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EXHIBIT 10.11
SERIES B REIMBURSEMENT AGREEMENT
--------------------------------
between
RADIATION STERILIZERS, INCORPORATED
and
▇▇▇▇▇ FARGO BANK, N.A.
Dated as of November 1, 1985
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TABLE OF CONTENTS
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Page
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1. Definitions and Accounting Terms 1
1.1 Defined Terms 1
1.2 Use of Defined Terms 5
1.3 Accounting Terms 5
1.4 Exhibits 5
2. Series B Bonds 5
3. Letters of Credit 5
4. Loan Documents 6
4.1 Guaranty 6
4.2 Series B 6
4.3 Other Documents and Actions 7
4.4 Additional Security 7
5. Conditions to Issuance and Disbursements 7
5.1 Conditions to Issuance 7
5.2 Conditions to Disbursements 8
6. Reimbursement and Other Payments; Extension 9
6.1 Reimbursement 9
6.2 Fees 10
6.3 Increased Costs Due to Change in Law 10
6.4 Obligations Absolute 11
6.5 Extension of Series B Letter of Credit 11
6.6 Reserve Accounts 12
7. Representations and Warranties by Company 13
7.1 Formation of Company 13
7.2 Execution, Delivery and Performance of
Loan Documents and Bond Documents 14
7.3 Financial Statements 15
7.4 No Material Adverse Change 15
7.5 Tax Liability 16
7.6 Compliance with Laws 16
7.7 Litigation 16
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7.8 Official Statement 16
7.9 Conditions to Issuance 16
8. Representations and Warranties by Bank 17
8.1 Formation of Bank 17
8.2 Authorization 17
8.3 No Conflict 17
8.4 Actions and Proceedings 17
9. Affirmative Covenants 17
9.1 Governmental Approvals 18
9.2 Continued Existence 18
9.3 Books and Records 18
9.4 Annual Operating Statements 18
9.5 Notice of Certain Events 19
9.6 Opinions 19
9.7 Defaults 19
9.8 Tax Appeals 19
9.9 Surplus Construction Funds 19
9.10 Notice Re Disbursement Conditions 20
9.11 Compliance with Requirements 20
10. Negative Covenants 20
10.1 Transfers of Project or Obligations 20
11. Events of Default and Remedies Upon Default 20
11.1 Events of Default 20
11.2 Remedies Upon Default 22
11.3 Cumulative Remedies; No Waiver 23
12. Miscellaneous 24
12.l Actions 24
12.2 Nonliability of Bank 24
12.3 No Representations by Bank 24
12.4 No Third Parties Benefited 24
12.5 Indemnity by Company 26
12.6 Commissions 26
12.7 Binding Effect 27
12.8 Execution in Counterparts 27
12.9 Prior Agreements; Amendments; Consents 27
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12.10 Survival of Representations and
Warranties 27
12.11 Notices 27
12.12 Further Assurances 29
12.13 Governing Law 29
12.14 Severability of Provisions 29
12.15 Inconsistency With Loan Documents 29
12.16 Headings 29
12.17 Time of the Essence 29
12.18 No FDIC Insurance 29
13. Interest and Payment Terms 29
13.1 Manner of Payment 29
13.2 Interest 30
13.3 Waivers 30
Section
EXHIBITS Reference
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"A" Series B Letter of Credit 3
"B" Conditions to Disbursement 1.1(e), 5.2
"C" Legal Description 1.1(u)
"D" Permitted Encumbrances Exhibit "B"
"E" Description of Facilities 1.1(s)
"F" Reserve Accounts Pledge Agreement 6.6.4
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SERIES B REIMBURSEMENT AGREEMENT
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This Series B Reimbursement Agreement is entered into as of November
1, 1985, by and between RADIATION STERILIZERS, INCORPORATED, a California
corporation ("Company"), and ▇▇▇▇▇ FARGO BANK, N.A., a national banking
association ("Bank").
1. Definitions And Accounting Terms.
1.1 Defined Terms. As used in this Series B Reimbursement Agreement,
the following terms shall have the meanings set forth respectively after each:
(a) "Agreement" means this Series B Reimbursement Agreement,
either as originally executed or as it may from time to time be
supplemented, modified or amended.
(b) "Bond Documents" means all of the instruments, documents
and agreements which may be executed from time to time by Issuer, Trustee,
the Original Purchaser and/or Company in connection with the Series B
Bonds (other than the Loan Documents), including without limitation the
following, each of which were executed as of even date herewith unless
otherwise indicated and in each case either as originally executed or as
the same may from time to time be supplemented, modified or amended:
(1) Trust Indenture between Issuer and Trustee, relating
to the Series B Bonds (the "Trust Indenture");
(2) the Series B Loan Agreement (as defined below); and
(3) Bond Purchase Agreement among Company, Issuer and
the Original Purchaser, relating to the Series B Bonds (the "Bond
Purchase Agreement").
(c) "Business Day" means any day of the year, other than a
Saturday or a Sunday, (a) on which banks located (i) in the cities in
which the principal corporate trust office of Trustee and the principal
office of Bank are located, and (ii) in New York, New York, are not
required or authorized by law to remain closed, and (b) on which the New
York Stock Exchange, Inc. is not closed.
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(d) "Code" means the Internal Revenue Code of 1954, as
amended, and references to the Code and Sections of the Code shall include
relevant regulations and proposed regulations thereunder and any successor
provisions to such Sections, regulations or proposed regulations.
(e) "Conditions to Disbursement" means the conditions set
forth in Exhibit "B" attached hereto, either as now existing or as it may
from time to time be supplemented, modified or amended.
(f) "Depository" means First City Bank of Dallas, a state
banking corporation.
(g) "Designated Representative" means either the "Authorized
Company Representative" under the Series B Loan Agreement or, if Bank so
requests, a different Person, authorized by Company, with the approval of
Bank, to deliver certificates, requests for disbursements and other
documents and material to Bank pursuant to this Agreement.
(h) "Disbursement" means each of the disbursements by
Depository of Series B Bond Proceeds pursuant to this Agreement and the
Bond Documents.
(i) "Documents" means, collectively, the Bond Documents and
the Loan Documents.
(j) "Event of Default" means each of those events so
designated in Article 11 of this Agreement.
(k) "Fiscal Year" means Company's fiscal year, ending on March
31 of each calendar year.
(l) "Guarantor" means ▇▇▇▇▇▇▇ ▇▇▇▇ & Associates, a California
limited partnership.
(m) "Guaranty" means the guaranty required pursuant to Section
4.1 of this Agreement, either as originally executed or as it may from
time to time be supplemented, modified or amended.
(n) "Improvements" means the improvements located on the
Property and any and all other improvements now or hereafter comprising
any portion of the Property.
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(o) "Issuer" means the Trinity River Industrial Development
Authority, a non-profit industrial development corporation.
(p) "Loan Documents" means, collectively, this Agreement, the
Guaranty and the Series B Pledge Agreement, in each case either as
originally executed or as the same may from time to time be supplemented,
modified or amended.
(q) "Original Purchaser" means Prudential-Bache Securities
Inc., a Delaware corporation.
(r) "Person" means any person or entity, whether an
individual, trustee, corporation, partnership, trust, unincorporated
organization or otherwise.
(s) "Project" means the construction and operation of the
industrial facility described in Exhibit "E" attached hereto for the
sterilization of packaged products using ionizing radiation, as provided
herein and in the Series B Loan Agreement.
(t) "Project Costs" means all costs of any nature whatsoever
incurred by or on behalf of Company in connection with the Project.
(u) "Property" means the real property described in Exhibit
"C" attached hereto, together with all easements and other rights now or
hereafter made appurtenant thereto, all improvements and fixtures now or
hereafter located thereon, and all additions or accretions thereto.
(v) "Related Loan Documents" means the documents defined in
the Series A Reimbursement Agreement as the "Loan Documents."
(w) "Remarketing Agent" means the Remarketing Agent appointed
in accordance with Section 403 of the Trust Indenture.
(x) "Series A Bonds" means the bonds for which amounts are
available to be drawn under the Series A Letter of Credit.
(y) "Series A Letter of Credit" means the letter of credit to
be issued by Bank pursuant to the Series A Reimbursement Agreement.
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(z) "Series A Loan Agreement" means the Series 1985A Loan
Agreement between Issuer and Company of even date herewith relating to the
loan to Company of the Series A Bond Proceeds.
(aa) "Series A Reimbursement Agreement" means the Series A
Reimbursement Agreement of even date herewith between Bank and Company.
(bb) "Series B Bond Proceeds" means the proceeds of the Series
B Bonds, including without limitation any insurance or condemnation
proceeds or other assets held by Trustee in special funds established
pursuant to the Series B Bond Documents or otherwise.
(cc) "Series B Bonds" means the Trinity River Industrial
Development Authority Variable Rate Demand Industrial Development Revenue
Bonds (Radiation Sterilizers, Incorporated Project), Series 1985B, to be
issued pursuant to the Trust Indenture.
(dd) "Series B Company Bonds" means Series B Bonds (a)
purchased by Trustee or the Remarketing Agent (as defined in the Trust
Indenture) with moneys furnished by Company pursuant to Section 4.11 of
the Series B Loan Agreement and (b) delivered to Bank or its nominee
pursuant to Section 401(j) or 401(k) of the Trust Indenture as a result of
the occurrence of an Event of Default.
(ee) "Series B Drawing Bonds" means Series B Bonds delivered
or deemed delivered to Bank or its nominee pursuant to the Trust Indenture
as the result of a "C Drawing," or a "C Drawing" and a "D Drawing," under
the Series B Letter of Credit.
(ff) "Series B Letter of Credit" means the Series B Letter of
Credit to be issued by Bank pursuant to Section 3 of this Agreement,
either as originally executed or as it may from time to time be
supplemented, modified or amended.
(gg) "Series B Loan Agreement" means the Series 1985B Loan
Agreement between Issuer and Company of even date herewith relating to the
loan to Company of the Series B Bond Proceeds.
(hh) "Series B Pledge Agreement" means the pledge and security
agreement required pursuant to Section 4.2 of this Agreement, either as
originally exe-
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cuted or as it may from time to time be supplemented, modified or amended.
(ii) "Trustee" means Bank One Trust Company, N.A., a national
banking association, or its successors as trustee under the Trust
Indenture.
1.2 Use of Defined Terms. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any number of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
generally accepted accounting principles applied on a consistent basis.
1.4 Exhibits. All Exhibits to this Agreement, either as now existing
or as the same may from time to time be supplemented, modified or amended, are
incorporated herein by this reference.
2. Series B Bonds. Company contemplates entry into the Bond Documents in
order to cause the issuance of the Series B Bonds, so that the Series B Bond
Proceeds may be used to finance the Project.
3. Letters of Credit. In order to enhance the marketability of the Series
A Bonds and the Series B Bonds, Company requested that Bank issue an irrevocable
standby letter of credit, with Company's reimbursement obligations secured by
various parcels of real property owned by Company and Guarantor. Company hereby
acknowledges that Bank's appraisers have determined that the value of such
parcels is substantially less than the value of the requested letter of credit,
but that Bank has agreed to back the Series B Bonds without taking real property
security for Company's reimbursement obligations in connection therewith,
Company has therefore requested that Bank issue two irrevocable standby letters
of credit. The first letter of credit (the "Series B Letter of Credit") shall be
substantially in the form attached hereto as Exhibit "A" and shall be issued in
the face amount of $2,505,377.00, of which an amount not exceeding $2,450,000.00
shall be available to pay the principal amount or purchase price of the Series B
Bonds, and an amount not exceeding $55,377.00 shall be available for the accrued
interest on the Series B Bonds, all as more particularly provided in the
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particularly provided in the Series B Letter of Credit. Company's obligations in
connection with the Series B Letter of Credit shall be secured by the cash
collateral held in the Reserve Accounts (as defined below). The second letter of
credit (the "Series A Letter of Credit") shall be substantially in the form
attached to the Series A Reimbursement Agreement as Exhibit "A" and shall be
issued in the face amount of $2,198,596.00, of which an amount not exceeding
$2,150,000.00 shall be available to pay the principal amount or purchase price
of the Series A Bonds, and an amount not exceeding $48,596.00 shall be available
for interest accrued on the Series A Bonds, all as more particularly provided in
the Series A Letter of Credit. Company's obligations in connection with the
Series A Letter of Credit shall be secured by the Security Documents (as defined
in the Series A Reimbursement Agreement) and the cash collateral held in the
Reserve Accounts. Various rights and obligations of Bank and Company in
connection with the Series A Letter of Credit are set forth in the Series A
Reimbursement Agreement and the other Related Loan Documents. The Series A
Letter of Credit, the Series B Letter of Credit and any successor or substitute
letters of credit issued pursuant to this Agreement are sometimes collectively
referred to herein as the "Letters of Credit," Bank is willing to issue the
Series B Letter of Credit on the terms and conditions contained in this
Agreement and the other Loan Documents.
4. Loan Documents.
4.1 Guaranty. In consideration of Bank's entry into this Agreement
and the other Loan Documents, and in order to guarantee the prompt payment when
due of all sums of principal and interest advanced by Bank pursuant to the
Letters of Credit as well as the prompt payment when due of any other sums owing
pursuant to this Agreement or any of the other Loan Documents, Company shall, at
its sole expense, deliver or cause to be delivered to Bank a guaranty (the
"Guaranty") executed by Guarantor, in such form and content as Bank shall in its
sole discretion require.
4.2 Series B Pledge Agreement. In consideration of Bank's entry into
this Agreement and the other Loan Documents, and as security for the prompt
payment when due of all sums of principal and interest advanced by Bank pursuant
to the Series B Letter of Credit as well as for payment of all other sums owing
pursuant to this Agreement and the other Loan Documents, Company shall, at its
sole expense, deliver or cause to be delivered to Bank a pledge and security
agreement (the "Series B Pledge Agreement") executed by Company, in such form
and content as Bank shall in its sole discretion
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require, assigning to Bank Company's right, title and interest in and to the
Series B Drawing Bonds and the Series B Company Bonds.
4.3 Other Documents and Actions. Company agrees to execute,
acknowledge and/or deliver or cause to be executed, acknowledged and/or
delivered to Bank such other instruments, agreements and other documents, and to
take such actions, upon request by Bank, as Bank may reasonably request in order
to carry out the purposes of this Agreement and the other Loan Documents and the
transactions contemplated thereby.
4.4 Additional Security. Bank shall not acquire any security for the
obligations of Company or Guarantor under this Agreement or the other Loan
Documents, other than the Series B Pledge Agreement and the Guaranty, unless
Company shall have afforded to Trustee, for the benefit of the holders of the
Series B Bonds, prior to or simultaneously with the taking by Bank of such
security, rights which shall, at the option of Bank, be either senior to the
rights of Bank or of equal priority with the rights of Bank in connection with
such security.
5. Conditions to Issuance and Disbursements.
5.1 Conditions to Issuance. The obligation of Bank to issue the
Series B Letter of Credit is subject to the following conditions precedent:
5.1.1 Bank shall have received all of the following documents,
each of which shall be in form and substance satisfactory to Bank:
(a) the original Guaranty;
(b) the original Series B Pledge Agreement;
(c) copies of each of the Bond Documents;
(d) copies of the articles and by-laws of Company and any
and all supplements and amendments thereto, all certified to be true and
correct by the Secretary of Company;
(e) an original of each of the opinions, certificates, letters
and other documents specified in, Section 5(b) of the Bond Purchase
Agreement, in each case addressed to Bank;
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(f) a written opinion of Company's counsel, in form and
substance satisfactory to Bank, covering such matters relating to Company
and the Loan Documents as may be required by Bank;
(g) a copy of the partnership agreement of Guarantor, a
copy of the certificate of limited partnership of Guarantor as recorded in
San Mateo County, California, a copy of the Form LP-1 filed for Company
with the California Secretary of State, and copies of any and all
amendments to such documents, all certified as true, complete and correct
by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.;
(h) a written opinion of Guarantor's counsel, in form and
substance satisfactory to Bank, covering such matters relating to
Guarantor and the Loan Documents as may be required by Bank;
(i) the certificate required pursuant to Section 7.2.1,
below;
(j) an executed copy (or duplicates) of the Trust Indenture
and the Series B Loan Agreement;
(k) the financial statements of Company and Guarantor required
to be furnished hereunder and under the Guaranty, and the insurance
policies required to be furnished hereunder and under the Guaranty; and
(l) such other instruments, certificates, opinions, consents
and other documents as Bank may reasonably require.
5.1.2 The Series B Bonds shall have been simultaneously duly
executed and delivered, all of the Series B Bonds shall have been sold, and the
full authorized face amount of the Series B Bonds (less such fees to the
Original Purchaser as are paid therefrom at the time of sale, as provided in the
Bond Documents) shall have been received by Trustee, as required pursuant to the
Bond Documents.
5.1.3 All conditions to the issuance of the Series A Letter of
Credit shall have been satisfied.
5.2 Conditions to Disbursements. The conditions described in Exhibit
"B" attached hereto shall be conditions precedent to each Disbursement.
Following the initial purchase of the Series B Bonds by the Original Purchaser,
Bank shall provide Depository with a standing written approval of all
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Disbursements thereafter requested by the Authorized Company Representative (as
defined in the Series B Loan Agreement); provided, however, that such standing
approval shall automatically be revoked as of the date on which any Event of
Default (or event which, with the giving of notice or the passage of time or
both, would constitute an Event of Default) occurs or on which any Condition to
Disbursement fails to be fulfilled. Following any such revocation, Bank's
approval shall be required at the time of each Disbursement unless and until
Bank, in its sole discretion, chooses to provide Trustee with another revocable
standing approval.
6. Reimbursement and Other Payments; Extension.
6.1 Reimbursement. Company hereby agrees to pay to Bank at the times
indicated, in cash or by such other means as may be satisfactory to Bank in its
sole discretion, the following:
(a) on the date of any disbursement of funds by Bank under the
Series B Letter of Credit, the entire amount of any and all funds
disbursed by Bank under the Series B Letter of Credit;
(b) upon demand, all reasonable amounts expended, advanced or
incurred by Bank (i) in connection with the negotiation, preparation,
execution, delivery, issuance, administration and performance of the
Series B Letter of Credit, this Agreement or any other Loan Document, or
any matter related thereto; (ii) to satisfy any obligation of Company or
Guarantor under this Agreement or any of the Loan Documents; and (iii) to
enforce the rights of Bank under this Agreement or any other Loan Document
(including without limitation any costs incurred by Bank in connection
with any insolvency or bankruptcy proceeding affecting Company or
Guarantor or any other Person involved in the Project), which amounts will
include all court costs, appraisal fees, reasonable attorneys' fees, fees
of auditors and accountants and investigation expenses reasonably incurred
by Bank in connection with any such matters;
(c) upon demand, all other amounts owing to Bank by Company
under this Agreement or any of the other Loan Documents.
All sums owing pursuant to this Agreement and the other Loan Documents shall be
payable with interest as provided in Article 13.
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6.2 Fees. Company hereby agrees to pay to Bank, in cash or by such
other means as may be satisfactory to Bank in its sole discretion (i) on or
before the date on which the Series B Bonds are sold to the Original Purchaser
pursuant to the Bond Purchase Agreement, as an administration fee for the first
year of the term of the Series B Letter of Credit, in advance, an amount equal
to one and one-quarter percent (1.25%) of the undrawn amount initially available
to be drawn under the Series B Letter of Credit; and (ii) for each subsequent
year that the Series B Letter of Credit remains in effect until the expiration
of its three (3) year term, Company shall pay to Bank, in advance, on or before
the anniversary of issuance of the Series B Letter of Credit, a loan
administration fee in an amount equal to one and one-quarter percent (1.25%) of
the undrawn amount available to be drawn under the Series B Letter of Credit as
of the last day of the preceding year of the term of the Series B Letter of
Credit (which amount will take into account principal reductions of the Series B
Bonds). In no event shall Bank have any obligation to make reimbursement or to
otherwise account to Company in respect of fees paid by Company as a result of
any reduction in the undrawn amount under the Series B Letter of Credit.
6.3 Increased Costs Due to Change in Law. If any change in any law
or regulation or in the interpretation thereof by any court or administrative
agency shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against letters of credit issued by Bank, or (ii)
impose on Bank any other condition regarding this Agreement or the Series B
Letter of Credit (other than changes in the rates of income taxation generally
applicable to Bank), and the result of any such event shall be to increase the
cost to Bank of issuing or maintaining the Series B Letter of Credit (which
increase in cost shall be determined by Bank's reasonable allocation of the
aggregate of such cost increases resulting from such events), and such
requirement or cost shall remain in effect for more than one hundred eighty
(180) days after notice thereof from Bank to Company, then (a) Bank shall so
notify Company, and (b) upon receipt of such notice from Bank, Company shall
promptly pay to Bank, from time to time as specified by Bank, additional amounts
which shall be sufficient to compensate Bank for such increased costs as accrue
after the expiration of such one hundred eighty (180) day period, together with
interest on each such amount from the date of such notice until payment in full
thereof at the rate set forth in Article 13. A certificate as to such increased
cost incurred by Bank as a
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result of any such event, submitted by Bank to Company, shall be conclusive as
to the amount thereof.
6.4 Obligations Absolute. The obligations of Company under the Loan
Documents shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:
(a) any lack of validity or enforceability of the Series B
Letter of Credit, or any of the Documents or any other agreement or
instrument related thereto;
(b) any amendment or waiver of or any consent to departure
from the terms of the Series B Letter of Credit or any of the Documents or
any other agreement or instrument related thereto;
(c) the existence of any claim, set-off, defense or other
right which the Company, Guarantor or Issuer may have at any time against
Trustee, any beneficiary or any transferee of the Series B Letter of
Credit (or any Person for whom Trustee, any such beneficiary or any such
transferee may be acting), Bank or any other Person, whether in connection
with this Agreement, the Series B Letter of Credit, any of the other Loan
Documents, the Series B Bonds or any other agreement or instrument related
thereto, or in connection with the Project or any unrelated transaction;
(d) any statement, draft or any other document presented under
the Series B Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever;
(e) the surrender or impairment of any security for the
performance or observance of the terms of this Agreement, any of the other
Loan Documents or any other agreement related thereto; or
(f) any other circumstance, happening or omission
whatsoever, whether or not similar to any of the foregoing.
6.5 Extension of Series B Letter of Credit. The term of the Series B
Letter of Credit may be extended if, following Company's request, Bank and
Company reach agreement on the terms of such extension, Bank shall not be
obligated
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to enter into any such extension or to otherwise extend, modify or supplement
the Series B Letter of Credit or any of the other Loan Documents.
6.6 Reserve Accounts. On or before December 15, 1986, Bank shall
establish and designate two interest-bearing accounts (the "Unrestricted Reserve
Account" and the "Restricted Reserve Account"). The Unrestricted Reserve Account
and the Restricted Reserve Account are collectively referred to herein (and in
the Series A Reimbursement Agreement) as the "Reserve Accounts." On December 15,
1986, Company shall deposit with Bank cash in the amount of $333,000.00, which
amount shall be apportioned between the Unrestricted Reserve Account and the
Restricted Reserve Account pursuant to subsection 6.6.3, below. On December 15,
1987, Company shall deposit with Bank an additional $333,000.00, which amount
shall be apportioned between the Unrestricted Reserve Account and the Restricted
Reserve Account pursuant to subsection 6.6.3, below. In connection with the
Reserve Accounts, Bank and Company agree as follows:
6.6.1 All amounts held in the Reserve Accounts shall be
invested by Bank in accordance with instructions of Company that are wholly
acceptable to Bank, subject to all restrictions imposed by Bond Counsel from
time to time.
6.6.2 Bank and Company acknowledge that, as of the date of
this Agreement, Bond Counsel has advised them (a) that moneys to be deposited in
the Reserve Accounts and certain moneys deposited in other trust funds and
accounts (the "Trustee Accounts") held by Trustee (collectively, the "Arbitrage
Funds"), are subject to arbitrage restrictions, (b) that a portion of the
Arbitrage Funds (the "Unrestricted Funds") may be invested at an unrestricted
yield, which portion shall not exceed the smallest of (i) one and one-quarter
percent (1.25%) of the average annual debt service on, (ii) the maximum annual
debt service on, or (iii) fifteen percent (15%) of the aggregate outstanding
principal amount of, the Series A Bonds and the Series B Bonds, and (c) that if
the amount of the Unrestricted Funds is calculated pursuant to subsection (i),
"average annual debt service" shall mean the annual interest that the Series A
Bonds and the Series B Bonds would bear if initially issued at the Fixed
Interest Rate (as defined in the Trust Indenture and the Trust Indenture
relating to the Series B Bonds (collectively, the "Trust Indentures"]).
6.6.3 Those amounts to be deposited by Company pursuant to
this Section 6.6 that qualify as Unrestricted Funds shall be deposited in the
Unrestricted Reserve Account.
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Those amounts to be deposited by Company pursuant to this Section 6.6 that are
in excess of the Unrestricted Funds (the "Restricted Funds") shall be deposited
in the Restricted Reserve Account and shall be subject to yield restrictions as
required by Bond Counsel from time to time. At such times as a portion of the
Series A Bonds and/or the Series B Bonds are redeemed or otherwise cancelled in
accordance with the provisions of either Trust Indenture, Bond Counsel shall
consult with Bank and Bank shall, to the extent required by Bond Counsel,
transfer all or a portion of the Unrestricted Funds from the Unrestricted
Reserve Account to the Restricted Reserve Account, thereby increasing the
Restricted Funds and decreasing the Unrestricted Funds.
6.6.4 Company hereby grants to Bank and Trustee a lien on and
a security interest in the Reserve Accounts, all amounts deposited in the
Reserve Accounts and all proceeds of the investment or disposition of the
amounts deposited therein, as security for (a) the payment and performance of
all indebtedness and other obligations of Company to Bank under the Loan
Documents (including the "Loan Documents" as defined in this Agreement and the
"Loan Documents" as defined in the Series A Reimbursement Agreement) and (b) the
payment by Company to Trustee of the principal of, and all accrued interest on,
the Series A Bonds and the Series B Bonds. Company shall, at its sole expense,
deliver or cause to be delivered to Bank a pledge and security agreement (the
"Reserve Accounts Pledge Agreement") executed by Company, in the form attached
hereto as Exhibit "F", and from time to time execute and deliver such other
instruments and documents as Bank may require in order to evidence or perfect
such pledge.
6.6.5 In the event that Company desires to provide substitute
collateral in lieu of payment of all or a portion of the moneys to be deposited
by Company pursuant to this Section 6.6, acceptance of such substitute
collateral shall be in Bank's sole and absolute discretion.
7. Representations and Warranties by Company. As a material inducement to
Bank's entry into this Agreement and the transactions contemplated hereby,
Company represents and warrants to Bank as follows:
7.1 Formation of Company. Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, (b) has all requisite power and authority to conduct its business
and to own and lease its properties, and (c) is duly qualified to do
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business in, and is in good standing in, every jurisdiction in which the nature
of business conducted by it makes such qualification necessary or where failure
to so qualify would have a material adverse effect on its business or financial
condition or its performance of its obligations under the Documents.
7.2 Execution, Delivery and Performance of Loan Documents and Bond
Documents.
7.2.1 Company and Guarantor have all requisite power and
authority to execute and deliver, and to perform all of their obligations under,
the Documents, and shall execute and deliver to Bank, prior to the issuance of
the Series B Letter of Credit and as a condition thereto, a certificate
evidencing the due authorization and consent of the board of directors of
Company and the partners in Guarantor to the execution of the Documents and the
entry by Company and Guarantor into the transaction contemplated thereby.
7.2.2 The execution and delivery by Company of, and the
performance by Company of all of its obligations under, each Document has been
duly authorized by all necessary action and do not and will not:
(a) require any consent or approval not heretofore obtained of
any Person having any interest in Company;
(b) violate any provision of, or require any consent under the
articles or by-laws of Company;
(c) result in or require the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest, claim, charge,
right of others, or other encumbrance of any nature (other than as
contemplated under the Documents) upon or with respect to any property now
owned or leased or hereafter acquired by Company;
(d) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in
effect having applicability to Company; or
(e) result in a breach of or constitute a default under, or
cause or permit the acceleration of any material obligation owed under,
any indenture or loan or credit agreement or any other agreement, lease,
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or instrument to which Company is a party or by which Company or any of
its property is bound or affected.
7.2.3 At the time of execution of this Agreement, Company is
not in default in any respect that is materially adverse to the interests of the
holders of the Documents or that would have any material adverse effect on the
financial condition of Company or the conduct of its business under any law,
rule, regulation, order, writ, judgment, injunction, decree, determination,
award, indenture, agreement, lease or instrument described in Section 7.2.2(d)
or Section 7.2.2(e), above.
7.2.4 No authorization, consent, approval, order, license,
exemption from, or filing or registration or qualification with, any court or
governmental department, public body, authority, commission, board, bureau,
agency, or instrumentality, is or will be required to authorize, or is otherwise
required (except for such authorizations, consents, approvals, orders, licenses,
exemptions or filings as may be required under the state securities or "Blue
Sky" laws in connection with the sale of the Series B Bonds by the Original
Purchaser under the Bond Purchase Agreement, which shall be obtained to the
extent necessary by the Original Purchaser) in connection with the following:
(a) the execution and delivery by Company of, and the
performance by Company of all of its obligations under, the Documents, or
(b) the creation of the liens, security interests, or other
charges or encumbrances described in the Documents.
7.2.5 Each of the Documents, when executed and delivered, will
constitute the legal, valid, and binding obligations of Company (to the extent
it is a party thereto or obligated thereunder), enforceable against Company in
accordance with its terms.
7.3 Financial Statements. Company has furnished to Bank its
financial statements, and such statements and any other financial statements or
reports submitted by Company to Bank or to the Original Purchaser accurately
reflect the financial position of Company as of the date thereof.
7.4 No Material Adverse Change. There has been no material adverse
change in the condition, financial or
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otherwise, of Company since the dates of the financial statements described in
Section 7.3, above.
7.5 Tax Liability. Company has filed all tax returns (federal, state
and local) required to be filed and has paid all taxes shown thereon to be due
and all property taxes due, including interest and penalties, if any; provided,
however, that Company shall not be required to pay and discharge any such tax so
long as the legality thereof shall be promptly and actively contested in good
faith and by appropriate proceedings. Company has established and is maintaining
adequate reserves for tax liabilities, if any (including any tax liabilities
contested pursuant to this Section 7.5).
7.6 Compliance with Laws. Company is and shall remain in compliance
in all material respects with all laws, regulations and requirements applicable
to its business and has obtained all authorizations, consents, approvals,
orders, licenses, exemptions from, and has accomplished all filings or
registrations or qualifications with, any court or governmental department,
public body, authority, commission, board, bureau, agency or instrumentality,
failure to obtain or comply with which would have a material and adverse effect
upon its business.
7.7 Litigation. There are no actions, suits or proceedings pending
or threatened against or affecting Company or the property of Company before any
court or governmental department, public body, authority, commission, board,
bureau, agency or instrumentality, except as expressly disclosed to Bank in
writing by Company prior to the execution of this Agreement,
7.8 Official Statement. To the best of Company's knowledge, neither
the Official Statement nor the Preliminary Official Statement provided in
connection with the Series B Bonds, nor any certificate or statement or any data
furnished by Company to Bank or to Trustee or any other person or entity in
connection with the negotiation of this Agreement or any of the other Documents
or the transactions contemplated thereby (other than statements contained in the
Preliminary Official Statement which were revised or corrected in the Official
Statement) contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained herein or therein, in the light
of the circumstances under which they were made, not misleading.
7.9 Conditions to Issuance. All of the conditions to issuance of the
Series B Letter of Credit have been ful-
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filled, except as expressly disclosed to Bank in writing by Company prior to the
execution of this Agreement.
8. Representations and Warranties by Bank. As a material inducement to
Company's entry into this Agreement and the transactions contemplated hereby,
Bank represents and warrants to Company that:
8.1 Formation of Bank. Bank is a national banking association, duly
organized, validly existing and in good standing; Bank has all requisite
corporate power to carry on its business as now being conducted, and has all
requisite corporate power and authority to enter into this Agreement, issue the
Series B Letter of Credit, and perform its obligations hereunder and thereunder.
8.2 Authorization. The execution, delivery and performance of this
Agreement and the issuance of the Series B Letter of Credit by the Bank have
been duly authorized by all necessary corporate action on the part of Bank.
8.3 No Conflict. The execution, delivery and performance of this
Agreement and the issuance of the Series B Letter of Credit by Bank do not
conflict with or violate any provision of the articles of incorporation or
by-laws of Bank and do not, to the best of Bank's knowledge, conflict with,
violate, result in a breach of, or cause a default under (i) any provision of
federal, state or local law or regulation relating to the business or assets of
Bank, (ii) any provision of any consent, arbitration award, judgment or decree
by which Bank is bound, or (iii) any provision of any agreement or instrument to
which Bank is a party or by which Bank or its assets are bound or restricted.
8.4 Actions and Proceedings. There is no pending action or
proceeding before any court, governmental agency or arbitrator against Bank and,
to the best of Bank's knowledge, there in no threatened action or proceeding
against Bank before any court, governmental agency or arbitrator which would
materially and adversely affect the ability of the Bank to perform its
obligations under this Agreement or the Series B Letter of Credit, subject to
applicable laws, principles and judicial decisions.
9. Affirmative Covenants. For so long as any obligation of Company
in connection with this Agreement or any of the other Loan Documents remains
outstanding, Company shall, unless Bank otherwise consents in writing:
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9.1 Governmental Approvals. Deliver to Bank, from time to time at
Bank's request, evidence in form and substance satisfactory to Bank that Company
has complied with all applicable laws, ordinances, regulations and other
requirements relating thereto.
9.2 Continued Existence. Maintain its existence, and continue to be
a corporation in good standing in the State of California. In connection with
the covenants given pursuant to this Section 9.2, Company agrees that it will
not dissolve or otherwise dispose of all or substantially all of its assets.
9.3 Books and Records. Maintain full and complete books of account
and other records reflecting the results of its operations (in conjunction with
any other ventures as well as specifically with respect to the Project),
including without limitation all contributions of equity investment capital, and
provide to Bank, promptly after request by Bank therefor, such financial
statements and other information pertaining to Company, and the assets and
operations of Company, as Bank may from time to time request.
9.4 Annual Operating Statements. Deliver to Bank the following:
(a) Promptly and in any event within ninety (90) days after
the end of each Fiscal Year, balance sheets and statements of income for
Company's operations for such Fiscal Year, accompanied with all supporting
schedules and certificates of Company's chief financial officer that the
statements are true and correct.
(b) Upon request, copies of all such regular or periodic
financial statements or financial reports as Company shall send to its
shareholder(s),
(c) Upon request, copies of all such regular or periodic
reports which are available for public inspection which Company may be
required to file with any federal or state department, bureau, commission
or agency, including without limitation tax returns.
(d) Promptly and in any event within one hundred twenty (120)
days after the end of each Fiscal Year, a certification of a Designated
Representative that no Event of Default has occurred and Company is in
compliance with all covenants and agreements made by
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Company and contained in this Agreement or any of the Loan Documents.
9.5 Notice of Certain Events. Promptly notify Bank if (a) Company
learns of the occurrence of any event which constitutes, or will constitute,
with the passage of time or the giving of notice or both, an Event of Default or
a default under this Agreement or any of the other Documents, together with a
detailed statement by a responsible officer of Company specifying the nature
thereof and what action Company is taking or proposes to take with respect
thereto, or (b) Company receives any notice from, or the taking of any other
action by, the holder of any promissory note, debenture or other evidence of
indebtedness of Company or of any security (as defined in the Securities Act of
1933, as amended) of Company with respect to a claimed default, together with a
detailed statement by a responsible officer of Company specifying the notice
given or other action taken by such holder and the nature of the claimed default
and what action Company is taking or proposes to take with respect thereto, or
(c) Company learns of the existence of any legal, judicial or regulatory
proceedings affecting Company or any property of Company in which the amount
involved is material and is not covered by insurance or which, if adversely
determined, would cause a material adverse change in the financial condition of
Company, or (d) there shall occur or exist any other event or condition causing
a material adverse change in the financial condition of Company.
9.6 Opinions. Deliver to Bank, concurrently with the delivery
thereof to Trustee, a copy of each opinion of counsel required pursuant to the
Bond Documents, in each case addressed to Bank.
9.7 Defaults of Others. Use its best efforts to cure or cause to be
cured all defaults of Trustee or Issuer under the Bond Documents, if
economically practical and/or required in order to avoid an acceleration of the
Series B Bonds,
9.8 Tax Appeals. Bring, maintain and diligently prosecute any and
all actions, appeals and proceedings which are available to Company in order to
challenge, reverse or set aside a "Determination of Taxability," as that term is
defined in the Bond Documents.
9.9 Surplus Construction Funds. Subsections 3.3(h)(i) and (iv) of
the Series B Loan Agreement notwithstanding, use moneys in the Construction Fund
(as defined in the Series B
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Loan Agreement) remaining after the Project is complete and fully paid for
solely for the purposes described in subsections 3.3(h)(ii) and (iii) of the
Series B Loan Agreement.
9.10 Notice re Disbursement Conditions. Promptly notify Bank if
Company learns that any Condition to Disbursement was not on the date of this
Agreement, or has since ceased to be, fulfilled.
9.11 Compliance with Requirements. Comply with all conditions,
covenants, restrictions, easements, reservations, rights, rights of way and all
applicable laws, ordinances, regulations, use permits, occupancy permits,
building permits and other requirements, including without limitation those
affecting or relating to the Property and the construction of any improvements
thereon.
10. Negative Covenants. For so long as any obligation of Company in
connection with this Agreement or any of the other Loan Documents remains
outstanding, Company shall not, unless Bank otherwise consents in writing:
10.1 Transfers of Property or Obligations. Assign or delegate any
obligations in connection with the Series B Bonds, the Series B Letter of
Credit, this Agreement or any of the other Documents, or sell, assign, convey,
lease as a whole or otherwise transfer the Property or any interest therein
without the express prior written consent of Bank, which consent may be granted
or withheld by Bank in its sole discretion. In connection with the restrictions
contained in this Section 10.1, Company acknowledges that Bank has entered into
the transaction contemplated by this Agreement in reliance upon the financial
strength, creditworthiness, reputation and management expertise of Company and
would not have entered into such transaction but for such reliance.
11. Events of Default and Remedies Upon Default.
11.1 Events of Default. The occurrence of any one or more of the
following, whatever the reason therefor, shall constitute an Event of Default
hereunder:
(a) Company shall fail to pay any amount of principal or
interest owing under this Agreement or any of the other Loan Documents,
together with interest thereon from the due date until payment at the rate
provided in Article 13, within ten (10) days after the date on which
payment is due; or
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(b) Either Company or Guarantor shall fail to perform or
observe any term, covenant or agreement contained in any of the Loan
Documents on its part to be performed or observed the breach of which can
be cured by the payment of money, within ten (10) days after notice; or
(c) Either Company or Guarantor shall fail to perform or
observe any term, covenant or agreement contained in any of the Loan
Documents on its part to be performed or observed, other than terms,
covenants or agreements the breach of which can be cured by the payment of
money, within thirty (30) days after notice (provided, however, that if
cure cannot reasonably be effected within such thirty (30) day period
there shall be no Event of Default under this Section 11.1(c) so
long as Company or Guarantor commences cure within such thirty (30) day
period and thereafter diligently prosecutes such cure to completion); or
(d) Trustee declares any default in connection with the Series
B Bonds or the Bond Documents or there is a Determination of Taxability
(as defined in the Trust Indenture); or
(e) Company shall fail to perform or observe any term,
covenant or agreement contained in any of the Bond Documents on its part
to be performed or observed; or
(f) Any representation or warranty in any of the Documents or
in any certificate, agreement, instrument or other document made or
delivered pursuant to or in connection with any of the Documents proves to
have been incorrect in any material respect when made; or
(g) The dissolution or liquidation of Company or Guarantor or
failure by Company or Guarantor promptly to lift any execution,
garnishment or attachment of such consequence as will materially impair
its ability to make any payments under the Loan Documents, or the entry of
an order for relief by a court of competent jurisdiction in any proceeding
for the liquidation or reorganization of Company or Guarantor, or the
filing of a petition by or against Company or Guarantor under the
provisions of any bankruptcy act or under any similar act which may be
hereafter enacted, or an assignment by Company or Guarantor for the
benefit of its creditors, or the entry by Company or Guarantor into an
agreement of composition
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with its creditors or the appointment of a receiver, trustee, custodian,
liquidator or similar officer for Company or Guarantor; or
(h) The occurrence of any Event of Default under the Series
A Reimbursement Agreement.
11.2 Remedies Upon Default. Upon the occurrence of any Event of
Default, Bank may, at its option, do any or all of the following:
(a) Declare the principal of all amounts owing under this
Agreement and the other Loan Documents (including all obligations secured
by the Security Documents) and all other indebtedness of Company to Bank,
together with interest thereon, to be forthwith due and payable,
regardless of any other specified maturity or due date, without notice of
default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind or
character, and without the necessity of prior recourse to any security;
(b) Implement any remedies available to Bank under or in
connection with the Bond Documents;
(c) Terminate its consent to the disbursement or release of
the remaining Series B Bond Proceeds;
(d) If the Event of Default may be cured by Bank by taking
actions or making payments of money, Bank shall have the right (but not
the obligation) to take such actions (including without limitation the
retention of attorneys and the commencement or prosecution of actions on
its own behalf or on behalf of Company), or make such payments and pay for
the costs of such actions (including without limitation attorneys' fees
and court costs) from its own funds; provided, however, that the taking of
such actions at Bank's expense or the making of such payments by Bank out
of Bank's own funds shall not be deemed to cure such Event of Default, and
the same shall not be so cured unless and until Company shall have
reimbursed Bank for any costs incurred in taking such actions and for any
such payments, together with interest at the rate provided for in Article
13, from the date of incurring such costs or making such payments until
the date of reimbursement. If Bank advances its own funds for such
purposes, such funds shall be secured by the Security Documents,
notwithstanding that such
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advances may cause the total amount advanced hereunder to exceed the
amount committed to be advanced pursuant to this Agreement, and Company
shall immediately upon demand reimburse Bank therefor with interest at the
rate provided for in Article 13, from the date of such advance until the
date of reimbursement; and
(e) Exercise any and all of its rights under the Documents or
as provided by law including, without limitation, making demand upon
Guarantor and collecting upon the Guaranty.
11.3 Cumulative Remedies; No Waiver. All remedies of Bank provided
for herein are cumulative and shall be in addition to any and all other rights
and remedies provided in the Series B Letter of Credit, the Bond Documents or
any of the other Loan Documents, or provided by law from time to time; provided,
however, that Bank hereby agrees to waive, during the tendency of any proceeding
by or against Company or Guarantor in bankruptcy or reorganization, its right to
set off any and all deposits (general or special) at any time held and other
indebtedness at any time owing by Bank to or for the credit or the account of
Company or Guarantor, as applicable, against any and all of the obligations of
Company or Guarantor, as applicable, now or hereafter existing under this
Agreement or in any of the other Loan Documents. The exercise of any right or
remedy by Bank hereunder shall not in any way constitute a cure or waiver of
default hereunder or under the Series B Letter of Credit, the Bond Documents or
any of the other Loan Documents, nor invalidate any notice of default or any act
done pursuant to any such notice, nor prejudice Bank in the exercise of any
rights hereunder or under the Series B Letter of Credit, the Bond Documents or
any of the other Loan Documents, unless in the exercise of said rights, Bank and
Trustee realize all amounts owed to either under the Series B Letter of Credit,
this Agreement, the Bond Documents and any of the other Loan Documents and all
Events of Default are cured. No waiver by Bank of any default or breach by
Company or Guarantor hereunder shall be implied from any omission by Bank to
take action on account of such default if such default persists or is repeated,
and no express waiver shall affect any default other than the default expressly
made the subject of the waiver. Any such express waiver shall be operative only
for the time and to the extent therein stated. Any waiver of any covenant, term
or condition contained herein shall not be construed as a waiver of any
subsequent breach of the same covenant, term or condition. The consent or
approval by Bank to or of any act by Company or Guarantor requiring further
consent or
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approval shall not be deemed to waive or render unnecessary consent or approval
to or of any subsequent act.
12. Miscellaneous.
12.1 Actions. Bank shall have the right to commence, appear in, and
defend any action or proceeding purporting to affect the rights or duties of
Bank, Company or Guarantor hereunder or under the Guaranty or the payment of any
funds hereunder or under the Guaranty, and in connection therewith Bank may pay
necessary expenses, employ counsel and pay reasonable attorneys' fees. Company
agrees to pay to Bank, on demand, all costs and expenses incurred by Bank in
connection therewith, including without limitation reasonable attorneys' fees,
together with interest from the date of expenditure at the rate provided in
Article 13, In the event that either Bank or Company shall bring an action
against the other to interpret or enforce the terms or provisions of the Series
B Letter of Credit, this Agreement or any of the other Loan Documents, the
prevailing party in such action shall be entitled to recover its attorneys' fees
and costs (whether or not taxable) as awarded by a court of competent
jurisdiction, whether or not such action is prosecuted to final judgment.
12.2 Nonliability of Bank. Company acknowledges and agrees that:
(a) the relationship between Company and Bank is, and shall at
all times remain, solely that of borrower and lender, and Bank neither
undertakes nor assumes any responsibility or duty to Company to select,
review, inspect, supervise, pass judgment upon or inform Company of any
matter in connection with the Project, including without limitation
matters relating to the adequacy or legal sufficiency of any of the
documents, agreements or arrangements pertaining to the Series B Bonds,
the Bond Documents or the rights or obligations of any Person in
connection therewith; and Company shall rely entirely upon its own
judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment or information supplied to Company by
Bank in connection with such matters is for the protection of Bank only
and neither Company nor any other Person is entitled to rely thereon;
(b) Bank owes no duty of care to protect Company against
negligent, faulty, inadequate or defective building or construction;
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(c) Bank shall not be responsible or liable to Company for any
loss, damage, liability or claim of any kind relating to injury or death
to persons or damage to property in connection with the negligent, faulty,
inadequate or defective building or construction or use or operation of
any of the Properties, and Company hereby indemnifies and holds Bank
harmless from any such loss, damage, liability or claim.
(d) Bank shall not be responsible or liable to Company for use
which may be made of the Series B Letter of Credit or for any acts or
omissions of Trustee and any beneficiary or transferee in connection
therewith;
(e) Bank shall not be responsible or liable to Company for the
validity, sufficiency or genuineness of documents (except as to Bank's
signatures thereon), or of any indorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged (except to the extent Bank
is grossly negligent in accepting or relying upon such documents);
(f) Bank shall not be responsible or liable to Company as a
result of any circumstances in any way related to the making or failure to
make payment under the Series B Letter of Credit, other than as a result
of the gross negligence or willful misconduct of Bank.
12.3 No Representations by Bank. By accepting or approving anything
required to be observed, performed or fulfilled, or to be given to Bank pursuant
to this Agreement or any of the other Documents, including any certificate,
statement of profit and loss or other financial statement, survey, appraisal or
insurance policy, Bank shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or representation to anyone with respect
thereto by Bank. Bank may accept documents in connection with the Series B
Letter of Credit or any of the other Documents which appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
12.4 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Company and Bank in connection with the Series B Letter of Credit. It is made
for
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the sole protection of Company, Bank, and Bank's successors and assigns. No
other Person shall have any rights of any nature hereunder or by reason hereof,
except to the extent that Trustee is expressly granted rights hereunder.
12.5 Indemnity by Company. Company hereby indemnifies and holds
harmless Bank and its directors, officers, agents and employees (collectively
the "indemnitees") from and against:
(a) any and all claims, demands, actions or causes of action
that are asserted against any indemnitee by any Person if the claim,
demand, action or cause of action directly or indirectly relates to a
claim, demand, action or cause of action that the Person has or asserts
against Company in connection with the issuance of the Series B Letter of
Credit, the Series B Bonds, any of the Bond Documents, or the transaction
to which such documents pertain;
(b) any and all claims, demands, actions or causes of action
that are asserted against any indemnitee by any Person and arise from or
in connection with (i) any statement or omission, actual or alleged, in
the Bond Documents, or (ii) any breach or default, actual or alleged, of
the representations, warranties, covenants, conditions or agreements
contained in this Agreement or any of the other Loan Documents or in any
of the Bond Documents; and
(c) any and all liabilities, losses, costs or expenses
(including court costs and attorneys' fees) that any indemnitee suffers or
incurs as a result of the assertion of any claim, demand, action or cause
of action specified in Section 12.5(a) or Section 12.5(b), above.
The indemnity contained in this Section 12.5 shall not extend to any claims,
demands, actions, causes of action, liabilities, losses, costs or expenses which
result solely from the gross negligence or willful misconduct of Bank.
12.6 Commissions. Company hereby indemnifies and holds Bank harmless
from any responsibility, cost and/or liability, including any attorneys' fees
incurred, in connection with any claim by any Person for the payment of any
commission, charge or brokerage fee in connection with the Series B Bonds or any
of the other transactions contemplated in connection with this Agreement.
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12.7 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of Company, Bank and their respective successors and assigns,
subject to the provisions of Section 10.1, above.
12.8 Execution in Counterparts. This Agreement and any other Loan
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or any other Loan Document, as the case may be, taken together will be deemed to
be but one and the same instrument. The execution of this Agreement or any other
Loan Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
12.9 Prior Agreements; Amendments; Consents. This Agreement,
together with the other Documents, contains the entire agreement between Bank
and Company with respect to the Series B Letter of Credit, and all prior
negotiations, understandings and agreements with respect to the Series B Letter
of Credit are superseded by this Agreement and the other Documents. No
amendment, modification, supplement, termination or waiver of any provision of
this Agreement or any of the other Loan Documents, and no consent to any
departure by Company therefrom, may in any event be effective unless in writing
signed by Bank, and then only in the specific instance and for the specific
purpose given.
12.10 Survival of Representations and Warranties. All
representations and warranties of Company contained herein or in any other Loan
Document (qualified in each case by the facts and circumstances surrounding each
such document at the time such document was executed) will survive the delivery
of the Series B Letter of Credit and are material and have been and will be
relied upon by Bank, notwithstanding any investigation made by Bank or on behalf
of Bank. For the purpose of the foregoing, all statements contained in any
certificate, agreement or other writing delivered by or on behalf of Company or
Guarantor pursuant hereto or pursuant to any other Loan Document or in
connection with the transactions contemplated hereby or thereby shall be deemed
to be representations and warranties of Company contained herein or in the other
Loan Documents, as the case may be.
12.11 Notices. All notices, requests, demands, directions and other
communications provided for in this
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Agreement and under any of the other Loan Documents must be in writing and must
be mailed, telegraphed, delivered or sent by Telex or cable to the appropriate
party at its address as follows:
If to Company:
Radiation Sterilizers, Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
General Counsel
Radiation Sterilizers, Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Bank:
▇▇▇▇▇ Fargo Bank, N.A.
Real Estate Industries Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
with a copy to:
Sheppard, Mullin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Addresses for purposes of notice may be changed from time to time by written
notice sent to the other parties in accordance with this Section 12.11. Any
notice, request, demand, direction given by telegram, Telex or cable must be
confirmed within 48 hours by letter mailed or delivered to the appropriate party
at its respective address. If any notice, request, demand, direction or other
communication is given by mail it will be effective upon the earlier of (a) 96
hours after deposit in the U.S. Mail, certified or registered mail, return
receipt requested postage prepaid or (b) actual receipt, as indicated by the
return receipt; if given by telegraph or cable, when delivered to the telegraph
company with
-28-
33
charges prepaid; if given by Telex, when sent; or if given by personal delivery,
when delivered.
12.12 Further Assurances. Company shall, at its expense and without
expense to Bank, do, execute and deliver such further acts and documents as Bank
from time to time requires for the purpose of assuring and confirming unto Bank
the rights hereby created or intended now or hereafter so to be, or for carrying
out the intention or facilitating the performance of the terms of any Loan
Document.
12.13 Governing Law. All of the Loan Documents shall be governed by,
and construed and enforced in accordance with, the laws of the State of Texas.
12.14 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable or invalid shall be inoperative,
unenforceable or invalid without affecting the remaining provisions, and to this
end the provisions of all Loan Documents are declared to be severable.
12.15 Inconsistency With Loan Documents. In the event that any of
the provisions of the Loan Documents are inconsistent with the provisions of
this Agreement, the provisions of this Agreement shall prevail.
12.16 Headings. Article and section headings in this Agreement are
included for convenience of reference only and are not part of this Agreement
for any other purpose.
12.17 Time of the Essence. Time is of the essence.
12.18 No FDIC Insurance. Company and Bank hereby agree that the
transaction contemplated in this Agreement is not intended to and shall not
constitute a "deposit" within the meaning of 12 U.S.C. Section 1813(l)(1).
Neither Company nor Bank nor any successor or assign of either shall make any
claim against the Federal Deposit Insurance Corporation in the event of any
failure by Bank, in whole or in part, to fulfill its obligations with respect to
any draw or draws under the Series B Letter of Credit.
13. Interest and Payment Terms.
13.1 Manner of Payment. All amounts to be paid to Bank under this
Agreement and the other Loan Documents shall be paid to Bank at its banking
offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in coin or
cur-
-29-
34
rency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts. All such payments shall be
in immediately available funds, and shall be timely only if received by Bank
before 1:00 p.m., San Francisco, California, time, on the date that such payment
is required to be made. Any payment received by Bank after such time shall be
considered for all purposes (including the calculation of interest, to the
extent permitted by law) as having been made on Bank's next following business
day. As used in this Article 13, the term "business day" shall mean a day other
than a Saturday, Sunday or a day upon which banking institutions in the State of
California are authorized or required by law to close. If the date for any
payment to Bank falls on a day that is not a business day, then for all purposes
of such payment the same shall be deemed to have fallen on the next following
business day, and such extension of time shall in such case be included in the
computation of payments of interest.
13.2 Interest. Interest shall accrue on all amounts owing to Bank
under this Agreement and the other Loan Documents and remaining from time to
time unpaid, from the date so paid by Bank or otherwise becoming owing under the
Loan Documents until payment thereof, at a varying rate per annum (based on an
actual day basis using a 360 day year) which is two percent (2%) above the
floating commercial loan rate announced by Bank from time to time as its prime
rate, provided that the interest rate shall not exceed the maximum lawful
non-usurious rate of interest under applicable law. Adjustments in the varying
interest rate shall be made on the same day as each change in the announced
prime rate.
13.3 Waivers. Company and any and each co-maker, guarantor,
accommodation party, endorser or other person liable for the payment or
collection of any and all amounts owed to Bank under the loan Documents
expressly waive demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, bringing of suit and diligence
in taking any action to collect such amounts and in the handling of any
collateral at any time existing as security in connection therewith, and shall
be directly and primarily liable for the payment of all sums owing and to be
owing, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any such
-30-
35
amount or in connection with any lien or security interest at any time had or
existing as security for any such amount.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
"Company":
RADIATION STERILIZERS, INCORPORATED,
a California corporation
By /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Its President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇.
-----------------------------------
Its Secretary
"Bank":
▇▇▇▇▇ FARGO BANK, N.A.,
a national banking association
By /s/ [SIG]
-----------------------------------
Assistant Vice President
Printed Name and Title
-31-
36
EXHIBIT "A"
SERIES B LETTER OF CREDIT
Irrevocable Letter of
Credit No. ___________
Dated as of __________, 19__
Bank One Trust Company, N.A.
as Trustee and Paying Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Ladies and Gentlemen:
▇▇▇▇▇ Fargo Bank, N.A. ("Bank") hereby establishes in your favor for the
account of Radiation Sterilizers, Incorporated, a California corporation
("Company"), its Irrevocable Letter of Credit No. ________ ("Series B Letter of
Credit") in a maximum amount of up to $2,505,377.00 (as more fully described
below) effective immediately and expiring at Bank's counters by 4:00 PM,
San Francisco time, on December 15, 1988, unless extended by Bank (the
"Expiration Date").
This Series B Letter of Credit is being issued in connection with that
certain Trust Indenture (the "Trust Indenture") dated as of November 1, 1985,
between you, as Trustee, and the Trinity River Industrial Development Authority,
a nonprofit industrial development corporation (the "Issuer"), pursuant to which
the Issuer has agreed to authorize and issue and sell Trinity River Industrial
Development Authority Variable Rate Demand Industrial Development Revenue Bonds
(Radiation Sterilizers, Incorporated Project), Series 1985B, (the "Series B
Bonds") in the aggregate principal amount of $2,450,000.00, the payment of which
Series B Bonds is secured by, among other things, this Series B Letter of
Credit.
As used in this Series B Letter of Credit, the term "business day" shall
mean a day other than (i) a Saturday, (ii) a Sunday, (iii) a day upon which
banking institutions in the State of California, the State of Texas or the City
of New York are authorized or required by law to close, or (iv) a day on which
the New York Stock Exchange, Inc. is closed.
You, as Trustee and Paying Agent, pursuant to the Trust Indenture, are
hereby irrevocably authorized to draw
-1-
37
on Bank, for the account of Company, in accordance with the terms and conditions
hereof and subject to reductions in amounts as hereinafter set forth, an
aggregate amount not exceeding $2,505,377.00 (Two Million Five Hundred Five
Thousand Three Hundred Seventy-Seven Dollars) (the "Stated Amount"), of which
(A) an aggregate amount not exceeding $2,450,000.00 may be drawn upon with
respect to "A Drawings" and "C Drawings", as defined below, to cover principal
of the Series B Bonds, and (B) an aggregate amount not exceeding $55,377.00 may
be drawn upon with respect to "B Drawings," "D Drawings" and A Drawings", as
defined below, to cover 55 days of interest (calculated at an assumed interest
rate of 15% per annum) on the Series B Bonds.
Funds under this Series B Letter of Credit are only available to you
against your draft(s) drawn on ▇▇▇▇▇ Fargo Bank, N.A., stating on their face:
"Drawn under ▇▇▇▇▇ Fargo Bank, N.A. Irrevocable Letter of Credit No. _________
and upon your presenting to ▇▇▇▇▇ Fargo Bank, N.A., one or more of the following
written certificates:
(A) Your written certificate signed by you in the form of Exhibit A
attached hereto appropriately completed (an "A Drawing");
(B) Your written certificate signed by you in the form of Exhibit B
attached hereto appropriately completed (a "B Drawing");
(C) Your written certificate signed by you in the form of Exhibit C
attached hereto appropriately completed (a "C Drawing");
(D) Your written certificate signed by you in the form of Exhibit D
attached hereto appropriately completed (a "D Drawing");
(E) Your written certificate signed by you in the form of Exhibit E
attached hereto appropriately completed (an E Drawing").
All documents presented to Bank in connection with any demand for
payment hereunder, as well as all notices and other communications to Bank with
respect to this Series B Letter of Credit, shall be in writing and addressed and
presented to Bank at its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Letter of Credit Operations - AU 1175, or any other
place in the United States which may be designated by Bank by written notice
delivered
-2-
38
to you. Such documents, notices and other communications shall be personally
delivered to Bank, or may be sent to Bank by tested Telex in which case draft
requirements are waived.
If Bank receives any of your drafts drawn hereunder at such office,
all in strict conformity with the terms and conditions of this Series B Letter
of Credit, on or prior to the Expiration Date, Bank will honor the same and make
payment hereunder. Payments to you under this Series B Letter of Credit shall be
made by wire transfer of immediately available funds to Bank One, Columbus,
N.A., Columbus, Ohio, for your Account No. ▇▇-▇▇▇▇-▇, Attn: Corporate Trust
Administration, or into such other account as you designate to Bank in writing
from time to time. If a proper draft and certificate are presented by 11:30
A.M., New York time, payment will be made that same business day; otherwise
payment will be made the next business day.
Upon a Drawing hereunder, the total amount of this Series B Letter
of Credit shall be reduced as follows:
(A) With respect to any A or B Drawing, the total amount of this
Series B Letter of Credit shall be reduced by the amount of such Drawing;
(B) With respect to any C or D Drawing, the total amount of this
Series B Letter of Credit shall be reduced by the amount of such Drawing,
provided that Bank shall reinstate the amount of such drawing if such
amount is paid to Bank by Company prior to default under that certain
Series B Reimbursement Agreement dated as of November 1, 1985 (the "Series
B Reimbursement Agreement"), by and between Company and Bank. In addition,
in the event Bank transfers any Series B Drawing Bonds (as defined in the
Series B Reimbursement Agreement) in its possession following any C
Drawing to any person or entity (other than to you, as Trustee, for
cancellation), an amount equal to the amount of such C Drawing (and any
corresponding D Drawing) which was applied to pay principal and interest
on the Series B Bonds being so transferred shall automatically be
reinstated hereunder. Bank will send notice of any such reinstatement to
you, as Trustee, in the form attached hereto as Exhibit F; and
(C) With respect to any E Drawing, the total amount of this Series B
Letter of Credit shall be reduced by the amount of such Drawing and such
amount shall then be immediately and automatically reinstated, and Bank
-3-
39
will send notice of such reinstatement to you, as Trustee, in the form
attached hereto as Exhibit F.
Only you, as Trustee and Paying Agent, may make a drawing under this
Series B Letter of Credit. Upon the payment to you, as Trustee and Paying Agent,
of the amount specified in a draft drawn hereunder, Bank will be fully
discharged on its obligation under this Series B Letter of Credit with respect
to such draft and shall not thereafter be obligated to make any further payments
under this Series B Letter of Credit in respect to such draft to you or any
other person who may have made to you or makes to you a demand for payment of
principal of, purchase price of or interest on any Series B Bond. By paying to
you an amount demanded in such draft(s) we make no representation as to the
correctness of the amount demanded in such draft(s).
Upon the earliest of (i) 15 days after the making by you of an A
Drawing (and any associated B Drawing) hereunder (other than an A Drawing for
partial redemption); (ii) Bank's receipt of a certificate signed by your officer
and an officer of Company stating (a) that no Series B Bonds are Outstanding
within the meaning of the Trust Indenture and (b) that such officers are duly
authorized to sign such certificate on behalf of you and Company; (iii) Bank's
receipt of a certificate signed by your officer and an officer of Company
stating (a) that an Alternate Letter of Credit (as defined in the Trust
Indenture) has been accepted by you as Trustee under the Trust Indenture and (b)
that such officers are duly authorized to sign such certificate on behalf of you
and on behalf of Company; (iv) Bank's receipt of a certificate signed by your
officer and an officer of Company stating (a) that no less than 15 days prior to
the date of such certificate, the interest rate on the Series B Bonds was
converted to a Fixed Interest Rate (as defined in the Trust Indenture), (b) that
you have not received written notification from both Company and Bank stating
that this Series B Letter of Credit is not to be cancelled, and (c) that such
officers are duly authorized to sign such certificate on behalf of you and on
behalf of Company; or (v) the Expiration Date, this Series B Letter of Credit
shall automatically terminate and be delivered to Bank for cancellation.
This Series B Letter of Credit shall be governed by (i) the Uniform
Customs and Practice for Documentary Credit as fixed by the Congress of the
International Chamber of Commerce from time to time (the "Uniform Customs") and
(ii) the laws of the State of California, including the Uniform Commercial Code
as in effect in the State of California, In the
-4-
40
event of a conflict between the Uniform Customs and the laws of the State of
California, the Uniform Customs shall prevail. Communications with respect to
this Series B Letter of Credit shall be in writing and shall be addressed to
Bank at its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Letter of Credit Operations - AU 1175, specifically referring to the
number of this Series B Letter of Credit.
This Series B Letter of Credit is transferable in its entirety to
any transferee who has succeeded you as Trustee under the Trust Indenture. Each
letter of credit issued upon any such transfer may be successively transferred.
Transfer of the available balance under this Series B Letter of Credit to such
transferee shall be effected by the presentation to Bank of this Series B Letter
of Credit accompanied by a certificate substantially in the form of Exhibit G
attached hereto. Following such presentation, and as soon as this original
Series B Letter of Credit is returned to the Bank and the Bank has been paid its
customary transfer fee, Bank shall forthwith transfer the same to your
transferee or, if so requested by your transferee, issue an irrevocable letter
of credit to your transferee with provisions therein consistent with those of
this Series B Letter of Credit.
This Series B Letter of Credit sets forth in full Bank's
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 Series B Bonds and the
Trust Indenture), except only the certificates) and the draft(s) referred to
herein; and any such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement except for such certificate(s)
and such draft(s).
In the event of any failure by Bank, in whole or in part, to fulfill
its obligations with respect to any draw or draws under this Series B Letter of
Credit, no person or entity shall have the right to make any claim against the
Federal Deposit Insurance Corporation in connection with such failure. By its
signature below, Bank One Trust Company, N.A., a national banking association,
as Trustee and Paying Agent, acknowledges receipt of this Series B Letter of
Credit
-5-
41
and agrees that the terms of this paragraph shall bind itself and its successors
and assigns.
Very truly yours,
▇▇▇▇▇ FARGO BANK, N.A.
By ____________________
Its ________________
ACCEPTED AND AGREED TO
THIS _______ DAY OF NOVEMBER, 1985:
BANK ONE TRUST COMPANY, N.A.
By _____________________
Its _________________
-6-
42
EXHIBIT A
---------
CERTIFICATE FOR "A DRAWING"
---------------------------
(PRINCIPAL UPON ACCELERATION, PARTIAL REDEMPTION,
FULL REDEMPTION, OR MATURITY)
The undersigned, a duly authorized officer of Bank One Trust
Company, N.A., a national banking association, as Trustee ("Trustee") and as
Paying Agent ("Paying Agent") hereby certifies to ▇▇▇▇▇ Fargo Bank, N.A.
("Bank"), with reference to ▇▇▇▇▇ Fargo Bank, N.A. Irrevocable Letter of Credit
No. ____________ (the "Series B Letter of Credit," the capitalized terms defined
therein and not defined herein being used as therein defined) issued by Bank in
favor of Trustee and Paying Agent, that:
(1) The undersigned is Trustee and Paying Agent under the Trust
Indenture for the holders of the Series B Bonds.
(2) The undersigned is making a drawing under the Series B Letter of
Credit with respect to the payment of principal upon acceleration, partial
redemption, full redemption or maturity of the Series B Bonds.
(3) The amount of the draft accompanying this certificate, together
with the aggregate of all prior A Drawings and C Drawings under the Series B
Letter of Credit for the payment of the principal amount or purchase price of
the Series B Bonds (other than C Drawings for which Bank has delivered notices
of reinstatement), does not exceed $2,450,000.00.
(4) The amount of the draft accompanying this certificate, together
with the aggregate of all prior Drawings under the Series B Letter of Credit
(other than Drawings for which the Series B Letter of Credit has been
reinstated), does not exceed the Stated Amount, and was computed in accordance
with the terms and conditions of the Series B Bonds and the Trust Indenture.
(5) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply it directly to the payment when due of the
appropriate amount of principal owing on account of the Series B Bonds pursuant
to the Trust Indenture, (b) no portion of it shall be applied
A-1
43
by the undersigned for any other purpose, and (c) no portion of it shall be
commingled with other funds held by the undersigned or the Depository (as
defined in the Series B Reimbursement Agreement). This drawing is made in
accordance with the provisions of the Trust Indenture.
IN WITNESS WHEREOF, Trustee and Paying Agent has executed and
delivered this certificate as of the ______________ day of ________, 19__.
BANK ONE TRUST COMPANY, N.A.
a national banking association,
as Trustee and Paying Agent
By.______________________
Title ________________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
---------
CERTIFICATE FOR "B DRAWING"
---------------------------
(ACCRUED INTEREST UPON ACCELERATION, PARTIAL REDEMPTION,
FULL REDEMPTION, OR MATURITY)
The undersigned, a duly authorized officer of Bank One Trust
Company, N.A., a national banking association, as Trustee ("Trustee") and as
Paying Agent ("Paying Agent") hereby certifies to ▇▇▇▇▇ Fargo Bank, N.A.,
("Bank"), with reference to ▇▇▇▇▇ Fargo Bank, N.A., Irrevocable Letter of Credit
No. ________ (the "Series B Letter of Credit," the capitalized terms defined
therein and not defined herein being used as therein defined) issued by Bank in
favor of Trustee and Paying Agent, that:
(1) The undersigned is Trustee and Paying Agent under the Trust
Indenture for the holders of the Series B Bonds.
(2) The undersigned is making a drawing under the Series B Letter of
Credit with respect to the payment of accrued and unpaid interest upon
acceleration, partial redemption, full redemption, or maturity of the Series B
Bonds.
(3) Interest has accrued on the Series B Bonds and is due and
payable and the amount of the draft accompanying this certificate, together with
the aggregate of all prior B Drawings, D Drawings, and E Drawings under the
Series B Letter of Credit for payment of accrued interest on the Series B Bonds,
other than D Drawings for which the Series B Letter of Credit has been
reinstated, does not exceed $55,377.00.
(4) The amount of the draft accompanying this certificate, together
with the aggregate of all prior Drawings under the Series B Letter of Credit
(other than Drawings for which the Series B Letter of Credit has been
reinstated), does not exceed the Stated Amount, and was computed in accordance
with the terms and conditions of the Series B Bonds and the Trust Indenture.
(5) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply it directly to the payment when due of the
appropriate amount of interest owing on account of the Series B Bonds pursuant
to the Trust Indenture, (b) no portion of it shall be applied by the undersigned
for any other purpose, and (c) no portion of
B-1
45
it shall be commingled with other funds held by the undersigned or the
Depository (as defined in the Series B Reimbursement Agreement). This drawing is
made in accordance with the provisions of the Trust Indenture.
IN WITNESS WHEREOF, Trustee and Paying Agent has executed and
delivered this certificate as of the ______ day of ____________________, 19__.
BANK ONE TRUST COMPANY, N.A.,
a national banking association
as Trustee and Paying Agent
By _________________________
Title ___________________
B-2
46
EXHIBIT C
---------
CERTIFICATE FOR "C DRAWING"
---------------------------
(PRINCIPAL OF SERIES B BONDS DELIVERED
TO REMARKETING AGENT OR PAYING AGENT)
The undersigned, a duly authorized officer of Bank One Trust
Company, N.A., a national banking association, as Trustee ("Trustee"), and as
Paying Agent ("Paying Agent") hereby certifies to ▇▇▇▇▇ Fargo Bank, N.A.,
("Bank"), with reference to ▇▇▇▇▇ Fargo Bank, N.A. Irrevocable Letter of Credit
No. _________ (the "Series B Letter of Credit," the capitalized terms defined
therein and not defined herein being used as therein defined) issued by Bank in
favor of Trustee and Paying Agent, that:
(1) The undersigned is Trustee and Paying Agent under the Trust
Indenture for the holders of the Series B Bonds.
(2) Paying Agent is making a drawing under the Series B Letter of
Credit (a) at the written request (or oral request to be immediately followed in
writing) of the Remarketing Agent (as defined in the Series B Reimbursement
Agreement) to pay, pursuant to Section 401(g) of the Trust Indenture, the
principal amount of the purchase price of those repurchased Series B Bonds which
the Remarketing Agent has been unable to remarket, the principal amount of which
is equal to the amount of the draft accompanying this certificate, and which
Series B Bonds (i) are now held by either the Remarketing Agent pursuant to its
representation to Paying Agent, which representation Paying Agent has not
independently verified, or are held by Paying Agent and (ii) shall be
re-registered in the name of Bank, or its agent, as pledgee, and delivered to
Bank, or such agent, within 5 business days following receipt by Paying Agent of
the amount demanded hereby; or (b) to pay, pursuant to Section 401(h) of the
Trust Indenture, the portion of the purchase price of the Series B Bonds
delivered to Paying Agent for purchase equal to the principal amount of such
Series B Bonds, and Paying Agent shall deliver to Bank, or its agent, as
pledgee, within 5 business days following receipt by Paying Agent of the amount
demanded hereby, a principal amount of Series B Bonds equal to the amount of the
draft accompanying this certificate.
(3) The amount of the draft accompanying this certificate, together
with the aggregate of all prior pay-
C-1
47
ments made pursuant to A Drawings and C Drawings under the Series B Letter of
Credit (other than reinstated amounts) does not exceed $2,450,000.00.
(4) Upon receipt of the amount demanded hereby, (a) Paying Agent
will either (i) deliver it to the Remarketing Agent or use the same only for the
purpose of purchase of the Series B Bonds referenced in Paragraph 2(a) hereof,
or (ii) use it for the purpose of purchase of the Series B Bonds referred to in
Paragraph 2(b) hereof; (b) no portion of it shall be applied by Paying Agent for
any other purpose; and (c) no portion of it shall be commingled with other funds
held by Paying Agent. This drawing is made in accordance with the provisions of
the Trust Indenture.
IN WITNESS WHEREOF, Paying Agent has executed and delivered this
certificate as of the ______________ day of __________, 19__,
BANK ONE TRUST COMPANY, N.A.,
a national banking association
as Paying Agent
By _____________________
Title _______________
C-2
48
EXHIBIT D
---------
CERTIFICATE FOR "D DRAWING"
---------------------------
(ACCRUED INTEREST ON SERIES B BONDS DELIVERED
TO REMARKETING AGENT OR PAYING AGENT)
The undersigned, a duly authorized officer of Bank One Trust
Company, N.A., a national banking association, as Trustee ("Trustee") and as
Paying Agent ("Paying Agent") hereby certifies to ▇▇▇▇▇ Fargo Bank, N.A.
("Bank"), with reference to ▇▇▇▇▇ Fargo Bank, N.A., Irrevocable Letter of Credit
No. __________ (the "Series B Letter of Credit," the capitalized terms defined
therein and not defined herein being used as therein defined) issued by Bank in
favor of Trustee and Paying Agent, that:
(1) The undersigned is Trustee and Paying Agent under the Trust
Indenture for the holders of the Series B Bonds.
(2) Paying Agent is making a drawing under the Series B Letter of
Credit (a) at the written request (or oral request to be immediately followed in
writing) of the Remarketing Agent (as defined in the Series B Reimbursement
Agreement), to pay, pursuant to Section 401(g) of the Trust Indenture, the
amount of accrued interest on those Series B Bonds that the Remarketing Agent
has been unable to remarket, which amount of accrued interest is equal to the
amount of the draft accompanying this certificate; or (b) to pay, pursuant to
Section 401(h) of the Trust Indenture, the portion of the purchase price of the
Series B Bonds delivered to Paying Agent for purchase equal to the amount of
accrued and unpaid interest on such Series B Bonds to the date of purchase
thereof, which amount of accrued interest is equal to the amount of the draft
accompanying this certificate.
(3) The amount of the draft accompanying this certificate, together
with the aggregate of all prior B, D and E Drawings under the Series B Letter of
Credit (other than reinstated amounts), does not exceed $55,377.00.
(4) The amount of the draft accompanying this certificate was
computed in accordance with the terms and conditions of the Series B Bonds and
the Trust Indenture.
(5) Upon receipt by Paying Agent of the amount demanded hereby, (a)
Paying Agent will either (i) deliver it
D-1
49
to the Remarketing Agent or use the same only for the purpose of reimbursement
or payment of accrued interest referenced in Paragraph 2(a) hereof, or (ii) use
it for the purpose of reimbursement or payment of accrued interest referenced in
Paragraph 2(b) hereof; (b) no portion of it shall be applied by Paying Agent for
any other purpose; and (c) no portion of it shall be commingled with other funds
held by Paying Agent. This drawing is made in accordance with the provisions of
the Trust Indenture.
(6) To the extent that the payment demanded hereby is to be made in
accordance with the Series B Letter of Credit on a date between a Record Date
and the corresponding Interest Payment Date (as those terms are defined in the
Trust Indenture), Paying Agent now holds and shall, within 5 business days
following receipt by Paying Agent of the payment demanded hereby, deliver to
Bank, due-▇▇▇▇ checks that, in the aggregate, are in the amount and in the form
required by the Trust Indenture.
IN WITNESS WHEREOF, Paying Agent has executed and delivered this
certificate as of the ________ day of _________, 19__.
BANK ONE TRUST COMPANY, N.A.,
a national banking association
as Paying Agent
By ________________________
Title __________________
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EXHIBIT E
---------
CERTIFICATE FOR A DRAWING"
--------------------------
(ACCRUED INTEREST UPON INTEREST PAYMENT DATE)
The undersigned, a duly authorized officer of Bank One Trust
Company, N.A., a national banking association, as Trustee ("Trustee") and as
Paying Agent ("Paying Agent") hereby certifies to ▇▇▇▇▇ Fargo Bank, N.A.
("Bank"), with reference to ▇▇▇▇▇ Fargo Bank, N.A., Irrevocable Letter of Credit
No. _____________ (the "Series B Letter of Credit," the capitalized terms
defined therein and not defined herein being used as therein defined) issued by
Bank in favor of Trustee and Paying Agent, that:
(1) The undersigned is Trustee and Paying Agent under the Trust
Indenture for the holders of the Series B Bonds.
(2) The undersigned is making a drawing under the Series B Letter of
Credit with respect to the payment of accrued and unpaid interest upon an
Interest Payment Date (as defined in the Trust Indenture) during the continuance
of an Event of Default under the Series B Reimbursement Agreement for which Bank
has not yet exercised its right to demand that the undersigned accelerate the
Series B Bonds.
(3) Interest has accrued on the Series B Bonds and is due and
payable, and the amount of the draft accompanying this certificate, together
with the aggregate of all prior B Drawings, D Drawings and E Drawings under the
Series B Letter of Credit for the payment of accrued interest on the Series B
Bonds, other than D Drawings for which the Series B Letter of Credit has been
reinstated, does not exceed $55,377,00,
(4) The amount of the draft accompanying this certificate, together
with the aggregate of all prior Drawings under the Series B Letter of Credit
(other than Drawings for which the Series B Letter of Credit has been
reinstated), does not exceed the Stated Amount, and was computed in accordance
with the terms and conditions of the Series B Bonds and the Trust Indenture.
(5) Upon receipt by the undersigned of the amount demanded hereby,
(a) the undersigned will apply it directly to the payment when due of the
appropriate amount of interest
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owing on account of the Series B Bonds pursuant to the Trust Indenture, (b) no
portion of it shall be applied by the undersigned for any other purpose, and (c)
no portion of it shall be commingled with other funds held by the undersigned.
This drawing is made in accordance with the provisions of the Trust Indenture,
IN WITNESS WHEREOF, Trustee and Paying Agent has executed and
delivered this certificate as of the _______ day of __________ 19__.
BANK ONE TRUST COMPANY, N.A.,
a national banking association
as Trustee and Paying Agent
By ______________________
Title ________________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
---------
NOTICE OF AUTOMATIC REINSTATEMENT OF AMOUNTS AVAILABLE
UNDER IRREVOCABLE LETTER OF CREDIT NO. __________
DATED AS OF ______________, 19__
The undersigned, a duly authorized officer of ▇▇▇▇▇ Fargo Bank, N.A.
("Bank"), hereby certifies to the Trustee under the Trust Indenture dated as of
November 1, 1985, between the Trinity River Industrial Development Authority and
Bank One Trust Company, N.A., a national banking association ("Trustee"), with
reference to Irrevocable Letter of Credit No. ______________ (the "Series B
Letter of Credit") issued by Bank in favor of Trustee, that the amount drawn by
Trustee pursuant to its _____________ Drawing dated as of ________________ has
been reinstated as of ____________ and is available for draw subject to the
terms of the Series B Letter of Credit.
In witness whereof, Bank has executed and delivered this Certificate
this ________ day of ________, 19__
▇▇▇▇▇ FARGO BANK, N.A.
By: _____________________
Its _________________
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EXHIBIT G
---------
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Series B Letter of Credit Operations
AU 1175
Re: ▇▇▇▇▇ Fargo Bank, N.A.,
Irrevocable Letter of Credit
----------------------------
No. ______________
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit (the "Series B Letter of Credit") in its entirety.
By this transfer, all rights of the undersigned beneficiary in and
to the Series B Letter of Credit are transferred to the transferee and the
transferee shall have sole rights as beneficiary thereof, including sole rights
relating to any amendments, whether increases or extensions or other amendments
and whether now existing or hereafter made. All amendments are to be advised
direct to the transferee without necessity of any consent of or notice to the
undersigned beneficiary.
The original Series B Letter of Credit is returned herewith, along
with your customary transfer fee, and we ask
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you to endorse the transfer on the reverse thereof and forward it direct to the
transferee with your customary notice of transfer.
Very truly yours,
----------------------------------
Signature of Beneficiary
SIGNATURE AUTHENTICATED
-----------------------
(Bank)
-----------------------
(Authorized Signature)
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EXHIBIT "B"
CONDITIONS TO DISBURSEMENT
--------------------------
1. Conditions to All Disbursements. Bank shall not be obligated to approve
any Disbursement of Series B Bond Proceeds under Section 3.3 of the Series B
Loan Agreement unless each of the following conditions are fulfilled:
1.1 Completion of Project. The acquisition and construction of the
Project shall have been completed in accordance with the plans and
specifications therefor.
1.2 Permits, Etc. All required governmental inspections, reports and
certifications shall have been made, and all occupancy, use and other permits
required by all applicable governmental regulatory authorities and public
utility companies shall have been issued, for the full operation of the Project.
EXHIBIT "B"
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56
EXHIBIT "C"
LEGAL DESCRIPTION
-----------------
All that certain real property, together with all appurtenances
thereto and all improvements now or hereafter located thereon, situated in the
City of Fort Worth, County of Tarrant, State of Texas, and described as follows:
▇▇▇ ▇▇-▇-▇-▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, an Addition to the City
of Fort Worth, Tarrant County, Texas, according to plan recorded in Volume
388-183 Page 44, Deed Records of Tarrant County, Texas.
EXHIBIT "C"
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57
EXHIBIT "E"
DESCRIPTION OF FACILITIES
-------------------------
EXHIBIT "E"
Page 1 of 1
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EXHIBIT "F"
RESERVE ACCOUNTS PLEDGE AGREEMENT
---------------------------------
This Reserve Accounts Pledge Agreement (the "Agreement"), dated as
of _____________,19__, is executed by RADIATION STERILIZERS, INCORPORATED, a
California corporation ("Debtor"), for the equal and ratable benefit of ▇▇▇▇▇
FARGO BANK, N.A., a national banking association ("Bank"), and BANK ONE TRUST
COMPANY, N.A., a national banking association ("Trustee") (Bank and Trustee are
collectively referred to herein as "Secured Party"), pursuant to that certain
Series A Reimbursement Agreement Agreement (the "Series A Reimbursement
Agreement") and that certain Series B Reimbursement (the "Series B Reimbursement
Agreement") (collectively, the "Reimbursement Agreements"), each of which was
executed as of November 1, 1985 between Bank and Debtor. Capitalized terms used
and not otherwise defined herein shall have the meanings set forth for them in
the Reimbursement Agreements.
1. Grant Of Security Interest. For valuable consideration, the receipt and
sufficiency of are hereby acknowledged, Debtor hereby assigns, transfers and
pledges to Secured Party all of Debtor's right, title and interest in those
certain Reserve Accounts established with and designated by Bank pursuant to
Section 6.6 of each of the Reimbursement Agreements, all amounts deposited in
the Reserve Accounts and all proceeds of the investment or disposition of the
amounts deposited therein, together with all other money or property heretofore
delivered or which shall hereafter be delivered to or come into the possession,
custody or control of Secured Party (whether described herein or not) in any
manner or for any purpose whatsoever during the existence of this Agreement
(collectively, the "Collateral"), and whether held in a general or special
account or deposit for safekeeping or otherwise, together with whatever is
receivable or received when the Collateral or proceeds are sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary, including without limitation all rights to payment, including
returned premiums, with respect to any insurance relating to the Collateral, and
all rights to payment with respect to any cause of action affecting or relating
to the Collateral, and including any stock rights, rights to subscribe, stock
splits, liquidating dividends, cash dividends, dividends paid in stock, new
securities, or other property which Debtor is or may hereafter be entitled to
receive on account of such securities or other property, including without
limitation stock received by Debtor due to stock splits or dividends paid in
stock (the
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EXHIBIT "F
59
"Proceeds"), and in the event that Debtor receives any such property, Debtor
will immediately deliver it to Secured Party to be held by Secured Party in the
same manner as the property originally pledged hereunder.
2. Obligations Secured. The obligations secured hereby are (a) the payment
and performance of all indebtedness and other obligations of Debtor to Bank
under the Loan Documents (including the "Loan Documents" as defined in the
Series A Reimbursement Agreement and the "Loan Documents" as defined in the
Series B Reimbursement Agreement), (b) the payment by Debtor to Trustee of the
principal of, and all accrued interest on, the Series A Bonds and the Series B
Bonds, (c) all obligations of Debtor and rights of Secured Party under this
Agreement, and (d) all present and future obligations of Debtor to Bank of other
kinds (collectively, the "Obligations"). The word "obligation" is used herein in
its most comprehensive sense and includes all present and future indebtedness,
liabilities, undertakings, covenants and conditions, whether voluntary or
involuntary, absolute or contingent, liquidated or unliquidated, determined or
undetermined, earned or unearned, and due or not due.
3. Termination. This Agreement will terminate upon the performance in full
of all Obligations of Debtor to Secured Party.
4. Warranties Of Debtor. Debtor represents and warrants: (1) with respect
to the Collateral and Proceeds generally: (a) that Debtor is the owner or has
control thereof; (b) that Debtor has the right to pledge the Collateral and
Proceeds; and (c) that the same is genuine, free from liens, adverse claims,
setoffs, default, prepayment, defenses and conditions precedent of any kind or
character; and (2) specifically with respect to Collateral and Proceeds
consisting of investment securities, instruments, chattel paper, documents,
contracts, insurance policies or any like property: (a) that all persons
appearing to be obligated thereon have authority and capacity to contract and
are bound as they appear to be; and (b) that the same comply with applicable
laws concerning the form, content and manner of preparation and execution.
5. Covenants Of Debtor.
A. Debtor Agrees in General: (a) to pay or perform all Obligations
secured hereby when due; (b) to pay all reasonable expenses, including
attorneys' fees, incurred by Secured Party in the perfection, preservation,
realization,
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60
enforcement and exercise of its rights, powers and remedies hereunder; (c) to
permit Secured Party to exercise its powers; (d) to execute and deliver such
documents as Secured Party deems necessary to create, perfect and continue the
security interests contemplated hereby; (e) not to permit any lien on the
Collateral, except in favor to Secured Party; and (f) not to change its chief
place of business or the place where Debtor keeps its records concerning the
Collateral and Proceeds without first giving Secured Party written notice of the
address to which Debtor is moving same.
B. Debtor Agrees with Regard to Collateral and Proceeds: Unless
Secured Party elects to exercise its right and power to do so, Debtor agrees:
(a) not to commingle Proceeds with other property; (b) not to sell, hypothecate
or otherwise dispose of any Collateral or Proceeds subject hereto at any time,
except to Secured Party; and (c) to provide any service and do any other acts or
things necessary to keep Collateral and Proceeds free and clear of all defenses,
rights of offset and counterclaim.
6. Powers Of Lender. Debtor appoints Bank, Trustee, or either of them, its
true attorneys in fact to perform any of the following powers, which are coupled
with an interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by Secured Party's officers and employees, or any of
them, at any time: (a) to perform any Obligation of Debtor hereunder in Debtor's
name or otherwise; (b) to liquidate the Reserve Accounts or any time deposit
pledged to Secured Party hereunder prior to its maturity date and to apply the
proceeds thereof to payment of any Obligations, notwithstanding the fact that
such liquidation may give rise to Federal penalties for early withdrawal of
funds from a time deposit; (c) to notify any person obligated on any security,
instrument or other document subject to this Agreement of Secured Party's rights
hereunder; (d) to collect by legal proceedings or otherwise all dividends,
interest, principal or other sums now or hereafter payable upon or on account of
the Collateral; (e) to enter into any extension, reorganization, deposit, merger
or consolidation agreement, or any other agreement relating to or affecting the
Collateral, and in connection therewith to deposit or surrender control of the
Collateral, accept other property in exchange for the Collateral, and do and
perform such acts and things as Secured Party may deem proper, and any money or
property received in exchange for the Collateral may be applied to the
indebtedness or held by Secured Party under this Agreement; (f) to make any
compromise or settlement Secured Party deems desirable or
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61
proper in respect of the Collateral; (g) to insure, process and preserve the
Collateral; and (h) to perform any obligation of Debtor under this Agreement. To
effect the purposes of this Agreement, or otherwise upon instructions of Debtor,
or any of them, Secured Party may cause the Collateral to be transferred to
Secured Party's name or the name of Secured Party's nominee. Only in the event
of a default hereunder may Secured Party, without obligation do so, exercise as
to the Collateral any other rights, powers and remedies of an owner thereof.
7. Cash Collateral Account. Any money received by Secured Party in respect
of the Collateral may, at Secured Party's option, be retained in a
non-interest-bearing cash collateral account and the same shall, for all
purposes, be deemed Collateral hereunder,
8. Lender's Care And Delivery Or Collateral. Secured Party's obligation
with respect to Collateral and Proceeds in its possession shall be strictly
limited to the duty to exercise reasonable care in the custody and preservation
of such Collateral and Proceeds. Secured Party shall have no duty to take any
steps necessary to preserve the rights of Debtor against prior parties, or to
initiate any action to protect against the possibility of decline in the market
value of the Collateral or Proceeds. Secured Party shall not be obligated to
take any action with respect to the Collateral or Proceeds requested by Debtor
unless such request is made in writing, and Secured Party determines that the
requested actions would not jeopardize the value of the Collateral and Proceeds
as security for the indebtedness. Secured Party may at any time deliver the
Collateral and Proceeds, or any part thereof, to Debtor and the receipt thereof
by Debtor shall be a complete and full acquaintance for the Collateral and
Proceeds so delivered, and Secured Party shall thereafter be discharged from any
liability or responsibility therefore.
9. Payment Of Taxes, Charges, Liens And Assessments. Debtor agrees to pay
prior to delinquency all taxes, charges, liens and assessments against the
Collateral and Proceeds, and upon the failure of Debtor to do so, Secured Party
at its option may pay any of them and shall be the sole judge of the legality or
validity thereof and the amount necessary to discharge the same. Any such
payments made by Secured Party shall be obligations of Debtor to Secured Party,
due and payable immediately without demand, together with interest at a rate
determined in accordance with the provisions of Section 13, below, and shall be
secured by the Collateral
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and Proceeds, subject to all of the terms and conditions of this Agreement.
10. Events Of Default. The occurrence of any of the following shall be an
"Event of Default" under this Agreement: (a) the occurrence of any "Event of
Default" under either of the Reimbursement Agreements, (b) Debtor's failure to
pay any amount owing under the Series A Loan Agreement or the Series B Loan
Agreement which relates to the principal amount of, and accrued interest on, the
Series A Bonds and/or the Series B Bond, (c) failure by Debtor to timely and
fully perform any Obligation of Debtor contained herein; and (d) breach of any
warranty contained herein.
11. Remedies. Upon the occurrence of any event of default, Secured Party
shall have the right to declare immediately due and payable all or any
indebtedness secured hereby and to terminate any commitments to make loans or
otherwise extend credit to Debtor, without presentment, demand or notice of
dishonor, all of which are expressly waived by Debtor. Secured Party shall have
all other rights, privileges, powers and remedies granted to a secured party
upon default under the California Commercial Code or otherwise provided by law,
including without limitation the right to contact any persons obligated to
Debtor on Collateral and to instruct such persons to deliver all Proceeds
directly to Secured Party; the rights, privileges, powers and remedies of
Secured Party shall be cumulative; no single or partial exercise of any of them
shall preclude the further or other exercise thereof or any abandonment or
discontinuance of steps to enforce such right, power, privilege or remedy. Any
waiver, permit, consent or approval of any kind by Secured Party of any default
hereunder or any such waiver of any provisions or conditions hereof, must be in
writing and shall be effective only to the extent set forth in writing. While
Debtor is in default: (1) Secured Party may, at any time and at Secured Party's
sole option, liquidate the Reserve Accounts and any time deposits pledged to
Secured Party hereunder, whether or not said time deposits have matured and
notwithstanding the fact that such liquidation may give rise to Federal
penalties for early withdrawal of funds from a time deposit; (2) Secured Party
may appropriate the Collateral and apply all Proceeds toward repayment of the
indebtedness in such order of application as Secured Party may from time to time
elect or, at Secured Party's sole option, place any Proceeds in the cash
collateral account; and (3) Debtor will assemble and deliver all Collateral and
Proceeds, and books and records pertaining thereto, to-Secured Party at a
reasonably convenient place designated by Secured Party. It is agreed that
public or private sales, for cash or on credit,
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to a wholesaler or retailer or investor, or user of collateral of the types
subject to this Agreement, or public auction, are all commercially reasonable
since differences in the sales prices generally realized in the different kinds
of sales are ordinarily offset by the differences in the costs and credit risks
of such sales. Any proceeds of any disposition of the Collateral following the
occurrence of an Event of Default, or any part thereof, may be applied by
Secured Party to the payment of expenses incurred by Secured Party in connection
with the foregoing, including reasonable attorneys' fees, and the balance of
such proceeds may be applied by Secured Party toward the payment of the
indebtedness and in such order of application as Secured Party may from time to
time elect.
12. Disposition Of Collateral And Proceeds. Upon the transfer of all or
any part of the Obligations, Secured Party may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all liability and
responsibility with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred, Secured Party shall
retain all rights and powers hereby given.
13. Costs, Expenses And Attorneys' Fees. All payments, advances, charges,
costs and expenses, including reasonable attorneys' fees, made or incurred by
Secured Party in exercising any right, power or remedy conferred by this
Agreement or in the enforcement thereof shall be paid to Secured Party by Debtor
immediately and without demand, together with interest at the rate per annum
specified in the promissory note described in Section 2, above.
14. Statute Of Limitations. Until all indebtedness shall have been paid in
full, the power of sale and all other rights, powers and remedies granted to
Secured Party hereunder shall continue to exist and may be exercised by Secured
Party at any time and from time to time irrespective of the fact that the
indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all indebtedness
secured hereunder.
15. Miscellaneous. Presentment, protest, notice of protest, notice of
dishonor and notice of nonpayment are waived with respect to any Proceeds to
which Secured Party
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is entitled hereunder; any right to direct the application of payments or
security for Obligations of Debtor hereunder and any right to require
proceedings against others or to require exhaustion of security are waived; and
consent to extensions, forbearances or alterations of the terms of
indebtednesses, the release or substitution of security, and the release of
guarantors is given with respect to Proceeds subject to this Agreement; provided
however, that in each instance Secured Party believes in good faith that the
action in question is commercially reasonable in that it does not unreasonably
increase the risk of nonpayment of the indebtedness to which the action applies.
Debtor hereby waives any benefit of or any right to participate in any
Collateral or other security whatsoever now or hereafter held by Secured Party.
16. Governing Law. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of Debtor and shall be
governed by and construed in accordance with the laws of the State of
California.
17. Severability Of Provision. If any provision of this Agreement shall be
held to be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
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65
invalidating the remainder of such provision or any remaining provisions of this
Agreement.
18. Bank and Trustee. Until the first to occur of (a) the expiration of
the Series A Letter of Credit or (b) default by Bank in the performance of any
of its obligations under the Series A Letter of Credit, the following shall
apply:
(1) Trustee shall not have the right to exercise or
implement any right or remedy provided to Secured Party under this
Agreement without first obtaining the express prior written consent
of Bank to the same; and
(2) In the event of any disagreement between Trustee and
Bank as to the exercise or implementation of any right or remedy
provided to Secured Party under this Agreement, the decision of Bank
shall control as between Trustee and Bank.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
"Debtor":
RADIATION STERILIZERS, INCORPORATED,
a California corporation
By _________________________
Its _____________________
By _________________________
Its _____________________
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