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Exhibit 10.14
SECOND AMENDED AND RESTATED
LOAN AGREEMENT
AS OF MARCH 30, 2001
THE XXXXX-X'XXXX COMPANY, formerly known as The O'Gara Company
("TKOGC"), X'XXXX-XXXX & XXXXXXXXXX ARMORING COMPANY ("OGHEAC"), XXXXX HOLDINGS,
INC. ("KHI") and XXXXX ASSOCIATES, INC. ("KAI") (TKOGC, OGHEAC, KHI and KAI are
sometimes hereinafter individually and collectively referred to as the
"Borrower"), and KEYBANK NATIONAL ASSOCIATION ("Lender"), hereby agree as set
forth below. This Agreement amends and restates that certain Amended and
Restated Loan Agreement dated as of October 30, 1998 between The Xxxxx-X'Xxxx
Company, X'Xxxx-Xxxx & Xxxxxxxxxx Armoring Company, Xxxxx Holdings, Inc. and
Xxxxx Associates, Inc. and Lender (the "Prior Agreement"). All Loans, accrued
interest and fees outstanding under the Prior Agreement will be deemed to be
outstanding under this Agreement.
1. RECITALS.
1.1 On May 30, 1997, The O'Gara Company and X'Xxxx-Xxxx & Xxxxxxxxxx
Armoring Company and Lender entered into a loan agreement (the "Original
Agreement"). On December 1, 1997, The Xxxxx-X'Xxxx Company, X'Xxxx-Xxxx &
Xxxxxxxxxx Armoring Company, Xxxxx Holdings, Inc. and Xxxxx Associates, Inc. and
Lender entered into an Amended and Restated Loan Agreement. On October 30, 1998,
Borrower and Lender entered into the Prior Agreement. Such Prior Agreement was
amended by an Amendment to Loan Agreement dated as of June 25, 1999, a Second
Amendment to Loan Agreement dated as of October 6, 1999, a Third Amendment to
Loan Agreement dated May 12, 2000, a Fourth Amendment to Loan Agreement dated
September __, 2000, a Fifth Amendment to Loan Agreement dated as of December 28,
2000, and a Sixth Amendment to Loan Agreement dated as of March __, 2001, all of
which were made a part of the Prior Agreement.
1.2 Borrower and Lender desire to amend and restate the Prior
Agreement, pursuant to this Second Amended and Restated Loan Agreement (this
"Agreement" or the "Loan Agreement").
2. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
will have the meanings given those terms in the second to last section of this
Agreement.
3. CREDIT FACILITIES.
3.1 REVOLVING CREDIT LOAN.
3.1.1 TOTAL FACILITY. Lender will make available to Borrower a
revolving credit facility of up to $40,000,000 ("Total Facility"), subject to
the terms and conditions and
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made upon the representations and warranties of Borrower set forth in this
Agreement. Amounts outstanding under the revolving credit facility from time to
time will be referred to as the "Revolving Credit Loan". The Revolving Credit
Loan will be represented by the promissory note of Borrower of even date
herewith and all amendments, extensions and renewals thereto and restatements
and replacements thereof ("Revolving Credit Note"). The Revolving Credit Loan
will bear interest and will be payable in the manner set forth in the Revolving
Credit Note, the terms of which are incorporated herein by reference.
Beginning on June 30, 2001 and on the additional dates set forth below
(each a "Reduction Date"), the amount of the Total Facility (and the amount
permitted to be borrowed hereunder) will be reduced by the amount specified next
to such date below. To the extent the amount outstanding on the Revolving Credit
Loan is in excess of the amount of the Total Facility on any Reduction Date
(after giving effect to such reduction) the Borrower will make a principal
payment to the Lender in the amount of such excess on such Reduction Date.
Reduction Date Required Reduction
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June 30, 2001 $1,135,800
September 30, 2001 $1,135,800
December 31, 2001 $1,703,700
March 31, 2002 $1,703,700
To the extent that the Revolving Credit Loan is less than the Total Facility,
Borrower may borrow such excess provided no Event of Default is then existing.
At no time shall Borrower be entitled to use the proceeds from the sale of any
assets consented to by Lender pursuant to SECTION 7.13 to make such Required
Payments.
3.1.2 ADVANCES. Advances will be made as specified in the Revolving
Credit Note.
3.1.3 EXTENSIONS. After the initial term of the Revolving Credit Note,
Lender in its sole discretion may extend or renew the Total Facility and the
Revolving Credit Note by accepting from Borrower one or more new notes, each of
which will be deemed to be the Revolving Credit Note under this Agreement. In no
event will Lender be under any obligation to extend or renew the Total Facility
or the Revolving Credit Note beyond the initial term thereof.
3.1.4 COMMITMENT FEE. Borrower will pay to Lender a commitment fee from
the date on which all of the conditions precedent set forth in Section 9.1,
below are satisfied, computed at the rate of 0.25% per annum, on the average
daily difference between: (i) the outstanding amount of the Note and (ii) the
Total Facility, such Commitment Fee to be
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payable quarterly in arrears on the last day of each September, December, March
and June and upon the maturity date of the Note and/or the date this Agreement
is terminated.
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3.2 ISSUANCE OF LETTERS OF CREDIT.]
3.2.1 ALTERNATE LETTER OF CREDIT. Lender has issued for the account
of Borrower its letter of credit ("Alternate Letter of Credit") in substitution
of the letter of credit issued by PNC Bank, Ohio, National Association ("PNC
Letter of Credit") in connection with Borrower's $2,300,000 Variable Rate Demand
Economic Development Revenue Bonds, Series 1986 (O'Xxxx Xxxx & Xxxxxxxxxx
Armoring Company Limited Partnership Project) ("Bonds"), which Alternate Letter
of Credit is in the amount of $1,356,250.
3.2.2 TRANSACTIONAL LETTERS OF CREDIT. In consideration of the terms
and conditions of this Agreement, Lender from time to time at the request and on
the instructions of Borrower, has and will continue to issue for the account of
Borrower, Lender's acceptance and/or letters of credit and renewals, extensions
and amendments thereto (collectively, "Transactional Letters of Credit"). The
specific terms with respect to each Transactional Letter of Credit will be as
requested by Borrower; PROVIDED that (i) the requested Transactional Letter of
Credit satisfies the requirements of Section 3.2.3 below, and (ii) the maximum
stated amount of the Transactional Letters of Credit outstanding at any time may
not exceed $6,000,000. Borrower acknowledges that as to each Transactional
Letter of Credit, Borrower: (a) will independently determine that it is in its
best interest to enter into the transaction to which the Transactional Letter of
Credit relates and to cause the Transactional Letter of Credit to be issued to
the beneficiary, (b) is responsible for the terms and wording of the
Transactional Letter of Credit, including but not limited to the conditions of
drawing contained therein, and (c) is not relying on Lender in any manner with
respect to the items described in clauses (a) and (b) above, and has sought
independent legal or other advice with respect thereto to the extent it deemed
necessary.
3.2.3 TERMS OF TRANSACTIONAL LETTERS OF CREDIT. All Transactional
Letters of Credit shall be issued on Lender's standard forms therefor (or in
such other form as Lender and Borrower may agree) for the account of Borrower
and shall be, unless otherwise agreed by Lender in its discretion, denominated
in United States Dollars. Unless Lender agrees otherwise, no Transactional
Letter of Credit shall be issued or renewed with a maturity date beyond May 31,
2002.
3.2.4 PROCEDURE FOR TRANSACTIONAL LETTERS OF CREDIT. Borrower shall
give Lender written notice (or telephone advice thereof promptly confirmed in
writing but in no event later than 11:00 a.m. Cincinnati time on the day on
which such telephonic notice is given) of its request for a Transactional Letter
of Credit at least five (5) Business Days prior to the date on which a
Transactional Letter of Credit is requested to be issued. Such notice shall be
accompanied by all Letter of Credit Documents reasonably required by Lender,
duly executed, and shall specify: (a) the name and address of the beneficiary of
the Transactional Letter of Credit, (b) the type and amount of the Transactional
Letter of Credit, (c) whether the Transactional Letter of Credit is revocable or
irrevocable, (d) the Business Day on which the Transactional Letter of Credit is
to be issued and the date on which the Transactional Letter of Credit is to
expire, (e) the terms of payment of any draft or drafts which may be drawn under
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the Transactional Letter of Credit, and (f) any other terms or provisions
Borrower desires to be contained in the Transactional Letter of Credit. In the
event of any conflict between the provisions of this Agreement and the
provisions of any applicable Letter of Credit Documents, the provisions of this
Agreement shall prevail and control unless otherwise expressly provided in the
Letter of Credit Documents. Lender will, subject to the terms and conditions of
this Credit Agreement, make such Transactional Letter of Credit available to
Borrower at Lender's office.
3.2.5 LETTER OF CREDIT FEES AND EXPENSES. In consideration of the
issuance by Lender of each of the Letters of Credit, Borrower will pay to Lender
(a) commissions with respect to each Letter of Credit so long as Lender is
obligated under the applicable Letter of Credit, computed on such amounts and:
(i) as to Letters of Credit that are standby letters of credit, at the rate of
one percent (1%) per annum of the stated amount of each Letter of Credit,
payable quarterly for Letters of Credit then outstanding in advance and
calculated on the basis of a year of 360 days and the actual number of days
elapsed, with a $300 minimum per Letter of Credit per annum and an additional
issuance fee of $150 per Letter of Credit, such minimum fees and issuance fees
to be adjusted from time to time to Lender's standard rates and with respect to
Letters of Credit when the minimum fee is charged the fee will be collected upon
its issuance, and (ii) as to Letters of Credit that are import/export letters of
credit, at the rate of one quarter of one percent (.25%) of the stated amount of
each Letter of Credit, payable upon issuance, with a $75 minimum per Letter of
Credit and an additional issuance fee of $50 per Letter of Credit, such minimum
fees and issuance fees to be adjusted from time to time to Lender's standard
rates and (b) all expenses that Lender reasonably incurs in connection with any
Letter of Credit (including but not limited to attorney's fees, wire transfer
charges, fees of correspondent and confirming banks, foreign exchange fees,
etc.). Lender will credit Borrower on a pro-rata basis for Letters of Credit
commissions with respect to Letters of Credit paid or terminated prior to its
stated maturity date.
3.2.6 REIMBURSEMENT FOR DRAWINGS. Borrower will reimburse Lender for
any drawing under a Letter of Credit on the day on which payment of such drawing
is made by Lender unless otherwise agreed to in writing by the Lender. All
payments hereunder will be made in United States Dollars and as to any drafts or
acceptances payable in currency other than United States Dollars, Borrower will
pay Lender the equivalent of the amount paid by Lender in United States Dollars.
Equivalent United States Dollar amounts will be determined at the selling rate
of exchange then offered at the time of payment by Lender for cable transfers to
the place of payment in the currency in which the acceptance or draft is
payable, plus any payments made by Lender to comply with any governmental
exchange regulations applicable to the purchase of such foreign currency. All
delinquent reimbursement payments will bear interest at the Default Rate.
3.2.7 METHOD AND PLACE OF PAYMENT. All payments by Borrower to
Lender under this Agreement will be made to Lender in lawful currency of the
United States and in immediately available funds at its office at 000 Xxxx
Xxxxxx, Xxxxxxxxxx, Xxxx 00000,
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until otherwise notified in writing by Lender. In the event the date specified
for any payment is not a Business Day, such payment will be made on the next
following Business Day and interest after such Business Day (and after the
expiration of any applicable grace period, if any) will accrue at a rate equal
to the Default Rate until paid.
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3.2.8 LIABILITY AND INDEMNIFICATION OF LENDER.
Any action taken or omitted by Lender, any correspondent bank
or confirming bank, under or in connection with the Letters of Credit or drafts
or documents relating thereto, if taken or omitted without negligence or willful
misconduct, will be binding upon Borrower and will not result in Lender or any
correspondent bank or confirming bank being under any liability to Borrower.
Lender, any correspondent bank or confirming bank or any of their officers,
directors or employees will not be liable or responsible for: (a) the use which
may be made of the Letters of Credit or for any acts or omissions of any
beneficiaries or any transferees in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s) thereon, even
if such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) if through the actions of shippers or
any other party, any documents fail to reach their destination in due time; (d)
the kind, quality, quantity, delivery or existence of property represented by
any documents; (e) the sufficiency, coverage or validity of any insurance, the
financial standing or responsibility of any insurer, or any other risk connected
with insurance on any property; (f) delay in giving or the failure to give
notice of arrival or any other notice; (g) failure of any draft to bear any
reference or adequate reference to any of the Letters of Credit; (h) any delay
or deviation from instructions in regard to shipment or any delay or deviation
from instructions in regard to payment other than on a Letter of Credit; (i) any
variation between invoices and insurance documents or between invoices and bills
of lading, warehouse receipts or other documents; (j) any negligence or fraud of
any shipper, inspector, forwarding agent or other party; (k) errors, omissions,
interruptions or delays in transmission or delivery of any messages or documents
by mail, telex or other means; or (l) any other circumstances whatsoever in
making or failing to make payment under any of the Letters of Credit, except
only damages which Borrower proves were caused by Lender, any correspondent bank
or confirming bank or any of their officers, directors or employees under either
of the following circumstances and in those cases Borrower will have a claim
only against the entity or its officers, directors or employees that actually
committed the acts giving rise to such claim: (i) negligence or willful
misconduct in determining whether a draft or other documents presented under any
Letter of Credit complies with the terms of the Letter of Credit or (ii) the
willful or negligent failure to pay under a Letter of Credit after the
presentation to it by any beneficiary or transferee of a draft and documents
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance of and not in limitation of the foregoing, Lender, its correspondent
banks and confirming banks may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary and any action taken or omitted in good
faith in connection with any of the Letters of Credit or any documents or
property related to any of the Letters of Credit will be binding on Borrower and
will not result in any liability of Lender, its correspondent banks and
confirming banks will not be liable for any failure or inability to perform in
accordance with the terms of any of the Letters of Credit by reason of any
censorship, law, control or restriction rightfully or wrongfully exercised by
any de facto or de jure government or group exercising or exerting
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governmental powers, or for any other act or omission for which banks are
relieved of responsibility under applicable law and/or the Uniform Customs, as
that term is defined below.
Borrower hereby agrees at all times to indemnify, defend and hold
harmless Lender and its correspondent banks and confirming banks, and all
directors, officers, employees, agents and attorneys thereof, from and against
any and all claims, suits and other legal proceedings, and from and against any
and all demands, liabilities, judgments, losses, claims, damages, attorney fees,
court costs, interest and penalties, costs and other expenses which Lender or
any such indemnified party jointly or severally may, at any time, sustain or
incur by reason of or in consequence of or arising out of this Agreement or any
of the Letters of Credit or the use (or the proposed or potential use) of the
proceeds hereunder or thereunder, including but not limited to any of the
foregoing arising out of any legal proceeding seeking to enjoin or require any
payment under any of the Letters of Credit; provided that Borrower is not
required to indemnify Lender, correspondent banks or confirming banks for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (a) the willful misconduct or negligence of such entity
in determining whether a draft or other documents presented under any of the
Letters of Credit complied with the terms of the Letter of Credit or (b) the
willful or negligent failure of such entity to pay under any of the Letters of
Credit after the presentation to it by the beneficiary or any transferee of a
draft and documents strictly complying with the terms and conditions of any of
the Letters of Credit. Without limiting the generality of the foregoing but also
subject to the terms and conditions of the foregoing, Borrower agrees that if,
after receipt by Lender of any payment of all or any part of the Letter of
Credit obligations, demand is made at any time upon Lender, or any correspondent
or confirming bank for the repayment or recovery of any amount or amounts
received by it in payment or on account of any of the Letter of Credit
obligations and it repays all or any part of such amount or amounts by reason of
any final and non-appealable judgment, decree or order of any court or
administrative body that Lender has defended in good faith, or by reason of any
settlement or compromise of any such demand entered into in good faith and on
reasonable grounds, this Agreement will continue in full force and effect and
Borrower will be liable, and will indemnify, defend and hold harmless Lender and
any correspondent or confirming bank for the amount or amounts so repaid. The
provisions of this Section will be and remain effective notwithstanding any
contrary action so taken will be without prejudice to the rights of Lender and
any correspondent or confirming bank under this Agreement and will be deemed to
have been conditioned upon such payment having become final and irrevocable.
The provisions of this SECTION 3.2.8 will survive the termination of
this Agreement.
3.2.9 DOCUMENTATION. Lender may accept or honor as complying with any
Letter of Credit any draft or other document otherwise in order which has been
signed or issued by or to the administrator, executor or trustee in bankruptcy
of or any receiver for any of the property of any party designated in any of the
Letters of Credit or in Borrower's instructions, in the place of the name,
signature or act of such party.
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3.3 ADDITIONAL COSTS.
3.3.1 TAXES, RESERVE REQUIREMENTS, ETC. In the event that any
applicable law, treaty, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to Lender, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by Lender with
any guideline, request or directive of any such authority (whether or not having
the force of law), will: (a) affect the basis of taxation of payments to Lender
of any amounts payable by Borrower under this Agreement (other than taxes
imposed on the overall net income of Lender, by any jurisdiction, or by any
political subdivision or taxing authority of any such jurisdiction, in which
Lender has its principal office), (b) impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by Lender, or (c) impose any other
condition with respect to this Agreement, any Note executed in connection with
this Agreement or any of the Security Documents, and the result of any of the
foregoing is to increase the cost of making, funding or maintaining any such
Note or to reduce the amount of any sum receivable by Lender thereon, then
Borrower will pay to Lender from time to time, upon request by Lender,
additional amounts sufficient to compensate Lender for such increased cost or
reduced sum receivable provided, however, that Borrower will be responsible for
such payment only if Lender requires such payments from other similarly situated
Persons to whom Lender extends credit that are obligated to Lender pursuant to
provisions similar to this Section.
3.3.2 CAPITAL ADEQUACY. If either: (a) the introduction of, or any
change in, or in the interpretation of, any United States or foreign law, rule
or regulation or (b) compliance with any directive, guidelines or request from
any central bank or other United States or foreign governmental authority
(whether or not having the force of law) promulgated, made, or that becomes
effective (in whole or in part) after the date hereof affects or would affect
the amount of capital required or expected to be maintained by Lender or any
corporation directly or indirectly owning or controlling Lender and Lender
determines that such introduction, change or compliance has or would have the
effect of reducing the rate of return on Lender capital or on the capital of
such owning or controlling corporation as a consequence of its obligations
hereunder or under any Note or any commitment to lend thereunder to a level
below that which Lender or such owning or controlling corporation could have
achieved but for such introduction, change or compliance (after taking into
account Lender's policies or the policies of such owning or controlling
corporation, as the case may be, regarding capital adequacy) by an amount deemed
by Lender (in its sole discretion) to be material, then, from time to time,
Borrower will pay to Lender such additional amount or amounts as will compensate
Lender for such reduction provided, however, that Borrower will be responsible
for such payment only if Lender requires such payments from other similarly
situated Persons to whom Lender extends credit that are obligated to Lender
pursuant to provisions similar to this Section.
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3.3.3 CERTIFICATE OF LENDER. A certificate of Lender setting forth such
amount or amounts as will be necessary to compensate Lender as specified above
will be delivered to Borrower and will be conclusive absent manifest error.
Borrower will pay Lender the amount shown as due on any such certificate within
10 days after its receipt of the same; provided, however that Lender will
deliver such certificate to Borrower within six months of Lender' obtaining
knowledge of the occurrence of an event for which Borrower is responsible
hereunder. The protection of this Section will be available to Lender regardless
of any possible contention of invalidity or inapplicability of the law,
regulation, etc., that results in the claim for compensation under this Section.
4. COLLATERAL.
4.1 The Collateral for the repayment of the Obligations will be that
granted pursuant to the Security Documents.
4.2 The Collateral for the reimbursement obligations with respect to the
Alternate Letter of Credit is the Mortgage.
5. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into this Agreement
and to make the advances herein contemplated, Borrower hereby represents and
warrants as to itself and each Guarantor as follows:
5.1 ORGANIZATION. Borrower and each Guarantor is a corporation or limited
liability company, as applicable, duly organized and in good standing under the
laws of the state of its incorporation, is duly qualified in all jurisdictions
where required by the conduct of its business or ownership of its assets except
where the failure to so qualify would not have a material adverse effect on its
condition, financial or otherwise, and has the power and authority to own and
operate its assets and to conduct its business as is now done.
5.2 LATEST FINANCIALS. Its Current Financial Statements dated December 31,
2000 as delivered to Lender are true, complete and accurate in all material
respects and fairly present its financial condition, assets and liabilities,
whether accrued, absolute, contingent or otherwise and the results of its
operations for the periods specified therein. The annual financial statements of
all business entities included in the Current Financial Statements have been
prepared in accordance with generally accepted accounting principles applied
consistently with preceding periods subject to any comments and notes contained
therein. It shall be an Event of Default under this Agreement if, upon delivery
of the audited Current Financial Statements dated December 31, 2000 to Lender,
Lender determines in its sole discretion that a material adverse change has
occurred in the financial condition of Borrower and its Subsidiaries taken as a
whole from the internally prepared financial statements dated December 31, 2000
and attached hereto as SCHEDULE 5.2 that have been delivered to Lender.
5.3 RECENT ADVERSE CHANGES. Except as specifically disclosed in the
Disclosure Schedule and/or the Proxy Statement/Prospectus, since the dates of
the most recent of its
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Current Financial Statements, none of Borrower or Guarantors have suffered any
damage, destruction or loss which has materially and adversely affected the
business or assets of Borrower or its Subsidiaries taken as a whole and no event
or condition of any character has occurred which has materially and adversely
affected TKOGC and its Subsidiaries' assets, liabilities, business or financial
condition taken as a whole, and it has no knowledge of any event or condition
currently existing or threatened which may materially and adversely affect TKOGC
and its Subsidiaries' assets, liabilities, business or financial condition taken
as a whole.
5.4 RECENT ACTIONS. Except as disclosed in the Disclosure Schedule and/or
the Proxy Statement/Prospectus, since the dates of the most recent of its
Current Financial Statements, each of its business has been conducted in the
ordinary course and each of Borrower and Guarantor have not: (a) incurred any
obligations or liabilities, whether accrued, absolute, contingent or otherwise,
other than liabilities incurred and obligations under contracts entered into in
the ordinary course of business and other than liabilities to Lender or
otherwise as may be permitted herein; (b) discharged or satisfied any lien or
encumbrance or paid any obligations, absolute or contingent, other than current
liabilities, in the ordinary course of business; (c) mortgaged, pledged or
subjected to lien or any other encumbrance any of its assets, tangible or
intangible, or cancelled any debts or claims except in the ordinary course of
business and except for Permitted Liens; or (d) made any loans, other than to
Subsidiaries as permitted under this Agreement, or otherwise conducted its
business other than in the ordinary course.
5.5 TITLE. Borrower and each Guarantor has good and marketable title to the
assets reflected on the most recent of its Current Financial Statements, free
and clear from all liens and encumbrances except for: (a) current taxes and
assessments not yet due and payable, (b) liens and encumbrances, if any,
reflected or noted on said balance sheet or notes, (c) any security interests,
pledges or mortgages to Lender, in its capacity as Collateral Agent, in
connection with the closing of this Agreement, (d) assets disposed of in the
ordinary course of business, and (e) Permitted Liens.
5.6 TITLE TO GOVERNMENT RECEIVABLES. Borrower and each Guarantor has good
and marketable title to the Government Receivables, free and clear from all
liens and encumbrances, except for any security interests, pledges or
assignments to Lender, in its capacity as Collateral Agent, in connection with
the closing of this Agreement.
5.7 LITIGATION, ETC. Except as disclosed on the Disclosure Schedule and/or
the Proxy Statement/Prospectus, as of the date hereof, there are no actions,
suits, proceedings or governmental investigations pending or, to its knowledge,
threatened against Borrower or any Guarantor and there is no basis known to it
for any such actions, suits, proceedings or investigations which, if adversely
determined, could result in a material and adverse change in the financial
condition, business or assets of TKOGC and its Subsidiaries taken as a whole.
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5.8 TAXES. Except as to taxes not yet due and payable, it has filed all
returns and reports that are now required to be filed by it in connection with
any federal, state or local tax, duty or charge levied, assessed or imposed upon
it or its property, including unemployment, social security and similar taxes;
and all of such taxes have been either paid or adequate reserve or other
provision has been made therefor. It has filed for no extension of time for the
payment of any tax or for the filing of any tax return, other than the filing
for extensions that may be filed after the Closing Date.
5.9 AUTHORITY. Borrower and each Guarantor has full power and authority to
enter into the transactions provided for in this Agreement. The documents to be
executed by it in connection with this Agreement, when executed and delivered by
it will constitute the legal, valid and binding obligations of it enforceable in
accordance with their respective terms except as such enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws in effect from time to time affecting the rights of creditors
generally and except as such enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in law or in equity).
5.10 OTHER DEFAULTS. There does not now exist any default or violation by
it of or under any of the terms, conditions or obligations of: (a) as to
entities only, its Articles or Certificate of Incorporation or Organization and
Regulations or Bylaws or Operating Agreement, as applicable; (b) any indenture,
mortgage, deed of trust, franchise, permit, contract, agreement, or other
instrument to which it is a party or by which it is bound; (c) the Note Purchase
Agreement, as amended and/or restated from time to time; or (d) any law,
regulation, ruling, order, injunction, decree, condition or other requirement
applicable to or imposed upon it by any law or by any governmental authority,
court or agency; and the transactions contemplated by this Agreement and the
Security Documents will not result in any such default or violation.
5.11 LICENSES, ETC. It has obtained any and all material licenses, permits,
franchises or other governmental authorizations necessary for the ownership of
its properties and the conduct of its business. It possesses adequate licenses,
patents, patent applications, copyrights, trademarks, trademark applications,
and trade names to continue to conduct its business as heretofore conducted by
it, without any conflict with the rights of any other person or entity.
5.12 SUFFICIENT CAPITAL. It now has capital sufficient to carry on its
business, all business and transactions in which it is about to engage, and is
now solvent and able to pay its debts as they mature. It now owns property
having a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay its debts.
5.13 ERISA. It and each of its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the regulations
and published interpretations thereunder. No Reportable Event has occurred as to
which it or any such ERISA Affiliate was required to file a report with the
PBGC, and, as of the Closing Date, the present value of all benefit liabilities
under all the Plans (based on those assumptions used to
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fund such Plans) did not, as of the last annual valuation date applicable
thereto, exceed by more than $25,000 the aggregate value of the assets of such
Plans. Neither it nor any such ERISA Affiliate has incurred any Withdrawal
Liability that materially adversely affects the financial condition of it and
its ERISA Affiliates taken as a whole. Neither it nor any such ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, where such reorganization has resulted or can reasonably be expected
to result in an increase in the contributions required to be made to such Plan
that would materially and adversely affect the financial condition of it and its
ERISA Affiliates taken as a whole.
5.14 REGULATION U. No part of the proceeds of any Loans will be used to
purchase or carry any margin stock (as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System).
5.15 ENVIRONMENTAL MATTERS. Qualified, however, as to SECTION 5.15.3,
below, by those matters, if any, set forth in the Environmental Report:
5.15.1 Borrower and the activities or operations on any of the real
estate that Borrower owns or occupies (the "Property") are in compliance in all
material respects with all applicable material federal, state and local,
statutes, laws, regulations, ordinances, policies and orders relating to
regulation of the environment, health or safety, or contamination or cleanup of
the environment (collectively "Environmental Laws").
5.15.2 Borrower has obtained all material approvals, permits, licenses,
certificates, or satisfactory clearances from all governmental authorities
required under Environmental Laws with respect to the Property and any
activities or operations at the Property.
5.15.3 To the best of Borrower's knowledge, after an investigation
meeting the standard set forth at 42 U.S.C. Section 9601 (35)(B)(1986) and any
similar standards for environmental investigations under state Environmental
Laws ("Due Investigation"), there have not been and are not now any solid waste,
hazardous waste, hazardous or toxic substances, pollutants, contaminants, or
petroleum in, on, under or about the Property in violation of any applicable
law. The use which Borrower makes and intends to make of the Property will not
result in the deposit or other release of any hazardous or toxic substances,
solid waste, pollutants, contaminants or petroleum on, to or from the Property.
5.15.4 To the best of Borrower's knowledge, after Due Investigation,
there have been no complaints, citations, claims, notices, information requests,
orders or directives on environmental grounds or under Environmental Laws
(collectively "Environmental Claims") made or delivered to, pending or served
on, or anticipated by Borrower or its agents, or of which Borrower or its
agents, are aware or should be aware (i) issued by any governmental department
or agency having jurisdiction over the Property or the activities or
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operations at the Property, or (ii) issued or claimed by any third party
relating to the Property or the activities or operations at the Property.
5.16 LABOR MATTERS. There are no material strikes or other material labor
disputes against it pending or, to its knowledge, threatened. The hours worked
and payment made to its employees in all material respects have not been in
violation of the Fair Labor Standards Act or any other applicable law dealing
with such matters. All payments due from it, or for which any claim may be made
against it, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on its books. The
consummation of the transactions contemplated herein will not give rise to a
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which it is a party or by which it is
bound.
5.17 NAME, PLACES OF BUSINESS AND LOCATION OF COLLATERAL. The address of
its respective principal place of business and every other place from which
Borrower and each Guarantor conducts business is as specified in the Disclosure
Schedule. The Collateral and all books and records pertaining to the Collateral
are and will be located at the addresses indicated on the Disclosure Schedule.
In the five years preceding the date hereof, Borrower and each Guarantor has not
conducted business under any name other than its current name nor maintained any
place of business or any assets in any jurisdiction other than those disclosed
on the Disclosure Schedule.
5.18 STOCK. Except as listed on the Disclosure Schedule, Borrower and each
Guarantor do not own more than one percent (1%) of the issued and outstanding
capital stock or other ownership interests of any corporation, firm or entity.
5.19 SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES. Except as listed on the
Disclosure Schedule, Borrower and each Guarantor has no Subsidiaries and is not
a party to any partnership agreement or joint venture agreement.
5.20 CONSENTS. Except for the consent in connection with the Government
Receivables, no consent, approval, exemption, order or authorization of, or a
registration or filing with, any government body or any third party is required
by any law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Security Documents by Borrower or
Guarantor.
5.21 STATUS OF PLEDGED COLLATERAL. Except for Securify, Inc., all the
shares of capital stock included in the Pledged Collateral to be pledged
pursuant to the Pledge Agreements are or will be upon issuance validly issued
and nonassessable and owned beneficially and of record by the pledgor free and
clear of any lien or restriction on transfer, except as otherwise provided by
the Pledge Agreement and except as the right of the Lender to dispose of the
shares may be limited by the Securities Act of 1933, as amended, and the
regulations promulgated by the Securities and Exchange Commission thereunder and
by applicable state
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securities laws. There are no shareholder or other agreements or understandings
with respect to the shares of capital stock included in the Pledged Collateral.
5.22 SECURITY INTERESTS. The liens and security interests granted to Lender
pursuant to the Security Documents in the Collateral constitute and will
continue to constitute security interests under the Uniform Commercial Code as
in effect in each applicable jurisdiction (the "Uniform Commercial Code") or
other applicable law entitled to all the rights, benefits and priorities
provided by the Uniform Commercial Code or such law. Upon the filing of
financing statements relating to said security interests in each office and in
each jurisdiction where required, taking possession of any stock certificates or
other certificates evidencing the Pledged Collateral, all such action as is
necessary or advisable to establish such rights of Lender will have been taken,
and there will be upon execution and delivery of the Security Documents, such
filings and such taking of possession, no necessity for any further action in
order to preserve, protect and continue such rights, except the filing of
continuation statements with respect to such financing statements within six
months prior to each five-year anniversary of the filing of such financing
statements, and except for any instruments required to be filed under the
Collateral Assignment or the Federal Assignment of Claims Act, and except for
actions required to be taken with pledges or the perfection of foreign
securities. All filing fees and other expenses in connection with each such
action have been or will be paid by Borrower.
6. AFFIRMATIVE COVENANTS. From the date of execution of this Agreement until all
Obligations to Lender have been fully paid and this Agreement terminated,
Borrower will and will cause each Guarantor to:
6.1 BOOKS, RECORDS AND ACCESS TO THE COLLATERAL. Maintain proper books of
account and other records and enter therein complete and accurate entries and
records of all of its transactions and give representatives of Lender access
thereto at all reasonable times, including permission to examine, copy and make
abstracts from any of such books and records and such other information as it
may from time to time reasonably request. It will give Lender reasonable access
to the Collateral for the purposes of examining the Collateral and verifying its
existence. Borrower and each Guarantor will make available to Lender for
examination copies of any reports, statements or returns which it may make to or
file with any governmental department, bureau or agency, federal or state, and
will furnish to Lender copies of any reports, statements or returns and exhibits
thereto that Borrower may make to or file with the Securities Exchange
Commission. In addition, Borrower and each Guarantor will be available to
Lender, or cause its officers or members, as applicable, to be available from
time to time upon reasonable notice to discuss the status of the Loans, its
respective business and any statements, records or documents furnished or made
available to Lender in connection with this Agreement.
6.2 QUARTERLY STATEMENTS. Furnish Lender within 45 days after the end of
each calendar quarter internally prepared financial statements of TKOGC with
respect to such calendar quarter, which financial statements will: (a) be in
reasonable detail and in form reasonably satisfactory to Lender; (b) be
accompanied by a Compliance Certificate; (c)
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include a balance sheet as of the end of such period, profit and loss and
surplus statements for such period and a statement of cash flows for such
period; (d) include prior year comparisons; and (e) be on a consolidated and
consolidating basis for TKOGC and its Subsidiaries. The delivery by TKOGC of its
quarterly report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission will be deemed to
satisfy the financial statement delivery requirements of this Section.
6.3 ANNUAL STATEMENTS. Furnish Lender within 105 days after the end of each
fiscal year of TKOGC annual audited financial statements which will; (a) include
a balance sheet as of the end of such year, profit and loss and surplus
statements and a statement of cash flows for such year; (b) be on a consolidated
basis with TKOGC and its Subsidiaries; (c) be accompanied by a Compliance
Certificate, and (d) contain the unqualified opinion of an independent certified
public accountant acceptable to Lender and its examination will have been made
in accordance with generally accepted auditing standards and such opinion will
contain a report reasonably satisfactory to Lender of any inconsistency in the
application of generally accepted accounting principles with the preceding
years' statements, if any. The delivery by TKOGC of its annual report on Form
10-K prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission will be deemed to satisfy the financial
statement delivery requirements of this Section.
6.4 AUDITOR'S LETTERS, ETC. Furnish any letter, other than routine
correspondence, directed to it by its auditors or independent accountants,
relating to its financial statements, accounting procedures, financial
condition, tax returns or the like since the date of the most recent of its
Current Financial Statements to Lender.
6.5 TAXES. Pay and discharge when due all indebtedness and all taxes,
assessments, charges, levies and other liabilities imposed upon it, its income,
profits, property or business, except those which currently are being contested
in good faith by appropriate proceedings and for which it has set aside adequate
reserves or made other adequate provision with respect thereto, but any such
disputed item will be paid forthwith upon the commencement of any proceeding for
the foreclosure of any lien which may have attached with respect thereto, unless
Borrower has set aside with Lender cash reserves to cover the amount in dispute.
6.6 OPERATIONS. Continue its business operations in substantially the same
manner as at present, except where such operations are rendered impossible by a
fire, strike or other events beyond its control; keep its real and personal
properties in good operating condition and repair; make all necessary and proper
repairs, renewals, replacements, additions and improvements thereto and comply
with the provisions of all leases to which it is party or under which it
occupies or holds real or personal property so as to prevent any loss or
forfeiture thereof or thereunder.
6.7 INSURANCE. Comply with the insurance requirements of the Security
Documents. In addition, keep its respective insurable real and personal property
insured with responsible insurance companies against loss or damage by fire,
windstorm and other hazards
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which are commonly insured against in an extended coverage endorsement in an
amount equal to not less than 80% of the insurable value thereof on a
replacement cost basis and also maintain public liability insurance in a
reasonable amount. Schedules of all insurance will be submitted to Lender upon
request. Such schedules will contain a description of the risks covered, the
amounts of insurance carried on each risk, the name of the insurer and the cost
of such insurance. Such schedules will be supplemented from time to time
promptly to reflect any change in insurance coverage.
6.8 COMPLIANCE WITH LAWS. Comply in all material respects with all material
laws and regulations applicable to it and to the operation of its business,
including without limitation those relating to environmental and health matters,
and do all things necessary to maintain, renew and keep in full force and effect
all rights, permits, licenses, certificates, satisfactory clearances and
franchises necessary to enable it to continue its business.
6.9 ENVIRONMENTAL VIOLATIONS.
6.9.1 In the event that any hazardous or toxic substances, pollutants,
contaminants, solid waste or hazardous waste, or petroleum are released (as that
term is defined under Environmental Laws) at the Property, or are otherwise
found to be in, on, under or about the Property in violation of Environmental
Laws or in excess of cleanup levels established under Environmental Laws,
immediately will notify Lender in writing and will commence such action as may
be required with respect to such items, including, but not limited to, removal
and cleanup thereof, and deposit with Lender cash collateral, letter of credit,
bond or other assurance of performance in form, substance and amount reasonably
acceptable to Lender to cover the cost of such action. Upon request, Borrower
will provide Lender with updates on the status of Borrower's actions to resolve
or otherwise address such items.
6.9.2 In the event Borrower receives notice of an Environmental Claim
from any governmental agency or other third party alleging a violation of or
liability under Environmental Laws with respect to the Property or Borrower's
activities or operations at the Property, immediately notify Lender in writing
and will commence such action as may be required with respect to such
Environmental Claim. Upon request, Borrower will provide Lender with updates on
the status of Borrower's actions to resolve or otherwise address such
Environmental Claim.
6.10 ACCOUNTS. So long as any of the Loans are in effect: (i) maintain
Lender as TKOGC's and OGHEAC's primary bank of account; (ii) TKOGC and OGHEAC
will maintain all operating accounts, investment accounts and cash management
services at Lender and (iii) KHI and KAI will use their best efforts to move
their accounts to Lender and maintain all operating accounts, investment
accounts and cash management services at Lender in a reasonably timely manner
provided Lender makes a satisfactory service proposal.
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6.11 ERISA COMPLIANCE. Comply in all material respects with the applicable
provisions of ERISA and furnish to Lender: (i) as soon as possible, and in any
event within 30 days after any officer of it or any ERISA Affiliate knows or has
reason to know that any Reportable Event has occurred that alone or together
with any other Reportable Event could reasonably be expected to result in
liability of it to the PBGC in an aggregate amount exceeding $25,000, a
statement of a financial officer setting forth details as to such Reportable
Event and the action that it proposes to take with respect thereto, together
with a copy of the notice of such Reportable Event, if any, given to the PBGC,
(ii) promptly after receipt thereof, a copy of any notice it or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) or to appoint a trustee to administer any such Plan, (iii)
within 10 days after the due date for filing with the PBGC pursuant to Section
412(n) of the Code of a notice of failure to make a required installment or
other payment with respect to a Plan, a statement of its financial officer
setting forth details as to such failure and the action that it proposes to take
with respect thereto together with a copy of any such notice given to the PBGC
and (iv) promptly and in any event within 30 days after receipt thereof by
Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy
of each notice received by Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability in an amount exceeding $25,000, or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, both within the meaning of Title IV of ERISA, and which, in
each case, is expected to result in an increase in annual contributions of it or
an ERISA Affiliate to such Multiemployer Plan in an amount exceeding $25,000.
6.12 NOTICE OF DEFAULT. Notify Lender in writing within five days after it
knows or has reason to know of the occurrence of an Event of Default.
6.13 SALE AND LEASEBACK. Except as may be permitted by Section 7.1, not
directly or indirectly enter into any arrangement to sell or transfer all or any
part of its assets then owned by Borrower and each Guarantor and thereupon or
within one year thereafter rent or lease any of the assets so sold or
transferred.
6.14 WAIVERS. Unless Borrower receives reasonably equivalent value in
exchange therefor, not waive any right or rights of substantial value which,
singly or in the aggregate, is or are material to its condition (financial or
other), properties or business.
6.15 BUSINESS NAMES AND LOCATIONS. Immediately notify Lender of any change
in the name under which Borrower and each Guarantor conducts its respective
business and, unless Lender otherwise consents in writing, keep and maintain all
of the Collateral supplied by Borrower and each Guarantor only at its respective
addresses listed in the Disclosure Schedule, keep its respective principal place
of business at the address specified in the Disclosure Schedule and notify
Lender immediately upon the opening or closing of any place from which Borrower
and each Guarantor conducts business.
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6.16 ACQUISITION OF ASSETS. Not acquire any assets, real or personal,
unless such assets are automatically covered by the existing Security Documents
or within 10 days of such acquisition, Borrower or Guarantor, as applicable,
delivers to Lender a mortgage, pledge or security agreement to encumber such
asset in favor of Lender.
7. NEGATIVE COVENANTS. From the date of execution of this Agreement until all of
the Obligations have been fully paid, Borrower will not, and Borrower will cause
each Guarantor to not, without Lender's prior written consent:
7.1 DEBT. Incur any Debt or permit any Subsidiary to incur any Debt other
than: (a) the Loans and any subsequent Indebtedness to Lender; (b) open account
obligations incurred in the ordinary course of business having maturities of
less than 90 days; (c) the Senior Notes; (d) Debt as listed in SCHEDULE 7.1,
hereto, and (e) Debt not covered by items (a) through (d) hereof not in excess
of $1,000,000 outstanding at any time. For the purposes of Section 7.1, any
Person becoming a Subsidiary after the date hereof shall be deemed to have
incurred all of its then outstanding Debt at the time it becomes a Subsidiary.
7.2 ACQUISITIONS. Acquire the stock or all or substantially all of the
assets of any other Persons or merge with any other Person, without the prior
written consent of the Lender.
7.3 LIENS. Incur, create, assume, become or be liable in any way, or suffer
to exist any mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets, now or hereafter owned, other than Permitted
Liens. In addition, Borrower will not permit any of the TKOGC Subsidiaries to
incur Debt that is secured by any lien or encumbrance other than by Permitted
Liens. In addition, the Borrower will not agree to or permit its Subsidiaries to
agree to a negative pledge with respect to its assets except to Lender, in its
capacity as Collateral Agent, and as provided in the Note Purchase Agreement
executed in connection with the Senior Notes.
7.4 GUARANTEES. Other than with respect to the Senior Notes and guarantees
by one or more of the Persons constituting Borrower of the obligations of one or
more other Persons constituting Borrower or of the obligations of any Guarantor
or real estate rental obligations of any Subsidiary, guarantee, endorse or
become contingently liable for the obligations of any person, firm or
corporation, except in connection with the endorsement and deposit of checks in
the ordinary course of business for collection or accounts payable incurred by
Subsidiaries in the ordinary course of business.
7.5 INTEREST COVERAGE RATIO. Permit the ratio of Borrower's consolidated
earnings before interest and taxes for the prior three-month period divided by
the interest expenses for the prior three-month period to be less than 1.25 to
1.0 measured on each March 31, June 30, September 30 and December 31, that any
Loan remains outstanding based upon the results of the most current quarter.
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7.6 NET WORTH MAINTENANCE. Fail to maintain at all times a minimum
consolidated Net Worth of not less than $110,000,000 as of the Closing Date and
thereafter, calculated at the end of each quarter thereafter. The amount of
Tangible Net Worth must be at all times at least $35,000,000. As used herein,
"Tangible Net Worth" shall mean the sum of all assets, excluding intangible
assets, minus the sum of all liabilities.
7.7 MINIMUM EBITDA. Permit consolidated earnings before interest and taxes
plus depreciation and amortization for the fiscal quarter ending on March 31,
2001, and for each fiscal quarter thereafter as measured on each June 30,
September 30, December 31 and March 31, to be less than $6,000,000.00.
7.8 CAPITAL EXPENDITURES. Make capital expenditures or acquisitions,
including the capitalized value of any leases in the aggregate, which, when
calculated in accordance with generally accepted accounting principles, would
exceed $8,000,000.00 in fiscal year 2001 and thereafter.
7.9 FUNDED DEBT. Permit Consolidated Funded Debt to exceed $82,000,000 at
any time.
7.10 CASH BALANCES HELD BY SUBSIDIARIES. Permit the TKOGC Subsidiaries,
other than OGHEAC and KAI, to hold cash balances for any reason other than to
fund working capital and other general corporate purposes in the ordinary
course; provided however that the Borrower may, with Lender's prior written
consent which will not be unreasonably withheld, permit any foreign subsidiary,
created solely for the purpose of minimizing tax liability, to hold cash
balances.
7.11 REDEMPTIONS. Purchase, retire, redeem or otherwise acquire for value,
directly or indirectly, any shares of its capital stock now or hereafter
outstanding, except as part of a stock option plan, a stock buy back plan or
stock distribution plan that may be approved by the Board of Directors of
Borrower, provided, however, that the value of such purchase, retirement,
redemption or acquisition does not exceed $1,000,000.
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7.12 INVESTMENTS. The Borrower will not, and will not permit any TKOGC
Subsidiaries to, at any time make or permit to exist any Investment except:
7.12.1 Property to be used in the ordinary course of business of the
Borrower and the TKOGC Subsidiaries;
7.12.2 Current assets arising from the sale or goods and services in
the ordinary course of business of the Borrower and the TKOGC
Subsidiaries;
7.12.3 Investments in one or more subsidiaries or in any Person that
concurrently with such Investment becomes a subsidiary;
provided that such Investments are in compliance with Section
7.10, above and as to an Investment in foreign subsidiaries
(other than a Borrower or any Guarantor), such Investments do
not exceed $1,000,000 in the aggregate in any fiscal year;
7.12.4 Investments existing as of the date hereof and more
particularly set forth in SCHEDULE 7.12.4 hereof;
7.12.5 Investments in United States Governmental Securities, provided
that such obligations mature within 365 days from the date of
acquisition thereof;
7.12.6 Investments in securities issued by Federal Farm Credit Bank,
Federal National Mortgage Association, Federal Home Loan
Mortgage Corp., Federal Home Loan Bank, Student Loan Marketing
Association, and Tennessee Valley Authority, provided that
such obligations mature within 365 days from the date of
acquisition thereof;
7.12.7 Investments in certificates of deposit, banker's acceptances
or accounts issued or held by an Acceptable Bank, provided
that such obligations mature within 365 days from the date of
acquisition thereof;
7.12.8 Investments in accounts held by a Non-Qualifying Bank,
provided that the amount held in accounts by all
Non-Qualifying Banks for the benefit of Borrower or any TKOGC
Subsidiary will not exceed the amount of working capital
required by Borrower; or such TKOGC Subsidiary in the ordinary
course of business;
7.12.9 Investments in variable rate tax exempt bonds, notes or funds
given either of the two highest ratings by a credit rating
agency of recognized national standing, or if payment
thereunder may be made by drawing on letters of credit issued
by Acceptable Banks, so long as the Investments in such bonds,
notes or funds mature within one year of the date of
acquisition thereof;
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7.12.10 Investments in commercial paper given either of the two
highest ratings by a credit rating agency of recognized
national standing and maturing not more than 270 days from the
date of creation thereof; and
7.12.11 Investments in money market mutual funds that invest solely in
so-called "money market" instruments maturing not more than
one year after the acquisition thereof, which funds have
assets in excess of $500,000,000.
7.12.12 Investments not otherwise included in Section 7.12.1 through
7.12.11, provided that at the time any such investment is made
and immediately after giving effect thereto, the aggregate
amount of all such investments would not exceed 12.5% of
Consolidated Net Worth.
As used in this Section:
"ACCEPTABLE BANK" means any bank or trust company (i) which is
organized under the laws of the United States of America or any state
thereof, the United Kingdom, France or Canada, (ii) which has capital,
surplus and undivided profits aggregating at least $500,000,000 and
(iii) whose long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning all of
the Capital Stock of such bank or trust company) shall have been given
a rating of "A" or better by Standard and Poor's Ratings Group, "A2" or
better by Xxxxx'x Investors Service, Inc. or an equivalent rating by
any other credit rating agency of recognized national standing.
"INVESTMENT" means any investment, made in cash or by delivery
of property, by Borrower or any Subsidiary in any Person, whether by
acquisition, of capital stock, debt or other obligation or security, or
by loan, guaranty, advance, capital contribution or otherwise.
"NON-QUALIFYING BANK" means any bank or trust company, other
than an Acceptable Bank, which has capital, surplus and undivided
profits aggregating at least $100,000,000 (or the equivalent in a
foreign currency).
"UNITED STATES GOVERNMENTAL SECURITY" means any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America, so long as
such obligation or guarantee shall have the benefit of the full faith
and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United
States of America.
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7.13 MERGER, ACQUISITION OR SALE OF ASSETS. (a) Except for mergers and
acquisitions for which Borrower, or any one of them, is the surviving entity and
do not result in a Default, merge or consolidate with or into any other entity,
or (b) acquire all or substantially all the assets of any person, firm,
partnership, joint venture or corporation, or (c) except for disposition in
which the aggregate proceeds (or the Fair Market Value of such property) is less
than $1,000,000 per transaction or $2,000,000 in the aggregate per fiscal year,
sell, lease or otherwise dispose of any of its assets except for dispositions in
the ordinary course of business (collectively, a "Sale") without Lender's prior
consent. For any Sale of assets pursuant to this SECTION 7.13 which exceed the
amount of $1,000,000 per transaction or $2,000,000 in the aggregate per fiscal
year and to which Lender consents, within five (5) business days of any Sale of
assets, the Borrower shall make a mandatory prepayment of principal from the net
proceeds of such Sale (or the Fair Market Value of such property) to Lender and
the Noteholders consistent with the terms of the Intercreditor Agreement and the
Total Facility will be reduced by the amount of the payment made to Lender. To
the extent that Borrower receives any notes receivable or chattel paper in
exchange for a transfer permitted under this Section 7.13, Borrower shall grant
a security interest in and pledge such notes receivable or chattel paper to
Lender as Collateral Agent pursuant to the Intercreditor Agreement.
7.14 ADVANCES AND LOANS. Except investments permitted by Section 7.12,
above, lend money, give credit or make advances (other than advances not to
exceed $10,000 for any one employee and other reasonable and ordinary advances
to cover reasonable expenses of employees, such as travel expenses) to any
person, firm, joint venture or corporation, including, without limitation,
Affiliates.
7.15 SUBSIDIARIES. Except for acquisitions in compliance with Section 7.2
above or investments in compliance with Section 7.12, above, acquire any
Subsidiaries, create any Subsidiaries or enter into any partnership or joint
venture agreements.
7.16 TRANSACTIONS WITH AFFILIATES. Enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of its
business, and is on fair and reasonable terms no less favorable to it than it
would obtain in a comparable arm's length transaction with a non-Affiliate.
7.17 PREPAYMENTS TO NOTEHOLDERS. Except for those prepayments permitted to
be paid to the Noteholders under the Intercreditor Agreement, make any
prepayments of indebtedness under the Note Purchase Agreement to Noteholders.
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7.18 DIVIDENDS. Not permit TKOGC to declare or pay dividends of any kind
(other than dividends payable solely in shares of its capital stock) on any
shares of its capital stock now or hereafter outstanding or make any other
distribution of cash or property to its shareholders or their family members.
7.19 NOTE PURCHASE AGREEMENT. Take any action under this Agreement that
could or would with the passage of time result in the occurrence of a default or
an Event of Default under the Note Purchase Agreement.
7.20 INTERCREDITOR AGREEMENT. Permit Borrower to take any action under this
Agreement that could or would with the passage of time result in the occurrence
of a default or an Event of Default under the Intercreditor Agreement.
7.21 POST-CLOSING MATTERS. Fail to deliver to Lender in form and substance
satisfactory to Lender the documents, if any, noted as post-closing items on
SCHEDULE 7.21 on or before the date specified on SCHEDULE 7.21. If all of such
documents have not been delivered by the earlier of the date specified on
SCHEDULE 7.21 or May 15, 2001, then an Event of Default will be deemed to have
occurred hereunder, and Lender will have no obligation to make any further
advance hereunder at any time, as well as the other rights and remedies
available to Lender under this Agreement, and Lender may retain any Commitment
Fees paid pursuant to SECTION 3.1.4, above, to cover fees and expenses of Lender
through the date hereof. Notwithstanding any date set forth above or in Schedule
7.21, upon request of Borrower, Lender may extend such deadlines in its sole
discretion.
8. EVENTS OF DEFAULT. Upon the occurrence of any of the following events with
respect to Borrower or any Guarantor:
8.1 NON-PAYMENT. The non-payment of any principal amount of any Note when
due, whether by acceleration or otherwise, or the nonpayment of any interest
upon any Note or any other amount due Lender pursuant to this Agreement within 5
days of when the same is due;
8.2 COVENANTS. The default in the due observance of any affirmative
covenant or agreement to be kept or performed by it under the terms of this
Agreement or any of the Security Documents and the failure or inability of it to
cure such default within 30 days of the occurrence thereof; provided that such
30 day grace period will not apply to: (a) any default which in Lender's good
faith determination is incapable of cure, (b) any default that has previously
occurred, (c) any default in any negative covenants, or (d) any failure to
maintain insurance or to permit inspection of the Collateral or of its books and
records.
8.3 REPRESENTATIONS AND WARRANTIES. Any representation or warranty made by
it in this Agreement, in any of the Security Documents or in any report,
certificate, opinion, financial statement or other document furnished in
connection with the Obligations is false or erroneous in any material respect or
any material breach thereof has been committed;
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8.4 OBLIGATIONS. Except as provided in Sections 8.1, 8.2 and 8.3 above, the
default by it in the due observance of any covenant, negative covenant or
agreement to be kept or performed by it under the terms of this Agreement, the
Security Documents or any document now or in the future executed in connection
with any of the Obligations and the lapse of any applicable cure period provided
therein with respect to such default, or, if so defined therein, the occurrence
of any Event of Default or Default (as such terms are defined therein);
8.5 BANKRUPTCY, ETC. It: (a) dissolves or is the subject of any
dissolution, a winding up or liquidation; (b) makes a general assignment for the
benefit of creditors; or (c) files or has filed against it a petition in
bankruptcy, for a reorganization or an arrangement, or for a receiver, trustee
or similar creditors' representative for its property or assets or any part
thereof, or any other proceeding under any federal or state insolvency law, and
if filed against it, the same has not been dismissed or discharged within 60
days thereof;
8.6 EXECUTION, ATTACHMENT, ETC. The commencement of any foreclosure
proceedings, proceedings in aid of execution, attachment actions, levies
against, or the filing by any taxing authority of a lien against it or against
any of the Collateral, except those liens being diligently contested in good
faith which in the aggregate do not exceed $500,000;
8.7 LOSS, THEFT OR SUBSTANTIAL DAMAGE TO THE COLLATERAL. In addition to the
rights of Lender to deal with proceeds of insurance as provided in the Security
Documents, the loss, theft or substantial damage to the Collateral if the result
of such occurrence (singly or in the aggregate) is the failure or inability to
resume substantially normal operation of its business within 30 days of the date
of such occurrence;
8.8 JUDGMENTS. Unless in the opinion of Lender adequately insured or
bonded, the entry of a final judgment for the payment of money involving more
than $500,000 against it and the failure by it to discharge the same, or cause
it to be discharged, within 10 days from the date of the order, decree or
process under which or pursuant to which such judgment was entered, or to secure
a stay of execution pending appeal of such judgment; the entry of one or more
final monetary or non-monetary judgments or order which, singly or in the
aggregate, does or could reasonably be expected to: (a) cause a material adverse
change in the value of the Collateral or its condition (financial or otherwise),
operations, properties or prospects, (b) have a material adverse effect on its
ability to perform its obligations under this Agreement or the Security
Documents, or (c) have a material adverse effect on the rights and remedies of
Lender under this Agreement, any Note or any Security Document;
8.9 REVOCATION OF GUARANTEE. The revocation or attempted revocation or
limitation in whole or in part of any Guarantee;
8.10 IMPAIRMENT OF SECURITY. (a) The validity or effectiveness of any
Security Document or its transfer, grant, pledge, mortgage or assignment by the
party executing it in favor of Lender is impaired; (b) any party to a Security
Document asserts that any Security Document is not a legal, valid and binding
obligation of it enforceable in accordance with its terms except affected by
applicable bankruptcy and insolvency laws and general principles of
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equity (regardless of whether asserted in a proceeding in law or in equity); (c)
the security interest or lien purporting to be created by any of the Security
Documents ceases to be or is asserted by any party to any Security Document
(other than Lender) not to be a valid, perfected lien subject to no liens other
than liens not prohibited by this Agreement or any Security Document; or (d) any
Security Document is amended, subordinated, terminated or discharged, or any
person is released from any of its covenants or obligations except to the extent
that Lender expressly consents in writing thereto;
8.11 BOND DOCUMENTS. The occurrence of an Event of Default under and as
defined in the Bond Documents.
8.12 OTHER INDEBTEDNESS TO LENDER OR LENDER'S AFFILIATES. A default with
respect to any evidence of Debt in excess of $10,000 by it (other than to Lender
pursuant to this Agreement) to Lender or to any of Lender's Affiliates, if the
effect of such default is to accelerate the maturity of such Debt or to permit
the holder thereof to cause such Debt to become due prior to the stated maturity
thereof, or if any Debt in excess of $10,000 of it for borrowed money (other
than to Lender pursuant to this Loan Agreement) is not paid when due and
payable, whether at the due date thereof or a date fixed for prepayment or
otherwise (after the expiration of any applicable grace period);
8.13 OTHER DEBT. A default with respect to any evidence of Debt in excess
of $250,000 by it (other than to Lender or to any of Lender's Affiliates), if
the effect of such default is to accelerate the maturity of such Debt or to
permit the holder thereof to cause such Debt to become due prior to the stated
maturity thereof, or if any Debt of it in excess of $250,000 for borrowed money
(other than to Lender or Lender's Affiliate pursuant to this Loan Agreement) is
not paid when due and payable, whether at the due date thereof or a date fixed
for prepayment or otherwise (after the expiration of any applicable grace
period);
8.14 MATERIAL ADVERSE CHANGE. Lender in its sole discretion determines in
good faith that a material adverse change has occurred in the financial
condition of Borrower and the Guarantors, taken as a whole, from (i) the
financial condition set forth in the financial statements most recently
furnished to Lender, or (ii) as set forth in the financial statements
immediately preceding the financial statements most recently furnished to Lender
or the financial condition of Borrower or any Guarantor most recently disclosed
to Lender in any manner;
8.15 IMPAIRMENT OF POSITION. Lender in its sole discretion determines in
good faith that an event has occurred which materially impairs the prospect of
payment of the Obligations and/or the value of the Collateral;
8.16 DEPRECIATION OF COLLATERAL. The market value of the Collateral in the
aggregate has depreciated as determined by Lender in its reasonable judgment and
Borrower or Guarantor, as applicable, fails to provide additional Collateral
subject to similar documentation, all in form amount and substance reasonably
acceptable to Lender;
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8.17 INTERCREDITOR AGREEMENT. The breach of Borrower or the Noteholders of
any provision of the Intercreditor Agreement and the continuance of such breach
for a period of five (5) business days.
then immediately upon the occurrence of any of the events described in SECTION
8.5 and at the option of the Lender upon the occurrence of any other Event of
Default, the Loans, all Notes and all other Obligations immediately will mature
and become due and payable without presentment, demand, protest or notice of any
kind which are hereby expressly waived. After the occurrence of any Event of
Default, Lender is authorized without notice to anyone to offset and apply to
all or any part of the Obligations all moneys, credits and other property of any
nature whatsoever of Borrower now or at any time hereafter in the possession of,
in transit to or from, under the control or custody of, or on deposit with
(whether held by Borrower individually or jointly with another party), Lender or
any of Lender's Affiliate. The rights and remedies of Lender upon the occurrence
of any Event of Default will include but not be limited to all rights and
remedies provided in the Security Documents and all rights and remedies provided
under applicable law. In furtherance but not in limitation of the foregoing,
upon the occurrence of an Event of Default, Lender may refuse to make any
further advances under any revolving credit note included in the Obligations.
Borrower waives any requirement of marshalling of the assets covered by the
Security Documents upon the occurrence of any Event of Default. Upon or at any
time after the occurrence of an Event of Default, Lender may request the
appointment of a receiver of the Collateral. Such appointment may be made
without notice, and without regard to (i) the solvency or insolvency, at the
time of application for such receiver, of the person or persons, if any, liable
for the payment of the Obligations; and (ii) the value of the Collateral at such
time. Such receiver will have the power to take possession, control and care of
the Collateral and to collect all accounts resulting therefrom. Notwithstanding
the appointment of any receiver, trustee, or other custodian, Lender will be
entitled to the possession and control of any cash, or other instruments at the
time held by, or payable or deliverable under the terms of this Loan Agreement
or any Security Documents to Lender.
9. CONDITIONS PRECEDENT.
9.1 AT CLOSING. Lender's obligation to make any of the Loans is conditioned
upon the receipt by Lender of all documents in form and substance acceptable to
Lender listed on the Closing Memo, except for those specifically listed thereon
as post-closing items.
9.2 NOTE PURCHASE AGREEMENT AMENDMENTS. Lender's obligation to make any of
the Loans is conditioned upon the receipt by Lender of evidence that certain
amendments, acceptable to Lender in its sole discretion, to the Note Purchase
Agreement have been completed.
9.3 ADDITIONAL ADVANCES. Lender's obligations to make any Loan and/or any
advance under any Note on any date in the future (to the extent that there are
funds remaining to be disbursed hereunder or under any Note) are subject to the
conditions precedent that:
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9.3.1 NO DEFAULTS. There does not exist any Event of Default, nor any
event which upon notice or lapse of time or both would constitute an Event of
Default.
9.3.2 ACCURACY. The representations and warranties contained in this
Agreement, the Security Documents, and in each document listed on the Closing
Memo and in any document delivered in connection therewith will be true and
accurate on and as of such date, in all material respects, except as such
warranties and representations may be affected by: (a) this Agreement or
transactions contemplated thereby, and (b) events occurring after the Closing
Date as to those representations and warranties relating to the Current
Financial Statements.
9.4 BORROWING REPRESENTATIONS. Each borrowing by Borrower hereunder will
constitute a representation and warranty by Borrower as of the date of such
borrowing that the conditions set forth in SECTION 9.3 have been satisfied.
10. CLOSING EXPENSES. In connection with the closing of the Original Agreement,
Borrower paid Lender immediately upon the execution of the Original Agreement a
reasonable sum for expenses and Attorneys Fees incurred by Lender in connection
with the preparation, execution and delivery of this Agreement and the attendant
documents and the consummation of the transactions contemplated hereby together
with all: (a) recording fees and taxes; (b) survey, appraisal and environmental
report charges; and (c) title search and title insurance charges, including any
stamp or documentary taxes, charges or similar levies which arise from the
payment made hereunder or from the execution, delivery or registration or any
Security Document or that Agreement. Upon the execution of the Amended and
Restated Agreement, Borrower will pay Lender a reasonable sum for expenses and
Attorneys Fees incurred by Lender in connection with the preparation, execution
and delivery of this Agreement and the attendant documents and the consummation
of the transactions contemplated hereby together with all: (a) recording fees
and taxes; (b) survey, appraisal and environmental report charges; and (c) title
search and title insurance charges, including any stamp or documentary taxes,
charges or similar levies which arise from the payment made hereunder or from
the execution, delivery or registration or any Security Document or this
Agreement. If Borrower fails to pay such fees, Lender is entitled to disburse
such sums as an advance under any Note.
11. POST-CLOSING EXPENSES. To the extent that Lender incurs any costs or
expenses in protecting or enforcing its rights in the Collateral or observing or
performing any of the conditions or obligations of Borrower or any Guarantor
thereunder, including but not limited to reasonable Attorneys' Fees in
connection with litigation, preparation of amendments or waivers, present or
future stamp or documentary taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of
any Security Document or this Agreement, such costs and expenses will be due on
demand, will be included in the Obligations and will bear interest from the
incurring or payment thereof at the Default Rate.
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12. REPRESENTATIONS AND WARRANTIES TO SURVIVE. All representations, warranties,
covenants, indemnities and agreements made by Borrower herein and in the
Security Documents will survive the execution and delivery of this Agreement,
the Security Documents and the issuance of any Notes.
13. ENVIRONMENTAL INDEMNIFICATION. Lender will not be deemed to assume any
liability or obligation for loss, damage, fines, penalties, claims or duties to
clean-up or dispose of wastes or materials on or relating to the Property merely
by conducting any inspections of the Property or by obtaining title to the
Property by foreclosure, deed in lieu of foreclosure or otherwise. Borrower,
including its successors and assigns, agrees to remain fully liable and will
indemnify, defend and hold harmless Lender, its directors, officers, employees,
agents, contractors, subcontractors, licensees, invitees, successors and
assigns, from and against any claims, demands, judgments, damages, actions,
causes of action, injuries, administrative orders, liabilities, costs, expenses,
clean-up costs, waste disposal costs, litigation costs, fines, penalties,
damages and other related liabilities arising from (i) the failure of Borrower
to perform any obligation herein required to be performed by Borrower, (ii) the
removal or other remediation of hazardous or toxic substances, hazardous wastes,
pollutants or contaminants, solid waste or petroleum at or from the Property,
(iii) any act or omission, event or circumstance existing or occurring resulting
from or in connection with the ownership, construction, occupancy, operation,
use and/or maintenance of the Property, (iv) any and all claims or proceedings
(whether brought by private party or governmental agency) for bodily injury,
property damage, abatement or remediation, environmental damage or impairment
and any other injury or damage resulting from or relating to any hazardous or
toxic substances, hazardous waste, pollutants, contaminants, solid waste, or
petroleum located upon or migrating into, from or through the Property (whether
or not any or all of the foregoing was caused by the Borrower or its tenant or
subtenant, or a prior owner of the Property or its tenant or subtenant, or any
third party and whether or not the alleged liability is attributable to the
handling, storage, generation, transportation or disposal of such material or
the mere presence of such material on the Property), and (v) Borrower's breach
of any representation or warranty contained in this Section. Without limitation,
the foregoing indemnities will apply to Lender with respect to claims, demands,
losses, damages (including consequential damages), liabilities, causes of
action, judgements, penalties, costs and expenses (including reasonable
attorneys' fees and court costs) which in whole or in part are caused by or
arise out of the negligence of Lender. Such indemnity, however, will not apply
to Lender to the extent the subject of the indemnification is caused by or
arises out of the gross negligence or willful misconduct of Lender. All
environmental representations, warranties, covenants, and indemnities will
continue indefinitely and may not be cancelled or terminated except by a writing
signed by Lender specifically referring to this Section. Notwithstanding
anything contained to the contrary in the Note, Loan Agreement, or other loan
documents evidencing or securing the Obligations, the provisions of this Section
will survive the termination or expiration of the Obligations, the full
repayment of the Obligations, or the acquiring of title by Borrower or its
successors and assigns by foreclosure, deed in lieu of foreclosure or otherwise,
and will be fully enforceable against Borrower and its successors and assigns.
The provisions
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of this Section will constitute a separate undertaking by Borrower and will be
an inducement to Borrower in extending the Loan evidencing the Obligations to
Borrower. The provisions of this Section will not be subject to any
anti-deficiency or similar laws.
14. DEFINITIONS. For purposes hereof:
14.1 Each accounting term not defined or modified herein will have the
meaning given to it under generally accepted accounting principles in effect on
the Closing Date.
14.2 "Affiliate" will mean any person, partnership, joint venture, company
or business entity under common control or having similar equity holders owning
at least ten percent (10%) thereof, whether such common control is direct or
indirect. All of Person's direct or indirect parent corporations, partners,
Subsidiaries, and the officers, shareholders, members, directors and partners of
any of the foregoing and persons related by blood or marriage to any of the
foregoing will be deemed to be a Person's Affiliates for purposes of this
Agreement.
14.3 "Attorneys Fees" will mean the reasonable value of the services (and
all costs and expenses related thereto) of the attorneys (and all paralegals and
other staff employed by such attorneys) employed by Lender from time to time to:
(i) take any action in or with respect to any suit or proceedings (bankruptcy or
otherwise) relating to the Collateral or this Agreement; (ii) protect, collect,
lease or sell, any of the Collateral; (iii) attempt to enforce any lien on any
of the Collateral or to give any advice with respect to such enforcement; (iv)
enforce any of Lender's rights to collect any of the Obligations; (v) give
Lender advice with respect to this Agreement, including but not limited to
advice in connection with any default, workout or bankruptcy; (vi) prepare any
amendments, restatements, amendments or waivers to this Agreement or any of the
documents executed in connection with any of the Obligations.
14.4 "Bond Documents" will mean the Trust Indenture dated as of September
1, 1986 between the County of Xxxxxx, Ohio and PNC Bank, Ohio, National
Association, executed in connection with the Bonds, the Loan Agreement dated as
of September 1, 1986 between O'Xxxx Xxxx & Xxxxxxxxxx Armoring Company Limited
Partnership and the County of Xxxxxx, Ohio executed in connection with the Bonds
and all other documents executed in connection with the Bonds.
14.5 "Business Day" will mean any day excluding Saturday, Sunday and any
other day on which banks are required or authorized to close in Ohio.
14.6 "Capitalization" will mean Funded Debt plus Net Worth.
14.7 "Closing" will mean the execution and delivery of the documents listed
on the Closing Memo.
14.8 "Closing Date" will mean the date on which this Agreement is executed.
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14.9 "Closing Memo" will mean the Closing Memorandum between Borrower and
Lender in connection with the transactions represented by this Agreement.
14.10 "Code" will mean the Internal Revenue Code of 1986, as amended from
time to time.
14.11 "Collateral" will mean any property, real or personal, tangible or
intangible, now or in the future securing the Obligations, including but not
limited to the property covered by the Security Documents listed in the Closing
Memo.
14.12 "Collateral Agent" will mean KeyBank National Association as the
Collateral Agent under the Intercreditor Agreement dated as of even date
herewith.
14.13 "Compliance Certificate" will mean the Compliance Certificate in the
form delivered to Borrower by Lender in connection with the Closing.
14.14 "Current Financial Statements" will mean the following financial
statements: TKOGC's internally prepared consolidated balance sheet dated
December 31, 2000 and statement of profit, loss and surplus for the period
January 1, 2000 through December 31, 2000. For the purposes of any future date
on which the representations and warranties contained in SECTION 5 hereof are
deemed to be remade, the most current financial statements, tax returns or other
documents with respect to Borrower or any Guarantor delivered to Lender pursuant
to SECTION 6 above will be deemed the "Current Financial Statements."
14.15 "Debt" will mean, without duplication: (i) all obligations (including
capitalized lease obligations) which in accordance with generally accepted
accounting principles would be shown on a balance sheet as a liability; (ii) all
obligations for borrowed money or for the deferred purchase price of property or
services; (iii) all guarantees, reimbursement, payment or similar obligations,
absolute, contingent or otherwise, under acceptance, letter of credit or similar
facilities, and (iv) all obligations for any Swap. For the purposes of this
Section, "Swap" shall mean, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps, and similar obligations
obligating such Person making payments, whether periodically or upon the
happening of a contingency. The amount of the obligation under any Swap shall be
the amount determined by Lender in its reasonable calculation to be that portion
of the Swap obligation that represents the credit risk of such Person under the
Swap.
14.16 "Default Rate" will mean 4% per annum plus the highest rate of
interest that would otherwise be in effect under any Note but not more than the
highest rate permitted by applicable law.
14.17 "Default" will mean any event or condition which with the passage of
time or giving of notice, or both, would constitute an Event of Default.
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14.18 "Disclosure Schedule" will mean the Disclosure Schedule delivered by
the Borrower to the Lender in connection with the Prior Agreement.
14.19 "Environmental Report" will mean the environmental site assessment of
the Property previously delivered to Lender.
14.20 "ERISA Affiliate" will mean any trade or business (whether or not
incorporated) that is a member of a group of which Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
14.21 "ERISA" will mean the Employee Retirement Income Security Act of
1974, or any successor statute, as amended from time to time.
14.22 "Event of Default" will mean any of the events listed in SECTION 8.
14.23 "Funded Debt" will mean all Indebtedness, other than any Swap
amounts, as that term is defined in SECTION 14.29, on a consolidated basis,
including any amount which may be considered the current portion of such
Indebtedness.
14.24 "Government Receivables" will mean those receivables payable to
Borrower or Guarantor from the U.S. Government which are to be assigned to
Lender in connection with this Agreement.
14.25 "Governmental Authority" will mean the government of the United
States of America or any state or other political subdivision thereof, or any
jurisdiction in which the Company or any Subsidiary conducts all or any part of
its business, or that asserts jurisdiction over any properties of the Company or
any Subsidiary, or any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
14.26 "Guarantees" will mean the guarantees of all or any part of the
Obligations, now existing or hereafter arising, including but not limited to
those listed on the Closing Memo, whether on a full, limited or non-recourse
basis and such term will include any person or entity that hypothecates or
otherwise pledges any property to Lender in connection with any of the
Obligations and will include any amendments thereto and restatements thereof.
14.27 "Guarantor(s)" will mean any persons or entities that now or in the
future deliver one or more Guarantees to Lender, including but not limited to,
Corplex, Inc., O'Gara Security International, Inc., O'Gara Satellite Networks,
Inc., Kroll Environmental Enterprises, Inc., Kroll Information Services, Inc.,
Xxxxx Associates International Holdings, Inc., Kroll Background America, Inc.,
Kroll Xxxxxxxxx Xxxx, Inc., Inphoto Surveillance, Inc., Kroll Schiff &
Associates, Inc., Kroll Laboratory Specialists, Inc., Xxxxx-X'Xxxx Crisis
Management Group, Inc., ITI Limited Partnership, International Training,
Incorporated and Kroll Xxxxxxx Xxxxxxxx, Ltd.
14.28 "Hazardous wastes", "hazardous substances" and "pollutants or
contaminants" will mean any substances, waste, pollutant or contaminant now or
hereafter included with any
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respective terms under any now existing or hereinafter enacted or amended
federal, state or local statute, ordinance, code or regulation, including but
not limited to the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 ET SEQ. ("CERCLA").
14.29 "Indebtedness" will mean, without duplication: (i) all obligations
for borrowed money or for the deferred purchase price of property (including
capitalized lease obligations) or services; (ii) all guarantees, reimbursement,
payment or similar obligations, absolute, contingent or otherwise, under
acceptance, letter of credit or similar facilities, and (iii) all obligations
for any Swap. For the purposes of this Section, "Swap" shall mean, with respect
to any Person, payment obligations with respect to interest rate swaps, currency
swaps, and similar obligations obligating such Person making payments, whether
periodically or upon the happening of a contingency. The amount of the
obligation under any Swap shall be the amount determined by Lender in its
reasonable calculation to be that portion of the Swap obligation that represents
the credit risk of such Person under the Swap.
14.30 "Intercreditor Agreement" will mean the Collateral Agency and
Intercreditor Agreement entered into as of even date with this Agreement between
Lender and the Noteholders under the Note Purchase Agreement.
14.31 "Lender's Affiliate" will mean any person, partnership, joint
venture, company or business entity under common control or having similar
equity holders owning at least ten percent (10%) thereof with Lender, whether
such common control is direct or indirect. All of Lender's direct or indirect
parent corporations, sister corporations, and Subsidiaries will be deemed to be
a Lender's Affiliate for purposes of this Agreement.
14.32 "Letters of Credit" will mean the Alternate Letter of Credit and all
Transactional Letters of Credit.
14.33 "Letter of Credit Documents" will mean the respective applications
and agreements with respect to Letters of Credit on Lender's standard forms
thereof (or such other form as Lender and Borrower may agree) signed at the time
of issuance or renewal of such Letters of Credit.
14.34 "Loan(s)" will mean any and all advances of funds under this
Agreement or any of the Notes.
14.35 "Mortgage" will mean the Open-End Mortgage, Assignment of Rents and
Leases and Security Agreement from OGHEAC to Lender securing the reimbursement
obligations relating to the Alternate Letter of Credit.
14.36 "Multiemployer Plan" will mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or
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accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
14.37 "Net Worth," at any particular time, will mean the sum of the amounts
appearing on the balance sheet of such entity under shareholder's equity as: (a)
the stated value of all outstanding stock, (b) capital, paid-in and earned
surplus and (c) cumulative foreign currency translation adjustments.
14.38 "Note(s)" will mean any note, now or in the future, between Borrower
and Lender, and will include any amendments made thereto and restatements
thereof, extensions and replacements.
14.39 "Note Purchase Agreement" will mean the Note Purchase Agreement dated
as of May 30, 1997 between The Kroll X'Xxxx Company, formerly known as The
O'Gara Company, and the Purchasers (as defined therein), as amended from time to
time as permitted by the Intercreditor Agreement.
14.40 "Noteholders" will mean the Purchasers of Senior Notes pursuant to
the Note Purchase Agreement.
14.41 "Obligations" will mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties owing to Lender or any of
Lender's Affiliates from Borrower of any kind or nature, present or future
(including any obligations under any interest rate swap, cap, collar, floor,
option, forward, or other type of interest rate protection, foreign exchange or
derivative transaction agreement, including any other master agreement covering
any such transaction) whether or not evidenced by any note, guaranty or other
instrument, whether arising under this Agreement or under any other agreement,
instrument or document, whether or not for the payment of money, whether arising
by reason of an extension of credit, opening of a letter of credit, loan,
guaranty, indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment, participation, purchase, negotiation,
discount or otherwise), absolute or contingent, joint or several, due or to
become due, now existing or hereafter arising and whether or not contemplated by
Borrower or Lender or Lender's Affiliates on the Closing Date.
14.42 "PBGC" will mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
14.43 "Permitted Liens" will mean:
(i) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by appropriate
proceedings, and as to which it has set aside on its books adequate
reserves to the extent required by generally accepted accounting
principles;
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(ii) deposits under workers' compensation, unemployment insurance
and social security laws, or to secure the performance of bids,
tenders, contracts (other than for the repayment of borrowed money)
or leases, or to secure statutory obligations or surety or appeal
bonds, or to secure indemnity, performance or other similar bonds in
the ordinary course of business;
(iii) liens imposed by law, such as carriers' warehousemen's or
mechanics' liens, incurred by it in good faith in the ordinary
course of business, and liens arising out of a judgment or award
against it with respect to which it will currently be prosecuting an
appeal, a stay of execution pending such appeal having been secured;
(iv) liens in favor of Lender or the Noteholders permitted by the
Intercreditor Agreement;
(v) reservations, exceptions, encroachments and other similar title
exceptions or encumbrances affecting real properties, provided such
do not materially detract from the use or value thereof as used by
the owner thereof;
(vi) attachment, judgment and similar liens provided that execution
is effectively stayed pending a good faith contest;
(vii) liens in favor of the United States or any department or
agency thereof in connection with progress payments made to
Borrower;
(viii) liens existing on the date of this Agreement and securing
Indebtedness of Borrower and/or its Subsidiaries referred to in
SCHEDULE 14.42 attached hereto; and
(ix) purchase money liens securing Debt permitted pursuant to
SECTION 7.1, above, which liens are limited in scope to the property
acquired with such Debt.
14.44 "Person" will include an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a joint
stock company, an unincorporated organization, a joint venture, a government
(foreign or domestic), any agency or political subdivisions thereof, or any
other entity.
14.45 "Plan" will mean any pension plan subject to the provisions of Title
IV of ERISA or Section 412 of the Code and which is maintained for employees of
Borrower or any ERISA Affiliate.
14.46 "Pledge Agreements" one or more Pledge Agreements executed and
delivered by The Xxxxx-X'Xxxx Company, X'Xxxx-Xxxx & Xxxxxxxxxx Armoring
Company, Kroll Holdings, Inc., Xxxxx Associates, Inc., O'Gara Security
International, Inc., Xxxxx Associates International Holdings, Inc. and Kroll
Background America, Inc. to Lender.
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14.47 "Pledged Collateral" will mean property of each Borrower and each
Guarantor in which security interests are to be granted under the Pledge
Agreements.
14.48 "Prime Rate" means the higher of: (i) that interest rate established
from time to time by Lender as Lender's Prime Rate, whether or not such rate is
publicly announced, or (ii) one half of one percent (0.5%) plus the Federal
Funds Effective Rate. The Prime Rate may not be the lowest interest rate charged
by Lender for commercial or other extensions of credit. As used herein, the
"Federal Funds Effective Rate" will mean a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the prior day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the opening quotations for such day for such
transactions received by Lender from three Federal funds brokers of recognized
standing selected by it.
14.49 "Priority Indebtedness" means, at any time, without duplication, the
sum of (a) all Debt of the Borrower secured by any Lien, other than any such
Debt secured by a Lien permitted by Section 14.43, the definition of Permitted
Liens, plus (b) all Debt of Subsidiaries, provided that there shall be excluded
from Priority Indebtedness (i) Debt of any Guarantor under the Guaranty
Agreement as defined in Note Purchase Agreements dated as of May 30, 1997
between TKOGC and the Purchasers named therein ("Note Purchase Agreements"),
(ii) unsecured Debt of any Guarantor, so long as such obligations of such
Guarantor are subject to the sharing provisions of the Sharing Agreement (as
defined in the Note Purchase Agreements) or are subject to an agreement
substantially similar to that provided for in the Sharing Agreement with Lender
as a party, (iii) Debt under this Agreement and under the notes issued under the
Note Purchase Agreements, and (iv) any Debt of any Subsidiary under clause (b)
above owing solely to the Borrower or any Wholly-Owned Subsidiary.
14.50 "Proxy Statement/Prospectus" will mean any document for disclosure or
reporting purposes filed with the Securities and Exchange Commission and
publicly available.
14.51 "Reportable Event" will mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
14.52 "Security Documents" will mean the agreements, pledges, mortgages,
guarantees, or other documents delivered by Borrower, any Guarantor or any other
person or entity to Lender previously, now or in the future to encumber the
Collateral in favor of Lender, including but not limited to those listed on the
Closing Memo, and all amendments thereto and restatements thereof.
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14.53 "Senior Notes" will mean those notes issued pursuant to Borrower's
$35,000,000 Note Purchase Agreement dated as of May 30, 1997 with the Lenders
listed in such Agreement.
14.54 "Subsidiaries" will mean a corporation of which shares of stock
having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) to elect a majority of the Board of Directors
or other managers of such corporation are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by a Person or by subsidiaries of such subsidiaries.
14.55 "Withdrawal Liability" will mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
All other terms contained in this Agreement and not otherwise defined herein
will, unless the context indicates otherwise, have the meanings provided for by
the Uniform Commercial Code of the State of Ohio to the extent the same are
defined therein.
15. GENERAL.
15.1 INDEMNITY. Borrower will indemnify, defend and hold harmless Lender,
its directors, officers, counsel and employees, from and against all claims,
demands, liabilities, judgments, losses, damages, costs and expenses, joint or
several (including all accounting fees and Attorneys' Fees reasonably incurred),
that Lender or any such indemnified party may incur arising under or by reason
of this Agreement or any act hereunder or with respect hereto or thereto
including but not limited to any of the foregoing relating to any act, mistake
or failure to act in perfecting, maintaining, protecting or realizing on any
collateral or lien thereon except the willful misconduct or gross negligence of
such indemnified party. Without limiting the generality of the foregoing and
subject to terms and conditions of the foregoing, Borrower agrees that if, after
receipt by Lender of any payment of all or any part of the Obligations, demand
is made at any time upon Lender for the repayment or recovery of any amount or
amounts received by it in payment or on account of the Obligations and Lender
repays all or any part of such amount or amounts by reason of any judgment,
decree or order of any court or administrative body, or by reason of any
settlement or compromise of any such demand, this Agreement will continue in
full force and effect and Borrower will be liable, and will indemnify, defend
and hold harmless Lender for the amount or amounts so repaid. The provisions of
this Section will be and remain effective notwithstanding any contrary action
which may have been taken by Borrower in reliance upon such payment, and any
such contrary action so taken will be without prejudice to Lender's rights under
this Agreement and will be deemed to have been conditioned upon such payment
having become final and irrevocable. The provisions of this Section will survive
the expiration or termination of this Agreement.
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15.2 CONTINUING AGREEMENT. This Agreement is and is intended to be a
continuing Agreement and will remain in full force and effect until the Loan is
finally and irrevocably paid in full and this Agreement is terminated by a
writing signed by Lender specifically terminating this Agreement.
15.3 NO THIRD PARTY BENEFICIARIES. Nothing express or implied herein is
intended or will be construed to confer upon or give any person, firm or
corporation, other than the parties hereto, any right or remedy hereunder or by
reasons hereof.
15.4 NO PARTNERSHIP OR JOINT VENTURE. Nothing contained herein or in any of
the agreements or transactions contemplated hereby is intended or will be
construed to create any relationship other than as expressly stated herein or
therein and will not create any joint venture, partnership or other
relationship.
15.5 WAIVER. No delay or omission on the part of Lender to exercise any
right or power arising from any Event of Default will impair any such right or
power or be considered a waiver of any such right or power or a waiver of any
such Event of Default or any acquiescence therein nor will the action or
nonaction of Lender in case of such Event of Default impair any right or power
arising as a result thereof or affect any subsequent default or any other
default of the same or a different nature. No disbursement of the Loans
hereunder will constitute a waiver of any of the conditions to Lender's
obligation to make further disbursements; nor, in the event that Borrower is
unable to satisfy any such condition, will any such disbursement have the effect
of precluding Lender from thereafter declaring such inability to be an Event of
Default.
15.6 NOTICES. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder will be in writing and will be
conclusively deemed to have been received by a party hereto and to be effective
if delivered personally to such party, or sent by telex, telecopy (followed by
written confirmation) or other telegraphic means, or by overnight courier
service, or by certified or registered mail, return receipt requested, postage
prepaid, addressed to such party at the address set forth below or to such other
address as any party may give to the other in writing for such purpose:
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To Lender: KeyBank National Association
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Fender
Telecopier: 000-000-0000
To Borrower: The Xxxxx-X'Xxxx Company
0000 XxXxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: General Counsel
Telecopier: 000-000-0000
and
The Xxxxx-X'Xxxx Company
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Telecopier: 000-000-0000
All such communications, if personally delivered, will be conclusively deemed to
have been received by a party hereto and to be effective when so delivered, or
if sent by telex, telecopy or telegraphic means, on the day on which
transmitted, or if sent by overnight courier service, on the day after deposit
thereof with such service, or if sent by certified or registered mail, on the
third business day after the day on which deposited in the mail.
15.7 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of Borrower and Lender and their respective successors and
assigns, provided, however, that Borrower may not assign this Agreement in whole
or in part without the prior written consent of Lender and Lender at any time
may assign this Agreement in whole or in part, provided, however, that no such
assignment by Lender will relieve Lender of its obligations hereunder unless
Borrower so consents in writing.
15.8 MODIFICATIONS. This Agreement, any Notes and the Security Documents,
and the documents listed on the Closing Memo, constitute the entire agreement of
the parties and supersede all prior agreements and understandings regarding the
subject matter of this Agreement, including but not limited to any proposal or
commitment letters. No modification or waiver of any provision of this
Agreement, any Note, any of the Security Documents or any of the documents
listed on the Closing Memo, nor consent to any departure by Borrower therefrom,
will be established by conduct, custom or course of dealing; and no
modification,
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waiver or consent will in any event be effective unless the same is in writing
and specifically refers to this Agreement, and then such waiver or consent will
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on Borrower in any case will entitle Borrower to any
other or further notice or demand in the same, similar or other circumstance.
15.9 REMEDIES CUMULATIVE. No single or partial exercise of any right or
remedy by Lender will preclude any other or further exercise thereof or the
exercise of any other right or remedy. All remedies hereunder and in any
instrument or document evidencing, securing, guaranteeing or relating to any
Loan or now or hereafter existing at law or in equity or by statute are
cumulative and none of them will be exclusive of the others or any other remedy.
All such rights and remedies may be exercised separately, successively,
concurrently, independently or cumulatively from time to time and as often and
in such order as Lender may deem appropriate.
15.10 ILLEGALITY. If fulfillment of any provision hereof or any transaction
related hereto or of any provision of the Notes or the Security Documents, at
the time performance of such provision is due, involves transcending the limit
of validity prescribed by law, then IPSO FACTO, the obligation to be fulfilled
will be reduced to the limit of such validity; and if any clause or provisions
herein contained other than the provisions hereof pertaining to repayment of the
Obligations operates or would prospectively operate to invalidate this Agreement
in whole or in part, then such clause or provision only will be void, as though
not herein contained, and the remainder of this Agreement will remain operative
and in full force and effect; and if such provision pertains to repayment of the
Obligations, then, at the option of Lender, all of the Obligations of Borrower
to Lender will become immediately due and payable.
15.11 GENDER, ETC. Whenever used herein, the singular number will include
the plural, the plural the singular and the use of the masculine, feminine or
neuter gender will include all genders.
15.12 HEADINGS. The headings in this Agreement are for convenience only and
will not limit or otherwise affect any of the terms hereof.
15.13 TIME. Time is of the essence in the performance of this Loan
Agreement.
15.14 GOVERNING LAW AND JURISDICTION; NO JURY TRIAL. THIS AGREEMENT WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES, AND BORROWER HEREBY AGREES TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN XXXXXXXX COUNTY, OHIO AND CONSENTS THAT ALL SERVICE
OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO BORROWER AT BORROWER'S ADDRESS
SET FORTH HEREIN FOR NOTICES AND SERVICE SO
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MADE WILL BE DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME HAS
BEEN DEPOSITED IN U.S. MAILS, POSTAGE PREPAID; PROVIDED THAT NOTHING CONTAINED
HEREIN WILL PREVENT LENDER FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS
AGAINST ANY SECURITY OR AGAINST BORROWER INDIVIDUALLY, OR AGAINST ANY PROPERTY
OF BORROWER, WITHIN ANY OTHER STATE OR NATION. BORROWER WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OR ANY ACTION
INSTITUTED HEREUNDER. BORROWER AND LENDER EACH WAIVE ANY RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY DOCUMENTS EVIDENCING
ANY OF THE OBLIGATIONS, OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH
AGREEMENTS.
((REMAINDER OF PAGE INTENTIONALLY BLANK, SIGNATURE PAGE FOLLOWS)
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Executed as of March 30, 2001
BORROWER
THE XXXXX-X'XXXX COMPANY
By:______________________________________
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
X'XXXX-XXXX & XXXXXXXXXX
ARMORING COMPANY
By:______________________________________
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXX HOLDINGS, INC.
By:______________________________________
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
KROLL ASSOCIATES, INC.
By:______________________________________
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
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LENDER
KEYBANK NATIONAL ASSOCIATION
By:______________________________________
Print Name: Xxxxx X. Fender
Title: Senior Vice President
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