1
Exhibit 10.17
AMENDED AND RESTATED
LOAN AGREEMENT
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 KROLL 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 Loan Agreement
dated as of May 30, 1997 between The O'Gara Company and X'Xxxx-Xxxx & Xxxxxxxxxx
Armoring Company 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 the Prior Agreement.
1.2 Borrower and Lender desire to amend and restate the Prior
Agreement, pursuant to this 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 line
of credit of up to $7,000,000 ("Total Facility"), subject to the terms and
conditions and made upon the representations and warranties of Borrower set
forth in this Agreement. Amounts outstanding under the line of credit 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.
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
1
2
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 0.5% 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 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.
3.2 TRANSACTION LOAN.
3.2.1 TRANSACTION FACILITY. Upon the execution of this Agreement to
facilitate the closing of the merger of a wholly owned subsidiary of TKOGC into
Xxxxx Holdings, Inc., Lender will lend to Borrower and Borrower will borrow from
Lender the sum of $7,000,000 ("Transaction Loan"), subject to the terms and
conditions and upon the representations and warranties of Borrower set forth in
this Agreement. The Transaction Loan will be evidenced by the promissory note of
Borrower of even date herewith and all amendments, extensions and renewals
thereto and replacements and restatements thereof ("Transaction Note"). The
Transaction Loan will bear interest and will be repayable in the manner set
forth in the Transaction Note, the terms of which are incorporated herein by
reference.
3.2.2 LOAN FEE. Borrower agrees to pay to Lender a fee equal to 1
percent of the principal amount of the Transaction Loan ($70,000) (the
"Transaction Fee"). The Transaction Fee will be paid to the Lender at Closing.
Lender acknowledges receipt of $25,000 from Borrower, which will be credited
against the Transaction Fee on the Closing Date.
3.2.3 TERMINATION OR EXPIRATION. If the Revolving Credit Loan
terminates or expires prior to the maturity date specified in the Transaction
Note, Borrower will prepay in full the Transaction Note on such termination or
expiration date.
3.2.4 CONSENT. Lender hereby consents to the transactions
contemplated by the Proxy Statement/Prospectus.
3.3 ISSUANCE OF LETTERS OF CREDIT.
3.3.1 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 $1,681,750.
2
3
3.3.2 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 3.3.3 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.
3.3.3 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,
1999.
3.3.4 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
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.
3.3.5 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)
3
4
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.
3.3.6 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.
3.3.7 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, 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.
3.3.8 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
4
5
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 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
5
6
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 3.3.8 will survive the
termination of this Agreement.
3.3.9 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.
3.4 ADDITIONAL COSTS.
3.4.1 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
6
7
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.
3.4.2 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.
3.4.3 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.
7
8
4. COLLATERAL.
4.1 The Collateral for the repayment of the obligations with respect to
the Transaction Loan will be that granted pursuant to the Security Documents
other than the Mortgage.
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. It is a corporation 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 it 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 September
30, 1997 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.
5.3 RECENT ADVERSE CHANGES. Except as specifically disclosed in the
Disclosure Schedule, since the dates of the most recent of its Current Financial
Statements, it has not suffered any damage, destruction or loss which has
materially and adversely affected its business or assets 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, its business has been conducted in the ordinary
course and it has 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; (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
8
9
than to Subsidiaries as permitted under this Agreement, or otherwise conducted
its business other than in the ordinary course.
5.5 TITLE. It 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 connection with the closing of this Agreement, (d) assets disposed of
in the ordinary course of business, and (e) Permitted Liens.
5.6 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 it 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.
5.7 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.
5.8 AUTHORITY. It 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).
5.9 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
corporate entities only, its Articles or Certificate of Incorporation and
Regulations or Bylaws, 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; or (c) 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.
5.10 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,
9
10
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.
5.11 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.
5.12 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 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.
5.13 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).
5.14 ENVIRONMENTAL MATTERS. Qualified, however, as to SECTION 5.14.3,
below, by those matters, if any, set forth in the Environmental Report:
5.14.1 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").
5.14.2 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.
5.14.3 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,
10
11
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.
5.14.4 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 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.
5.15 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.
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. It 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, it will be available to Lender, or cause its officers or general
partners, as applicable, to be available from time to time upon reasonable
notice to discuss the status of the Loans, its business and any statements,
records or documents furnished or made available to Lender in connection with
this Agreement.
6.2 MONTHLY STATEMENTS. Furnish Lender within 30 days after the end of
each calendar month internally prepared financial statements of TKOGC with
respect to such month,
11
12
which financial statements will be in the form prepared by TKOGC for its own
internal purposes and will include financial statements broken down by
geographic region for all entities being acquired through the transaction
contemplated by the Proxy Statement/Prospectus and by lines of business for all
other entities.
6.3 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) 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 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.
6.4 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.
6.5 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.
6.6 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.
6.7 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
12
13
which it occupies or holds real or personal property so as to prevent any loss
or forfeiture thereof or thereunder.
6.8 INSURANCE. Keep its insurable real and personal property insured
with responsible insurance companies against loss or damage by fire, windstorm
and other hazards 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.
6.9 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.
6.10 ENVIRONMENTAL VIOLATIONS.
6.10.1 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.
6.10.2 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.
6.11 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
13
14
operating accounts, investment accounts and cash management services at Lender
in a reasonably timely manner provided Lender makes a satisfactory service
proposal.
6.12 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.
6.13 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.
6.14 SALE AND LEASEBACK. Not directly or indirectly enter into any
arrangement to sell or transfer all or any part of its assets then owned by it
and thereupon or within one year thereafter rent or lease any of the assets so
sold or transferred.
6.15 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.
7. NEGATIVE COVENANTS. From the date of execution of this Agreement until all of
the Obligations have been fully paid, Borrower will not without Lender's prior
written consent:
7.1 DEBT. Incur any Indebtedness 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) rental
and lease payments for real or personal property whose aggregate annual rental
payments would exceed $4,800,000 when
14
15
added to Borrower's rental or lease agreements existing on the date hereof; (d)
the Senior Notes; and (e) the obligation to Xxxxx X. Xxxxx in the amount of
approximately $310,000.
7.2 ACQUISITIONS. Acquire the stock or assets of any other Persons,
without the prior written consent of the Lender except for the pending
acquisition of Acorn Communications Group, Inc., and Imea, a Russian corporation
and the pending merger between a wholly owned subsidiary of The O'Gara Company
and Xxxxx Holdings, Inc., under terms and conditions materially the same as
presented by Borrower to Lender as of the date hereof.
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 Indebtedness 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 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, 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 FIXED CHARGE COVERAGE. Permit the ratio of: (i) the sum of
consolidated net income before depreciation, amortization, taxes, interest
expense and operating lease payments for the four most recently completed fiscal
quarters to (ii) the sum of current maturities of long-term debt including
capitalized lease payments for the same four fiscal quarters plus interest
expense and operating lease payments for the same four fiscal quarters to be
less than as follows: 2 to 1 for the period beginning with the date of execution
of this Agreement and continuing through December 31, 1997; 2.5 to 1 for the
period beginning January 1, 1998 and continuing through December 31, 1998; and 3
to 1 beginning January 1, 1999 and as of the end of each quarter thereafter.
7.6 MANAGEMENT. Fail to give Lender notice within 5 days and pay to
Lender upon Lender's written demand given within 60 days after receipt of notice
and payable 90 days after such demand without any other grace period or notice,
the entire unpaid balance of all of the Obligations, if Xxxxxx X. X'Xxxx, Vice
Chairman of the Board; Xxxxxxx X. X'Xxxx, President and Chief Operating Officer;
Xxxxxxxx X. Xxxxxxxxxx, Controller and Treasurer; and Xxxxx X. Xxxxxx, Vice
President, Secretary and General Counsel, each is no longer involved directly in
the management of Borrower.
7.7 NET WORTH MAINTENANCE. Fail to maintain at all times a minimum
consolidated Net Worth of not less than $25,000,000 plus: (i) 65% of positive
consolidated net income (with no deductions for net losses) for all periods
subsequent to December 31, 1997, plus (ii) 75% of the net proceeds of any cash
equity offerings, calculated in accordance with generally accepted accounting
principles on a cumulative basis for all periods subsequent to December 31,
1997.
15
16
7.8 DEBT TO CAPITALIZATION.
7.8.1 Permit its ratio of Debt to Capitalization to exceed the
following amounts:
RATIO FROM TO
----- ---- --
70.00% Closing 12/31/97
70.00% 1/1/98 12/31/98
65.00% 1/1/99 and at all times thereafter
7.9 Permit its ratio of Debt to Capitalization to exceed 60% at any
time after it makes a Substantial Equity Offering.
7.10 INTANGIBLES. Permit the total amount of patents, trademarks, trade
names, organizational expenses, capitalized database expenditures and other
intangible items of similar nature and goodwill, which appear on the asset side
of such balance sheet, to exceed $25,000,000.
7.11 CAPITAL EXPENDITURES.
7.11.1 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 the
following amounts:
AMOUNT PERIOD
------ ------
$3,700,000 1997 Fiscal Year
$4,200,000 1998 Fiscal Year
$3,500,000 1999 Fiscal Year
7.11.2 Make capitalized database expenditures, which, when
calculated in accordance with generally accepted accounting principles, would
exceed $3,750,000 in the aggregate in any fiscal year.
7.11.3 Unexpended amounts from the prior fiscal year may not be
carried forward to the next fiscal year. Capital Expenditures as a result of
acquisitions made in compliance with this Agreement will be disregarded for
purposes of determining compliance with this covenant.
7.12 FOREIGN INVESTMENT. Permit foreign investment (which for purposes
hereof will not be deemed to limit acquisitions) in the aggregate, including
loans payable, accounts payable and advances to TKOGC Subsidiaries, to exceed
$11,000,000, but for purposes hereof
16
17
excluding the loan by TKOGC to O'Gara-France, S.A. of F80,000,000 for the
purpose of acquiring Xxxxx, X.X.
7.13 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.
7.14 REDEMPTIONS. Purchase, retire, redeem or otherwise acquire for
value, directly or indirectly, any shares of its capital stock now or hereafter
outstanding.
7.15 INVESTMENTS. Purchase or hold beneficially any stock, other
securities or evidences of indebtedness of, or make any investment or acquire
any interest whatsoever in, any other person, firm or corporation other than
short term investments of excess working capital invested in one or more of the
following:
7.15.1 Investments in a Borrower;
7.15.2 Investments in one or more TKOGC Subsidiaries or in any
Person that concurrently with such Investment becomes a TKOGC Subsidiary;
provided that such Investments are in compliance with Section 7.12, above and as
to an Investment in domestic TKOGC Subsidiaries (other than a Borrower or any
Guarantor), such Investments do not exceed $1,000,000 in the aggregate in any
fiscal year;
7.15.3 Investments in United States Governmental Securities,
provided that such obligations mature within 365 days from the date of
acquisition thereof;
7.15.4 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;
7.15.5 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;
7.15.6 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;
7.15.7 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;
17
18
7.15.8 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
7.15.9 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.
7.15.10 Investments in Transamerica Waste in the amount of
approximately $25,000.
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,
(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.
7.16 MERGER, ACQUISITION OR SALE OF ASSETS. Except for mergers and
acquisitions for which Borrower, or any one of them, is the surviving entity and
are otherwise in compliance with Section 7.2, above, and do not result in a
Default, merge or consolidate with or into any other entity or acquire all or
substantially all the assets of any person, firm, partnership, joint venture or
corporation, or sell, lease or otherwise dispose of any of its assets except for
dispositions in the ordinary course of business.
7.17 ADVANCES AND LOANS. Except foreign investments permitted by
SECTION 7.12 and investments permitted by Section 7.15, 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.
18
19
7.18 SUBSIDIARIES. Except for acquisitions in compliance with Section
7.2 above or investments in compliance with Section 7.15, above, acquire any
Subsidiaries, create any Subsidiaries or enter into any partnership or joint
venture agreements.
7.19 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.
7.20 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 the Closing Memo on or before the date specified in the Closing Memo.
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;
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
19
20
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 $100,000;
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 $100,000 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 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.
20
21
8.12 OTHER INDEBTEDNESS TO LENDER OR LENDER'S AFFILIATES. A default
with respect to any evidence of Indebtedness 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
Indebtedness or to permit the holder thereof to cause such Indebtedness to
become due prior to the stated maturity thereof, or if any Indebtedness 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 INDEBTEDNESS. A default with respect to any evidence of
Indebtedness 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 Indebtedness or to permit the holder thereof to cause such
Indebtedness to become due prior to the stated maturity thereof, or if any
Indebtedness 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);
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.
21
22
9. CONDITIONS PRECEDENT.
9.1 AT CLOSING. Lender's obligation to make any of the Loans is
conditioned upon: (i) the concurrent closing of the transaction represented by
this Agreement and the merger between a wholly owned subsidiary of The O'Gara
Company and Kroll Holdings, Inc. on or before December 15, 1997 and (ii) 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 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:
9.2.1 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.
9.2.2 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.
9.3 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 9.2 have been satisfied.
10. CLOSING EXPENSES. Borrower will pay Lender immediately upon the execution of
this 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 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
22
23
included in the Obligations and will bear interest from the incurring or payment
thereof at the Default Rate.
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,
23
24
and will be fully enforceable against Borrower and its successors and assigns.
The provisions 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.
24
25
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 "Compliance Certificate" will mean the Compliance Certificate in
the form delivered to Borrower by Lender in connection with the Closing.
14.13 "Current Financial Statements" will mean the following financial
statements: (a) TKOGC's and OGHEAC's audited consolidated balance sheet dated
December 31, 1996 and statement of profit, loss and surplus for the fiscal year
ended December 31, 1996; (b) TKOGC's and OGHEAC's internally prepared
consolidated balance sheet dated September 30, 1997 and statement of profit,
loss and surplus for the period January 1, 1997 through September 30, 1997; (c)
KHI's and KAI's audited consolidated balance sheet dated December 31, 1996 and
statement of profit, loss and surplus for the fiscal year ended December 31,
1996; and (d) KHI's and KAI's internally prepared consolidated balance sheet
dated September 30, 1997 and statement of profit, loss and surplus for the
period January 1, 1997 through September 30, 1997.
14.14 "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.
14.15 "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.
14.16 "Disclosure Schedule" will mean the Disclosure Schedule delivered
by the Borrower to the Lender in connection with the Closing.
14.17 "Environmental Report" will mean the environmental site
assessment of the Property previously delivered to Lender.
14.18 "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.
14.19 "ERISA" will mean the Employee Retirement Income Security Act of
1974, or any successor statute, as amended from time to time.
14.20 "Event of Default" will mean any of the events listed in
SECTION 8.
25
26
14.21 "Funded Debt" will mean all Indebtedness which matures more than
one year after the date of its creation including any amount which may be
considered the current portion of such Indebtedness.
14.22 "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.
14.23 "Guarantor(s)" will mean any persons or entities that now or in
the future deliver one or more Guarantees to Lender. Initially, the Guarantors
will mean O'Gara Security International, Inc., O'Gara Satellite Networks, Inc.,
Kroll Environmental Enterprises, Inc., Kroll Information Services, Inc., Xxxxx
Associates International Holdings, Inc. and Xxxxx International, Inc.
14.24 "Hazardous wastes", "hazardous substances" and "pollutants or
contaminants" will mean any substances, waste, pollutant or contaminant now or
hereafter included with any 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").
14.25 "Indebtedness" 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; and (iii) all guarantees, reimbursement, payment
or similar obligations, absolute, contingent or otherwise, under acceptance,
letter of credit or similar facilities.
14.26 "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.
14.27 "Letters of Credit" will mean the Alternate Letter of Credit and
all Transactional Letters of Credit.
14.28 "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.
14.29 "Loan(s)" will mean any and all advances of funds under this
Agreement or any of the Notes.
26
27
14.30 "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.
14.31 "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 accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
14.32 "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.
14.33 "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.
14.34 "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,
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.
14.35 "PBGC" will mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
14.36 "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;
(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;
27
28
(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;
(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; and
(viii) liens existing on the date of this Agreement and securing
Indebtedness of Borrower and/or its Subsidiaries referred to in
Schedule A attached hereto, subject to the payment in full of
such debt so noted on Schedule A with the proceeds of the Senior
Notes and/or the Loan.
14.37 "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.
14.38 "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.
14.39 "Prime Rate" will mean the rate per annum established by Lender
from time to time based on its consideration of various factors, including money
market, business and competitive factors, and it is not necessarily Lender's
most favored interest rate. Subject to any maximum or minimum interest rate
limitations specified herein or by applicable law, if and when such Prime Rate
changes, then in each such event, the rate of interest payable under this
Agreement, any Note, the Security Documents or any other document evidencing the
Obligations that is tied to the Prime Rate will change automatically without
notice effective the date of such changes.
14.40 "Proxy Statement/Prospectus" will mean the Proxy
Statement/Prospectus dated November 7, 1997 and delivered by Borrower to Lender.
14.41 "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
28
29
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Code Section 414).
14.42 "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.
14.43 "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.
14.44 "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.
14.45 "Substantial Equity Offering" will mean any equity offering which
will generate net cash proceeds to the Borrower of not less than $20,000,000,
excluding the equity offering described in the Proxy Statement/Prospectus.
14.46 "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
29
30
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.
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:
30
31
To Lender: KeyBank National Association
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
To Borrower: The Xxxxx-X'Xxxx Company
0000 XxXxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: 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, 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,
31
32
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 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
32
33
OBLIGATIONS, OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH AGREEMENTS.
Executed as of December 1, 1997
BORROWER
THE XXXXX-X'XXXX COMPANY
By: /s/ Xxxxx X. Xxxxxx
------------------------
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
X'XXXX-XXXX & XXXXXXXXXX
ARMORING COMPANY
By: /s/ Xxxxx X. Xxxxxx
------------------------
Print Name: Xxxxx X. Xxxxxx
Title: Vice President
34
XXXXX HOLDINGS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------
Print Name: Xxxxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXX ASSOCIATES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------
Print Name: Xxxxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
LENDER
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Print Name: Xxxxxx X. Xxxxxxx
Title: Vice President
34
