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EXHIBIT 10.28
SEVENTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CONSOLIDATED
REPLACEMENT CREDIT FACILITY AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO THIRD AMENDED AND RESTATED CONSOLIDATED
REPLACEMENT CREDIT FACILITY AND SECURITY AGREEMENT (this "Agreement") dated as
of July 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
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 and that certain Sixth Agreement dated as of April 1,
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 $25,000,000 Revolving Loan to the Borrower until July 1, 2001, evidenced
by a Fourth Amended and Restated Replacement Promissory Note dated April 1, 2001
and payable to the Lender, such Note being payable on July 1, 2001; and
WHEREAS, the Borrower and the Lender agreed to amend the Loan
Agreement (i) to extend the maturity date of the Revolving Loan to August 1,
2001; (ii) to modify the interest rate being paid to the Lender; and (iii) to
increase the maximum authorized borrowing cap to $26,500,000.
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
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 and Sixth Amendments thereto, are in full force and effect.
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1. The definitions of "Contract Rate" and "Notes" as set forth in
Section 1 of the Loan Agreement are, effective on the Effective Date (defined
below), hereby amended and restated to read as follows:
(A) Contract Rate - A fluctuating rate equals to three percent
(3.00%) above the Base Rate;
(B) Notes - The Fifth Amended and Restated Replacement
Promissory Note (Revolving Loan) and any other promissory note or
other instrument evidencing Borrower's obligation to repay any
Obligations.
B. Subsections 2.3(A) and (B) of the Loan Agreement is, effective on
the Effective Date, amended and restated as follows:
(A) Revolving Loan. The reference to July 1, 2001, shall
be deleted and replaced with August 1, 2001.
(B) Payment. The reference to July 1, 2001, shall be
deleted and replaced with August 1, 2001.
C. Subsection 2.3(C) of the Loan Agreement is, effective on the
Effective Date, amended and restated to read in its entirety as follows:
(C) The form of Borrower's Certificate attached to the
Loan Agreement as Exhibit A is, effective on the Effective
Date, hereby deleted, and the form of Borrower's Base
Certificate attached to this Agreement as Exhibit A is hereby
substituted therefor.
Section 2. Effective Date of the Agreement.
The effective date of this Agreement ("Effective Date") shall be
July 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:
2. 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
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(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.
3. The Fifth Amended and Restated Replacement Promissory Note
(Revolving Loan) in the form of Exhibit B attached hereto, with all blanks
completed, duly executed and delivered by Borrower to Lender.
4. 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.
D. 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.
Section 4. Facility Fee.
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.
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.
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Section 6. Applicable Law.
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.
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.
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.
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/ T. Xxxxxx Xxxxx By: /s/ Xxxxxxx Xxxx
------------------- ----------------
Name: T. Xxxxxx Xxxxx Name: Xxxxxxx Xxxx
Title: First Vice President, Managed Assets Title: Executive Vice President
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SCHEDULE 1
List of Guarantors
Domestic
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
International Total Services, Ltd. (United Kingdom)
International Transport Security, s.r.o. (Czech Republic)
International Transport Services, Ltd. (Thailand)
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EXHIBIT A
Borrowing Base Certificate
[SEE ATTACHED]
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BORROWING BASE CERTIFICATE
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
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 7-11) $_
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 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 EVP
Services, Inc.
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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 B
Form of Fourth Amended and Restated Replacement Promissory Note (Revolving
Loan)
[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 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000, 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 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
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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: /s/ Xxxx X. Xxxxxxxx
Its: Chief Executive Officer
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EXHIBIT C
Acknowledgment, Consent and Agreement
[SEE ATTACHED]
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ACKNOWLEDGMENT, CONSENT AND AGREEMENT
The undersigned each hereby acknowledges receipt of a copy of the
Seventh Amendment to Third Amended and Restated Consolidated Replacement Credit
Facility and Security Agreement dated as of July 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: July 2, 2001 CROWN TECHNICAL SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chairman of the Board
T.I.S. INCORPORATED
/s/ Xxxx X. Xxxxxxxx
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Name:
Title: Chief Executive Officer
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CERTIFIED INVESTIGATIVE SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Name:
Title: Chief Executive Officer
I.T.S. OF NEW YORK, INC.
By: Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chief Executive Officer
SELECTIVE DETECTIVE SERVICES, INC.
By: Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chief Executive Officer
INTERNATIONAL TOTAL SERVICES, LTD.
By: Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chief Executive Officer
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By: Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chief Executive Officer
INTERNATIONAL TRANSPORT SERVICES,
LTD.
By: Xxxx X. Xxxxxxxx
---------------------------------
Name:
Title: Chief Executive Officer
