1
EXHIBIT 10.43
$7,880,000
REIMBURSEMENT AGREEMENT
By and Between
STERIGENICS INTERNATIONAL,
a California corporation
And
COMERICA BANK-CALIFORNIA
Dated as of April 1, 1996
Relating to:
Village of Gurnee, Illinois
Industrial Development Revenue Bonds (SteriGenics International Project),
Series 1996
2
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of April 1, 1996 (this "Agreement"),
by and between STERIGENICS INTERNATIONAL, a California corporation duly
organized and existing under the laws of the State of California ("Company"),
and COMERICA BANK-CALIFORNIA, a California banking corporation (the "Credit
Bank").
WITNESSETH:
WHEREAS, Company proposes to finance the acquisition of an
approximately 11 acre site at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxx, and the construction and equipping of an approximately 78,000 square
foot contract radiation sterilization processing facility and the acquisition
and installation of machinery, equipment and other personal property to be used
in connection therewith, to be used primarily for the sterilization of health
care, laboratory, pharmaceutical and packaging products (collectively, the
"Project");
WHEREAS, in order to finance the Project, Company has requested the
assistance of the Village of Gurnee, Illinois, a municipal corporation and a
body politic and corporate of the State of Illinois (the "Issuer"), to issue
Village of Gurnee, Illinois Industrial Development Revenue Bonds (SteriGenics
International Project), Series 1996 (the "Bonds"), in the principal amount of
$7,750,000;
WHEREAS, in order to provide for the authentication and delivery of the
Bonds, to establish and declare the terms and conditions upon which the Bonds
are to be issued and secured and to secure the payment of the principal thereof
and of the interest and premium, if any, thereon, the Issuer has entered into an
Indenture of Trust (the "Indenture"), dated as of April 1, 1996, by and between
the Issuer and Bank One, Columbus, N.A. as trustee (the "Trustee");
WHEREAS, pursuant to the Indenture, Trustee will make certain
disbursements for the acquisition, construction and equipping of the Project
according to the terms more specifically set forth in the Indenture and the Loan
Agreement dated as of April 1, 1996 (the "Loan Agreement"), by and between the
Issuer and the Company;
WHEREAS, the Company has requested that the Credit Bank issue in favor
of the Trustee, for the account of the Company, a direct-pay letter of credit
("Letter of Credit") in an initial stated amount of $7,880,000, which Letter of
Credit is to be available to be drawn upon to provide funds for the payment of
principal and interest on and purchase price of the Bonds when due and payable;
and
WHEREAS, any Bonds purchased by the Credit Bank by application of
amounts drawn under the Letter of Credit pursuant to a Principal Drawing or
Interest Drawing (as defined herein) shall be reflected on the records of the
Depository as being held for the account of the Credit Bank until the Credit
Bank shall have been reimbursed for the amount so drawn and interest accrued
thereon in accordance with this Agreement, which reimbursement may be satisfied
by the payment of the principal and interest represented by the Bonds so held by
3
of the account of the Credit Bank, as provided herein and in such Bonds, or the
payment to the Credit Bank pursuant to the terms of that certain Placement and
Remarketing Agreement dated as of April 13, 1996 (the "Remarketing Agreement"),
among the Issuer, Company and Wheat, First Securities, Inc. following the
remarketing of the Bonds;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, capitalized terms used herein which are
not defined herein shall have the meanings set forth in the Indenture. In
addition, the following terms hall have the following meanings:
"Agreement" shall mean this Reimbursement Agreement, including any
Exhibits hereto, as the same may be supplemented and amended in accordance with
its terms.
"Base Rate" shall mean the rate of interest publicly announced from
time to time by the Credit Bank as its "reference rate" or "prime rate."
"Bonds" shall mean the Village of Gurnee, Illinois Industrial
Development Revenue Bonds (SteriGenics International Project), Series 1996.
"Bond Documents" shall mean, at any time, each of the following as in
effect or as outstanding, as the case may be, at such time: (i) the Bonds; (ii)
the Indenture; (iii) the Loan Agreement; (iv) the Remarketing Agreement; (v) the
Mortgage; (vi) the Guaranty; (vii) the Environmental Indemnity; (viii) this
Agreement; and (ix) any other agreements, instruments, certificates or other
documents executed in connection with the foregoing.
"Business Day" shall mean a day other than (i) a day on which the
banking institutions in (a) New York, New York or (b) the City of San Jose,
California or (c) Detroit, Michigan or (d) the cities in which the Trustee or
the Paying Agent (as defined in the Indenture) or the Remarketing Agent have
their respective principal offices are authorized to close or (ii) a day on
which the New York Stock Exchange is closed.
"Company" shall mean SteriGenics International, a California
corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations, rulings and proclamations promulgated or issued thereunder.
"Credit Bank" shall mean Comerica Bank-California, a California banking
corporation and its successors and assigns, as issuer of the Letter of Credit,
or any issuer of a substitute Letter of Credit.
-2-
4
"Credit Provider Rate" shall mean one and one-half percent (1 1/2%) in
excess of the rate of interest established by Credit Bank from time to time as
its base rate during any Period that interest shall accrue at such rate pursuant
to the terms of this Agreement, each change in such Base Rate to become
effective on the date such change is announced by Credit Bank, such rate to be
calculated on the basis of actual number of days elapsed and a 360-day ,year. In
each case, the Credit Provider Rate shall change when and as the Base Rate
Changes.
"Date of Issuance" has the meaning set forth in Section 2.1 hereof.
"Drawing" shall mean a drawing under the Letter of Credit in accordance
with its terms, and shall include a "Purchase Drawing," "Principal Drawing," and
"Interest Drawing."
"Drawing Fee" shall mean the fee described in Section 2.4 hereof.
"ERISA " means the Employment Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" shall have the meaning set forth in Article 9
hereof.
"Expiration Date" shall have the meaning assigned to that term in the
Letter of Credit.
"Environmental Indemnity" shall mean the unsecured environmental
indemnity agreement executed in favor of the Credit Bank as required by Section
3.1(h) hereof.
"Guaranty" shall mean the Guaranty, dated as of April 1, 1996, from the
Guarantors for the benefit of the Credit Bank, as the same may be supplemented
and amended in accordance with its terms.
"Guarantors" shall mean Xxxxxxx Xxxx, Jr. and The Xxxxxxx X. Xxxx, Xx.
Trust as guarantors under the Guaranty.
"Indenture" shall have the meaning set forth in the third WHEREAS
clause hereof, as the same may be supplemented and amended in accordance with
its terms.
"Interest Drawing" shall mean a Drawing under the Letter of Credit to
pay interest on the Bonds (other than Bonds registered in the name of the
Company) when due and payable by Issuer pursuant to Indenture.
"Issuer" shall mean the Village of Gurnee, Illinois.
"Letter of Credit" shall mean the Letter of Credit issued by the Credit
Bank pursuant to this Agreement, and shall include an amended Letter of Credit
or any substitute therefor.
"Letter of Credit Fee" shall mean the fee described in Section 2.2
hereof.
-3-
5
"Loan Agreement" shall mean that certain Loan Agreement, dated as of
April 1, 1996, by and between the Issuer and the Company and relating to the
Bonds, as the same may be supplemented and amended in accordance with its terms.
"Mortgage " shall mean the Real Estate Mortgage, Assignment of Rents
and Leases, Security Agreement and UCC-2 Financing Statement, dated as of April
1, 1996, from the Company to the Credit Bank.
"Permitted Encumbrances" shall mean, as of any particular time (i) the
Mortgage, (ii) liens for taxes and assessments not then delinquent or which are
being contested in good faith and for which adequate reserves have been created,
(iii) utility, access and other easements and rights of way restrictions and
exceptions that an authorized officer of Company certifies will not interfere
with or impair the use intended to be made of the Property and the Project and
as to the existence of which the Credit Bank has consented in writing, (iv)
covenants, conditions or restrictions or liens of record relating to the
Property and the Project and existing on the date of sale and delivery of the
Bonds as set forth in the ALTA Title Insurance Policy delivered pursuant to
Section 3.1(f) hereof, (v) covenants, conditions, restrictions or liens relating
to the Property or the Project over which Chicago Title Insurance Company
provides affirmative coverage, (vi) materialmen's, mechanic's and similar liens
securing amounts not yet past due or which are being contested in good faith and
for which adequate reserves have been created and (vii) such minor defects,
irregularities, encumbrances and clouds on title as normally exist with respect
to property similar in character to the Property and as do not materially impair
the use intended to be made of property affected thereby.
"PBGC" shall mean Pension Benefit Guaranty Corporation.
"Person " shall mean an individual, association, unincorporated
organization, corporation, partnership, joint venture, trust, government or any
governmental agency or political subdivision or any other entity or
organization.
"Plan" shall mean an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by Company for employees of Company or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Company is then making or accruing an obligation to make contributions or has
within the preceding five years of such plan made contributions.
"Principal Drawing" shall mean a Drawing under the Letter of Credit to
pay the principal of the Bonds (other than Bonds registered in name of the
Company) required to be made by Issuer upon the maturity thereof, upon
acceleration or upon the optional or mandatory redemption thereof, all pursuant
to the Bonds and the Indenture.
-4-
6
"Private Placement Memorandum" shall mean the private placement
memorandum, dated April 19, 1996, relating to the delivery and sale of the
Bonds, including any supplement to such Private Placement Memorandum.
"Project" shall mean the additions, extensions, alterations and
improvements to the Property to be financed with the proceeds of the Bonds,
including the acquisition of an approximately 11 acre site at 0000 Xxxxxxxx
Xxxxx, Xxxxxx, Xxxx Xxxxxx, Xxxxxxxx, and the construction and equipping of an
approximately 78,000 square foot contract radiation sterilization processing
facility and the acquisition and installation of machinery, equipment and other
personal property to be used in connection therewith, to be used primarily for
the sterilization of health care, laboratory, pharmaceutical and packaging
products;
"Property" means the real property, and any buildings, structures and
fixtures thereon, described in Exhibit A to the Mortgage.
"Purchase Drawing" shall mean a Drawing under the Letter of Credit to
pay the purchase price of the Bonds following the failure to remarket any Bonds
as set forth in Section 3.02 of the Indenture.
"Remarketing Agent" shall mean Wheat, First Securities, Inc., as
Remarketing Agent under the Remarketing Agreement, or any successor to it as
remarketing agent.
"Remarketing Agreement" shall mean that certain Placement and
Remarketing Agreement dated as of April 1, 1996 by and among the Issuer, Company
and the Remarketing Agent, and any successor remarketing agreement entered into
by the Issuer, Company and a successor remarketing agent in accordance with the
provisions of the Indenture.
"Restrictions" shall have the meaning set forth in Section 6.4 hereof
"Security Agreement" shall mean that certain Pledge and Security
Agreement dated as of April 1, 1996 by the Company in favor of Credit Bank.
"Special Counsel" shall mean Manatt, Xxxxxx & Xxxxxxxx, LLP.
"Stated Amount" shall mean the amount set forth in the Letter of Credit
as the "Stated amount", as such amount is reduced and reinstated from time to
time in accordance with the Letter of Credit.
"Stated Expiration Date" shall have the meaning assigned to that term
in the Letter of Credit.
"Transfer Certificate" shall have the meaning assigned to that term in
the Letter of Credit.
"Transfer Fee" shall mean the fee described in Section 2.4 hereof.
-5-
7
"Trustee" shall mean Bank One, Columbus, N.A., in its capacity as
trustee under the Indenture, and any other bank or trust company at any time
substituted in its place pursuant to and in accordance with the Indenture.
"Uniform Customs and Practice" means the Uniform Customs and Practice
for Documentary Credits approved by the International Chamber of Commerce and in
effect and adhered to by the Credit Bank as of the date of issuance of the
Letter of Credit.
ARTICLE 2
LETTER OF CREDIT; FEES; REIMBURSEMENT
Section 2.1. Amount and Terms of Letter of Credit. The Credit Bank
agrees, upon at least 24 hours' prior notice from Company to the Credit Bank and
on the terms and subject to the conditions hereinafter set forth, including,
without limitation, the conditions set forth in Article 3 hereof, to issue the
Letter of Credit on the date of delivery specified herein (the "Date of
Issuance"), provided such date of delivery is not later than April 19, 1996,
effective upon such delivery date and expiring on the Expiration Date. The
Letter of Credit will be issued in an initial Stated Amount of $7,880,000,
representing the aggregate principal amount represented by the Bonds as of the
Date of Issuance, plus interest on such principal amount for a period of 50 days
at a rate not to exceed twelve percent (12%) per annum. The Letter of Credit
shall be issued to the Trustee for the account of Company, and shall be
substantially in the form of Exhibit A hereto, with such changes to the form set
forth in Exhibit A as Company and the Credit Bank shall agree in writing are
necessary or advisable.
Section 2.2. Letter of Credit Fee. Company shall pay to the Credit Bank
a nonrefundable letter of credit fee (the "Letter of Credit Fee") in an amount
equal to 1.375% of the Stated Amount per each 12-month period for the period
from and including the Date of Issuance until but excluding the Expiration Date
on the Stated Amount available under the Letter of Credit in advance of the
first 12-month period to be paid on the Date of Issuance and in equal monthly
installments thereafter. The Letter of Credit Fee shall be calculated on the
basis of a 360-day year and shall be payable in respect of each 12-month period
in advance; provided, however, commencing on the one year anniversary of the
issuance of the Letter of Credit, in the event there is no default hereunder and
the Letter of Credit has terminated before the end of a 12-month period for
which the Letter of Credit Fee has been paid, Credit Bank shall refund that
portion of the Letter of Credit Fee relating to the period in which the Letter
of Credit is no longer in effect.
Section 2.3. Drawing Fee. Company shall pay to the Credit Bank for each
drawing on the date thereof a nonrefundable drawing fee (the "Drawing Fee") in
an amount equal to the usual and customary fee charged by the Credit Bank to its
customers for a draw under a letter of credit.
Section 2.4. Letter of Credit Transfer Fee. Any transfer of the Letter
of Credit by the Trustee or issuance of a substitute Letter of Credit shall be
made by, and be only effective upon, (a) in the case of such a transfer, the
Trustee providing the Credit Bank with
-6-
8
a Transfer Certificate (as defined in the Letter of Credit) in accordance with
the Letter of Credit and (b) in the case of such a transfer or such an issuance,
payment to the Credit Bank by Company of a transfer fee (the "Transfer Fee") of
$500 for each transfer or issuance and of the costs payable to the Credit Bank
in respect of each such transfer or issuance. No Transfer Fee shall be due in
the event of a transfer or substitution due to: (a) non-renewal of the Letter of
Credit; (b) a downgrading of the Letter of Credit; or (c) an increase in costs
associated with the Letter of Credit.
Section 2.5. Reduction and Reinstatement of Stated Amount. The Stated
Amount shall be automatically reduced and reinstated as specified in the Letter
of Credit; provided that the Letter of Credit shall be reinstated to the extent
the Credit Bank is paid the full sale price with respect to Bonds (or portions
thereof) purchased on its behalf which have been resold pursuant to the terms of
the Remarketing Agreement.
Section 2.6. Interest. Company hereby agrees to pay interest at the
Credit Provider Rate on any and all amounts required to be paid by Company under
this Agreement from and after the due date thereof until paid in full, whether
before or after the expiration of the Letter of Credit and this Agreement, at
the Stated Expiration Date or otherwise, such interest to be payable on demand.
Notwithstanding anything herein to the contrary, to the extent permitted by law,
if at any time the Credit Provider Rate exceeds any statutory or constitutional
interest rate limitation or restriction and the Credit Bank shall not receive
payment at the Credit Provider Rate, any subsequent reduction in the Credit
Provider Rate shall not reduce the rate of interest utilized for the calculation
of amounts payable to the Credit Bank hereunder until the total amount due if
the Credit Provider Rate had at all times been utilized, has been paid to the
Credit Bank.
Section 2.7 Increased Costs. If any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
Issuer charged with the administration thereof shall either (i) impose, modify
or deem applicable any reserve, special deposit, capitalization or similar
requirement against letters of credit issued by the Credit Bank or (ii) impose
on the Credit Bank any other condition relating, directly or indirectly, to this
Agreement or the Letter of Credit or the holding or owning of any Bonds by the
Credit Bank or the purchasing thereof, and the result of any event referred to
in (i) or (ii) above shall be to increase the cost to the Credit Bank of issuing
or maintaining the Letter of Credit, or of purchasing the Bonds, then, upon
demand by the Credit Bank, Company shall, upon not less than 10 days' prior
notice from the Credit Bank (which notice shall specify in reasonable detail the
circumstances giving rise to the increase and the method of calculating the
increase), pay to the Credit Bank, from time to time as specified by the Credit
Bank, such additional amounts as shall be demanded by the Credit Bank as
sufficient to compensate the Credit Bank for such increased cost, together with
interest at the Credit Provider Rate on amounts required to be paid under this
Section 2.7 from the due date of such payment following not less than 10 days'
prior notice until payment in full thereof.
Section 2.8. Net Payments. All payments under this Agreement shall be
made without set-off or counterclaim and in such amounts as may be necessary in
order that all such payments (after deduction or withholding for or on account
of a proportionate share
-7-
9
attributable to the transactions contemplated by this Agreement or any future
taxes, levies, imposts, duties or other charges of whatsoever nature imposed by
any government, any political subdivision or any taxing Issuer other than any
tax on or measured by the overall ,net income of the Credit Bank pursuant to the
income tax laws of the United States or the jurisdiction where the Credit Bank's
principal office is located (collectively, the "Taxes")) shall not be less than
the amounts otherwise specified to be paid under this Agreement. A certificate
as to any additional amounts payable to the Credit Bank under this Section 2.8
submitted to Company by the Credit Bank shall show in reasonable detail the
amount payable and the calculations used to determine in good faith such amount
and shall be conclusive absent manifest error. Any amounts payable by Company
under this Section 2.8 with respect to past payments shall be due within ten
days following receipt by Company of such certificate from the Credit Bank; any
such amounts payable with respect to future payments shall be due concurrently
with such future payments. With respect to each deduction or withholding for or
on account of any Taxes, Company shall promptly furnish to the Credit Bank such
certificates, receipts and other documents as may be required (in the reasonable
judgment of the Credit Bank) to establish any tax credit to which the Credit
Bank may be entitled. Without in any way affecting any of its rights under this
Section 2.8, the Credit Bank agrees that, upon its becoming aware that any of
the present or future payments due it under this Agreement would be subject to
deduction for Taxes, it will notify Company in writing and the Credit Bank
further agrees that it will use reasonable efforts not disadvantageous to it (in
its sole determination) in order to avoid or minimize, as the case may be, the
payment by Company of any additional amounts for Taxes pursuant to this Section
2.8.
Section 2.9. Reimbursement of Principal Drawings and Interest Drawings.
(a) If a Principal Drawing or Interest Drawing is repaid at or prior to 1:00
p.m. (Pacific time) on the same day on which it is made, no interest shall be
payable on such Drawing. Company hereby agrees to pay to the Credit Bank the
amount of each Principal Drawing and each Interest Drawing no later than 1:00
p.m. (Pacific time) on the first Business Day following the date of payment by
the Credit Bank of such Drawing, plus interest at the Credit Provider Rate on
such amounts from and including the date such amounts are paid by the Credit
Bank until payment in full by Company (as determined by the Credit Bank). If
Company shall not have paid to the Credit Bank such amounts (and such interest,
if any) before 1:00 p.m. on the second Business Day following the date of the
Credit Bank's payment of such Drawing, Company shall pay interest on such
amounts from and including such second Business Day until payment in full by
Company at such fluctuating interest rate per annum as shall be in effect from
time to time, which rate per annum for each day shall be equal to the Credit
Provider Rate in effect on such day, but in no event higher than the maximum
rate permitted by applicable law. Unless otherwise waived by the Credit Bank,
Company shall be obligated, without notice of a Principal Drawing or Interest
Drawing or demand for reimbursement from the Credit Bank (which notice is hereby
waived by Company), to reimburse the Credit Bank for all Principal Drawings and
Interest Drawings (with interest as Provided in the first sentence of this
Section 2.9) on or before 1:00 p.m. (Pacific time) on the second Business Day
following the day on which the Credit Bank honored such Drawings. If a Principal
Drawing or Interest Drawing is repaid after 1:00 p.m. (Pacific
-8-
10
time) on any Business Day, it shall be treated as having been repaid on the
following Business Day.
(b) The Credit Bank shall maintain in accordance with sound banking
practices an account or accounts evidencing the indebtedness of Company
resulting from each Principal Drawing and each Interest Drawing and the interest
accruing thereon, and in any legal action or proceeding in respect of this
Agreement, the entries made in such account or accounts shall all in the absence
of manifest error, be conclusive evidence of the existence and amounts of the
obligations of Company therein recorded.
Section 2.10. Reimbursement of Purchase Drawings. (a) Company's
obligation to reimburse the Credit Bank for any unreimbursed amounts drawn under
the Letter of Credit in respect of any Purchase Drawing shall be secured in part
by the purchased Bonds. The obligation of Company under this Agreement and under
the Indenture in respect of such Bonds purchased with the proceeds of a Purchase
Drawing shall be satisfied by the payment of such Bonds in accordance with their
terms and the terms of the Indenture and the subsequent payment to Credit Bank
of all such payments, or the reimbursement of the Credit Bank pursuant to the
terms of the Remarketing Agreement following the remarketing of the Bonds.
(b) In the event that any Bonds are registered in the name of Company
or the Credit Bank, on the date on which the Letter of Credit expires for any
reason, the principal amount of such Bonds and the interest accrued thereon
shall thereupon be paid by Company immediately to the Credit Bank; provided that
nothing herein contained shall affect any right which the Credit Bank may have
hereunder or under the Indenture or the Bonds upon the occurrence of an Event of
Default hereunder or thereunder.
Section 2.11. Security. Company, in order to secure its obligation to
make payments to the Credit Bank pursuant to the terms of this Agreement and to
perform all of its other covenants and agreements under this Agreement, has
pledged, assigned and granted to the Credit Bank, a lien on and security
interest in the Trust Estate subordinate only to the lien granted under the
Indenture to the owners of the Bonds and to the Trustee for its reasonable
compensation, expenses, charges, counsel fees and other disbursements incurred
in the performance of its powers and duties under the Indenture, and has
executed the Mortgage and caused to be delivered to Credit Bank the Guaranty for
the benefit of the Credit Bank.
Section 2.12. Place and Manner of Payment; Computation of Interest. All
payments by Company to the Credit Bank hereunder, except reimbursement of
Principal Drawings and Interest Drawings pursuant to Section 2.9 hereof and
reimbursement of Purchase Drawings pursuant to Section 2.10 hereof, shall be
made to the Credit Bank at 000 Xxxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 in lawful currency of the United States in immediately
available funds not later than 1:00 p.m. (Pacific time) on the date due, without
set-off, counterclaim or deduction of any kind. In the event that the date
specified for any such payment hereunder is not a Business Day, such payment
shall be made not later than the next following Business Day. Company shall pay
interest on any such payment not made on the due date, at the Credit Provider
Rate, to the Business Day on which such
-9-
11
payment is made. Computations of interest hereunder shall be made by the Credit
Bank and Company on the basis of actual days elapsed and a 360-day year.
ARTICLE 3
CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT
Section 3.1. Documents to be Received. The Credit Bank's obligation to
issue the Letter of Credit as set forth in Section 2.1 hereof is subject to the
conditions precedent that, on or prior to the Date of Issuance, the Credit Bank
shall receive the following documents, all in form and substance satisfactory to
the Credit Bank and its Special Counsel:
(a) a copy of the resolution or resolutions of Company,
certified as of the date of the delivery of the Bonds by an authorized
officer of Company, authorizing, among other things, the execution,
delivery and performance by Company of this Agreement and the Bond
Documents to which Company is a party and authorizing Company to obtain
the issuance of the Letter of Credit and certified copies of all other
documents evidencing any other action of Company taken with respect
thereto;
(b) a certificate, signed by a duly authorized officer of
Company, dated the date of the delivery of the Bonds, to the effect
that:
(i) The representations and agreements of Company
contained in this Agreement and each of the Bond Documents to
which it is a party are true, complete and correct in all
material respects as of the Date of Issuance;
(ii) To such official's knowledge, Company has
complied with all agreements, covenants and conditions to be
complied with by Company at or prior to the Date of Issuance
under this Agreement and each of the Bond Documents to which
it is a party;
(iii) To such official's knowledge, no event
affecting Company has occurred since the date of the Private
Placement Memorandum which either makes untrue or incorrect in
any material respect, as of the Date of Issuance, the
statements or information contained in the Private Placement
Memorandum concerning Company or is not reflected in the
Private Placement Memorandum but should be reflected therein
in order to make the statements and information therein
concerning Company not misleading in any material respect;
(iv) The information concerning Company and the
Project contained in the Private Placement Memorandum and the
appendices thereto does not contain any untrue statement of a
material fact or omit to state any fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading in any material respect; and
-10-
12
(v) No Event of Default has occurred and is
continuing, or would result from the issuance of the Letter of
Credit, the making of this Agreement or any of the other Bond
Documents to which Company is a party, and no event has
occurred and is continuing which would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both;
(c) a certificate of a duly authorized officer of Company
certifying the names and true signatures of the officers of Company
authorized to sign this Agreement and the Bond Documents to which
Company is a party;
(d) evidence of the status of Company as a California
corporation, duly incorporated, validly existing and in good standing
under the laws of the State of California and fully authorized to
operate the Project in Illinois and a copy of the Articles of
Incorporation, certified by the Secretary of State;
(e) a certified copy of the Bylaws of Company;
(f) an ALTA Title Insurance Policy for the benefit of the
Credit Bank, insuring the Mortgage as a valid and enforceable
first-priority lien on the Property in the original Stated Amount,
subject only to Permitted Encumbrances;
(g) this Agreement, the Mortgage, the Security Agreement and
the Environmental Indemnity, duly executed by Company;
(h) all Bond Documents (other than the Guaranty) and other
documents, certificates, opinions, approvals or filings with respect to
the Bond Documents, this Agreement or the transactions contemplated
thereby or hereby as the Credit Bank or its Special Counsel shall
reasonably request, in form and substance satisfactory to the Credit
Bank.
Section 3.2. Other Conditions Precedent to Issuance of the Letter of
Credit. The Credit Bank's obligation to issue the Letter of Credit as set forth
in Section 2.1 hereof shall be subject to the additional conditions precedent
that on or before the Date of Issuance:
(a) Company shall pay to the Credit Bank the Letter of Credit
Fee, for the first 12-month period in immediately available funds;
(b) no change shall have occurred in any law, regulation,
ruling or other action of the United States, or the State of Illinois
or the State of California or any political subdivision or Issuer
therein or thereof which, in the opinion of Special Counsel for the
Credit Bank would make it illegal or inadvisable for the Credit Bank to
issue the Letter of Credit as provided therein; and
(c) all legal requirements provided herein incident to such
issuance shall be reasonably satisfactory to the Credit Bank and its
Special Counsel.
-11-
13
ARTICLE 4
INDEMNIFICATION
In addition to any other amounts payable by Company under this
Agreement, Company hereby agrees to release, protect, indemnify, pay and save
the Credit Bank and its officers, directors, employees, attorneys and agents
(each, an "indemnified person") harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
attorneys' fees) which any indemnified person may, other than as a result of its
gross negligence or willful misconduct, incur or be subject to as a consequence,
direct or indirect, of (i) the execution and delivery or transfer of, or payment
or failure to pay, under the Letter of Credit, (ii) any breach by any party
hereto of any representation or warranty, covenant, term or condition in, or the
occurrence of any default, under, this Agreement or any of the Bond Documents,
including all fees or expenses resulting from the settlement or defense of any
claims or liabilities arising as a result of any such breach or default, (iii)
the holding or owning by the Credit Bank or its nominee of any Bond, (iv) the
issuance, sale or delivery of the Bonds, (v) the use of the proceeds of the
Bonds or any Drawing, or (vi) involvement of any indemnified person in any legal
suit, investigation, proceeding, inquiry or action as a consequence, direct or
indirect, of the Credit Bank's issuance of the Letter of Credit, the Credit
Bank's holding or owning of any Bond, the holding or owning of any Bond by the
Credit Bank's nominee, the Credit Bank's execution of this Agreement, or any
other event or transaction contemplated by any of the foregoing.
Promptly after receipt by an indemnified person of notice of the
commencement of any action in respect of which indemnity may be sought against
Company under this Article 4, such indemnified person will notify Company in
writing of the commencement thereof, and, subject to the provisions hereinafter
stated, Company may assume the defense of such action (including the employment
of counsel, who shall be satisfactory to the indemnified person, but at
Company's expense) insofar as such action shall relate to any alleged liability
in respect of which indemnification may be sought from Company.
An indemnified person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, and the fees and
expenses of such counsel shall be at the expense of Company.
ARTICLE 5
OBLIGATIONS ABSOLUTE
To the fullest extent permitted by applicable law, the obligations of
Company under this Agreement shall be unconditional and irrevocable, and shall
be paid or performed strictly in accordance with the terms of this Agreement
under all circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of the Letter of
Credit, this Agreement or any of the other Bond Documents;
-12-
14
(b) any amendment or waiver of or any consent to depart from
the terms of this Agreement (other than the provisions of this
Agreement specifically amended or waived) or any of the other Bond
Documents;
(c) the existence of any claim, set-off, defense or other
right which Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons
or entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Credit Bank or any other person or
entity, whether in connection with this Agreement, any if the other
Bond Documents or the transactions contemplated hereby or thereby or
any unrelated transaction;
(d) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) any nonapplication or misapplication by the Trustee or
otherwise of the proceeds of any Drawing;
(f) payment by the Credit Bank under the Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of the Letter of Credit;
(g) the failure by the Credit Bank to honor any Drawing under
the Letter of Credit or to make any payment demanded under the Letter
of Credit on the grounds that the demand for such payment does not
conform to the terms and conditions of the Letter of Credit; or
(h) any other circumstances or happening similar to any of the
foregoing.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF COMPANY
To induce the Credit Bank to enter into this Agreement and issue the
Letter of Credit, Company makes the representations and warranties to the Credit
Bank set forth in this Article 6 on and as of the date hereof.
Section 6.1. Organization; Powers. Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California and has the power and Issuer to carry on its business as presently
conducted including, without limitation, the operation of the Project, to own
its assets and to enter into and perform its obligations under this Agreement
and the other Bond Documents to which it is a party.
Section 6.2. Corporate Issuer, etc. The execution, delivery and
performance by Company of this Agreement and the other Bond Documents to which
Company is a party have been duly authorized by all necessary action of Company
and this Agreement and such
-13-
15
other Bond Documents constitute legal, valid and binding obligations of Company
enforceable in accordance with their terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally, by
general equitable principles which may limit the right to obtain equitable
remedies and by provisions of applicable California or Illinois law.
Section 6.3. Compliance with Laws and Contracts. The execution,
delivery and performance by Company of this Agreement and the other Bond
Documents to which Company is a party do not and will not (a) violate any
provision of any order, writ, judgment, injunction, decree, determination or
award as currently in effect to which Company is subject or of the Articles of
Incorporation or by-laws of Company or, to the best of Company's knowledge, any
law, rule or regulation to which Company is subject; (b) result in a breach of
or constitute a default under the provisions of any material indenture, loan or
credit agreement or any other agreement, lease or instrument to which Company
may be or is subject or by which it, or its property, is bound; or (c) result
in, or require, the creation or imposition of any mortgage, Mortgage,
assignment, pledge, lien, security interest or other charge or encumbrance of
any nature or with respect to any of the Property other than as provided
therein; and Company is not in default under any such order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument or any law, rule or regulation to which Company is subject.
Section 6.4. Approvals. Company has obtained all authorizations,
consents, approvals, licenses, exemptions of or filings or registrations with
all commissions, boards, bureaus, agencies, instrumentalities, trustees, holders
of any indebtedness of Company or any other Person, domestic or foreign,
necessary to the valid execution, delivery and performance by Company of this
Agreement and the other Bond Documents to which Company is a party which are
capable of being obtained on or prior to the Date of Issuance, except as such
may be required under the state securities or Blue Sky laws in connection with
the distribution of the Bonds by the Remarketing Agent. Company is familiar with
all conditions, restrictions, reservations, whether or not of record, statutes,
regulations and ordinances affecting the Property, including, without
limitation, all pollution control, environmental protection, zoning and land use
regulations, building codes and all restrictions and requirements imposed by the
Village of Gurnee, Illinois and all other governmental entities (collectively,
the "Restrictions"), with respect to the Property, the Project and the
construction of the Project and the existing and contemplated use of the
Property. Company has obtained or will timely obtain all permits, approvals,
consents and other authorizations necessary under the Restrictions for such
construction and use. As of the date hereof, Company is not aware of any
violation or asserted violation of any Restrictions concerning the Property or
the existing or contemplated use thereof, and further, Company is not aware of
any action or proceeding pending before any court or governmental agency with
respect to the validity of any such Restrictions or any of such authorizations
or permits.
Section 6.5. Financial Statements. The audited financial statements of
Company for the fiscal years ended in 1993 and 1994, and for the nine months
ending September 30, 1995 and the unaudited financial statements of Company for
the period from October 1, 1995 to December 31, 1995, copies of which have
heretofore been delivered to the Credit Bank,
-14-
16
were prepared in accordance with generally accepted accounting principles
consistently applied are true, complete and correct in all material respects and
fairly the financial position of Company as of their respective dates, and
there, have been no material adverse change in the financial position or
operations of Company since the financial statements were prepared.
Section 6.6 Litigation. There is no action, suit, proceeding, inquiry
or investigation at law, or in equity or before or by any court, public board or
body pending against or affecting Company or the properties, assets or
operations of Company (a) wherein an unfavorable decision, ruling or finding
could have a materially adverse affect upon: (i) the transactions contemplated
by, or the validity of, this Agreement, the other Bond Documents, or any
agreement or instrument to which Company is a party and which is used or
contemplated for use in the consummation of the transactions contemplated by
this Agreement and the other Bond Documents, (ii) the tax-exempt status of the
interest on the Bonds, or (iii) Company's property, assets, operations or
condition, financial or otherwise, or its ability to perform its obligations in
respect of the Indenture or this Agreement; or (b) which in any way contests the
existence, organization or powers of Company or the titles of the officers of
Company to their respective offices.
Section 6 7. Employee Benefit Plans. Company is in compliance in all
material respects with ERISA to the extent applicable to it and has received no
notice to the contrary from the PBGC or any other governmental entity or agency
and no reportable event (as defined in ERISA) which could result in a material
accumulated deficiency under ERISA or a material liability to the PBGC has
occurred and is continuing.
Section 6.8. Defaults. No Event of Default or event which with the
passage of time, the giving of notice or both could become an Event of Default
has occurred and is continuing.
Section 6.9. Disclosure. The information contained in the Private
Placement Memorandum under the captions "The Company," "The Project" and
"Litigation" is true and correct, and such information does not contain any
untrue statement of a material fact. There are no facts that Company has failed
to disclose to the Credit Bank that, individually or in the aggregate,
materially adversely affect, or so far as Company can foresee, will materially
adversely affect, the operations, affairs, properties, condition (financial or
otherwise) or prospects of Company or its ability to operate the Project and
perform under this Agreement and the other Bond Documents to which it is a
party.
Section 6.10. Title. The Company holds fee simple title to the
Property.
Section 6.11. Reports. All reports and forms required to be filed with
the Internal Revenue Service by Company have been so filed.
Section 6.12. Utilities. All utility services necessary for the
construction and operation of the Project are either available within or at the
boundaries of the Property or all necessary steps have been or shall be taken by
Company to assure the complete
-15-
17
construction thereof, including, without limitation, all electrical and
telephone facilities, water supply gas and storm and sanitary sewer facilities.
Section 6.13. Condemnation. No taking of the Property or any part
thereof through eminent domain, conveyance in lieu thereof, condemnation or
similar proceeding is pending or, to Company's knowledge, threatened by any
governmental agency.
Section 6.14. Roads. All roads necessary for the full utilization of
the Project for their intended purpose have been completed.
Section 6.15. Brokers. Company has not dealt with any person, firm or
corporation who is or may be entitled to any finder's fee, brokerage commission,
loan commission or other sum in connection with the issuance of the Letter of
Credit pursuant to this Agreement nor the entering into of this Agreement.
Company hereby agrees to indemnify and defend the Credit Bank and hold the
Credit Bank harmless against any and all loss, liability, cost or expense,
including reasonable attorneys' fees, which the Credit Bank may suffer or
sustain should such warranty or representation prove inaccurate in whole or in
part.
Section 6. 16. Mechanics' Liens. Company shall take whatever actions
may be necessary such that the title insurance policy required to be delivered
to the Credit Bank pursuant to Section 3.1(f) hereof not contain any exceptions
for any mechanics', materialmen's, carriers', warehousemen's or similar liens.
Section 6.17. Hazardous Materials. Company is not in violation of any
federal, state or local law, ordinance or regulation relating to environmental
conditions on, under or about the Property, including, but not limited to, soil
and groundwater conditions. Neither Company, nor to Company's knowledge, any
third party, has used, generated, manufactured, refined, produced, processed,
stored or disposed of on, under or about the Property or transported to or from
the Property any "Hazardous Materials" except in compliance with applicable law
nor does Company intend to use the Property in the future for the purpose of
generating, manufacturing, refining, producing, storing, handling, transferring,
processing or transporting of Hazardous Materials except cobalt 60. For the
purposes hereof, "Hazardous Materials" shall mean any flammable explosives,
radioactive materials, asbestos, organic compounds known as polychlorinated
biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants,
contaminants, hazardous wastes, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances," "hazardous materials," or "toxic
substances" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; or the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; or any
applicable law relating to radioactive and/or nuclear materials or substances or
any applicable Illinois law; and in the regulations adopted, published and/or
promulgated pursuant to said laws.
-16-
18
ARTICLE 7
AFFIRMATIVE COVENANTS OF COMPANY
Until the termination of this Agreement and the payment in full to the
Credit Bank of all amounts payable to the Credit Bank hereunder, Company hereby
covenants and agrees that it will:
Section 7.1. Reporting Requirements. Furnish to the Credit Bank:
(a) on request, notices of filing of all reports material to
the Project that Company may be required to file with any governmental
commission, department, board, bureau or agency of the Federal, State
or local government relating to the transactions contemplated by the
Indenture; and
(b) upon receipt, copies of all Nuclear Regulatory Commission
and Food and Drug Administration reports relating to the Project;
Section 7.2. Notices.
(a) Give prompt notice in writing to the Credit Bank of a
known occurrence of an Event of Default or event which with the passage
of time, the giving of notice or both could become an Event of Default,
and of any known development, financial or otherwise, which may be
reasonably expected to adversely affect the ability of Company to
perform its obligations as set forth hereunder or under any of the
other Bond Documents, setting forth the details of and the action
Company proposes to take with respect to such event or development; and
(b) Give prompt notice in writing to the Credit Bank of any
known pending action, suit or proceeding, relating to the operations or
the condition (financial or otherwise) of the Project or the ability of
Company to repay any debt incurred under this Agreement or the
Indenture or which questions the validity of the Bond Documents.
Section 7.3. Payment of Taxes and Other Obligations. From time to time
pay and discharge, or cause to be paid and discharged, all payments in lieu of
taxes, service charges, assessments or other governmental charges which may
lawfully be imposed upon the revenues and income from the Project and will pay
all lawful claims for labor, material and supplies which if unpaid might become
a lien or charge upon the Project, revenues or income or which might impair the
security of the Bonds or the use of the Project revenues or other funds to pay
the principal of and interest thereon, all to the end that the priority and
security of the Bonds and of the Credit Bank shall be preserved; provided that
nothing in this Section 7.3 shall require Company to make any such payment so
long as it in good faith shall contest the validity thereof and shall have
established adequate reserves with respect thereto.
-17-
19
Section 7.4. Preservation of Existence, etc. Preserve and maintain its
existence as a corporation duly incorporated, validly existing and in good
standing in the State of California and duly admitted to conduct business and
operate the Project in Illinois and its rights, franchises and privileges
material to the conduct of its business and to the performance of its
obligations under this Agreement and the Bond Documents to which it is a party,
and will not dissolve.
Section 7.5. Compliance with Laws, etc. Comply with the requirements of
all laws, rules, regulations and orders of any governmental Issuer,
noncompliance with which would, singly or in the aggregate, materially and
adversely affect its ability to complete or operate the Project or perform under
this Agreement or any other Bond Documents to which Company is a party, unless
the same shall be contested by it in good faith and by appropriate proceedings
which shall operate to stay the enforcement thereof.
Section 7.6 Inspection Rights. At any reasonable time and from time to
time upon three (3) days' prior written notice, permit the Credit Bank or any
agents or representatives thereof to examine and make copies of the records and
books of account related to the transactions contemplated by this Agreement, and
at any reasonable time to visit the Project and to discuss its affairs, finances
and accounts with Company and its independent accountants.
Section 7.7. Keeping of Records and Books of Account. Keep or cause to
be kept proper and current books and accounts (separate from all other records
and accounts) in which complete and accurate entries shall be made of all
transactions relating to the Project and the Revenues and other funds provided
for in the Loan Agreement, and will prepare and furnish to the Credit Bank the
financial statements required under Section 7.1.
Section 7.8. Maintenance of Approvals, Filings and Registrations. At
all times maintain in effect, renew and comply with all the terms and conditions
of all consents, licenses, approvals and authorizations as may be necessary or
appropriate under any applicable law or regulation for the execution, delivery
and performance of this Agreement and the other Bond Documents to which Company
is a party, and to make this Agreement and such other Bond Documents its legal,
valid, binding and enforceable obligations, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally, to general equitable principles which may limit the right
to obtain equitable remedies and to provisions of applicable California or
Illinois law.
Section 7.9. Maintenance and Operation of the Project. (a) Subject to
applicable requirements and restrictions imposed, and to the extent permitted,
by law, operate or cause to operate the Project in the manner described in the
Private Placement Memorandum.
(b) To the extent material to the transactions contemplated herein or
in the Bond Documents, operate and maintain or cause to operate and maintain the
Project in accordance with all applicable governmental laws, ordinances,
approvals, rules, regulations and requirement including, without limitation,
such zoning, sanitary, pollution and safety ordinances and laws and such rules
and regulations thereunder as may be binding upon
-18-
20
Company. Company further covenants and agrees that it will cause to be
maintained and operated all engines, boilers, pumps, machinery, apparatus,
fixtures, fittings and equipment of any kind in, or that shall be placed in any
building or structure now or hereafter at any time constituting part of the
Project in good repair, working order and condition, except such property or
equipment as is no longer being utilized by Company, and that it will from time
to time make or cause to be made all necessary and proper replacements, repairs,
renewals and improvements so that the efficiency and value of the Project shall
not be impaired.
Section 7.10. Insurance and Performance Bonds Required. Maintain, in
accordance with the provisions hereof and of the Mortgage, insurance on the
Project with responsible and reputable insurance companies and associations
which are acceptable to the Credit Bank, including, without limitation, public
liability, property damage, hurricane, fire and extended coverage insurance,
title insurance, business and rental interruption insurance including
interruption due to earthquake; provided that such property damage, fire and
extended coverage and earthquake insurance and title insurance shall each be
maintained in an amount not less than the greater of the aggregate principal
amount of the Bonds or the full insurable replacement value of the Project (the
term "full insurable replacement value" as used herein shall mean the cost to
repair or replace the Project and any portion thereof with property of like kind
and quality, without deduction for depreciation). All such policies shall name
Company, the Credit Bank and the Trustee as insured parties, beneficiaries or
loss payees as their interest may appear. Each policy shall contain a provision
to the effect that the insurer shall not cancel or substantially modify the
policy provisions without first giving 30 days' advance written notice thereof
to Company, the Trustee and the Credit Bank. At least once during each 12-month
period, commencing on the Date of Issuance, Company shall file with the Trustee
and the Credit Bank a certificate setting forth the policies of insurance
maintained pursuant to this Agreement and the Mortgage, the names of the
insurers and insured parties, the amounts of such insurance and applicable
deductibles, the risks covered thereby and the expiration dates thereof.
Section 7.11. ERISA. Promptly pay and discharge all obligations and
liabilities, applicable to Company, arising under ERISA of a character which if
unpaid or unperformed might result in the imposition of a lien against any of
its properties or assets and promptly notify the Credit Bank of the occurrence
of any reportable event (as defined in ERISA) which might result in the
termination by the PBGC of any Plan or of receipt of any notice from PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor.
Company will notify the Credit Bank of its intention to terminate or withdraw
from any Plan and will not terminate any such Plan or withdraw therefrom unless
it shall be in compliance with all of the terms and conditions of this Agreement
after giving effect to any liability to PBGC resulting from such termination or
withdrawal.
Section 7.12. Bond Proceeds; Additional Funds. Cause the proceeds of
the Bonds to be used for the purposes set forth in the Indenture and the Loan
Agreement and make any necessary deposit into the funds and accounts established
under and referred to in the Indenture and the Loan Agreement.
-19-
21
Section 7.13. Further Assurances. Execute and deliver to the Credit
Bank all such documents and instruments and do all such other acts and things as
may be necessary or required by the Credit Bank to enable the Credit Bank to
exercise and enforce its rights under this Agreement and to realize thereon, and
record and file and re-record and re-file all such documents and instruments, at
such time or times, in such manner and at such place or places, all as may be
necessary or required by the Credit Bank to validate, preserve and protect the
position of the Credit Bank under this Agreement.
ARTICLE 8
NEGATIVE COVENANTS OF COMPANY
Until the termination of this Agreement and the payment in full to the
Credit Bank of all amounts payable to the Credit Bank hereunder, Company hereby
covenants and agrees that, without the prior written consent of the Credit Bank,
Company will not directly or indirectly:
Section 8.1. Additional Indebtedness. Issue any other obligations
payable, with respect to principal or interest, from the revenues of the Project
which have, or purport to have, any lien upon the revenues of the Project
superior to or on a parity with the lien of the Credit Bank and the Trustee for
the Bonds; provided, however, that nothing in this covenant shall prevent
company from issuing and selling pursuant to law refunding bonds or other
refunding obligations payable from and having a first lien upon the revenues of
the Project if such refunding certificates or other refunding obligations are
issued for the purpose of, and are sufficient for the purpose of, prepaying all
of the Bonds authorized by the Indenture and then outstanding.
Section 8.2. Limitation on Encumbrances on the Project. Create, assume
or suffer to exist any mortgage, Mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including the charge upon property
purchased under conditional sales or other title retention agreements) (a
"security interest") upon the Project, unless the obligations of Company under
this Agreement shall be secured prior to any indebtedness or other obligation
secured by such security interest and Company further covenants and agrees that
if such a security interest is created or assumed by Company, it will make or
cause to be made effective a provision whereby the obligation of Company under
this Agreement will be secured prior to such indebtedness or other obligation
secured by such security interest; provided, however, that notwithstanding the
foregoing provisions and without securing obligations of Company under this
Agreement, Company may create, suffer or assume Permitted Encumbrances.
Section 8.3. Amendments. Amend, modify, terminate, grant or waive, or
permit the amendment, modification, termination or grant of, or any waiver under
(or consent to, or permit or suffer to occur any action or omission which
results in, or is equivalent to, an amendment, modification, or grant of a
waiver under) the Bond Documents or the resolutions adopted by Company on April
18, 1996 authorizing the delivery of the agreements to be entered into by
Company relating to the issuance of the Letter of Credit and the Bonds.
-20-
22
Section 8.4. Private Placement Memorandum. Make any changes in
reference to the Credit Bank in any revision or amendment of the Private
Placement Memorandum.
Section 8.5. Arbitrage. Use, or permit the use of, the proceeds of any
Bond in any manner that would have caused the Bonds, at the time of issuance
thereof, to be "arbitrage bonds" within the meaning of Section 148 of the Code.
Section 8.6. Prohibited Uses. Use any of the properties financed or
refinanced out of any proceeds of the Bonds or suffer or permit such properties,
to be used in any manner or take any action or omit to take any action which
would adversely affect the tax exempt status of interest on the Bonds.
Section 8.7. Prohibition on Sale of Assets. Sell, lease, assign,
transfer or otherwise dispose of any of the Project property or assets whether
now owned or acquired in the future, except (a) obsolete or worn out property or
equipment no longer necessary in the ordinary course of the Project's business,
or (b) property disposed of in the ordinary course of the Project's business for
adequate consideration.
ARTICLE 9
DEFAULT AND REMEDIES
Section 9.1. Events of Default. Each of the following events shall, at
the option of the Credit Bank, constitute an "Event of Default" under this
Agreement:
(a) the occurrence of any event which constitutes an "Event of
Default" under the Indenture, the Security Agreement, the Guaranty, the
Environmental Indemnity or the Mortgage; or
(b) the failure by Company to pay any amount payable hereunder
within three (3) Business Days following the due date of such amount;
or
(c) the failure by Company to perform or observe any other
term, covenant or agreement contained in this Agreement, provided that
the failure of Company to perform such covenants (other than as
provided in subsections (a) and (b) of this Section 9.1 and other than
the covenants set forth in Article 8 hereof) shall not be deemed an
Event of Default if Company is diligently proceeding to cure such
nonperformance; provided, however, that such cure shall have been
achieved, in any event, no later than thirty (30) days after written
notice given to Company by the Credit Bank; or
(d) any warranty, representation or other written statement
made by or on behalf of Company contained in this Agreement, or in any
Bond Document or in any instrument furnished in compliance with or in
reference to any of the foregoing, is false or misleading in any
material respect on any date as of which made, and such falsity or
misleading statement materially and adversely affects the Project, the
Property or Company, or its ability to or perform under this Agreement,
the
-21-
23
Environmental Indemnity, the Mortgage, the Security Agreement or any
other Bond Documents to which Company is a party; or
(e) Company makes an assignment for the benefit of creditors,
files a petition in bankruptcy, is unable generally to pay its debts as
they come due, is adjudicated insolvent or bankrupt or there is entered
any order or decree granting relief in any involuntary case commenced
against Company under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or if Company petitions or
applies to any tribunal for any receiver, trustee, liquidator,
assignee, custodian, sequestrator or other similar official of Company
or of any substantial part of its properties, or commences any
proceeding in a court of law for a reorganization, readjustment of
debt, dissolution, liquidation or other similar procedure under the law
or statutes of any jurisdiction, whether now or hereafter in effect, or
if there is commenced against Company any such proceeding in a court of
law which remains undismissed or shall not be discharged, vacated or
stayed, or such jurisdiction shall not be relinquished, within sixty
(60) days after commencement; or
(f) Company by any act, indicates its consent to, approval of,
or acquiescence in any such proceeding in a court of law, or to an
order for relief in an involuntary case commenced against Company under
any such law, or to the appointment of any receiver, trustee,
liquidator, assignee, custodian, sequestrator or other similar official
for Company, or if Company suffers any such receivership, trusteeship,
liquidation, assignment, custodianship, sequestration or other similar
procedure to continue undischarged for a period of sixty (60) days
after commencement or if Company takes any action for the purposes of
effecting the foregoing; or
(g) any material provision of this Agreement, the Mortgage,
the Guaranty, the Security Agreement, the Environmental Indemnity or of
any of the Bond Documents shall cease to be valid and binding, or
Company or any governmental Issuer shall contest any such provision, or
Company, or any agent or trustee on behalf of Company, shall deny that
it has any or further liability under this Agreement, the Environmental
Indemnity, the Mortgage, the Security Agreement or any of the Bond
Documents; or
(h) final judgment for the payment of money in excess of an
aggregate of $100,000 related to the Project and not fully covered by
insurance shall be rendered against Company and the same shall remain
undischarged for a period of thirty (30) consecutive days during which
execution shall not be effectively stayed or for the payment of which a
surety bond or other adequate security has not been obtained in the
judgment of the Credit Bank; or
(i) any reportable event (as defined in ERISA) which the
Credit Bank determines in good faith constitutes grounds for the
termination of any Plan of Company or for the appointment by the
appropriate United States District Court of a trustee to administer or
liquidate any such Plan, shall have occurred and be continuing thirty
(30) days after written notice to such effect shall have been given to
Company
-22-
24
by the Credit Bank; or any such Plan shall be terminated; or a trustee
shall be appointed by the appropriate United States District Court to
administer any such Plan; or the PBGC shall institute proceedings to
administer or terminate any such Plan; and in the case of any such
event the aggregate amount of vested unfunded liabilities under such
Plan shall exceed (either singly or in the aggregate in the case of any
such liability arising under more than one such Plan) 5% of the total
assets of Company; or
(j) the failure of any Bonds to be remarketed within 60 days
of the date of a Purchase Drawing.
Section 9.2. Remedies. Upon the occurrence of an Event of Default
pursuant to Section 9.1 (e) or (f), all amounts payable by Company under this
Agreement shall become due and payable, in each case automatically and
immediately without any presentment, demand, protest or other notice or
formality of any kind (all of which are expressly waived). Upon the occurrence
of an Event of Default (other than pursuant to Section 9.l(e) or (f) the Credit
Bank may, by notice to Company, declare all amounts payable by Company under
this Agreement to be immediately due and payable (and the same shall upon such
notice become immediately due and payable), in each case without any
presentment, demand, protest or other notice or formality of any kind. Upon any
such occurrence, the Credit Bank may, in addition, (a) exercise of all of its
rights and remedies under any other Bond Document or applicable law or (b)
exercise all or any combination of the remedies provided for in this Section
9.2.
ARTICLE 10
CONTINUING OBLIGATION
This Agreement is a continuing obligation of Company and shall, until
the later of the Expiration Date or the date upon which all amounts due and
owing to the Credit Bank hereunder shall have been fully and finally paid, be
binding upon Company, its successors and assigns, and inure to the benefit of
and be enforceable by the Credit Bank and its successors, transferees and
assigns; provided, that Company may not assign all or any part of this Agreement
without the prior written consent of the Credit Bank.
ARTICLE 11
LIMITED LIABILITY OF THE CREDIT BANK
Company hereby assumes all risks of the acts, omissions or misuse of
the Letter of Credit by the Trustee or any successor thereto. Neither the Credit
Bank nor any of its officers, directors or agents shall be liable or
responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of, or the making of a Drawing under, the Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign the Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may
-23-
25
prove to be invalid or ineffective for any reason; (iii) for failure of the
Trustee to comply fully with the conditions required in order to effect a
Drawing; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; (v) for
any loss or delay in the transmission or otherwise of any Bond, document or
draft required in order to make a Drawing; or (vi) for any consequences arising
from causes beyond the control of the Credit Bank; provided, however, that
Company shall have a claim against the Credit Bank, and the Credit Bank shall be
liable to Company, to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by Company which Company proves were
proximately caused by (x) the Credit Bank's willful misconduct or gross
negligence in determining whether documents presented under the Letter of Credit
comply with the terms of the Letter of Credit or (y) the Credit Bank's willful
failure to pay under the Letter of Credit after the presentation to it by the
Trustee of a draft and certificate strictly complying with the terms and
conditions of the Letter of Credit. None of the above shall affect, impair, or
prevent the vesting of any of the Credit Bank's rights or powers hereunder.
In furtherance and extension, and not in limitation, of the specific
provisions hereinabove set forth, any action taken or omitted by the Credit Bank
under or in connection with the Letter of Credit or any related Bond Documents
or other documents, if taken or omitted in good faith, shall be binding upon
Company and shall not put the Credit Bank under any resulting liability to
Company.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Amendments, Nonwaiver and Remedies. This Agreement may be
amended only upon the written agreement of Company and the Credit Bank, and
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if Company shall first obtain the written
consent of the Credit Bank. No course of dealing between Company and the Credit
Bank, nor any delay in exercising any, rights hereunder, shall operate as a
waiver of any rights of the Credit Bank hereunder. No single or partial exercise
of any right under this Agreement shall preclude any other further exercise of
such right or the exercise of any other right. The Credit Bank may remedy any
default by Company hereunder or with respect to any other person, firm or
corporation in a reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by Company. The remedies
provided in this Agreement are cumulative and not exclusive of any remedies
provided by law.
Section 12.2. Survival of Representations and Warranties. All
agreements, representations and warranties of Company contained in this
Agreement and in any Bond Documents delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the issuance of the Letter of
Credit hereunder, and the agreements contained in Article 4 and Section 12.3
hereof shall survive payment of the Bonds, the reimbursement to the Credit Bank
of any payments or disbursements under the Letter of Credit and the termination
of this Agreement.
-24-
26
Section 12.3. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated or the Letter of Credit is issued, Company agrees
to pay on demand, all reasonable costs and expenses of the Credit Bank
including, without limitation, the fees and expenses of Special Counsel in
connection with the preparation, issuance or delivery, as the case may be, of
the Letter of Credit, this Agreement, the other Bond Documents and any other
documents which may be delivered in connection with any of the foregoing. In
addition, Company agrees to pay on demand all costs and expenses of the Credit
Bank (including reasonable counsel fees and expenses) in connection with (i) the
filing, recording, administration, transfer, amendment, maintenance, renewal or
cancellation of the Letter of Credit, this Agreement or the other Bond
Documents, (ii) any payment by the Credit Bank under the Letter of Credit, or
(iii) any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of the
Letter of Credit, this Agreement or the other Bond Documents, and any other
documents which may be delivered in connection with this Agreement. In addition,
Company agrees to pay promptly all costs and expenses of the Credit Bank for (i)
any and all amounts which the Credit Bank has paid relating to the Credit Bank's
curing of any Event of Default under this Agreement or any of the other Bond
Documents, (ii) the enforcement of this Agreement or any of the other Bond
Documents, or (iii) any action or proceeding relating to a court order,
injunction, or other process or decree restraining or seeking to restrain the
Credit Bank from paying any amount under the Letter of Credit on the
presentation of drafts and other documents in connection with the same. Company
agrees to save the Credit Bank harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omitting to pay any
taxes and fees to the extent Company is obligated to pay the same under this
Section 12.3.
Section 12.4. Waiver of Right of Set-off and Limitation on Credit Bank
Collateral.
(a) Upon the occurrence and during the continuance of any
Event of Default, the Credit Bank is hereby authorized at any time and
from time to time, without notice to Company (any such notice being
expressly waived by Company) and to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Credit Bank to or for the credit
of the account of Company against any and all of the obligations of
Company now or hereafter existing under this Agreement, irrespective of
whether or not the Credit Bank shall have made any demand hereunder.
(b) The Credit Bank agrees promptly to notify Company after
any such set-off and application; provided that the failure to give
such notice shall not affect the validity of such sell-off and
application. The rights of the Credit Bank under this Section 12.4 are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Credit Bank may have.
Section 12.5. Notices. All notices, requests and other communications
hereunder shall be in written form (including bank wire, telegram, facsimile,
telex or similar writing) and shall be given to the party to whom addressed, at
its address, facsimile or telex number
-25-
27
set forth below, or such other address, facsimile or telex number as such party
may hereafter specify for the purpose by notice to the other parties listed
below. Each such notice, request or communication shall be effective (i) if
given by telex, facsimile or other electronic means, when such communication is
transmitted to the address specified below and the appropriate answer back is
received, (ii) if given by mail, three days after such communication is
deposited in the United States mail with postage prepaid by registered or
certified mail, return receipt requested, addressed as aforesaid or (iii) if
given by any other means, when delivered at the address specified below. All
notices given by telex, facsimile or other electronic means shall be confirmed
in writing as promptly as practicable.
If to Company:
SteriGenics International
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President-Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to counsel:
Xxxx, Xxxx, Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Credit Bank:
Comerica Bank-California
000 Xxxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Commercial Loan Services Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to counsel:
Manatt, Xxxxxx & Xxxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-26-
28
Section 12.6. Participation. The Credit Bank may at any time arrange
for other banking institutions of the Credit Bank's choosing ("Participants") to
participate in all or any portion of the Credit Bank's obligations under the
Letter of Credit, of the obligations of Company evidenced hereby and by the
Bonds which may be held by the Credit Bank or its nominee ("Participations").
Without in any way limiting the right of the Participants hereunder, Company
agrees that the Participants shall be entitled to (i) receive copies of all
documents furnished to the Credit Bank pursuant to Section 7.1 hereof (at such
addresses as the Credit Bank shall designate from time to time to Company) and
(ii) receive the benefits of Sections 2.7 and 2.8 hereof to the extent of their
respective Participations. Notwithstanding the Credit Bank's granting of any
Participations, Company shall have the right to continue dealing solely with the
Credit Bank and agents of the Credit Bank which have been appointed in writing
(as to the appointment of which Company has received written notice). No
Participant shall enter into any reimbursement or other similar agreement with
Company with respect to the Letter of Credit, this Agreement or the Bonds.
Section 12.7. Satisfaction Requirement. If any agreement, certificate
or other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to the Credit Bank, the determination of
such satisfaction shall be made by the Credit Bank in its sole and exclusive
judgment exercised in good faith.
Section 12.8. Uniform Customs and Practices. This Agreement and the
Letter of Credit shall be subject to the Uniform Customs and Practice (a copy of
which is available upon request), and, in the event any provision of the Uniform
Customs and Practice is or is construed to vary from or be in conflict with any
provision of the California Uniform Commercial Code, as from time to time
amended and in force (the "Commercial Code"), the Uniform Customs and Practice
shall prevail. In addition to other rights of the Credit Bank hereunder or under
application for the Letter of Credit, any action, inaction or omission taken or
suffered by the Credit Bank, or by any of its correspondents, under or in
connection with the Letter of Credit or the relative instruments, documents, or
property, if in good faith and in conformity with such foreign or domestic laws,
regulation, or customs as the Credit Bank or any of its correspondents may deem
to be applicable thereto, shall be binding upon the Company and shall not place
the Credit Bank or any of its correspondents under any liability to the Company.
Section 12.9. Governing Law. This Agreement and the Letter of Credit
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of California, without giving
effect to conflicts of law principles. The parties hereby waive, to the fullest
extent permitted by law, any rights they may have to a jury trial.
Section 12.10. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
-27-
29
Section 12.11. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
-28-
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
STERIGENICS INTERNATIONAL
By /s/
------------------------------
Name XXXXXX X. XXXXXX, XX.
Title VICE PRESIDENT FINANCE
COMERICA BANK-CALIFORNIA
By /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name XXXXXX X. XXXXXX
Title VICE PRESIDENT
-29-
