreement ("Agreement") is made and
entered into as of December 1, 1998, by and between American Xtal Technology,
Inc. (the "Borrower") and U.S. Bank National Association (the "Bank").
RECITALS
A. The Borrower and Xxxxxx Trust Company of California (the "Trustee")
have entered into an Indenture dated as of December 1, 1998 (the "Indenture"),
pursuant to which the Borrower will issue its Variable Rate Taxable Demand
Revenue Bonds Series 1998 (the "Bonds") in an aggregate principal amount of
$11,615,000.
B. To assure payment of the principal and interest with respect to the
Bonds when due, the Borrower has requested that the Bank issue an irrevocable,
direct pay letter of credit in favor of the Trustee in substantially the form of
Exhibit A hereto (such letter of credit and any successor letter of credit being
the "Letter of Credit"), in the amount of $11,986,680 (the "Commitment"), of
which $11,615,000 shall support the payment of principal with respect to the
Bonds and $371,680 shall support the payment of 96 days of interest with respect
to the Bonds at a rate not to exceed 12% per annum based on a 360-day year
(actual days elapsed).
C. As more fully set forth in this Agreement, the Borrower has agreed to
reimburse the Bank for drawings under the Letter of Credit and to grant to the
Bank a security interest in certain Collateral (as hereafter defined) to secure
the Obligations (as hereafter defined) of the Borrower under this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. For purposes of this Agreement
(including the Recitals hereof), the following terms shall have the respective
meanings specified below.
"Agreement" shall mean this Letter of Credit and Reimbursement Agreement,
including the exhibits hereto.
"Annual Letter of Credit Fee" shall have the meaning assigned to that term
in Section 8.1(a) hereof.
"Bank" shall mean U.S. Bank National Association.
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"Bank Documents" shall mean the Loan Agreement, the Pledge Agreement, the
Deeds of Trust, the Security Agreement, and the Third Party Lienholder
Agreement.
"Business Day" shall mean a day of the year which is not (i) a Saturday or
Sunday or (ii) a day on which banks located in Sacramento, California, or banks
located in the city in which the principal office of the Trustee or the Tender
Agent (as such terms are defined in the Indenture) is located are authorized or
obligated by law or executive order to close or (iii) a day on which the New
York Stock Exchange is closed.
"Bonds" shall have the meaning assigned to that term in Recital A hereto.
"Closing Date" shall mean the date that all conditions precedent to the
issuance of the Letter of Credit are satisfied in accordance with the terms
hereof.
"Collateral" shall mean, collectively, (i) the "Collateral" as defined in
the Security Agreement and (ii) the "Property" and the "Collateral" as defined
in the Deeds of Trust.
"Commitment" shall have the meaning assigned to that term in Recital B
hereto.
"Deeds of Trust" shall mean, collectively, each Deed of Trust, Security
Agreement, Assignment of Leases and Rents and Fixture Filing executed and
delivered by the Borrower for the benefit of the Bank securing the Obligations
(in whole or in part) and encumbering the Collateral or any portion thereof, in
each case, as the same may be amended, supplemented or otherwise modified from
time to time in writing in accordance therewith.
"Event of Default" shall have the meaning assigned to that term in Section
7.1 hereof.
"Fixed Interest Rate" shall mean a fixed, nonfloating interest rate with
respect to the Bonds established in accordance with the terms of Section 2.03(D)
of the Indenture.
"Improvements" shall have the meaning assigned to that term in the Deeds of
Trust.
"Indenture" shall have the meaning assigned to that term in Recital A
hereto.
"Interest Drawing" shall have the meaning assigned to that term in the
Letter of Credit.
"Interest Purchase Drawing" shall have the meaning assigned to that term in
the Letter of Credit.
"Letter of Credit" shall have the meaning assigned to that term in Recital
B hereto.
"Letter of Credit Origination Fee" shall have the meaning assigned to that
term in Section 8.1(b) hereof.
"Loan Agreement" means that certain Loan Agreement dated as of September
18, 1998, by and between the Borrower and the Bank, as the same may be amended,
supplemented or otherwise modified from time to time in writing in accordance
therewith.
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"Obligations" shall mean all obligations of the Borrower to the Bank under
this Agreement and the Related Documents, including without limitation the
obligation to reimburse the Bank for amounts paid under the Letter of Credit,
the obligation to pay the fees due hereunder, and the obligation to prepay
obligations on account of the Letter of Credit during the continuance of an
Event of Default.
"Outstanding" with respect to the Bonds shall have the meaning assigned to
that term in the Indenture.
"Pledge Agreement" means that certain Pledge Agreement and Security
Agreement of even date herewith made by the Borrower in favor of the Bank, as
the same may be amended, supplemented or otherwise modified from time to time in
writing in accordance therewith.
"Potential Default" shall mean an event which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.
"Principal Drawing" shall have the meaning assigned to that term in the
Letter of Credit.
"Principal Purchase Drawing" shall have the meaning assigned to that term
in the Letter of Credit.
"Property" shall have the meaning assigned to that term in the Deeds of
Trust.
"Reference Rate" shall mean the fluctuating per annum rate announced from
time to time by the Bank in Sacramento, California as its "prime rate." The
prime rate is a rate set by the Bank based upon various factors including the
Bank's costs and desired return and general economic conditions, and is used as
a reference point for pricing some loans, which may be priced at, above, or
below the prime rate.
"Related Documents" shall mean, collectively, the Bank Documents, the
Letter of Credit, the Bonds and the Indenture.
"Security Agreement" shall mean that certain Security Agreement of even
date herewith by and between the Borrower, as debtor, and the Bank, as secured
party, as the same may be amended, supplemented or otherwise modified from time
to time in writing in accordance therewith.
"Third Party Lienholder Agreement" means that certain Third Party
Lienholder Agreement dated as of November 30, 1998, by and between the Bank and
the United States Small Business Administration, and acknowledged and consented
to by the Borrower, as the same may be amended, supplemented or otherwise
modified from time to time in writing in accordance therewith.
SECTION 1.2 Accounting Terms. All accounting terms used herein and not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles, consistently applied.
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ARTICLE II
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 2.1 The Letter of Credit. The Borrower requests the Bank to issue
the Letter of Credit, and the Bank agrees, on the terms and conditions
hereinafter set forth, to issue the Letter of Credit to the Trustee. The
Borrower agrees to execute and deliver such additional application materials
with respect to the Letter of Credit and such other documents as the Bank shall
reasonably request in connection therewith.
SECTION 2.2 Issuing the Letter of Credit. The Letter of Credit shall be
issued to the Trustee on the Closing Date upon fulfillment of the conditions set
forth in Article III hereof. The Borrower shall reimburse the Bank for any and
all draws under the Letter of Credit in accordance with the terms and conditions
set forth below.
SECTION 2.3 Reimbursement. In satisfaction of its obligation to reimburse
the Bank for any amount drawn under the Letter of Credit, the Borrower hereby
agrees to (i) pay to the Bank the amount of each Interest Drawing and each
Interest Purchase Drawing on the day such drawing is honored by the Bank and
(ii) to pay to the Bank the amount of each Principal Drawing and each Principal
Purchase Drawing on the day such drawing is honored by the Bank.
SECTION 2.4 Grant of Security. As security for its obligation to reimburse
the Bank for any amounts paid pursuant to any drawing under the Letter of Credit
and for all other obligations of the Borrower hereunder, including any interest
due pursuant to Section 2.9, the Borrower hereby pledges and assigns to the
Bank, and grants to the Bank a lien and security interest in, all of the
Borrower's right, title, and interest in and to the Collateral. The Borrower
agrees to maintain and preserve the Collateral and to take such actions as the
Bank shall, from time to time, reasonably request to create, establish, maintain
and perfect the Bank's security interest therein.
SECTION 2.5 Reimbursement and Computations. All payments made on account of
the Obligations shall be made by the Borrower, without setoff or counterclaim,
in lawful money of the United States of America in immediately available funds,
free and clear of and without deduction for any taxes, fees or other charges of
any nature whatsoever imposed by any taxing authority and must be received by
the Bank by 1:00 p.m. California time on the day of payment, it being expressly
agreed and understood that if a payment is received after 1:00 p.m. California
time by the Bank, such payment will be considered to have been made by the
Borrower on the next succeeding Business Day and interest thereon shall be
payable by the Borrower at the rate specified in Section 2.9 hereof during such
extension. All payments to the Bank hereunder shall be made at the following
address: U.S. Bank National Association, 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention: International Department.
SECTION 2.6 Non-Business Days. Whenever any payment or reimbursement to be
made hereunder, or any bond redemption required to be made pursuant to Section
5.l(f), shall be due or required on a day which is not a Business Day, such
payment, reimbursement or redemption shall be made on the next succeeding
Business Day, and such extension of time shall
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in such case be included in the computation of any such payment, reimbursement
or redemption (if applicable).
SECTION 2.7 Evidence of Obligation. The Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the obligation of the
Borrower resulting from each drawing under the Letter of Credit. In any legal
action or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of error in calculation, be conclusive
evidence of the existence and amounts of the obligations of the Borrower therein
recorded.
SECTION 2.8 Obligations Absolute. The payment or reimbursement obligations
of the Borrower under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with and subject to the terms and
conditions of this Agreement under all circumstances, including, without
limitation, the following circumstances:
(a) any lack of validity or enforceability of any of the Related
Documents;
(b) any amendment or waiver of or any consent to departure from all
or any of the Related Documents;
(c) the existence of any claim, set-off, defense, or other right
which the Borrower may have at any time against the Trustee or any other
beneficiary, or any transferee, of the Letter of Credit (or any persons or
entities for whom the Trustee, any such beneficiary, or any such transferee may
be acting), the Bank, or any other person or entity, whether in connection with
this Agreement, the transactions contemplated herein or in the Related
Documents, or any unrelated transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
(e) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
the Letter of Credit; or
(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 2.9 Default Interest. If an Event of Default has occurred and is
continuing, the Obligations shall bear interest, payable on demand, at the
Reference Rate plus 5% per annum (such sum, the "Default Rate") until such
required payment plus interest thereon has been paid; provided, however, that
nothing contained in this Section 2.9 shall be construed to waive or limit any
of the rights and remedies of the Bank with respect to such nonpayment under
this Agreement or the Related Documents.
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SECTION 2.10 Tranches of Debt. The obligations owing at any time by the
Borrower to the Bank shall, solely for the purpose of identifying which portions
of the Obligations are secured by specific items of Collateral, be divided into
the following tranches ("Tranches"):
Tranche Maximum Principal Amount of Tranche
------- -----------------------------------
A $4,900,000
B $5,440,000
C All remaining indebtedness and Obligations
owing hereunder or under the Related
Agreements at any time
Any payments received by the Bank hereunder shall be applied to the Obligations
payable under each of the Tranches on a pro rata basis. As the maximum amount of
the Letter of Credit is reduced in connection with each partial redemption of
the Bonds required under Section 5.l(f) hereof, the reduction of the maximum
principal amount of Obligations payable under each of the Tranches shall be as
set forth in Schedule I attached hereto.
SECTION 2.11 Repayment of Bank Debt. The Borrower hereby agrees that,
simultaneously with its issuance of the Bonds and the Bank's issuance of the
Letter of Credit, a portion of the proceeds derived from the sale of the Bonds
shall be paid directly to the Bank for the purpose of paying in full all
indebtedness owing under (a) that certain promissory note dated as of October 1,
1996, in favor of Commercial Bank of Fremont (now the Bank) in the original
principal amount of $3,537,355.00 (the "Fremont Note"), and (b) that certain
promissory note dated as of May 27, 1997, in favor of U.S. Bank (now the Bank)
in the original principal amount of $750,000.00 (the "USB Note"). The amount of
principal and interest owing under (i) the Fremont Note is $3,481,838.90 of
principal and accrued and unpaid interest, and (ii) the USB Note is $709,117.68
of principal and accrued and unpaid interest. (The amounts listed in the
preceding clauses (i) and (ii) represent principal and accrued and unpaid
interest outstanding under the Fremont Note and the USB Note, respectively, as
of December 5, 1998. To the extent that the Fremont Note and the USB Note are
repaid prior to December 5, 1998, as is currently anticipated by the parties,
the Bank will promptly refund to the Borrower the amount of any overpayment.)
ARTICLE III
CONDITIONS OF ISSUANCE
SECTION 3.1 Conditions Precedent to Issuance of the Letter of Credit. The
obligation of the Bank to issue the Letter of Credit is subject to the condition
precedent that the Bank shall have received on or before the date of the
issuance of the Letter of Credit each of the following, in form and substance
satisfactory to the Bank:
(a) a fully executed copy of the Indenture;
(b) a fully executed copy of the Pledge Agreement;
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(c) a fully executed copy of each Deed of Trust, acknowledged and in
recordable form;
(d) evidence satisfactory to the Bank that all the Collateral has
been duly pledged to the Bank;
(e) an opinion of counsel to the Borrower, opining as to such matters
(including, but not limited to, the validity and enforceability of this
Agreement and the other Related Documents to which the Borrower is a party), and
otherwise in such form and substance as the Bank shall reasonably require;
(f) certified copies of all documents evidencing any necessary action
approving this Agreement and each Related Document to which the Borrower is a
party and all other necessary action with respect to each such document;
(g) policies of title insurance insuring, to the Bank's satisfaction,
the first priority liens (or, in the case of the lien on the Solar Way property
that is to be junior to the lien on such property held by the SBA, as specified
in the Third Party Lienholder Agreement, such lower priority as the Bank may
accept in its discretion) of the Deeds of Trust encumbering the land described
in Exhibit A to each Deed of Trust ("Land"), in such form, and with such
endorsements, as the Bank shall require;
(h) a fully executed Third Party Lienholder Agreement in form and
substance acceptable to the Bank;
(i) a UCC-1 Financing Statement executed by the Borrower and recorded
in the Office of the Secretary of State of California; and
(j) such credit applications, financial statements, authorizations
and such information concerning the Borrower and its operations and condition
(financial and otherwise) as the Bank may reasonably request.
SECTION 3.2 Additional Conditions Precedent to Issuance of the Letter of
Credit. The obligation of the Bank to issue the Letter of Credit shall be
subject to the further conditions precedent that on the date of the issuance of
the Letter of Credit:
(a) the following statements shall be true, and the Bank shall have
received a certificate signed by the Borrower, dated the date of such issuance,
stating that:
(i) the representations and warranties contained in Section 4.1
of this Agreement, Section 4 of each Deed of Trust and Section 4 of the Security
Agreement are correct on and as of the date of issuance of the Letter of Credit
as though made on and as of such date; and
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(ii) no event has occurred and is continuing, or would result
from the issuance of the Letter of Credit, which constitutes an Event of Default
or would constitute an Event of Default but for the requirement that notice be
given or time elapse or both; and
(b) the Bank shall have received such other filings or recordations,
approvals, opinions, or documents as the Bank may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation, is
qualified to do business and is in good standing in each jurisdiction in which
the failure so to qualify or be in good standing would result in a material
adverse effect on the business or condition (financial or otherwise) of the
Borrower, and has all requisite power and authority to own its assets and carry
on its business and to execute, deliver and perform its obligations hereunder
and under the Related Documents to which it is a party.
(b) The execution, delivery, and performance by the Borrower of this
Agreement and each Related Document to which it is a party (i) are within its
powers, (ii) have been duly authorized by all necessary action, (iii) do not
contravene any law or contractual restriction binding on or affecting the
Borrower, and (iv) do not result in or require the creation of any lien,
security interest, or other charge or encumbrance (except as provided in or
contemplated by this Agreement or any of the Related Documents) upon or with
respect to any of its properties.
(c) No consent, authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery, and performance by the Borrower of
this Agreement and each Related Document to which it is a party other than that
which has been obtained or will be obtained when required.
(d) This Agreement is, and each Related Document to which the
Borrower is a party when delivered hereunder will be, the legal, valid, and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency, and other similar laws affecting
creditors' rights generally, and by the application of equitable principles.
(e) There is no pending or threatened action, investigation, or
proceeding before any court, governmental agency, or arbitrator against or
affecting the Borrower which may materially adversely affect the ability of the
Borrower to perform its obligations hereunder or under any Related Document to
which it is a party.
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(f) The pledge and assignment pursuant to this Agreement and the
Related Documents of the Collateral and any and all amounts on deposit from time
to time in any accounts which are part of the Collateral, create a valid binding
first priority security interest therein securing the Obligations purported to
be secured thereby.
(g) All financial statements, copies of which have heretofore been
furnished to the Bank, are complete and correct and present fairly in accordance
with generally accepted accounting principles, the financial condition of the
Borrower, and since the date of such statements there has been no material
adverse change in the Borrower or the Collateral.
ARTICLE V
COVENANTS
SECTION 5.1 Affirmative Covenants of the Borrower. So long as a drawing is
available under the Letter of Credit or the Borrower shall have any obligation
to pay any amount to the Bank hereunder, the Borrower will, unless the Bank
shall otherwise consent in writing:
(a) preserve and maintain its existence and its rights, and
franchises that Borrower reasonably deems necessary in the operation of its
business,
(b) comply with the requirements of the Related Documents to which it
is a party, and all applicable laws, ordinances, rules, and regulations of any
governmental authority, the non-compliance with which would have a material
adverse effect on the Borrower's operations, properties, ownership, assets,
management, or condition (financial or otherwise) or which could materially
impair the Borrower's ability to perform its obligations under this Agreement or
any Related Document;
(c) promptly, upon learning thereof, give written notice to the Bank
of:
(1) the occurrence of any Potential Default or Event of Default;
(2) any litigation or proceeding affecting the Borrower which
could have a material adverse effect on the condition of the Borrower or the
Property; and
(3) a material adverse change in the business, operations,
property or financial or other condition of the Borrower;
(d) comply with all agreements, conditions, covenants, restrictions
and other instruments which affect or impose a lien upon the Property or any of
the other Collateral, except as permitted under the Bank Documents;
(e) comply with all agreements, conditions, covenants and
restrictions set forth in the Loan Agreement and the other Bank Documents; and
(f) cause the Bonds to be redeemed on or prior to the dates (subject
to Section 2.6) and in the minimum principal amounts set forth on Schedule 1
hereto.
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SECTION 1.18 Negative Covenants of the Borrower. So long as a drawing is
available under the Letter of Credit or the Borrower shall have any obligation
to pay any amount to the Bank hereunder, the Borrower will not, without the
written consent of the Bank:
(a) sell, lease, transfer, or otherwise dispose of the Collateral,
except in connection with the transactions contemplated or permitted herein and
in the Bank Documents;
(b) create or permit to exist any lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement, upon or
with respect to the Collateral, except as permitted under the Bank Documents;
(c) enter into or consent to any amendment or modification of the
Indenture;
(d) request a conversion of interest on the Bonds to the Fixed
Interest Rate; or
(e) issue or incur, as the case may be, any bond, note, loan, advance
or other indebtedness or obligation (including lease and installment sale
obligations) having a lien senior to or on a parity with the Bank's lien on all
or any portion of the Collateral, except as permitted under the Bank Documents.
ARTICLE VI
ADDITIONAL PROVISIONS RELATING TO COLLATERAL
SECTION 6.1 Exercise of Rights with Respect to Collateral. Upon the
occurrence and during the continuance of any Event of Default hereunder, the
Bank is authorized to (a) apply the Collateral in satisfaction of the
Obligations; and (b) in the name of the Bank or in the name of the Borrower, (i)
exercise all other rights and remedies provided for herein, in any Related
Document or otherwise available to it in respect of the Collateral and to
exercise all the rights and remedies of a secured party under the Uniform
Commercial Code and other laws in effect in the State of California, (ii)
without notice, retain the Collateral or any part thereof, and (iii) dispose of
the Collateral in any manner permitted by law; provided, however, that the Bank
shall not be obligated to make any sale of Collateral or the proceeds thereof
regardless of any notice of sale having been given. The Bank may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
SECTION 6.2 Bank to Exercise Reasonable Care. The Bank shall be deemed to
have exercised reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which the Bank accords its own property of similar nature, it being
understood that the Bank shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to any
Collateral.
SECTION 6.3 Further Assurances. The Borrower agrees that at any time, and
from time to time, at the expense of the Borrower, the Borrower will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or reasonably desirable, as the Bank may request,
in order to protect any security interest granted or
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purported to be granted hereby or by any Related Document or to enable the Bank
to exercise and enforce its rights and remedies hereunder or under any Bank
Document with respect to any Collateral.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 Events of Default. The occurrence of any of the following
events shall be an "Event of Default" hereunder:
(a) the Borrower shall fail to pay any amount payable by it under
this Agreement or any Related Document when due; or
(b) any representation or warranty made, or deemed made, by the
Borrower under or in connection with this Agreement or any Related Document
shall prove to have been incorrect in any material respect when made, or
(c) the Borrower shall fail to perform or observe its covenant
contained in Section 5.l(f) or the Bonds shall otherwise not be redeemed on or
prior to the dates and in the minimum principal amounts set forth on Schedule 1
hereto; or
(d) the Borrower shall fail to perform or observe any other term,
covenant, or agreement contained in this Agreement on its part to be performed
or observed and any such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the Bank; or
(e) the Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower seeking to adjudicate
it a bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property (and, in the case of an involuntary proceeding, such proceeding
shall remain undismissed or unstayed for a period of 60 days); or the Borrower
shall take any action to authorize any of the actions set forth above in this
subsection (e); or
(f) any provision of this Agreement or any Related Document to which
the Borrower is a party shall at any time for any reason cease to be valid and
binding on the Borrower or shall be declared to be null and void, or the
validity of any provision of this Agreement or any such Related Document shall
be contested by the Borrower or the enforceability of any provision of this
Agreement or any such Related Document shall be contested by the Borrower, or a
proceeding shall be commenced by any governmental agency or authority having
jurisdiction over the Borrower seeking to establish the invalidity of this
Agreement or any such Related Document or the unenforceability in any respect
thereof; or
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(g) any event of default under any Related Document shall have
occurred.
SECTION 7.2 Upon an Event of Default. If any Event of Default shall have
occurred and be continuing, the Bank may do any, all, or none of the following:
(i) declare that all amounts available for drawing under the Letter of Credit
are due and payable, (ii) give notice to the Trustee to demand the immediate
prepayment of the Bonds as contemplated in Section 7.01(e) of the Indenture, and
(iii) exercise in respect of the Collateral any or all rights and remedies as if
a draft representing the full amount then available under the Letter of Credit
had been presented to the Bank and paid by it.
ARTICLE VIII
FEES AND PAYMENTS
SECTION 8.1 Fees.
(a) Annual Letter of Credit Fee. The Borrower shall pay to the Bank
commencing on the Closing Date, an annual fee (the "Annual Letter of Credit
Fee") for providing the Letter of Credit in an amount equal to one and
one-quarter percent (1.25%) per annum calculated on the basis of a 360-day year
and actual days elapsed, based on the actual daily amount of the Letter of
Credit available to be drawn upon in such year. Such fee shall be due and
payable to the Bank annually in advance on the Closing Date and on each
anniversary thereof.
(b) The Letter of Credit Origination Fee. The Borrower shall pay to
the Bank a fee (the "Letter of Credit Origination Fee") for providing the Letter
of Credit in an amount equal to one-half of one percent (.50%) of the
Commitment. Such fee shall be due and payable upon the issuance of the Letter of
Credit.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 9.2 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and mailed by registered mail, return receipt
requested, or delivered, or shall be by facsimile transmission promptly
confirmed in writing, addressed as follows:
To the Trustee:
Xxxxxx Trust Company of California
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Floor
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Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
To the Borrower:
American Xtal Technology, Inc.
0000 Xxxxx Xxx
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx
Facsimile: (000) 000-0000
To the Bank:
U.S. Bank National Association
Fremont Business Banking
00000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
or, as to each party, to such other person or at such other address as shall be
designated by such party in a written notice to the other party. All such
notices and communications shall be effective (i) if delivered by hand, when
delivered; (ii) if sent by mail, upon the earlier of the date of receipt or five
Business Days after deposit in the mail, first class (or air mail, with respect
to communications to be sent to or from the United States), postage prepaid; and
(iii) if sent by facsimile transmission, when sent, except that notices to the
Bank pursuant to the provisions of Article II hereof shall not be effective
until received by the Bank.
SECTION 9.3 No Waiver; Remedies. No failure on the part of any party hereto
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. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 9.4 Indemnification.
(a) The Borrower hereby indemnifies and holds the Bank harmless from
and against any and all claims, damages, losses, liabilities, costs, or expenses
which the Bank may incur or which may be claimed against the Bank by reason of
(i) any conditions, occupancy, use, possession, conduct or management of, or
work done in or about, or from the planning, design, acquisition, installation,
or construction of the Property, or any part thereof, or (ii) carrying out of
any of the transactions contemplated by this Agreement and the Related
Documents, including, but not limited to, any certifications or representations
made by the Borrower in connection therewith; provided, however, that the
Borrower shall not be obligated to indemnify the Bank for
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claims, damages, losses, liabilities, costs and expenses resulting solely from
the Bank's gross negligence or willful misconduct.
(b) Nothing in this Section 9.4 is intended to limit the Borrower's
obligations contained in Article II hereof. Without prejudice to the survival of
any other obligation of the Borrower hereunder, the indemnities and obligations
of the Borrower contained in this Section 9.4 shall survive the payment in full
of amounts payable pursuant to Article II hereof and the termination of the
Letter of Credit.
(c) In the event that any applicable law, order, regulation, treaty
or directive issued by any central bank or other governmental authority, agency
or instrumentality or any governmental or judicial interpretation or application
thereof, or compliance by the Bank with any request or directive (whether or not
having the force of law) issued by any central bank or other governmental
authority, agency or instrumentality:
(1) does or shall subject the Bank to any tax of any kind
whatsoever with respect to this Agreement or the Letter of Credit, or change the
basis of taxation of payments to the Bank of any reimbursement, fee, interest or
any other amount payable hereunder (except for change in the rate of tax on the
overall net income of the Bank);
(2) does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar requirements
against assets held by, or deposits or other liabilities in or for the account
of, advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of the Bank which is not otherwise included in the
determination of interest payable on the Obligations; or
(3) does or shall impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Bank of
issuing, renewing or maintaining the Letter of Credit or to reduce any amount
receivable in respect thereof or the rate of return on the capital of the Bank
or any corporation controlling the Bank, then, in any such case, the Borrower
agrees to promptly pay to the Bank, upon its written demand, any additional
amounts necessary to compensate the Bank for such additional cost or reduced
amounts receivable or rate of return as determined by the Bank with respect to
this Agreement or the Letter of Credit. If the Bank becomes entitled to claim
any additional amounts pursuant to this subparagraph (c), it shall promptly
notify the Borrower of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence containing the calculation thereof in reasonable detail submitted by
the Bank to the Borrower shall be conclusive in the absence of manifest error.
The provisions hereof shall survive the termination of this Agreement and
payment of the Obligations and all other amounts payable hereunder.
SECTION 9.5 Liability of the Bank. As between the Borrower and the Bank,
the Borrower assumes all risks of the acts or omissions of the Trustee and any
other beneficiary or transferee of the Letter of Credit with respect to its use
of the Letter of Credit. Neither the Bank nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be
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made of the Letter of Credit or any acts or omissions of the Trustee and any
other beneficiary or transferee in connection therewith; (b) the validity,
sufficiency, or genuineness of documents presented to the Bank, or of any
endorsements thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent, or forged; (c) payment by the Bank
against presentation of documents which do not comply with the terms of the
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any damage, deficiency, loss,
cost, or expense arising out of any action, claim, or other circumstance of any
nature whatsoever relating to the payment or failure to make payment under the
Letter of Credit, except that the Borrower shall have a claim against the Bank,
and the Bank shall be liable to the Borrower, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by (i) the Bank's willful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Bank's willful failure to make
lawful payment under the Letter of Credit after the presentation to it by the
Trustee or a successor trustee under the Indenture of a draft and certificate
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
unless acceptance of such documents after receipt of such notice constitutes
gross negligence or willful misconduct.
SECTION 9.6 Costs, Expenses, and Taxes. The Borrower agrees to pay
immediately following demand therefor all reasonable costs and expenses in
connection with the preparation, execution, delivery, filing, and recording of
this Agreement, the Bank Documents, and any other documents which may be
delivered in connection with this Agreement, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Bank with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities under this Agreement and the Related Documents, the costs of
substituting a letter of credit or other credit enhancement, and any and all
other costs, expenses, fees, liabilities, and claims of any nature whatsoever
(including reasonable counsel fees and expenses) arising out of or in connection
with (i) the enforcement of this Agreement, the Related Documents and such other
documents as may be delivered in connection therewith, (ii) any action or
proceeding relating to a court order, injunction, or other process or decree
restraining or seeking to restrain the Bank from paying any amount under the
Letter of Credit and (iii) amending or supplementing this Agreement or the
Related Documents for any purpose. In addition, the Borrower shall pay any and
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, and recording of all
instruments required by the Bank to be filed in connection with the transactions
contemplated hereby, and, to the extent permitted by law, agrees to hold the
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees. The
Borrower shall be furnished with copies of bills relating to the foregoing upon
request.
SECTION 9.7 Participations, Etc. The Borrower acknowledges that the Bank
may elect to sell, assign and otherwise transfer to other persons (each, a
"Transferee") all or portions of, and participations in, the Bank's interests
hereunder and under the Related Documents from time to time and expressly agrees
that each Transferee shall be entitled to the rights of the
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"Bank" hereunder. For purposes of this Section 9.7, the Bank may disclose to a
potential or actual Transferee any and all information supplied to the Bank by
or on behalf of the Borrower. The Borrower agrees to execute and deliver to the
Bank such documents, instruments and agreements, including, without limitation,
amendments to the Related Documents, deemed necessary or desirable by the Bank
to effect such transfers.
SECTION 9.8 Binding Effect. This Agreement shall become effective when it
shall have been executed by the parties hereto and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns (including Transferees, as described in Section 9.7
hereof.
SECTION 9.9 Assignments. The Borrower may not assign its rights or
obligations under this Agreement without the prior written consent of the Bank
in its sole discretion. Subject to the foregoing, all provisions contained in
this Agreement or any document or agreement referred to herein or relating
hereto shall inure to the benefit of the Bank, its successors and assigns, and
shall be binding upon the Borrower and its successors and assigns.
SECTION 9.10 Severability. Any provision of this Agreement which is
prohibited, unenforceable, or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability, or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
SECTION 9.11 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California (without
giving effect to principles of conflict of laws).
SECTION 9.12 Headings. Section headings in this Agreement shall have no
substantive or interpretative effect, are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
SECTION 9.13 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as the original and all of which
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
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AMERICAN XTAL TECHNOLOGY, INC.
By: /s/ XXX XXXXXX
-------------------------------------
Its: Vice President
------------------------------------
U.S. BANK NATIONAL ASSOCIATION
By: /s/ XXXX X. GUGLIELIMINA
-------------------------------------
Its: Senior Vice President
------------------------------------
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EXHIBIT A
TO LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
Irrevocable Letter of Credit
U.S. Bank National Association
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Date: [________________]
CREDIT No. [_________________]
Xxxxxx Trust Company of California
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xx.
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Department
Ladies & Gentlemen:
You, as Trustee under that certain Indenture dated as of December 1, 1998
(the "Indenture"), between you and American Xtal Technology, Inc. (the
"Borrower"), pursuant to which the Borrower has executed and delivered U.S.
$11,615,000 in aggregate principal amount of its Variable Rate Taxable Demand
Revenue Bonds Series 1998 (Xtal Project) (the "Bonds"), are hereby irrevocably
authorized to draw on this Irrevocable Letter of Credit No. [__________] issued
by U.S. Bank National Association (the "Bank"), for the account of the Borrower,
available by your drafts at sight upon the terms and conditions hereinafter set
forth, an aggregate amount that does not exceed the sum of the Principal
Component and the Interest Component as set forth below, which in no event will
exceed U.S. $11,986,680 (such sum, subject to such maximum amount, being herein
referred to as the "Stated Amount"). This Letter of Credit is effective
immediately and expires on the close of business at the Bank's Office (as
defined below) on December 1, 2008 (the "Expiration Date").
The amount available under Principal Drawings (as defined in paragraph (A)
below) and Principal Purchase Drawings (as defined in paragraph (C) below) shall
not exceed, in the aggregate, U.S. $11,615,000, as such amount shall be
decreased as hereinafter provided (the "Principal Component"). The amount
available under Interest Drawings (as defined in paragraph (B) below) and
Interest Purchase Drawings (as defined in paragraph (D) below) shall not exceed
U.S. $371,680, representing payment of up to 96 days' interest accrued on the
Bonds at or prior to the Expiration Date, calculated at the rate of twelve
percent (12%) per annum on the basis of a 360-day year (actual days elapsed), as
such amount may be decreased and/or increased as hereinafter provided (the
"Interest Component"). At no time may the aggregate drawing outstanding
hereunder exceed the Stated Amount.
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Funds under this Letter of Credit are available to you against your sight
drafts drawn on us, stating on their face: "Drawn under Irrevocable Letter of
Credit No. [__________] issued by U.S. Bank National Association, 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxxxx 00000."
(A) Subject to paragraph (C) below, if the drawing is being made with
respect to any payment of principal with respect to the Bonds (a "Principal
Drawing"), the sight draft shall be accompanied by your written certificate
purporting to be signed by you in the form of Exhibit A attached hereto
appropriately completed.
(B) If the drawing is being made with respect to a payment of interest
with respect to the Bonds (an "Interest Drawing"), the sight draft shall be
accompanied by your written certificate purporting to be signed by you in the
form of Exhibit B hereto appropriately completed.
(C) If the drawing is being made in accordance with Section 2.04 of the
Indenture with respect to payment of the portion of the purchase price of Bonds
delivered to the Trustee or the Tender Agent appointed pursuant to the Indenture
(the "Tender Agent") equal to the principal amount of such Bonds (a "Principal
Purchase Drawing"), the sight draft shall be accompanied by your written
certificate purporting to be signed by you in the form of Exhibit C attached
hereto appropriately completed.
(D) If the drawing is being made with respect to payment of the portion of
the purchase price of Bonds referred to in paragraph (C) above equal to the
amount of accrued and unpaid interest with respect to such Bonds to the date of
purchase of such Bonds (an "Interest Purchase Drawing"), the sight draft shall
be accompanied by your written certificate purporting to be signed by you in the
form of Exhibit D attached hereto appropriately completed, and such Interest
Purchase Drawing shall be made simultaneously with the related Principal
Purchase Drawing.
Presentation of such draft(s) and certificate(s) shall be made at the
Bank's office located at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxxxx
00000, Attention: International Department, Fax No. (000) 000-0000 or at any
other office in the United States that may be designated by us by written notice
delivered to you (the "Bank's Office").
We hereby agree that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon delivery of the
certificate(s) as specified herein if presented at such office on or before the
Expiration Date. Provided that in each case the documents presented in
connection with a drawing conform to the terms and conditions hereof, the
following time schedule shall prevail:
(A) If a drawing is made by you hereunder and received by us at or prior
to 9:00 a.m. Pacific time, on a Business Day (as hereinafter defined), payment
shall be made to you or to your order of the amount specified, in immediately
available funds, at or prior to 1:00 p.m. Pacific time, on the same Business
Day.
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(B) If a drawing is made by you hereunder and received by us after 9:00
a.m. Pacific time, on a Business Day, payment shall be made to you or to your
order of the amount specified, in immediately available funds, at or prior to
9:30 a.m. Pacific time, on the following Business Day.
If requested by you, payment under this Letter of Credit shall be made by
deposit of immediately available funds into an account designated by you.
As used herein, "Business Day" shall mean a day other than (i) a Saturday,
or a Sunday or (ii) a day on which banks located in Sacramento, California, or
banks located in the city in which your principal office or the principal office
of the Tender Agent is located are authorized or obligated by law or executive
order to close or (iii) a day on which the New York Stock Exchange is closed.
All payments hereunder shall be made with our own funds.
Each drawing honored by the Bank under this Letter of Credit shall
immediately reduce the Principal Component or the Interest Component (as the
case may be) by the amount of such drawing, and the Stated Amount shall be
correspondingly reduced. The Principal Component shall also be decreased without
amendment and without notice to you by the amount specified by the Trustee from
time to time pursuant to a notice to the Bank in the form attached hereto as
Exhibit E, such decrease to be effective upon receipt by the Bank of such
notice. The Principal Component and the Interest Component (and correspondingly,
the Stated Amount) so reduced shall be reinstated only as follows:
(A) The Interest Component (and correspondingly the Stated Amount) so
reduced shall be reinstated, in the case of a reduction resulting from an
Interest Drawing only, automatically as of the Bank's close of business in
Sacramento, California, on the day the Bank honors such Interest Drawing, to an
amount equal to 96 days' interest on the Bonds Outstanding, calculated at the
rate of Twelve Percent (12%) per annum on the basis of a 360-day year (actual
days elapsed).
(B) The Interest Component and the Principal Component (and
correspondingly the Stated Amount) so reduced shall be reinstated, in the case
of a reduction resulting from an Interest Purchase Drawing or a Principal
Purchase Drawing pursuant to Section 2.04 of the Indenture only, automatically
upon and to the extent the Bank has received from you notice of the
reimbursement of such payment in immediately available funds pursuant to your
certificate in the form of Exhibit F; in such case, the Principal Component
shall be reinstated in an amount equal to the portion of such payment
attributable to reimbursement of the Principal Purchase Drawing and the Interest
Component shall be reinstated to an amount equal to 96 days' interest on the
Bonds Outstanding, calculated at the rate of Twelve Percent (12%) per annum on
the basis of a 360-day year (actual days elapsed).
If the amount available under this Letter of Credit has been decreased
pursuant to a Principal Drawing, the Bank shall have the right to amend this
Letter of Credit or the right to require you to surrender this Letter of Credit
to the Bank, and to accept a substitute Letter of Credit which has an express
Principal
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Component and Interest Component equal to the Principal Component and Interest
Component as so decreased, but otherwise in a form and having terms identical to
this Letter of Credit.
Only you as Trustee may make a drawing under this Letter of Credit. Upon
the payment to you or to your order of the amount specified in a sight draft
drawn hereunder, we shall be fully discharged on 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 any other person who may have made to you or makes
to you a demand for payment of principal of, purchase price of, or interest on,
any Bond.
Upon the earliest of (i) the making by you of the final drawing available
to be made hereunder, (ii) our receipt of a certificate purporting to be signed
by your duly authorized officer and a duly authorized officer of the Borrower
stating that: "(a) the conditions precedent to the acceptance of an Alternate
Letter of Credit set forth in the Indenture have been satisfied, (b) the Trustee
has accepted the Alternate Letter of Credit, and (c) upon receipt by U.S. Bank
National Association of this certificate, Irrevocable Letter of Credit No.
[__________] issued by U.S. Bank National Association, shall terminate," or
(iii) the Expiration Date, this Letter of Credit shall automatically terminate
and be delivered to the Bank for cancellation.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (the "Uniform Customs"), excluding Article 41 thereof. In
addition, the Bank agrees that, notwithstanding the second sentence of Article
17 of the Uniform Customs, if the Expiration Date occurs on a Business Day upon
which the Bank's Office is closed by virtue of an interruption of the nature
described in Article 17, the Expiration Date will be extended to the next
Business Day upon which the Bank's Office is open. As to matters not governed by
the Uniform Customs, this Letter of Credit shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
conflicts of law principles. Communications with respect to this Letter of
Credit shall be in writing and shall be addressed to the Bank's Office,
specifically referring thereon to "Irrevocable Letter of Credit No. [_________]
issued by U.S. Bank National Association, 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxxxxxxx 00000."
This Letter of Credit may be transferred more than once, but only in the
amount of the full utilized balance hereof and only after receipt from the
Borrower of the Bank's then applicable transfer fee, to any single transferee
who has succeeded Xxxxxx Trust Company of California as trustee under the
Indenture. Transfers may be effected only through ourselves and only upon
presentation to us of a duly executed instrument of transfer in the form
attached hereto as Exhibit G. Any transfer of this Letter of Credit as aforesaid
must be endorsed by us on the reverse hereof and may not change the place of
presentation from our Letter of Credit office in Sacramento, California.
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), except only
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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).
Very truly yours,
U.S. BANK NATIONAL ASSOCIATION
By: _____________________________________
Name: _______________________________
Title: ______________________________
By: _____________________________________
Name: _______________________________
Title: ______________________________
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CERTIFICATE FOR PRINCIPAL DRAWING
EXHIBIT A TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
CERTIFICATE FOR PRINCIPAL DRAWING
The undersigned, [Insert Name of Beneficiary] (the "Trustee") hereby
certifies to U.S. Bank National Association (the "Bank"), with reference to
Irrevocable Letter of Credit No. [_________________] (the "Letter of Credit";
any capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued by the 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 the principal amount with respect to all or a portion
of the Bonds by reason of acceleration or prepayment pursuant to the terms of
the Indenture or by their maturity.
3. The amount of the sight draft accompanying this Certificate does not
exceed the Principal Component under the Letter of Credit.
4. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ___________ day of _________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
By: _____________________________________________
[Insert Name and Title of Authorized Officer]
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CERTIFICATE FOR INTEREST DRAWING
EXHIBIT B TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
CERTIFICATE FOR INTEREST DRAWING
The undersigned, [Insert Name of Beneficiary] (the "Trustee") hereby
certifies to U.S. Bank National Association (the "Bank"), with reference to
Irrevocable Letter of Credit No. [_________________] (the "Letter of Credit";
any capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued by the 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 interest accrued with respect to the Bonds that is due
and payable and that has accrued on or before the Expiration Date.
3. The amount of the sight draft accompanying this Certificate does not
exceed the Interest Component under the Letter of Credit.
4. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ___________ day of _________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
By: _____________________________________________
[Insert Name and Title of Authorized Officer]
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CERTIFICATE FOR PRINCIPAL PURCHASE DRAWING
EXHIBIT C TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
CERTIFICATE FOR PRINCIPAL PURCHASE DRAWING
The undersigned, [Insert Name of Beneficiary] (the "Trustee") hereby
certifies to U.S. Bank National Association (the "Bank"), with reference to
Irrevocable Letter of Credit No. [_________________] (the "Letter of Credit";
any capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued by the 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 to pay the
portion of the purchase price of Bonds delivered to the Trustee or the Tender
Agent, as the case may be, pursuant to Section 2.04 of the Indenture equal to
the principal amount with respect to such Bonds.
3. The principal amount with respect to the purchased Bonds for which
this drawing is made is $[insert Amount], and the Trustee has not heretofore
made a drawing which has been honored under the Letter of Credit with respect to
the principal amount, or any portion thereof, of the Bonds for such purchase.
The amount of the sight draft accompanying this Certificate does not exceed such
amount.
4. The amount of the sight draft accompanying this Certificate does not
exceed the Principal Component under the Letter of Credit.
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ___________ day of _________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
By: _____________________________________________
[Insert Name and Title of Authorized Officer]
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CERTIFICATE FOR INTEREST PURCHASE DRAWING
EXHIBIT D TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
CERTIFICATE FOR INTEREST PURCHASE DRAWING
The undersigned, [Insert Name of Beneficiary] (the "Trustee") hereby
certifies to U.S. Bank National Association (the "Bank"), with reference to
Irrevocable Letter of Credit No. [_________________] (the "Letter of Credit";
any capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued by the 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 to pay the
portion of the purchase price of Bonds delivered to the Trustee or the Tender
Agent, as the case may be, pursuant to Section 2.04 of the Indenture equal to
the amount of accrued and unpaid interest with respect to such Bonds to the date
of purchase thereof.
3. The amount of accrued and unpaid interest with respect to the
purchased Bonds for which this drawing is made is $[Insert Amount], and the
Trustee has not heretofore made a drawing which has been honored under this
Letter of Credit for the accrued and unpaid interest, or any portion thereof,
with respect to the purchased Bonds for such purchase. The amount of the sight
draft accompanying this certificate does not exceed the amount of interest
accrued and unpaid with respect to such Bonds to the date of purchase thereof.
4. The amount of the sight draft accompanying this Certificate does not
exceed the Interest Component under the Letter of Credit.
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ___________ day of _________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
By: _____________________________________________
[Insert Name and Title of Authorized Officer]
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CERTIFICATE FOR REDUCTION OF STATED AMOUNT
EXHIBIT E TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
U.S. Bank National Association
000 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Re: Irrevocable Letter of Credit No. [_________________]
issued by U.S. Bank National Association
Ladies & Gentlemen:
The undersigned (the "Trustee"), as beneficiary under the Irrevocable
Letter of Credit No. [_________________] (the "Letter of Credit"; any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit), hereby consents to a reduction of the
[Principal Component to $_______________] [AND/OR] [Interest Component to
$_______________].
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the ___________ day of _________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
By: _____________________________________________
[Insert Name and Title of Authorized Officer]
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REIMBURSEMENT CERTIFICATE
EXHIBIT F TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
U.S. Bank National Association
000 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Re: Irrevocable Letter of Credit No. [_________________]
issued by U.S. Bank National Association
Ladies & Gentlemen:
The undersigned, [Insert Name of Beneficiary] (the "Trustee") hereby
certifies to U.S. Bank National Association (the "Bank"), with reference to
Irrevocable Letter of Credit No. [_________________] (the "Letter of Credit";
any capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued by the 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 has today paid to you by wire transfer of immediately
available funds the amount of $__________, for the reimbursement to you of
[$__________ of unpaid principal with respect to the Bonds in connection with a
Principal Purchase Drawing and] $ __________ of accrued interest with respect to
the Bonds in connection with an Interest Purchase Drawing [, in each case]
honored pursuant to the Trustee's draft dated __________ in the aggregate amount
of $__________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the __________ day of __________________.
Very truly yours,
_________________________________________________
[Insert Name], as Trustee
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TRANSFER CERTIFICATE
EXHIBIT G TO IRREVOCABLE LETTER OF CREDIT NO. [_________________]
[Date]
U.S. Bank National Association
000 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Re: Irrevocable Letter of Credit No. [_________________]
issued by U.S. Bank National Association
Ladies & Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[Insert Name and Address of Transferee]
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 such 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, whether increases or extensions or other amendments and whether now
existing or hereafter made. The Letter of Credit may hereafter be amended,
extended or increased without necessity of any consent of or notice to the
undersigned beneficiary, and you will give notice thereof directly to the
transferee.
The advice of such Letter of Credit is returned herewith, and we ask you to
endorse the transfer on the reverse thereof and forward it directly to the
transferee with your customary notice of transfer.
SIGNATURE AUTHENTICATED Yours very truly,
__________________________________ _________________________________________
(Bank) Signature of Beneficiary
12
30
SCHEDULE 1
TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
[See attached.]
