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EXHIBIT 10-31
EIGHTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CONSOLIDATED
REPLACEMENT CREDIT FACILITY AND SECURITY AGREEMENT
THIS EIGHTH AMENDMENT TO THIRD AMENDED AND RESTATED
CONSOLIDATED REPLACEMENT CREDIT FACILITY AND SECURITY AGREEMENT (this
"Agreement") dated as of August 2, 2001, is entered into by and between
INTERNATIONAL TOTAL SERVICES, INC., an Ohio corporation ("Borrower"), and BANK
ONE, N.A., successor in interest by merger to BANK ONE, CLEVELAND, N.A., a
national banking association, as agent bank for itself and for THE PROVIDENT
BANK, an Ohio banking company (collectively, the "Lender").
WITNESSETH
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WHEREAS, the Borrower and the Lender are parties to that
certain Third Amended and Restated Consolidated Replacement Credit Facility and
Security Agreement dated as of March 31, 1997, as amended by that certain First
Amendment dated as of October 10, 1997, that certain Second Amendment dated as
of December 16, 1998, that certain Third Amendment dated as of September 14,
1999, that certain Fourth Amendment dated as of April 1, 2000, that certain
Fifth Amendment dated as of February 2001, that certain Sixth Agreement dated as
of April 1, 2001; and that certain Seventh Agreement dated as of July 2, 2001
(the "Loan Agreement"; all terms defined in the Loan Agreement being used herein
shall have the same meanings), pursuant to which the Lender has agreed to make a
$26,500,000 Revolving Loan to the Borrower until August 1, 2001, evidenced by a
Fifth Amended and Restated Replacement Promissory Note dated July 1, 2001 and
payable to the Lender, such Note being payable on August 1, 2001; and
WHEREAS, the Borrower and the Lender agreed to amend the Loan
Agreement to extend the maturity date of the Revolving Loan to August 16, 2001.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and the Lender agree as follows:
AGREEMENT
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Section 1. Amendment of Loan Agreement.
---------------------------
Except as expressly modified herein, all terms, conditions,
definitions and provisions of the Third Amended and Restated Consolidated
Replacement Credit Facility and Security Agreement and the First, Second, Third,
Fourth, Fifth, Sixth and Seventh Amendments thereto, are in full force and
effect.
A. Subsections 2.3(A) and (B) of the Loan Agreement is,
effective on the Effective Date, amended and restated as follows:
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EXHIBIT 10-31
(A) REVOLVING LOAN. The reference to August
1, 2001, shall be deleted and replaced with August
16, 2001.
(B) PAYMENT. The reference to August 1,
2001, shall be deleted and replaced with August 16,
2001.
Section 2. Effective Date of the Agreement.
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The effective date of this Agreement ("Effective Date") shall
be August 2, 2001 but Lender shall have no duty to fund until the date on which
all conditions precedent have been satisfied, or waived by the Lender in
writing.
Section 3. Conditions Precedent.
---------------------
Borrower hereby acknowledges and agrees that the effectiveness
of this Agreement is conditioned upon the receipt by the Lender, on or prior to
the date hereof, in form and substance satisfactory to the Lender and its
counsel, of the following:
A. A certificate, dated as of the date hereof, signed by the
Secretary of Borrower certifying as follows:
(i) Borrower's Articles of Incorporation and Code of
Regulations have not been modified or amended since June 17,
1997 (or certifying that true, correct and complete copies of
all such modifications and amendments are attached thereto);
and
(ii) Copies of resolutions of Borrower's Board of
Directors are attached thereto with respect to the approval of
this Agreement and of the matters contemplated hereby and
authorizing the execution, delivery and performance of this
Agreement and each other document, instrument, agreement or
note to be delivered pursuant hereto; and
(iii) As to the incumbency and signatures of the
officers of Borrower signing this Agreement and each other
document, instrument, agreement or note to be delivered
pursuant hereto.
B. An Acknowledgment, Consent and Agreement in the form of
Exhibit C attached hereto, with all blanks completed, duly executed and
delivered by the Guarantors as identified in Schedule 1 attached hereto to
Lender.
C. Such other documents, instruments, agreements and notes as
the Lender may reasonably request to implement this Agreement and the
transactions contemplated hereby and by the Loan Agreement.
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EXHIBIT 10-31
Section 4. Facility Fee.
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Contemporaneously with the execution of this Agreement,
Borrower shall pay to Lender a Facility Fee of $10,000 plus reasonable fees and
expenses, including but not limited to, attorney's fees, auditor's fees, etc.
Section 5. References.
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On and after the Effective Date of this Agreement, each
reference in the Loan Agreement to "this Agreement", "hereunder", "hereof", or
words of like import referring to the Loan Agreement, and in the Note to the
"Loan Agreement", "thereof", or words of like import referring to the Loan
Agreement, shall mean and refer to the Loan Agreement and shall be deemed to
refer to the form of Borrowing Base Certificate attached hereto as EXHIBIT A.
References to EXHIBIT C-1 in the definition of "Revolving Note" in the Loan
Agreement shall be deemed to refer to the Note, a copy of which is attached
hereto as EXHIBIT B. The Loan Agreement, as previously amended and as amended by
this Agreement, and all Credit Documents are and shall continue to be in full
force and effect and are hereby and in all respects ratified and confirmed.
References to the Loan Agreement in the Note shall be deemed to include all
amendments to the Loan Agreement whether specified in the Note or not.
Section 6. Applicable Law.
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This Agreement shall be deemed to be a contract under the laws
of the State of Ohio, and for all purposes shall be construed in accordance with
the laws of the State of Ohio.
Section 7. Release.
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The Borrower hereby represents and warrants to the Lender, and
agrees with the Lender, that it has no claim or offset against, or defense or
counterclaim to, any Obligation or Indebtedness to the Lender under the Loan
Agreement or other Credit Documents and, in consideration of this Agreement, the
Borrower hereby releases and discharges the Lender and its shareholders,
directors, officers, employees, attorneys, affiliates and subsidiaries from any
and all claims, demands, liability and causes of action whatsoever, now known or
unknown, existing on the Effective Date and arising prior to the date hereof and
arising out of or in any way related to Obligations, the Loan Agreement, this
Agreement, or any security interest related thereto or the administration of the
Revolving Loan or any other Indebtedness of Borrower, the Guarantors, or any
Affiliate to the Lender.
Section 8. Counterparts.
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This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and
any one of the parties hereto may execute this Agreement by signing any such
counterpart.
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EXHIBIT 10-31
IN WITNESS WHEREOF, the Borrower and the Lender have caused
this Agreement to be executed by their duly authorized officers as of the date
and year first above written.
BANK ONE, N.A. INTERNATIONAL TOTAL SERVICES, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: First Vice President, Managed Assets Title: Executive Vice President
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EXHIBIT 10-31
SCHEDULE 1
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List of Guarantors
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Domestic
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Crown Technical Systems, Inc. (Ohio)
T.I.S. Incorporated (Texas)
Certified Investigative Services, Inc. (Texas)
I.T.S. of New York, Inc. (New York)
Selective Detective Services, Inc. (New Jersey)
Foreign
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International Total Services, Ltd. (United Kingdom)
International Transport Security, s.r.o. (Czech Republic)
International Transport Services, Ltd. (Thailand)
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EXHIBIT 10-31
EXHIBIT A
Borrowing Base Certificate
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[SEE ATTACHED]
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BORROWING BASE CERTIFICATE
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At the close of business on _/__/__ Report # 479
-----------------------------------
Date _/__
Collateral Status Computation
----------------- Of Collateral
-------------
1. Balance (Domestic A/R) $_
2. Less: Ineligible Collateral (Domestic) $_
--
3. Eligible Collateral $_
4. Advance % rate 85%
5. Net Availability $_
6. Plus Sofa (not to exceed $3,000,000) $_
Total Availability
7. Available - Not To Exceed $26,500,000 $_
8. Less Reserves (Letters to Credit) # $_
9. NET $_
==
Loan Status
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10. Previous Loan Balance $_
11. Less: Collections $_
12. Add: Request for Funds $_
Wire Transfers $_
Other (interest, fees, etc.) $_
--
13. New Loan Balance $_
--
14. Excess Available (Line 9-13) $_
==
Borrower represents and warrants to Bank One, N.A. that all of the information
presented above and accompanying this Certificate is true, complete and correct
in every aspect as of the date hereof and has been computed in compliance with
the terms of the Third Amended and Restated Consolidated Replacement Credit
Facility and Security Agreement dated March 31, 1997, as amended through the
date hereof, between Bank One, N.A., and International Total Services, Inc. (the
"Credit Agreement"). In the event of any conflict between the terms of this
Certificate and the Credit Agreement, the terms of the Credit Agreement shall
control. Borrower further represents and warrants that as of the date hereof,
after giving effect to any loan or advance requested by Borrower
contemporaneously herewith, except as may have been otherwise expressly
disclosed in writing by Borrower to and received by Bank One N.A., that; (i)
there has been no material adverse change in Borrower's financial position,
operations or assets since the date of the latest financial statements of
Borrower delivered to Bank One, N.A.; (ii) to the extent that any loan or
advance requested contemporaneously herewith, or that is otherwise based upon
this certificate, will be used, in whole or in part, for the payment of wages,
Borrower has paid or deposited or is able to pay and intends to and shall make
timely payment or deposit of all taxes required to be deducted and withheld from
said wages; and (iii) all said wages incurred in the production of any inventory
included in this Certificate have been
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paid or will be timely paid. Borrower acknowledges that Bank One is entitled to
rely on this Certificate in making loans and advances to Borrower.
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Borrower Name: Authorized Signature: Title:
International Total Services, Inc. EVP
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Prepared By: Cash Mgmt. Dir.
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#Includes the reserve for Delta G-Max accounts and the FAA Fine Accrual.
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EXHIBIT 10-31
EXHIBIT B
Form of Fifth Amended and Restated Replacement Promissory Note (Revolving Loan)
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[SEE ATTACHED]
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FIFTH AMENDED AND RESTATED
REPLACEMENT PROMISSORY NOTE
(Revolving Loan)
$26,500,000 Cleveland, Ohio
July 2, 2001
FOR VALUE RECEIVED, INTERNATIONAL TOTAL SERVICES, INC., a
corporation organized under the laws of the State of Ohio (hereinafter referred
to as the "Company"), promises to pay to the order of BANK ONE, N.A., successor
by merger to BANK ONE, CLEVELAND, N.A. (hereinafter referred to as the "Bank"),
the principal amount of Twenty-Six Million Five Hundred Thousand Dollars
($26,500,000), or such lesser amount as shall have from time to time been
borrowed by the Company, on August 1, 2001, or sooner as hereinafter provided,
with interest on the unpaid balance of said principal amount from the date
hereof at the Contract Rate, as defined in the Agreement hereinafter referred
to, which definition is hereby accepted by the Company, as the same may from
time to time be established.
The Company agrees to pay interest on the unpaid principal
amount outstanding of this Note in monthly installments, commencing on the 1st
day of August, 2001 and continuing on the 1st day of each month thereafter. The
unpaid balance of the principal amount outstanding and all accrued interest
thereon shall be due and payable on August 1, 2001.
Payments of both principal of and interest on this Note shall
be made in lawful money of the United States of America, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or at such other place as the Bank or any subsequent
holder hereof shall have designated to the Company in writing. Interest payable
on this Note shall be computed on a three hundred sixty (360) day per year basis
counting the actual number of days elapsed.
This Note, in part, evidences, but does not extinguish or
satisfy, a pre-existing indebtedness of the Company to the Bank heretofore
evidenced by a $25,000,000 Third Amended and Restated Replacement Promissory
Note dated April 1, 2000, a $25,000,000 Second Amended and Restated Replacement
Promissory Note dated September 14, 1999, a $30,000,000 Amended and Restated
Replacement Promissory Note (Revolving Loan) dated October 10, 1997 to the Bank,
which note was issued in substitution for that certain $10,500,000 Replacement
Promissory Note (Revolving Loan) dated March 31, 1997 to the Bank and is issued
pursuant to and is entitled to the benefits of a Third Amended and Restated
Consolidated Replacement Credit Facility and Security Agreement dated as of
March 31, 1997, as amended by that certain First Amendment to Third Amended and
Restated Consolidated Replacement Credit Facility and Security Agreement dated
as of October 10, 1997, that certain Second Amendment to Third Amended and
Restated Consolidated Replacement Credit Facility and Security Agreement dated
as of December 16, 1998 and that certain Third Amendment to Third Amended and
Restated Consolidated Replacement Credit Facility and Security Agreement dated
September 14, 1999, that certain Fourth Amendment to Third Amended and Restated
Consolidated Replacement Credit Facility and Security Agreement dated April 1,
2000, that
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EXHIBIT 10-31
certain Fifth Amendment to Third Amended and Restated Consolidated Replacement
Credit Facility and Security Agreement dated February 2001, and that certain
Sixth Amendment to Third Amended and Restated Consolidated Replacement Credit
Facility and Security Agreement dated of April 1, 2001, each by and between the
Company and the Bank (collectively, the "Agreement"), to which Agreement
reference is hereby made for a statement of the rights and obligations of the
Bank and the duties and obligations of the Company in relation thereto; but
neither this reference to the Agreement nor any provisions thereof shall affect
or impair the absolute and unconditional obligation of the Company to pay the
principal of or interest on this Note when due.
The Company may prepay all or any portion of this Note at any
time or times and in any amount only as provided in the Agreement.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing beyond any applicable grace period, the principal
of this Note may be declared immediately due and payable at the option of the
Bank.
No delay on the part of any holder hereof in exercising any
power or rights hereunder shall operate as a waiver of any power or rights. Any
demand or notice hereunder to the Company may be made by delivering the same to
the address last known to the Bank, or by mailing the same to such address, with
the same effect as if delivered to the Company in person.
The Company hereby authorizes any attorney-at-law to appear in
any court of record in the State of Ohio, or in any other state or territory of
the United States, at any time or times after the above sum becomes due, and
waive the issuance and service of process and confess judgment against it, in
favor of any holder of this Note, for the amount then appearing due, together
with the costs of suit, and thereupon to release all errors and waive all rights
of appeal and stay of execution. The foregoing warrant of attorney shall survive
any judgment, it being understood that should any judgment be vacated for any
reason, the foregoing warrant of attorney nevertheless may thereafter be used
for obtaining an additional judgment or judgments.
"WARNING. BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED
TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT OR ANY OTHER CAUSE."
This Note is executed at Cleveland, Cuyahoga County, Ohio.
INTERNATIONAL TOTAL SERVICES, INC.
By:
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Name:
Its: Chief Executive Officer
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EXHIBIT C
Acknowledgment, Consent and Agreement
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[SEE ATTACHED]
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ACKNOWLEDGMENT, CONSENT AND AGREEMENT
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The undersigned each hereby acknowledges receipt of a copy of
the Eighth Amendment to Third Amended and Restated Consolidated Replacement
Credit Facility and Security Agreement dated as of August 2, 2001, by and
between International Total Services, Inc. ("Borrower") and Bank One, N.A.,
successor by merger to Bank One, Cleveland, N.A. ("Bank One") and by executing
this Acknowledgment, Consent and Agreement the undersigned each hereby agrees to
remain bound by the terms and conditions of its respective Amended and Restated
Replacement Guaranty Agreement, Guaranty Agreement, Amended and Restated
Replacement Guarantor Security Agreement and Guarantor Security Agreement, as
applicable, each dated as of August 11, 1995, executed and delivered to Bank One
in connection with the Second Amended and Restated Replacement Credit Agreement
dated as of August 11, 1995, as subsequently amended, and each other document
hereafter executed in connection herewith or therewith by the undersigned.
Dated: August 2, 2001 CROWN TECHNICAL SYSTEMS, INC.
By:
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Name:
Title: Chairman of the Board
T.I.S. INCORPORATED
By:
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Name:
Title: Chief Executive Officer
CERTIFIED INVESTIGATIVE
SERVICES, INC.
By:
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Name:
Title: Chief Executive Officer
I.T.S. OF NEW YORK, INC.
By:
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Name:
Title: Chief Executive Officer
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EXHIBIT 10-31
SELECTIVE DETECTIVE SERVICES, INC.
By:
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Name:
Title: Chief Executive Officer
INTERNATIONAL TOTAL SERVICES, LTD.
By:
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Name:
Title: Chief Executive Officer
INTERNATIONAL TRANSPORT
SECURITY, s.r.o.
By:
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Name:
Title: Chief Executive Officer
INTERNATIONAL TRANSPORT
SERVICES, LTD.
By:
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Name:
Title: Chief Executive Officer
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