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EXHIBIT 10.50
LETTER OF CREDIT AGREEMENT
Dated as of December 1, 1984
By and Between
SOUTH JERSEY PROCESS TECHNOLOGY, INC.
and
BANKERS TRUST COMPANY
$2,500,000
CITY OF SALEM MUNICIPAL PORT AUTHORITY
Port Development Revenue Bonds
(South Jersey Process Technology, Inc. Project)
Series of 1984
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
----
l. Issuance of Letter of Credit; Fees ..................... 1
2. Agreement to Repay Letter of Credit Draw-
ings; Pledged Bonds .................................... 3
3. Conditions Precedent to Issuance of the Letter of Credit 5
4. Indemnification ........................................ 7
5. Character of Obligations Hereunder ..................... 7
6. Convenants ............................................. 7
7. Representations and Warranties ......................... 9
8. Events of Default ...................................... 12
9. Definitions ............................................ 15
10. Nature of Bank's Duties ................................ 17
11. Miscellaneous .......................................... 19
ANNEX I - FORM OF LETTER OF CREDIT
ANNEX II - FORM OF PLEDGE AGREEMENT
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LETTER OF CREDIT AGREEMENT
AGREEMENT dated as of December 1, 0000 xxxxxxx XXXXX XXXXXX PROCESS
TECHNOLOGY, INC., a corporation organized and existing under the laws of the
State of New Jersey (the "Company"), and BANKERS TRUST COMPANY (the "Bank");
WHEREAS, the City of Salem Municipal Port Authority (the "Issuer")
pursuant to the Act (as defined in the Indenture hereinafter referred to)
intends to issue and sell its Port Development Revenue Bonds (South Jersey
Process Technology, Inc. Project) Series of 1984 in the aggregate principal
amount of $2,500,000 (the "Bonds") pursuant to a Trust Indenture dated as of
December 1, 1984 (the "Indenture") from the Issuer to The Farmers and Merchants
National Bank of Bridgeton, as trustee (the "Trustee") and to use the proceeds
thereof to finance the cost of constructing, improving and equipping a radiation
processing system with related facilities (the "Project") and to finance the
Project pursuant to the provisions of a Sublease and Security Agreement dated as
of December 1, 1984 (the "Sublease Agreement") between the Issuer and the
Company; and
WHEREAS, the Company has requested the Bank to issue its irrevocable
letter of credit in the form of Annex I attached hereto (the "Letter of Credit",
which term shall include any substitute therefor or replacement thereof issued
in accordance with the terms of the Letter of Credit); and
WHEREAS, the obligations of the Company hereunder are to be guaranteed by
Simon Engineering P.L.C., an English company (the "Guarantor"), pursuant to a
Guaranty-Agreement dated as of December 1, 1984, between the Guarantor and the
Bank (the "Guaranty Agreement");
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Issuance of Letter of Credit; Fees.
1A. Amount and Terms of Letter of Credit. The Bank agrees, on the terms
and subject to the conditions herein-
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after set forth, to issue the Letter of Credit to the Trustee in an amount not
to exceed $2,500,000 plus an amount equal to 120 days' interest on the Bonds,
computed as though the Bonds bore interest at the rate of 15% per annum
notwithstanding the actual rate borne from time to time by the Bonds and
expiring on December 15, 1994, unless otherwise terminated or extended.
1B. Letter of Credit Fee. The Company hereby agrees to pay to the Bank a
letter of credit fee, computed on the basis of the actual number of days elapsed
over a year of 360 days, at a rate per annum equal to 3/4% of the Stated Amount
of the Letter of Credit outstanding from time to time, but including, in any
event, the principal amount of any Pledged Bonds. Such fees are to be paid in
immediately available funds quarterly in arrears on the fifteenth day of each
March, June, September and December, until the Termination Dater and on the
Termination Date, commencing March 15, 1985.
1C. Transfer Fees. The Company hereby agrees to pay to the Bank upon each
transfer of the Letter of Credit in accordance with its terms, $150 or such
other amount as shall at the time of transfer be the charge which the Bank is
making for transfers of similar letters of credit.
1D. Drawing Fees. The Company hereby agrees to pay to the Bank upon each
drawing by the Trustee under the Letter of Credit, the sum of $50 or such other
amount as shall at the time of such drawing be the charge which the Bank is
making for drawings on similar letters of credit.
1E. Additional Payments. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof, or in generally accepted accounting
principles, shall either (i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against letters of credit issued by the
Bank or (ii) impose on the Bank any other condition relating, directly or
indirectly, to this Agreement or the Letter of Credit, and the result of any
event referred to in the preceding clause (i) or (ii) shall be to increase the
cost to the Bank of issuing or maintaining the Letter of Credit, then, upon
demand by the Bank, the Company shall promptly pay to the Bank, from time to
time as specified by the Bank, such additional amounts as shall be sufficient to
compensate the Bank for such increased cost together with interest on each such
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amount from the date demanded until payment in full thereof at 125% of the Prime
Lending Rate.
2. Agreement to Repay Letter of Credit Drawings; Pledged Bonds.
2A. Reimbursement. The Company hereby agrees:
(i) to pay to the Bank (1) on the Termination Date, an amount equal to
all "A Drawings" under the Letter of Credit; and (2) interest on each such
amount from the date of drawing of such amount under the Letter of Credit
until payment (including prepayment) in full thereof, at the Prime Lending
Rate plus 1%, payable quarterly in arrears on the fifteenth day of each
March, June, September and December and on the date of payment (including
prepayment) of any such amount;
(ii) to pay to the Bank immediately after any payment is made under
the Letter of Credit pursuant to any "B Drawing" or any "C Drawing" to pay
principal of or interest (or the portion of Purchase Price corresponding
to interest) on the Bonds, an amount equal to such amount so paid under
the Letter of Credit; and
(iii) to pay to the Bank interest on any and all amounts required to
be paid as provided in Paragraph 1, clause (1) of Paragraph 2 A(i),
Paragraph 2 A(ii) and, to the extent permitted by law, clause (2) of
Paragraph 2 A(i) from and after the due date thereof until payment in
full, payable on demand, at 125% of the Prime Lending Rate. If any payment
under the Letter of Credit with respect to a "B Drawing" or a "C Drawing"
shall be reimbursed by the Company to the Bank on the same date such
payment is made by the Bank, no interest shall be payable on the amount of
such drawing.
2B. Pledge of Bonds. As security for the payment of the obligations of the
Company pursuant to Paragraph 2A(i) above, the Company will pledge to the Bank,
and grant to the Bank a security interest in, its right, title and interest in
and to Bonds delivered to the Bank in connection with "A Drawings" (herein
called "Pledged Bonds"), pursuant to a pledge agreement in the form of Annex II
attached hereto (the "Pledge Agreement"). Any amounts from time to time owing to
the Bank pursuant to Paragraph 2A(i) above may be prepaid (i) at any time by the
Company on one Business Day's
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notice stating the amount to be prepaid (which shall be $5,000 or a whole
multiple thereof), and (ii) at any time on behalf of the Company on one Business
Day's notice from the Company directing the Bank to deliver a specified
principal amount of Pledged Bonds held by the Bank for sale pursuant to Section
3.09(b) of the Indenture. Upon payment to the Bank of the amount to be prepaid
pursuant to clause ( i) or ( ii) above, together with accrued interest, as set
forth in clause (2) of Paragraph 2A(i), to the date of such prepayment on the
amount to be prepaid, the outstanding obligations of the Company under Paragraph
2A(i) above shall be reduced by the amount of such prepayment, interest shall
cease to accrue on the amount prepaid, and the Bank shall release from the
pledge and security interest created by the Pledge Agreement a principal amount
of Pledged Bonds equal to the amount of such prepayment, provided that prior to
such release from the pledge and security interest created by the Pledge
Agreement of Bonds delivered to the Bank in connection with an "A Drawing", the
Company shall have paid to the Bank the amount owing in respect of the "C
Drawing" if any, made in conjunction with such "A Drawing". Such Bonds shall be
delivered to the Company, in the event of a prepayment pursuant to clause (i)
above, or to the Tender Agent pursuant to Section 3.09(b) of the Indenture, in
the event of a prepayment pursuant to clause (ii) above, as appropriate.
Notwithstanding the foregoing, no prepayment of amounts owing to the Bank
pursuant to Paragraph 2A(i) may be made, and no Pledged Bonds shall be released,
during the period commencing two Business Days prior to an interest payment date
with respect to the Bonds and ending at the close of business on such interest
payment date.
2C. Reinstatement of Letter of Credit. After any "C Drawing", the
obligation of the Bank to honor demands for payment under the Letter of Credit
with respect to payment of interest (or the portion of Purchase Price
corresponding to interest) on the Bonds will automatically be reinstated upon
the terms and conditions set forth in the Letter of Credit. Upon release by the
Bank pursuant to Paragraph 2B hereof of any Pledged Bonds, the obligation of the
Bank to honor demands for payment under the Letter of Credit with respect to
payment of the principal, or the portion of Purchase Price corresponding to
principal, of the Bonds will automatically be reinstated upon the terms and
conditions set forth in the Letter of Credit.
2D. Credit for Amount Paid on Bonds. The Company shall (i) receive a
credit against its obligation to pay
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interest pursuant to clause (2) of Paragraph 2A(i) above to the extent of any
amounts actually paid by the Issuer to the Bank in respect of the interest due
on any Pledged Bonds and (ii) receive a credit against its reimbursement
obligation pursuant to clause (1) of Paragraph 2A(i) above to the extent of any
amounts actually paid by the Issuer to the Bank in respect of the principal due
on any Pledged Bonds.
2E. Computation of Interest; Place of Payment. Interest payable hereunder
shall be computed on the basis of a 360-day year, actual number of days elapsed.
All payments by the Company to the Bank hereunder shall be made in lawful
currency of the United States and in immediately available funds at the Bank's
office at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Letter
of Credit Division. In the event the date specified for any payment hereunder is
not a Business Day, such payment shall be made on the next following Business
Day and interest shall be paid at the rate provided for herein on any such
payment to the Business Day on which such payment is made.
3. Conditions Precedent to Issuance of the Letter of Credit. This
Agreement shall become effective, and the Bank will issue the Letter of Credit,
on the date the Bonds are issued and sold to the purchaser(s) thereof, provided
that all of the following conditions are met:
3A. This Delivery of the Bonds and Operative Documents. This Agreement,
the Sublease Agreement, the Pledge Agreement, the Guaranty Agreement, the
Remarketing Agreement (as defined in the Indenture), the Tender Agent Agreement,
and the Indenture (collectively, the "Operative Documents") and the Bonds shall
have been executed and delivered by the parties thereto, each in form and
substance satisfactory to the Bank. The Bank shall have received an executed or
conformed copy of each of the Operative Documents.
3B. No Default. On the Date of Issuance and after giving effect to the
issuance of the Letter of Credit, there shall exist no Default or Event of
Default.
3C. Representations and Warranties. On the Date of Issuance and after
giving effect to the issuance of the Letter of Credit, all representations and
warranties of the Company and the Guarantor contained herein or in the other
Operative Documents or otherwise made in writing in connection herewith shall be
true and correct in all material respects with the same force and effect as
though such rep-
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resentations and warranties had been made on and as of such date.
3D. Certificates of Compliance. There shall have been delivered to the
Bank (i) a certificate of an authorized officer of the Company, dated the Date
of Issuance, to the effect that, insofar as concerns the Company, all of the
conditions specified in Paragraphs 3B and 3C have been satisfied as of such
date, and (ii) a certificate of an authorized officer of the Guarantor, dated
the Date of Issuance, to the effect that, insofar as concerns the Guarantor, all
of the conditions specified in Paragraphs 3B and 3C have been satisfied as of
such date.
3E. Opinions of Counsel. There shall have been delivered to the Bank (i)
an opinion of Messrs. Xxxxxxxxxx, Xxxxx and Xxxxxxx, counsel to the Company,
dated the Date of Issuance and in form and substance satisfactory to the Bank,
covering such matters as the Bank may reasonably request, and (ii) an opinion of
Xxxxxx Xxxx & Hills, counsel to the Guarantor, dated the Date of Issuance and in
form and substance satisfactory to the Bank, covering such matters as the Bank
may reasonably request.
3F. Opinion of Bond Counsel. There shall have been delivered to the Bank
an opinion (or a signed copy of such opinion together with a satisfactory
reliance letter) of Messrs. Drinker Xxxxxx & Xxxxx, Bond Counsel, dated the Date
of Issuance and in form and substance satisfactory to the Bank, to the effect
that the Bonds are legal, valid and binding obligations of the Issuer and that
interest on the Bonds is exempt from Federal income taxes under existing
statutes regulations and rulings, and covering such other matters as the Bank
may reasonably request.
3G. Other Documents. There shall have been delivered to the Bank such
other information, documents, instruments, approvals (and if requested by the
Bank, certified duplicates of executed copies thereof) or opinions as the Bank
or its counsel may reasonably request.
3H. Documentation and Proceedings. All corporate and legal proceedings and
all instruments in connection with the transactions contemplated by this
Agreement and the other Operative Documents shall be satisfactory in form and
substance to the Bank and its counsel and the Bank shall have received all
information and copies of all documents, including records of corporate
proceedings, governmental
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approvals and incumbency certificates which it may have reasonably requested in
connection with the transactions contemplated by this Agreement and the other
Operative Documents, such documents where appropriate to be certified by proper
officers.
4. Indemnification. In addition to amounts, payable under Paragraphs l and
2 of this Agreement, the Company hereby agrees to protect, indemnify, pay and
save the Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which the Bank may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of the Letter of Credit, other than as a
result of the gross negligence or willful misconduct of the Bank, (ii) any
breach by the Company, the Guarantor or the Issuer of any warranty, covenant,
term or condition in, or the occurrence of any default under, this Agreement,
any other Operative Document or the Bonds, together with all reasonable expenses
resulting from the compromise or defense of any claims or liabilities arising as
a result of any such breach or default, and (iii) defense against any legal
action commenced to challenge the validity of any of the above referred to
instruments. The obligations of the Company under this Paragraph 4 shall survive
the payment of the Bonds and the termination of this Agreement.
5. Character of Obligations Hereunder. The obligations of the Company
under this Agreement are primary, absolute, independent, irrevocable and
unconditional. The Company understands and agrees that no payment by it under
any other agreement (whether voluntary or involuntary or pursuant to court order
or otherwise) shall constitute a defense to the several obligations hereunder
except to the extent that the Bank has been indefeasibly paid in full.
6. Covenants. The Company agrees that, so long as any amount is payable
under this Agreement:
6A. Compliance with Agreements. The Company will observe and perform all
of its obligations under this Agreement and the other Operative Documents to
which it is a party. The Company will not amend or otherwise modify, or agree to
the amendment, modification or termination of, any of the Bonds or the Operative
Documents, without the consent of the Bank.
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6B. Notice of Default. The Company will furnish to the Bank as soon as
possible and in any event within two Business Days after the discovery by any
executive officer of the Company of any Event of Default or Default, an
Officer's Certificate, setting forth the details of such Event of Default or
Default and the action which the Company proposes to take with respect thereto.
6C. Financial Statements. The Company will deliver to the Bank, in
duplicate the following documents relating to the Company and the Parent
Corporation: (i) within 45 days after the end of each fiscal quarterly period in
each fiscal year an income statement and a surplus statement for the period from
the beginning of the current fiscal year to the end of such quarterly period,
and a balance sheet as at the end of such quarterly period, signed by an
authorized financial officer, (ii) within 90 days after the end of each fiscal
year similar statements for such year certified by independent certified public
accountants acceptable to the Bank whose certificate shall be satisfactory to
the Banks, (iii) copies of all statements and reports sent to stockholders or
filed with the Securities and Exchange Commission, and (iv) such other financial
data as the Bank may reasonably request. All financial statements specified in
clauses (i) and (ii) above shall be furnished in consolidated form for the
Company and all consolidated subsidiaries with comparative figures for the
corresponding period in the preceding year. Together with each delivery of
financial statements required by clause (i) above, the Company will deliver to
the Bank an Officer's Certificate stating that there exists no Event of Default
or Default or, if any such Event of Default or Default exists, stating the
nature thereof, the period of existence thereof and what action the Company
proposes to take with respect thereto.
The Bank is hereby authorized to deliver a copy of any financial statement
delivered to it pursuant to this Xxxxxxxxx 0X to any regulatory body having
jurisdiction over it.
6D. ERISA. The Company will as soon as possible and in any event within 10
days after the Company or a Subsidiary knows or has reason to know that a
Reportable Event has occurred, that an accumulated funding deficiency has been
incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver of the minimum funding standard under Section 412 of the
Code with respect to a Plan, that a Plan has been or may be terminated, that
proceedings may be or have been instituted to terminate a Plan,
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or that the Company, a Subsidiary or an ERISA Affiliate will or may incur any
liability to or on account of a Plan under Section 4062, 4063, 4064, 4201 or
4204 of ERISA, the Company will deliver to the Bank an Officer's Certificate
setting forth details as to such occurrence and action, if any, which the
Company or the Subsidiary is required or proposes to take, together with any
notices required or proposed to be filed with or by the Company, the Subsidiary,
the ERISA Affiliate, the PBGC or the plan administrator with respect thereto.
The Company will furnish to the Bank a copy of the annual report of each Plan
(Form 5500) required to be filed with the Internal Revenue Service. Copies of
annual reports or any notices required to be delivered to the Bank hereunder
shall be delivered no later than 10 days after the later of the date such report
or notice has been filed with the Internal Revenue Service or the PBGC or
received by the Company or the Subsidiary.
6E. Inspection. The Company covenants that, so long as this Agreement
shall remain in effect, it will permit any Person designated by the Bank in
writing at the Bank's expense to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or extracts
therefrom, and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company, all at such reasonable
times and as often as the Bank may reasonably request.
6F. Company to Maintain Its Corporate Existence. The Company will maintain
its corporate existence, will not dissolve or otherwise dispose of all or
substantially all of its assets, and (unless the surviving corporation following
any consolidation or merger is the Company) will not consolidate with or merge
into another Person or permit one or more other Persons to consolidate with or
merge into it.
7. Representations and Warranties. The Company represents and warrants
that:
7A. Organization and Qualification. The Company is a corporation duly
organized and existing in good standing under the laws of its state of
incorporation and the Company has and each Subsidiary has the corporate power to
own its respective property and to carry on its respective business as it is now
being conducted.
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7B. Financial Statements. The Company has furnished the Bank with the
following financial statements identified by a principal financial officer of
the Parent Corporation: (i) consolidated audited balance sheets of the Parent
Corporation and its consolidated subsidiaries as at December 31, 1982 and
December 31, 1983, and consolidated profit and loss and surplus statements of
the Parent Corporation and its consolidated subsidiaries for the fiscal years
ended on such dates, respectively, certified by its certified public
accountants; and (ii) a consolidated balance sheet of the Parent Corporation and
its consolidated subsidiaries as at September 30, 1984, and consolidated profit
and loss and surplus statements of the Parent Corporation and its consolidated
subsidiaries for the nine months ended on such date, prepared by, the Parent
Corporation. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments) and have
been prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved and show all liabilities,
direct and contingent of the Parent Corporation and its consolidated
subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Parent Corporation and its
consolidated subsidiaries as at the dates thereof, and the profit and loss and
surplus statements fairly present the results of the operations of the Parent
Corporation and its consolidated subsidiaries for the periods indicated. There
has been no material adverse change in the business, condition (financial or
otherwise) or operations of the Parent Corporation or any of its consolidated
subsidiaries since December 31, 1983.
7C. Actions Pending. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any of their respective properties, which might
result in any material adverse change in the business, condition (financial or
otherwise) or operations of the Company any of its Subsidiaries or which
involves the possibility of materially adversely affecting the ability of the
Company to comply with this Agreement or any of the other Operative Documents to
which the Company is a party.
7D. Taxes. The Company and each of its Subsidiaries has filed all Federal
and State income tax returns which, to the best knowledge of the officers of the
Company, are re-
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quired to be filed, and each has paid all taxes as shown on said returns and on
all assessments received by it to the extent that such taxes have become due.
7E. Compliance with ERISA. The Plans are in substantial compliance with
ERISA, no Plan is insolvent or in reorganization, no Plan has an accumulated or
waived funding deficiency within the meaning of Section 412 of the Code, neither
the Company nor a Subsidiary nor an ERISA Affiliate has incurred any material
liability (including any material contingent liability) to or on account of a
Plan pursuant to Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no proceedings
have been instituted to terminate any Plan, and no condition exists which
presents a material risk to the Company or a Subsidiary of incurring a liability
to or on account of a Plan pursuant to any of the foregoing Sections of ERISA.
7F. Conflicting Agreements and Other Matters. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which materially and adversely affects
its business, property or assets, or financial condition. The execution,
delivery and performance of this Agreement and each of the other Operative
Documents to which the Company is a party will not result in the violation of or
be in conflict with or constitute a default under the charter or by-laws of the
Company or any term or provision of any mortgage, lease, agreement or other
instrument, or any judgment, decree, governmental order, statute, rule or
regulation, by which the Company is bound or to which any of its assets is
subject. No approval by, authorization of, or filing with any federal, state or
other governmental commission, agency or authority is necessary in connection
with the execution and delivery by the Company of this Agreement or the other
Operative Documents to which the Company is a party. Neither the Company nor any
subsidiary is a party to,or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) which restricts or otherwise limits the incurring of the Indebtedness
to be represented by this Agreement and the other Operative Documents.
7G. Disclosure. There is no fact known to the Company or any Subsidiary
which materially adversely affects or in the future may,(so far as the Company
can now foresee) materially adversely affect the business, property assets or
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financial condition of the Company or any of its Subsidiaries which has not been
set forth in this Agreement or in the other documents, certificates and
statements furnished to the Bank by or on behalf of the Company prior to the
date hereof in connection with the transactions contemplated hereby,
7H. Operative Documents. The Company makes each of the representations and
warranties contained in the Operative Documents to which the Company is a party
to, and for the benefit of, the Bank as if the same were set forth at length
herein.
8. Events of Default. Upon the occurrence of any of the following events
(herein referred to as an "Event of Default"), unless waived by the Bank:
(i) the occurrence of an "Event of Default" as described and defined
in the Indenture; or
(ii) failure to pay any amount when due under the terms of this
Agreement; or
(iii) failure on the part of the Company to perform or observe any of
the terms of Paragraph 6 hereof; or
(iv) the Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any of the Operative
Documents on its part to be performed or observed and (a) with respect to
any such term, covenant or agreement contained herein, any such failure
remains unremedied for 30 days; and (b) with respect to any such term,
covenant or agreement contained in any of the other Operative Documents,
any such failure remains unremedied after any applicable grace period
specified in such Operative Document; or
(v) any warranty, representation or other written statement made by or
on behalf of the Company contained herein, in any of the other Operative
Documents or in any instrument furnished in compliance with or in
reference to this Agreement is false or misleading in any material respect
on the date as of which made; or
(vi) default shall be made in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of
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the Company or any of its Subsidiaries (except any such Indebtedness of
any Subsidiary to the Company or to any other Subsidiary) or any interest
or premium thereon, or default shall be made in the performance or
observance of any obligation or condition with respect to any such
Indebtedness if the effect of such default is to accelerate the maturity
of any such Indebtedness or to permit the holder or holders thereof, or
any trustee or agent for such holders, to cause such Indebtedness to
become due and payable prior to its expressed maturity, or any such
Indebtedness shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment) prior to
stated maturity, whether or not any such default shall subsequently be
cured; or
(vii) the Company or any Subsidiary shall (1) apply for or consent to
the appointment of a receiver, trustee, liquidator or custodian or the
like of itself or of its property, (2) admit in writing its inability to
pay its debts generally as they become due, (3) make a general assignment
for the benefit of creditors, (4) be adjudicated a bankrupt or insolvent,
(5) commence a voluntary case under the Federal bankruptcy laws of the
United States of America or file a voluntary petition or answer seeking
reorganization, an arrangement with creditors or an order for relief or
seeking to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding, or action shall be
taken by it for the purpose of effecting any of the foregoing or (6) if
without the application, approval or consent of the Company or any
Subsidiary, as the case may be, a proceeding shall be instituted in any
court of competent jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in respect of the
Company or any Subsidiary, as the case may be, an order for relief or an
adjudication in bankruptcy reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment
of debts, or the appointment of a trustee, receiver, liquidator or
custodian or the like of the Company or any Subsidiary, as the case may
be, or of all or any substantial part of its assets, or other like relief
in respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by the Company or any subsidiary, as
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the case may be, in good faith, the same shall (A) result in the entry of
an order for relief or any such adjudication or appointment or (B)
continue undismissed, or pending and unstayed, for any period of sixty
(60) consecutive days; or
(viii) a Plan shall fail to maintain the minimum funding standard
required by Section 412 of the Code for any plan year or a waiver of such
standard is sought or granted under Section 412(d) of the code, or a Plan
is, shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA, or the Company or a Subsidiary or an
ERISA Affiliate has incurred or is likely to incur a liability to or on
account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA,
and there shall result from any such event or events either a liability or
a material risk of incurring a liability to the PBGC or a Plan, which in
the opinion of the Bank, will have a material adverse effect upon the
business operations or the financial condition of the Company or a
Subsidiary; or
(ix) the occurrence of an "Event of Default" as described and defined
in the Guaranty Agreement;
then, and in any such event, the Bank may, in its sole discretion, but shall not
be obligated to, (1) by notice to the Company, declare all amounts payable by
the Company hereunder (including, without limitation, amounts payable pursuant
to Paragraph 2A hereof) to be forthwith due and payable, and the same shall
thereupon become due and payable without demand, presentment, protest or further
notice of any kind, all of which are hereby expressly waived, and/or (2)
exercise all of its rights and remedies under the Operative Documents and/or (3)
by notice to the Trustee, require the Trustee to accelerate payment of all Bonds
and interest accrued thereon as provided in Section 10.02 of the Indenture.
No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or any other Operative Document or now or hereafter existing at law or
in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default, omission or failure of performance hereunder shall
impair any
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17
such right or power or shall be construed to be a waiver thereof, but any such
right or power may be exercised from time to time and as often as may be deemed
expedient. In order to exercise any remedy reserved to the Bank in this
Agreement, it shall not be necessary to give any notice, other than such notice
as may be herein expressly required. In the event any provision contained in
this Agreement should be breached by any party and thereafter duly waived by the
other party so empowered to act, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder. No
waiver, amendment, release or modification of this Agreement shall be
established by conduct, custom or course of dealing, but solely by an instrument
in writing duly executed by the parties thereunto duly authorized by this
Agreement.
9. Definitions. For the purpose of this Agreement, in addition to terms
defined elsewhere herein, the following terms shall have the following meanings:
"A Drawing" shall have the meaning specified in the Letter of Credit which
shall be a drawing in respect of the payment of the portion of the Purchase
Price corresponding to principal of the Bonds.
"B Drawing" shall have the meaning specified in the Letter of Credit which
shall be a drawing in respect of the payment of principal of the Bonds.
"Business Day" shall mean a day on which the Bank and the Trustee are each
open for the purpose of conducting a commercial banking business.
"C Drawing" shall have the meaning specified in the Letter of Credit which
shall be a drawing in respect of the payment of interest, or the portion of
Purchase Price corresponding to interest, on the Bonds.
"Code" shall mean the Internal Revenue Code of 1954, as amended from time
to time,
"Date of Issuance" shall mean the date of issuance and delivery of the
Letter of Credit,
"Default" shall mean any event which with notice or lapse of time, or
both, would become an Event of Default.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Company or a Subsidiary would be deemed to
be a "single employer" within the meaning of Section 4001 of ERISA.
"Event of Default" shall have the meaning specified in Paragraph 8 hereof.
"Indebtedness" shall mean, for any Person, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property and
(ii) all direct or indirect guarantees of such Person in respect of, and all
obligations or undertakings (contingent or otherwise) of such Person to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness of any other Person for borrowed money or for the deferred
purchase price of property.
"Officer's Certificate" shall mean a certificate signed by the Chairman of
the Company's Board of Directors, or President of the Company and its Secretary
or Assistant Secretary or Treasurer, or such other officer as shall be
authorized by the Company's Board of Directors to act on behalf of the Company,
under its corporate seal. One person shall not, however, be permitted to execute
the certificate in more than one capacity.
"Operative Documents" shall have the meaning assigned to such term in
Paragraph 3A hereof.
"Parent Corporation" shall mean Radiation Technology, Inc., a New Jersey
corporation, and its successors and assigns.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Person" shall mean an individual, corporation partnership, joint venture,
trust, unincorporated organization
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or any other juridical entity, or a foreign state or any agency or political
subdivision thereof.
"Plan" shall mean any multiemployer plan or single employer plan, as
defined in Section 4001 and subject to Title IV of ERISA, which is maintained,
or at any time during the five calendar years preceding the date of this
Agreement was maintained, for employees of the Company or a Subsidiary or an
ERISA Affiliate.
"Prime Lending Rate" shall mean the rate announced by the Bank from time
to time at its principal office as its prime lending rate for domestic
commercial loans; the Prime Lending Rate to change when and as such prime
lending rate changes.
"Purchase Price" shall have the meaning assigned to such term in the
Indenture.
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA (with respect to which the 30-day notice requirement has not been waived
by the PBGC).
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
"Stated Amount" shall have the meaning specified in the Letter of Credit.
"Subsidiary" shall mean any corporation of which at least a majority of
the outstanding stock having by the terms thereof ordinary voting power to elect
at majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the Company or one or more of its Subsidiaries or by the Company and one or more
of its Subsidiaries.
"Tender Agent" shall have the meaning assigned to such term in the
indenture.
"Tender Agent Agreement" shall mean the Tender Agent Agreement dated as of
December 1, 1984, among the Company, the Trustee and the Tender Agent.
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20
"Termination Date" shall mean the date the Letter of Credit terminates or
expires in accordance with its terms.
10. Nature of Bank's Duties. As between the Company and the Bank, the
Company shall assume all risks of the acts, omissions or misuse of the Letter of
Credit by the Trustee. The Bank shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letter of Credit, even if it should in fact prove to be in any or all
respects inaccurate, fraudulent or forged; (ii) for the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
the Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) for failure of the Trustee to comply fully with conditions
required in order to draw upon the Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under the Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Bank. None of the
above shall affect, impair, or prevent the vesting of any of the Bank's rights
or powers hereunder,
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Bank. under
or in connection with the Letter of Credit or the related drafts or document(s),
if taken or omitted in good faith, shall not put the Bank under any resulting
liability to the Company.
The Company hereby agrees at all times to protect, indemnify and save
harmless the Bank from and against any and all claims, actions, suits and other
legal proceedings, and from and against any and all losses, claims, demands,
liabilities, damages, costs, charges, counsel fees and other expenses which the
Bank may, at any time, sustain or incur by reason of or in consequence of or
arising out of the issuance of the Letter of Credit; it being the intention of
the parties that this Agreement shall be construed and applied to protect and
indemnify the Bank against any and
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21
all risks involved in the issuance of the Letter of Credit, all of which risks
are hereby assumed by the Company, including, without limitation, any and all
risks of the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
and omissions, herein called "Government Acts"). The Bank shall not, in any way,
be liable for any failure by the Bank or anyone else to pay any drawing under
the Letter of Credit as a result of any Government Acts or any other cause
beyond the control of the Bank. The obligations of the Company under this
Paragraph 10 shall survive the payment of the Bonds and the termination of this
Agreement.
Notwithstanding anything to the contrary contained in this Paragraph 10,
the Company shall have no obligation to indemnify the Bank in respect of any
liability incurred by the Bank arising solely out of the gross negligence or
willful misconduct of the Bank or out of the wrongful dishonor by the Bank of a
proper demand for payment made under the Letter of Credit,
11. Miscellaneous.
11A. Amendments. This Agreement may be amended, and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it if the Company shall obtain the written consent of the Bank. No
course of dealing between the Company and the Bank, nor any delay in exercising
any rights hereunder shall operate as a waiver of any rights of the Bank
hereunder.
11B. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by the Company in connection
herewith shall survive the execution and delivery of this Agreement, regardless
of any investigation made by the Bank or on its behalf.
11C. Expenses. The Company agrees to pay promptly all costs and expenses
in connection with the preparation, issuance, delivery, filing, recording, and
administration of the Letter of Credit, this Agreement, the other operative
Documents, the Bonds and any other documents which may be delivered in
connection with this Agreement, including, without limitation, all engineers'
and architects' fees, the reasonable fees and expenses of White 3 Case, counsel
for the Bank, and the reasonable fees and expenses of any local counsel who may
be retained by the Bank, with respect to the
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transactions contemplated by this Agreement, and all costs and expenses
(including reasonable counsel fees and expenses) in connection with (i) the
transfer, drawing upon, change in terms, maintenance, renewal or cancellation of
the Letter of Credit, (ii) any and all amounts which the Bank has paid relative
to the Bank's curing of any Event of Default resulting from the acts or
omissions of the Company under this Agreement, any other Operative Document or
the Bonds, (iii) the enforcement of this Agreement or any other Operative
Document, or (iv) 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. In addition, the Company
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 the
Letter of Credit, this Agreement, any other Operative Document or the Bonds, or
any other document which may be delivered in connection with this Agreement, and
agrees to save 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, Notwithstanding the foregoing, no payment shall be required under this
Paragraph 11C in respect of any cost or expense which the Bank has incurred
because of its gross negligence or willful misconduct,
11D. Set-off; Limitation on Bank Collateral. (i) In addition to any rights
now or hereafter granted under applicable law (including, but not limited to,
Section 151 of the New York Debtor and Creditor Law) and not by way of
limitation of any such rights, during the continuance of any Event of Default
hereunder the Bank is hereby authorized at any time and from time to time,
without notice to the Company or to any other person or entity, any such notice
being hereby expressly waived, to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by the Bank to or for the credit or the account of the Company against and
on account of the obligations and liabilities of the Company to the Bank under
this Agreement, irrespective of whether or not the Bank shall have made any
demand hereunder and although said obligations, liabilities or claims, or any of
them, shall be contingent or unmatured.
(ii) Notwithstanding the provisions contained in paragraph (i) above, the
Bank hereby agrees to waive the exercise, at any time after the commencement of
a proceeding in bankruptcy or reorganization with respect to the Company, of
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23
its right to set-off any and all deposits (general or special) at any time held
and other indebtedness at any time owing by the Bank to or for the credit or the
account of the Company against any and all of the obligations of the Company now
or hereafter existing in respect of the reimbursement obligations of the Company
set forth in this Agreement.
(iii) Except as provided in the Pledge Agreement with respect to the
Pledged Bonds, the Bank hereby agrees that it will not at any time accept any
collateral as security for the payment of the reimbursement obligations of the
Company set forth in this Agreement unless provision is made prior to or
simultaneously with the taking of such collateral security by the Bank for a
prior or an equal and ratable security interest in such collateral security to
be granted to the Trustee for the benefit of the holders from time to time of
the Bonds.
(iv) Notwithstanding the foregoing, the covenants of the Bank contained in
clauses (ii) and (iii) of this Paragraph 11D shall be of no force or effect at
such time as, in the opinion of nationally recognized counsel experienced in
bankruptcy matters, due to legislative or judicial developments after the date
hereof, the absence of such covenants or failure to comply therewith will not
constitute a basis for the granting of injunctive relief against payment under
the Letter of Credit.
11E. Binding Effect; Assignment. This Agreement is a continuing obligation
and shall (i) be binding upon the Company, its successors and assigns, and (ii)
inure to the benefit of and be enforceable by the Bank and its successors,
transferees and assigns; provided, that the Company may not assign all or any
part of this Agreement without the prior written consent of the Bank. The Bank
may assign, negotiate, pledge or otherwise hypothecate all or any portion of
this Agreement, or grant participations herein, in the Letter of Credit or in
any of its rights or security hereunder, including, without limitation, the
instruments securing the Company's obligations hereunder. No such assignment or
participation by the Bank, however, will relieve the Bank of its obligation
under the Letter of Credit. In connection with any assignment or participation,
the Bank may disclose to the proposed assignee or participant any information
that the Company is required to deliver to the Bank pursuant to this Agreement.
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24
11F. Notices. All communications provided for hereunder shall be sent by
first class mail and, if to the Bank, to it at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Letter of Credit Division and with a copy to it
at 000 Xxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: European
Department, Europe U.K. Group; and if to the Company, to it at X.X. Xxx 000, 000
Xxxx Xxxxxxx Road, Rockaway, New Jersey 07866, Attention: Vice President; or to
such other address with respect to either party as such party shall notify the
other in writing; provided, however, that any such communication to the Company
may also, at the Bank's option, be either delivered to the Company at its
address set forth above or to any officer of the Company.
1lG. Satisfaction Requirement. If any agreement, certificate or other
writing or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to the Bank, the determination of such satisfaction
shall be made by the Bank in its sole and exclusive judgment exercised in good
faith.
11H. Governing Law. This Agreement is being delivered and is intended to
be performed in the State of New York, and shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
such State.
11I. Consent to Jurisdiction and Venue, etc.
(i) The Company irrevocably (i) agrees that any suit, action or other
legal proceeding arising out of or relating to this Agreement or the other
Operative Documents may be brought in a court of record in the State of New York
or in the Courts of the United States of America located in such state, (ii)
consents to the jurisdiction of each such court in any such suit, action or
proceeding and (iii) waives any objection which it may have to the laying of
venue of any such suit, action or proceeding in any of such courts and any claim
that any such suit, action or proceeding has been brought in an inconvenient
forum. The Company hereby irrevocably appoints CT Corporation System (the
"Process Agent") with an office on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 as its agent to receive on behalf of the Company and its property
service of copies of the summons and complaint and any other process which may
be served in any such suit, action or proceeding. Such service may be made by
mailing or delivering a copy of such process to the Company in care of the
Process Agent at the Process
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25
Agent's above address and the Company hereby irrevocably authorizes and directs
the Process Agent to accept such service on its behalf . The Bank agrees to mail
to the Company at its address provided in Paragraph 11F hereof a copy of any
summons, complaint or other process mailed or delivered by it to the Company in
care of the Process Agent. As an alternate method of service, the Company also
irrevocably consents to the service of any and all process in any such suit,
action or proceeding by mailing of copies of such process to the Company at its
address provided in Paragraph 11F. The Company agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
All mailings under this Paragraph shall be by certified mail, return receipt
requested.
(ii) Nothing in this Paragraph 11I shall affect the right of the Bank to
serve legal process in any other manner permitted by law or affect the right of
the Bank to bring any suit, action or proceeding against the Company or its
property in the courts of any other jurisdiction.
11J. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
SOUTH JERSEY PROCESS
TECHNOLOGY, INC
By /s/ signature unreadable
------------------------
Title: President
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BANKERS TRUST COMPANY
By /s/ signature unreadable
------------------------
Title: V.P.
H. Cotterill
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ANNEX I
IRREVOCABLE LETTER OF CREDIT
BANKERS TRUST COMPANY
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
December 28, 1984
IRREVOCABLE LETTER OF CREDIT NO, V 65986-S
The Farmers and Merchants
National Bank of Bridgeton
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Trust Department
Dear Sirs:
At the request and on the instructions of our customer, South Jersey
Process Technology, Inc., a New Jersey corporation (the "Company"), we hereby
establish in your favor, as Trustee under the Trust Indenture, dated as of
December 1, 1984 (the "Indenture") from the City of Salem Municipal Port
Authority (the "Authority") to you pursuant to which $2,500,000 in aggregate
principal amount of the Authority's Port Development Revenue Bonds (South Jersey
Process Technology, Inc. Project) Series of 1984 (the "Bonds") are being issued,
this Irrevocable Letter of Credit in the amount of $2,625,000 (hereinafter, as;
reduced from time to time in accordance with the provisions hereof, the "Stated
Amount") of which an amount not exceeding $2,500,000 (as reduced from time to
time in accordance with the terms hereof, the "Principal Component") may be
drawn upon with respect to payment of the unpaid principal amount or the portion
of Purchase Price corresponding to principal of the Bonds, and an amount not
exceeding $125,000 (as reduced from time to time in accordance with the terms
hereof, the "Interest Component") may be drawn upon with respect to payment of
interest accrued or the portion of Purchase Price corresponding to interest
accrued on the Bonds on or prior to their stated maturity date, effective
immediately and expiring on December 15, 1994 unless terminated earlier in ac-
28
Annex I
page 2
cordance with the Provisions hereof or unless otherwise extended. All drawings
under this Letter of Credit will be paid with our own funds.
Funds under this Letter of Credit will be made available to you against
receipt by us of the following items at the time required below: (A) if the
drawing is being made with respect to payment of the portion of the Purchase
Price of Bonds delivered to the Tender Agent (as defined in the Indenture)
pursuant to Section 3.01, 3.02 or 3.06 of the Indenture corresponding to the
principal thereof (an "A Drawing"), (i) receipt by us of Bonds ("Pledged Bonds")
in an aggregate outstanding principal amount equal to the total amount specified
in your certificate referred to in clause (iii) below, (ii) receipt by us of any
and all due-bills for interest due on the next succeeding interest payment date
delivered pursuant to Section 3.06 of the Indenture in respect of such Pledged
Bonds and (iii) receipt by us of your written certificate in the form of Exhibit
A attached hereto appropriately completed and signed by an Authorized Officer;
(B) if the drawing is being made with respect to principal of the Bonds (a "B
Drawing"), receipt by us of your written certificate in the form of Exhibit B
attached hereto appropriately completed and signed by an Authorized officer; and
(C) if the drawing is being made with respect to the payment of interest, or the
portion of Purchase Price corresponding to interest, on the Bonds (a "C
Drawing"), receipt by us of your written certificate in the form of Exhibit C
attached hereto appropriately completed and signed by an Authorized Officer.
Such certificate(s), Pledged Bonds and due-bills shall be (x) presented at our
office located at One Bankers Trust Plaza, New York, New York, Attention: Letter
of Credit Division or at any other office in the City and State of New York
which may be designated by us by written notice delivered to you, or (y) in the
case of such certificate(s), sent to us by tested telex (Telex No. 126600,
126699, 126642, or 126609).
If a drawing is made by you hereunder at or prior to 11:00 A.M., New York
time, on a business day, and provided that such drawing and the documents and
other items presented in connection therewith conform to the terms and
conditions hereof, payment shall be made to you, or to your designee, of the
amount specified, in immediately available funds, not later than 3:00 P.M., New
York time, on the same business day or not later than 12:00 Noon, New York time,
on such later business day as you may specify. If requested by you, payment
under this Letter of Credit will be made by
29
Annex I
page 3
deposit of immediately available funds into a designated account that you
maintain with us. If a demand for payment made by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, we shall
give you prompt notice that the demand for payment was not effected in
accordance with the terms and conditions of this Letter of Credit, stating the
reasons therefor and that we will upon your instructions hold any documents at
your disposal or return the same to you. Upon being notified that the demand for
payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such non-conforming demand for payment to the extent that
you are entitled to do so.
Demands for payment hereunder honored by us shall not, in the aggregate,
exceed the Stated Amount, as the Stated Amount may have been reinstated by us as
provided in the next paragraph. Subject to the preceding sentence, each "A
Drawing" and each "B Drawing" honored by us hereunder shall pro tanto reduce the
Principal Component, and each "C Draw- ing" honored by us hereunder shall pro
tanto reduce the Interest Component, and any such reduction shall result in a
corresponding reduction in the Stated Amount, it being understood that after the
effectiveness of any such reduction you shall no longer have any right to make a
drawing hereunder in respect of the amount of such principal and/or interest on
the Bonds or the payment of Purchase Price corresponding thereto causing or
corresponding to such reduction.
Upon release by us of any Pledged Bonds, the Principal Component shall be
reinstated automatically by an amount equal to the principal amount of such
Pledged Bonds. In addition, (i) if you shall not have received, within ten
business days after any payment in respect of a "C Drawing", notice from us that
an Event of Default under the Letter of Credit Agreement dated as of December 1,
1984 between the Company and us has occurred and is continuing, the Interest
Component shall be reinstated automatically, as of the close of business on such
tenth business day (unless the Interest Component previously has been reinstated
with respect to such "C Drawing"), by the amount of such "C Drawing" and (ii)
upon the release by us of any Pledged Bonds, the Interest Component shall be
reinstated automatically by the amount of the "C Drawing" made to pay the
portion of the Purchase Price corresponding to interest on such Pledged Bonds
(unless the Interest Component previously has been reinstated with respect to
such "C Drawing"); provided,
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Annex I
page 4
however, that in no event shall the Interest Component be reinstated to an
amount in excess of 120 days' interest (computed at the rate of 15% per annum
and on the basis of a 360-day year, actual days elapsed, notwithstanding the
actual rate borne from time to time by the Bonds) on the sum of the then
applicable Principal Component plus the aggregate principal amount of any
Pledged Bonds at the time of any such reinstatement.
Only you or your successor as Trustee may make a drawing under this Letter
of Credit. Upon the payment to you, to your designee or to your account of the
amount demanded hereunder, we shall be fully discharged on our obligation under
this Letter of Credit with respect to such demand for payment and we shall not
thereafter be obligated to make any further payments under this Letter of Credit
in respect of such demand for payment 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. By paying to you an amount demanded in accordance
herewith, we make no representation as to the correctness of the amount
demanded.
This Letter of Credit applies only to the payment of principal or the
portion of Purchase Price of the Bonds corresponding to principal, and up to 120
days' interest (computed as aforesaid) accruing on the Bonds on or prior to the
expiration of this Letter of Credit and does not apply to any interest that may
accrue thereon or any principal or premium which may be payable with respect
thereto after such date,
Upon the earliest of (i) the making by you of the final drawing available
to be made hereunder; (ii) our receipt of a certificate signed by an Authorized
Officer stating that: "(a) the conditions precedent to the acceptance of a
Substitute Letter of Credit (as defined in the Indenture) have been satisfied,
(b) the Trustee has accepted the Substitute Letter of Credit and (c) on the
effective date of the Substitute Letter of Credit and after receipt by Bankers
Trust Company of this certificate, Bankers Trust Company Irrevocable Letter of
Credit No. V 65986-S shall terminate"; (iii) our receipt of a certificate signed
by an Authorized Officer stating that no Bonds remain Outstanding (as defined in
the Indenture); (iv) fifteen days after the Optional Conversion Date (as defined
in the Indenture); and (v) the stated
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Annex I
page 5
expiration date hereof, this Letter of Credit shall automatically terminate and
be delivered to us for cancellation.
Communications with respect to this Letter of Credit shall be in writing
and shall be addressed to us at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Letter of Credit Division, specifically referring thereon to
this Letter of Credit by number, with a copy to Bankers Trust Company, 000 Xxxx
Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: European Department,
Europe/U.K. Group.
This Letter of Credit may not be transferred or assigned, either in whole
or in part except to a successor trustee properly appointed and qualified
pursuant to Article XI of the Indenture. We agree to issue a substitute letter
of credit to any such successor trustee (and to successively replace any such
substitute letter of credit) upon the return to us for cancellation of the
original of the letter of credit to be replaced, accompanied by a request
relating to such letter of credit, which (i) shall be in the form of Exhibit D
attached hereto with the blanks appropriately completed, (ii) shall be signed by
an Authorized Officer, (iii) shall specify where indicated therein the same
letter of credit number as the number of the letter of credit to be replaced,
and (iv) shall state the name and address of the successor trustee. Each
substitute letter of credit will be in substantially the form of this Letter of
Credit except for the date and letter of credit number.
As used herein (a) "Authorized officer" shall mean any of your Vice
Presidents, Assistant Vice Presidents, Trust officers or Assistant Trust
Officers; (b) "Purchase Price" shall mean the principal amount of any Bonds to
be purchased in accordance with Section 3.01 or 3.02 of the Indenture and shall
mean the principal amount of, together with accrued interest on, any Bonds to be
purchased in accordance with Section 3.06 of the Indenture; and (c) "business
day" shall mean any day on which we are open for the purpose of conducting a
commercial banking business.
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 the certificate(s)
referred to herein; and any such reference
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Annex I
page 6
shall not be deemed to incorporate herein. by reference any document, instrument
or agreement except for such certificate(s) .
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits, 1983 Revision, ICC Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be a contract made under the
laws of the State of New York and shall, as to matters not governed by the
Uniform Customs, be governed by and construed in accordance with the laws of
said State.
Very truly yours,
BANKERS TRUST COMPANY
By___________________________
Title:
33
EXHIBIT A
CERTIFICATE FOR "A DRAWING"
[Date]
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No. V 65986-S
------------------------------------------------
The undersigned, a duly Authorized Officer of The Farmers and Merchants
National Bank of Bridgeton (the "Trustee"), hereby certifies to Bankers Trust
Company (the "Bank") 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 above-referenced
Letter of Credit in the amount of $__________ with respect to the payment
of the portion of the Purchase Price of the Bonds corresponding to the
principal amount thereof, which Bonds are to be purchased pursuant to
Section [3.01] (3.02] [3.06] of the Indenture.
(3) The amount demanded hereby does not exceed the amount available
on the date hereof to be drawn under the above-referenced Letter of Credit
in respect of the portion of the Purchase Price of Bonds corresponding to
the principal amount thereof.
(4) The amount demanded hereby does not include any amount in
respect of the purchase of any Pledged Bonds.
(5) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply the same directly to the payment when due
of the principal amount owing on account of the purchase of Bonds pursuant
to the Indenture, (b) no portion of said amount shall be applied by the
undersigned for any other purpose and (c) no portion of said amount shall
be commingled with other funds held by the undersigned.
34
Exhibit A
page 2
As used herein, the terms "Authorized Officer". "Indenture" , "Bonds" ,
"Pledged Bonds" and "Purchase Price" shall have the respective meanings assigned
to such terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of _____, 19__.
THE FARMERS AND MERCHANTS
NATIONAL BANK OF BRIDGETON,
as Trustee
By_____________________
Title:
35
EXHIBIT B
CERTIFICATE FOR "B DRAWING"
[Date]
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No. V 65986-S
------------------------------------------------
The undersigned, a duly Authorized Officer of The Farmers and Merchants
National Bank of Bridgeton (the "Trustee"), hereby certifies to Bankers Trust
Company (the "Bank") 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 above-referenced
Letter of Credit in the amount of $________________ with respect to the
payment of principal of the Bonds, which amount has, or will, within five
business days, become due and payable pursuant to the Indenture, upon
maturity or as a result of acceleration or redemption of the Bonds.
(3) The amount demanded hereby does not include any amount in
respect of the principal amount of any Pledged Bonds.
(4) The amount demanded hereby, together with the aggregate of all
prior payments made pursuant to "B Drawings" under the above-referenced
Letter of Credit, does not exceed $2,500,000.
(5) The amount demanded hereby does not exceed the amount available
on the date hereof to be drawn under the above-referenced Letter of Credit
in respect of the principal of the Bonds.
(6) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply the same directly to the payment when due
of the principal
36
Exhibit B
page 2
amount owing on account of the Bonds pursuant to the Indenture, (b) no
portion of said amount shall be applied by the undersigned for any other
purpose and (c) no portion of said amount shall be commingled with other
funds held by the undersigned.
As used herein, the terms "Authorized Officer", "Indenture", "Bonds"
"business day", "B Drawing" and "Pledged Bonds", shall have the respective
meanings assigned to such terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of _____, 19__.
THE FARMERS AND MERCHANTS
NATIONAL BANK OF BRIDGETON,
as Trustee
By________________________
Title:
37
EXHIBIT C
CERTIFICATE FOR "C DRAWING"
[Date]
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No. V 65986-S
------------------------------------------------
The undersigned, a duly Authorized Officer of The Farmers and Merchants
National Bank of Bridgeton (the "Trustee"), hereby certifies to Bankers Trust
Company (the "Bank") 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 above-referenced
Letter of Credit in the amount of $___________ with respect to payment of
[the portion of the Purchase Price of $______________ in principal amount
of the Bonds corresponding to the accrued interest thereon, which Bonds
are to be purchased pursuant to Section 3.06 of the Indenture] [accrued
interest on the Bonds, which amount has, or will, within five business
days, become due and payable pursuant to the Indenture].
(3) The amount demanded hereby does not exceed the amount available
on the date hereof to be drawn under the above-referenced Letter of Credit
in respect of interest on the Bonds.
(4) The amount demanded hereby does not include any amount in
respect of the interest on any Pledged Bonds.
(5) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply the same directly to the payment when due
of the [interest owing on account of the Bonds pursuant to the Indenture]
[portion of the Purchase Price of Bonds pursuant to Section 3.06 of the
Indenture corresponding to accrued interest thereon], (b) no portion of
said amount shall be applied by the undersigned for any other pur-
38
Exhibit C
page 2
pose and (c) no portion of said amount shall be commingled with other
funds held by the undersigned.
As used herein, the terms "Authorized Officer", "Indenture", "Bonds",
"business day", "Pledged Bonds" and "Purchase Price" shall have the respective
meanings assigned to such terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of _________, 19__.
___________________________
as Trustee
By_________________________
Title:
39
EXHIBIT D
INSTRUCTION TO ISSUE SUBSTITUTE LETTER OF CREDIT
(Date]
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No. V 65986-S
------------------------------------------------
Gentlemen:
Reference is made to (i) the above-referenced letter of credit (the "Old
Letter of Credit") and (ii) the Indenture of Trust, dated as of December 1, 1988
(the "Indenture"), between the City of Salem Municipal Port Authority and us.
[Name and address of successor trustee] (the "Successor Trustee") has been
appointed successor trustee under the Indenture. You are hereby requested to
issue, in accordance with the terms of the Old Letter of Credit, a new letter of
credit to the Successor Trustee having the same terms and providing for the same
Stated Amount as the Old Letter of Credit.
We submit herewith for cancellation the original of the Old Letter of
Credit.
The individual signing below on our behalf hereby represents that he or
she is duly authorized to so sign on our behalf.
Very truly yours,
THE FARMERS AND MERCHANTS
NATIONAL BANK OF BRIDGETON
By___________________________
Title:_________________
40
ANNEX II
PLEDGE AND SECURITY AGREEMENT, dated as of December 1, 1984, made by South
Jersey Process Technology, Inc., a corporation organized and existing under the
laws of the State of New Jersey (the "Pledgor"), to Bankers Trust Company (the
"Bank") pursuant to the Letter of Credit Agreement dated as of December 1, 1984,
between the Pledgor and the Bank (hereinafter, as the same may from time to time
be amended or supplemented, called the "Letter of Credit Agreement").
W I T N E S S E T H:
WHEREAS, the City of Salem Municipal Port Authority (the "Issuer") has
agreed with the Pledgor to issue its Port Development Revenue Bonds (South
Jersey Process Technology, Inc. Project) Series of 1984 (the "Bonds") under the
Trust Indenture dated as of December 1, 1984 (the "Indenture"), from the Issuer
to The Farmers and Merchants National Bank of Bridgeton, as trustee (the
"Trustee");
WHEREAS, the Indenture provides for the purchase of Bonds under certain
circumstances as set forth in Section 3.01, 3.02 and 3.06 of the Indenture (the
"Purchased Bonds") from the holders thereof;
WHEREAS, in connection with the issuance of the Bonds the Pledgor has
entered into the Letter of Credit Agreement in order to cause the Bank to issue
the Letter of Credit thereunder which may be used, inter alia, to pay the
Purchase Price of the Purchased Bonds (to the extent moneys drawn under the
Letter of Credit are used to purchase Purchased Bonds, such Purchased Bonds are
hereinafter referred to as "Pledged Bonds"); and
WHEREAS, it is a condition precedent to the obligation of the Bank to
enter into the Letter of Credit Agreement that the Pledgor shall have executed
and delivered this Pledge Agreement to the Bank;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to enter into the Letter of Credit Agreement and issue the Letter of
Credit thereunder and for other good and valuable consideration, receipt of
which is hereby acknowledged, the Pledgor hereby agrees with the Bank as
follows:
41
Annex II
page 2
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Letter of Credit Agreement shall have such defined meanings when used herein.
2. Pledge. The Pledgor hereby pledges, assigns, hypothecates, transfers,
and delivers to the Bank all its right, title and interest to the Pledged Bonds
as the same may be from time to time delivered to the Tender Agent by the
holders thereof and hereby grants to the Bank a first lien on, and security
interest in, its right, title and interest in and to the Pledged Bonds, the
interest thereon and all proceeds thereof, as collateral security for the prompt
and complete payment when due of all amounts due in respect of the obligations
of the Pledgor set forth in Paragraph 2A(i) of the Letter of Credit Agreement
and interest on such amounts as set forth in Paragraph 2A(iii) of the Letter of
Credit Agreement (all the foregoing being hereinafter called the "Obligations"),
3. Payments on the Bonds. If, while this Pledge Agreement is in effect,
Pledgor shall become entitled to receive or shall receive any principal or
interest payment in respect of the Pledged Bonds, the Pledgor agrees to accept
the same as the Bank's agent and to hold the same in trust on behalf of the Bank
and to deliver the same forth with to the Bank. All sums of money so paid in
respect of the Pledged Bonds which are received by the Pledgor and paid to the
Bank shall be credited against the obligations of the Pledgor to the Bank in the
manner set forth in Paragraph 2D of the Letter of Credit Agreement. So long as
no Default or Event of Default has occurred and is continuing, any amounts
received by the Bank in respect of the stated interest on any Pledged Bonds in
excess of the amounts then owing to the Bank pursuant to Paragraph 2A(i)(2) of
the Letter of Credit Agreement, shall, upon request of the Pledgor, be remitted
to the Pledgor.
4. Collateral. All property at any time pledged with the Bank hereunder
(whether described herein or not) and all income therefrom and proceeds thereof,
are herein collectively sometimes called the "Collateral".
5. Release of Pledged Bonds. If the Pledgor makes or causes to be made to
the Bank a prepayment in respect of its reimbursement obligation under Paragraph
2A(i) of the Letter of Credit Agreement pursuant to clause (i) of Paragraph 2B
thereof or such a prepayment is made on behalf of the Pledgor pursuant to clause
(ii) of Paragraph 2B thereof, the Bank
42
Annex II
page 4
equity of redemption in the Pledgor, which right or equity is hereby expressly
waived or released. The Bank shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care, safekeeping or otherwise of any and all of the
Collateral or in any way relating to the rights of the Bank hereunder, including
reasonable attorney's fees and legal expenses, to the payment, in whole or in
part, of the Obligations in such order as the Bank may elect, the Pledgor
remaining liable for any deficiency remaining unpaid after such application, and
only after so applying such net proceeds and after the payment by the Bank of
any other amount required to be paid by any provision of law, including, without
limitation, Section 9-504(l)(c) of the Uniform Commercial Code, need the Bank
account for the surplus, if any, to the Pledgor. The Pledgor agrees that the
Bank need not give more than ten days' notice of the time and place of any
public sale or of the time after which a private sale or other intended
disposition is to take place and that such notice is reasonable notification of
such matters. No notification need be given to the Pledgor if it has signed
after default a statement renouncing or modifying any right to notification of
sale or other intended disposition. In addition to the rights and remedies
granted to it in this Pledge Agreement and in any other instrument or agreement
securing, evidencing or relating to any of the obligations, the Bank shall have
all the rights and remedies of a secured party under the Uniform Commercial Code
of the State of New York. The Pledgor further agrees to waive and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
Uniform Commercial code and the Pledgor shall be liable for the deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all amounts to which the Bank is entitled, and the fees of any attorneys
employed by the Bank to collect such deficiency.
8. Representations, Warranties and Covenants of the Pledgor. The Pledgor
represents and warrants that: (a) on the date of delivery to the Bank of any
Pledged Bonds described herein, neither the Issuer, the Remarketing Agent (as
defined in the Indenture), the Tender Agent, nor the Trustee will have any
right, title or interest in and to the Pledged Bonds; (b) it has, and on the
date of delivery to the Bank of any Pledged Bonds will have, full power,
authority and legal right to pledge all of its right, title and interest in and
to the Pledged Bonds pursuant to this Pledge
43
Annex II
page 5
Agreement; (c) this Pledge Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms; (d) no consent of any
other party (including, without limitation, creditors of the Pledgor) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Pledge Agreement;
(e) the execution, delivery and performance of this Pledge Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which the Pledgor is a party or
which purports to be binding upon the Pledgor or upon its assets and will not
result in the creation or imposition of any lien, charge or encumbrance on or
security interest in any of the assets of the Pledgor except as contemplated by
this Pledge Agreement; and (f) the pledge, assignment and delivery of such
Pledged Bonds pursuant to this Pledge Agreement will create a valid first lien
on and a first perfected security interest in, all right, title or interest of
the Pledgor in or to such Pledged Bonds, and the proceeds thereof, subject to no
prior pledge, lien, mortgage, hypothecation, security interest, charge, option
or encumbrance or to any agreement purporting to grant to any third party a
security interest in the property or assets of the Pledgor which would include
the Pledged Bonds. The Pledgor covenants and agrees that it will defend the
Bank's right, title and security interest in and to the Pledged Bonds and the
proceeds thereof against the claims and demands of all persons whomsoever; and
covenants and agrees that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Bank as Collateral hereunder
and will likewise defend the Bank's right thereto and security interest therein.
9. No Disposition, etc. Without the prior written consent of the Bank the
Pledgor agrees that it will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Collateral, or any interest therein, or any proceeds thereof,
44
Annex II
page 6
except for the lien and security interest provided for by this Pledge Agreement
and sale of the Pledged Bonds pursuant to Section 3.09(b) of the Indenture.
10. Further Assurances. The Pledgor agrees that at any time and from time
to time upon the written request of the Bank, the Pledgor will execute and
deliver such further documents and do such further acts and things as the Bank
may reasonably request in order to effect the purposes of this Pledge Agreement.
11. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. No Waiver; Remedies Cumulative. The Bank shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder and no waiver shall be valid unless in writing, signed by the Bank,
and then only to the extent therein set forth. A waiver by the Bank of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Bank would otherwise have on any future occasion. No
failure to exercise nor any delay in exercising on the part of the Bank, any
right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights or remedies provided by the Operative Documents or by law.
13. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this Pledge Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the Bank. This Pledge Agreement and
all obligations of the Pledgor hereunder shall be binding upon the successors
and assigns of the Pledgor, and shall, together with the rights and remedies of
the Bank hereunder, inure to the benefit of the Bank and its successors and
assigns. This Pledge Agreement shall be governed
45
Annex II
page 7
by, and be construed and interpreted in accordance with, the laws of the State
of New York.
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed and delivered on the day and year first above written.
SOUTH JERSEY PROCESS
TECHNOLOGY, INC.
By__________________________
Title:
