SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
NTS-Properties V, a Maryland Limited Partnership
------------------------------------------------
(Name of Issuer)
Limited Partnership Interests
-----------------------------
(Title of Class of Securities)
62942E308
---------
(CUSIP Number)
J. D. Nichols,
Managing General Partner
NTS-Properties Associates V
10172 Linn Station Road
Louisville, Kentucky 40223
(502) 426-4800
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 10, 2000
(Date of Event which Requires of Filing this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ]
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CUSIP No. 62942E308 Page 2 of 14
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Introduction
------------
This Schedule 13D is being filed on behalf of: J.D. Nichols; Brian F.
Lavin; ORIG, LLC, a Kentucky limited liability company of which Mr. Nichols and
Mr. Lavin are the managing members ("ORIG"); Ocean Ridge Investments, Ltd., a
Florida limited partnership ("Ocean Ridge"); and NTS- Properties Associates V
(the "General Partner"), a Kentucky limited partnership. Mr. Nichols, Mr. Lavin,
ORIG, Ocean Ridge and the General Partner (the "Reporting Persons") may be
deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). This filing amends
and supplements two previous Schedule 13D's. The first was filed on February 21,
1997, by BKK Financial, Inc., an Indiana corporation ("BKK"), which is the
general partner of Ocean Ridge. The second was filed on February 5, 1999, on
behalf of Mr. Nichols, Mr. Lavin, ORIG, Ocean Ridge and the General Partner, and
supplemented and amended the February 21, 1997 filing. In addition to these two
filings, final amendments to Schedule 14D-1's intended to satisfy the reporting
obligations of the Reporting Persons under Section 13(d) of the Exchange Act
were filed on February 16, 1999 and January 11, 2000, in connection with tender
offers for limited partnership interests ("Interests") of NTS-Properties V, a
Maryland Limited Partnership (the "Partnership").
On February 10, 2000, pursuant to an Agreement, Bill of Sale and
Assignment, ORIG purchased 1,604 Interests from limited partners of the
Partnership for total consideration of $425,942, for an average price per
Interest of $265.55. In addition, from February 2000 through September 2000,
ORIG purchased an additional 162 Interests from limited partners in a series of
transactions for total consideration of $37,260, for an average purchase price
per Interest of $230. As a result of these purchases, the number of Interests
owned by ORIG increased from 2,804 to 4,570. As the result of previous
transactions, Ocean Ridge owns 2,632 Interests, and the General Partner owns
five Interests. The number of Interests owned by Ocean Ridge and the General
Partner have not changed since the filing of the previous Schedule 13D on
February 16, 1999.
The total number of Interests beneficially owned by the Reporting
Persons is 7,207, or 23.5% of the outstanding Interests of the Partnership. The
Reporting Persons under this Schedule are hereby amending the filings described
above to reflect the increase in the number of Interests beneficially owned by
them as a result of the purchase of Interests by ORIG from February 2000 through
September 2000.
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CUSIP No. 62942E308 Page 3 of 14
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
J. D. Nichols
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC Use Only
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4) Source of Funds: BK
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
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6) Citizenship or Place of Organization: U.S.A.
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Number of Shares Beneficially Owned by Each Reporting Person With:
7) Sole Voting Power 7,207(1)(2)
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8) Shared Voting Power 0
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9) Sole Dispositive Power 7,207(1)(2)
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10) Shared Dispositive Power 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,207(1)(2)
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
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13) Percent of Class Represented by Row (11): 23.5%
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14) Type of Reporting Person: IN
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(1) Includes: (i) five Interests owned by the General Partner, of which Mr.
Nichols is the managing general partner; (ii) 2,632 Interests owned by
Ocean Ridge; and (iii) 4,570 Interests owned by ORIG.
(2) Mr. Nichols disclaims beneficial ownership of 3,094 Interests, including:
(i) 2,632 Interests owned by Ocean Ridge; (ii) five Interests owned by the
General Partner; and (iii) 457, or 10%, of the Interests owned by ORIG.
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CUSIP No. 62942E308 Page 4 of 14
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
Brian F. Lavin
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC Use Only
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4) Source of Funds: BK
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
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6) Citizenship or Place of Organization: U.S.A.
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Number of Shares Beneficially Owned by Each Reporting Person With:
7) Sole Voting Power 0
--------------------------------------------------------------------------------
8) Shared Voting Power 7,207(1)(2)
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9) Sole Dispositive Power 0
--------------------------------------------------------------------------------
10) Shared Dispositive Power 7,207(1)(2)
--------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,207(1)(2)
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
--------------------------------------------------------------------------------
13) Percent of Class Represented by Row (11): 23.5%
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14) Type of Reporting Person: IN
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(1) Includes: (i) five Interests owned by the General Partner; (ii) 2,632
Interests owned by Ocean Ridge; and (iii) 4,570 Interests owned by ORIG.
(2) Mr. Lavin disclaims beneficial ownership of 6,750 Interests, including: (i)
2,632 Interests owned by Ocean Ridge; (ii) five Interests owned by the
General Partner; and (iii) 4,113, or 90%, of the Interests owned by ORIG.
<PAGE>
CUSIP No. 62942E308 Page 5 of 14
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
Ocean Ridge Investments, Ltd., a Florida limited partnership
--------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3) SEC Use Only
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4) Source of Funds: BK
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
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6) Citizenship or Place of Organization: Ocean Ridge is a Florida limited
partnership
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Number of Shares Beneficially Owned by Each Reporting Person With:
7) Sole Voting Power 0
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8) Shared Voting Power 7,207(1)(2)
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9) Sole Dispositive Power 0
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10) Shared Dispositive Power 7,207(1)(2)
--------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,207(1)(2)
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
--------------------------------------------------------------------------------
13) Percent of Class Represented by Row (11): 23.5%
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14) Type of Reporting Person: PN
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(1) Includes: (i) five Interests owned by the General Partner; (ii) 2,632
Interests owned by Ocean Ridge; and (iii) 4,570 Interests owned by ORIG.
(2) Ocean Ridge disclaims beneficial ownership of 4,575 Interests, including:
(i) five Interests owned by the General Partner; and (ii) 4,570 Interests
owned by ORIG.
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CUSIP No. 62942E308 Page 6 of 14
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
ORIG, LLC, a Kentucky limited liability company
--------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC Use Only
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4) Source of Funds: BK
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
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6) Citizenship or Place of Organization: ORIG is a Kentucky limited liability
company
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Number of Shares Beneficially Owned by Each Reporting Person With:
7) Sole Voting Power 0
--------------------------------------------------------------------------------
8) Shared Voting Power 7,207(1)(2)
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9) Sole Dispositive Power 0
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10) Shared Dispositive Power 7,207(1)(2)
--------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,207(1)(2)
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
--------------------------------------------------------------------------------
13) Percent of Class Represented by Row (11): 23.5%
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14) Type of Reporting Person: OO
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(1) Includes: (i) five Interests owned by the General Partner; (ii) 2,632
Interests owned by Ocean Ridge; and (iii) 4,570 Interests owned by ORIG.
(2) ORIG disclaims beneficial ownership of 2,637 Interests, including: (i)
2,632 Interests owned by Ocean Ridge; and (ii) five Interests owned by the
General Partner.
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CUSIP No. 62942E308 Page 7 of 14
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
NTS-Properties Associates V, a Kentucky limited partnership
--------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC Use Only
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4) Source of Funds: BK
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
--------------------------------------------------------------------------------
6) Citizenship or Place of Organization: NTS-Properties Associates V is a
Kentucky limited partnership
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned by Each Reporting Person With:
7) Sole Voting Power 0
--------------------------------------------------------------------------------
8) Shared Voting Power 7,207(1)(2)
--------------------------------------------------------------------------------
9) Sole Dispositive Power 0
--------------------------------------------------------------------------------
10) Shared Dispositive Power 7,207(1)(2)
--------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,207(1)(2)
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
--------------------------------------------------------------------------------
13) Percent of Class Represented by Row (11): 23.5%
--------------------------------------------------------------------------------
14) Type of Reporting Person: PN
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(1) Includes: (i) five Interests owned by the General Partner; (ii) 2,632
Interests owned by Ocean Ridge; and (iii) 4,570 Interests owned by ORIG.
(2) The General Partner disclaims beneficial ownership of 7,202 Interests,
including: (i) 2,632 Interests owned by Ocean Ridge; and (ii) 4,570
Interests owned by ORIG.
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CUSIP No. 62942E308 Page 8 of 14
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Item 2. Identity and Background.
The information required under this Item 2 is provided for each of the Reporting
Persons and other persons required to be listed pursuant to Instruction C
thereto on this Schedule 13D. The Reporting Persons may be deemed a "group"
within the meaning of Section 13(d)(3) of the Exchange Act.
ORIG, LLC:
---------
ORIG's address is 10172 Linn Station Road, Louisville, Kentucky 40223.
The principal business of ORIG is to invest in limited partnerships that own
commercial and residential real estate. During the past five years, ORIG has not
been the subject of any criminal proceedings. During the past five years, ORIG
was not a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, nor was it subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violations of such laws.
Ocean Ridge:
-----------
Ocean Ridge's address is 10172 Linn Station Road, Louisville, Kentucky
40223. The principal business of Ocean Ridge is to invest in limited
partnerships that own commercial and residential real estate. During the past
five years, Ocean Ridge has not been the subject of any criminal proceedings.
During the past five years, Ocean Ridge was not a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction, nor was it subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violations of such laws.
NTS-Properties Associates V:
---------------------------
The General Partner's address is 10172 Linn Station Road, Louisville,
Kentucky 40223. The principal business of the General Partner is to manage and
perform other real estate-related services related to the assets owned by the
Partnership. During the past five years, the General Partner has not been the
subject of any criminal proceedings. During the past five years, the General
Partner was not a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction, nor was it subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violations of such laws.
NTS Capital Corporation:
-----------------------
NTS Capital Corporation, a Kentucky corporation, is the corporate
general partner of the General Partner. During the past five years, NTS Capital
Corporation has not been the subject of any criminal proceedings. During the
past five years, NTS Capital Corporation was not a party to a judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violations of such laws.
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CUSIP No. 62942E308 Page 9 of 14
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J. D. Nichols:
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(a) J. D. Nichols.
(b) Mr. Nichols' business address is 10172 Linn Station Road, Louisville,
Kentucky 40223.
(c)-(d) Mr. Nichols is a managing member of ORIG. Mr. Nichols is also the
Chairman of the Board and sole director of NTS Capital Corporation,
the Chairman of the Board and sole director of NTS-Development Company
and a general partner of the General Partner. The address of
NTS-Development Company and NTS Capital Corporation is 10172 Linn
Station Road, Louisville, Kentucky 40223.
(e) Mr. Nichols has not been the subject of any criminal proceedings.
(f) During the past five years, Mr. Nichols was not a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction, nor was he subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violations of such
laws.
(g) Mr. Nichols is a citizen of the U.S.A.
Brian F. Lavin:
--------------
(a) Brian F. Lavin.
(b) Mr. Lavin's business address is 10172 Linn Station Road, Louisville,
Kentucky 40223.
(c)-(d) Mr. Lavin is a managing member of ORIG. Mr. Lavin is also the
President of NTS Capital Corporation and NTS-Development Company. The
address of NTS Capital Corporation and NTS-Development Company is
10172 Linn Station Road, Louisville, Kentucky 40223.
(e) Mr. Lavin has not been the subject of any criminal proceedings.
(f) During the past five years, Mr. Lavin was not a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction, nor was he subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violations of such
laws.
(g) Mr. Lavin is a citizen of the U.S.A.
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CUSIP No. 62942E308 Page 10 of 14
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Gregory A. Wells:
----------------
(a) Gregory A. Wells.
(b) Mr. Wells' business address is 10172 Linn Station Road, Louisville,
Kentucky 40223.
(c)-(d) Mr. Wells is the Senior Vice President and Chief Financial Officer
of NTS- Development Company and NTS Capital Corporation. The address
of NTS-Development Company and NTS Capital Corporation is 10172 Linn
Station Road, Louisville, Kentucky 40223.
(e) Mr. Wells has not been the subject of any criminal proceedings.
(f) During the past five years, Mr. Wells was not a party to a judicial or
administrative proceeding that resulted in a judgment, decree or final
order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violations
of such laws.
(g) Mr. Wells is a citizen of the United States.
Item 3. Source and Amount of Funds and Other Consideration.
On February 10, 2000, ORIG purchased 1,604 Interests pursuant an Agreement,
Bill of Sale and Assignment, a copy of which is attached hereto as Exhibit 3(a).
From February, 2000 through September, 2000, ORIG also purchased 162 Interests
from limited partners in a series of transactions. ORIG funded all of these
purchases from the proceeds of a $2,000,000 revolving line of credit issued by
Community Trust Bank, N.A. ("Community Trust Bank") pursuant to a Business Loan
Agreement, dated December 28, 1999 and attached hereto as Exhibit 1(a), which is
hereby incorporated by reference. The line of credit was secured by: (1) the
Interests of the Partnership held by ORIG; and (2) limited partnership interests
in partnerships affiliated with the Partnership which are held by ORIG. Mr.
Nichols and Mr. Lavin agreed to guarantee the indebtedness of ORIG with respect
to Community Trust Bank pursuant to Commercial Guaranties executed by each of
them on December 28, 1999, which are attached hereto as Exhibits 3(b) and 3(c)
respectively. Mr. Nichols guaranteed 75% of all indebtedness of ORIG or
$1,500,000, whichever is less, and Mr. Lavin guaranteed 25% of all indebtedness
of ORIG or $500,000, whichever is less. Under the terms of the Business Loan
Agreement, ORIG will repay the proceeds of the revolving line of credit.
Beginning on April 28, 2000, ORIG began making 20 consecutive quarterly interest
payments with respect to accrued interest on the unpaid principal balance. ORIG
repaid this loan with the proceeds of the loan described under Item 6 of this
Schedule 13D.
Item 4. Purpose of Transaction.
Each of the filers of this Schedule 13D has acquired its Interests with
an investment intent consistent with the Partnership's business plan.
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CUSIP No. 62942E308 Page 11 of 14
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The purpose of the acquisitions of Interests by ORIG was to provide
certain limited partners who desired to liquidate their investment in the
Partnership with a method for doing so.
(a) ORIG and the Partnership are considering making a tender offer to
purchase additional Interests from limited partners. Other than this
contemplated tender offer, none of the Reporting Persons has any plans or
proposals that would result in the acquisition by any person of additional
securities of the Partnership, or the disposition of securities of the
Partnership, other than the Interests purchased by ORIG which are described
herein.
(b) None of the Reporting Persons has any plans or proposals that
relate to or would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Partnership.
(c) None of the Reporting Persons has any plans or proposals that
relate to or would result in a sale or transfer of a material amount of assets
of the Partnership.
(d) None of the Reporting Persons has any plans or proposals that
relate to or would result in any change in the identity of the General Partner
or in the management of the Partnership, including, but not limited to, any
plans or proposals to change the number or term of the General Partner(s), to
fill any existing vacancy for the General Partner, or to change any material
term of the management agreement between the General Partner and the
Partnership.
(e) None of the Reporting Persons has any plans or proposals that
relate to or would result in any material change in the present distribution
policy or indebtedness or capitalization of the Partnership.
(f) None of the Reporting Persons has any plans or proposals that
relate to or would result in any other material change in the Partnership's
structure or business.
(g) None of the Reporting Persons has any plans or proposals that
relate to or would result in any change in the Partnership Agreement or other
actions that may impede the acquisition of control of the Partnership by any
person.
(h)-(j) Items (h) through (j) of this Item 4 are not applicable to the
Partnership because the Interests are not listed on a national securities
exchange and are not quoted on an inter-dealer quotation system of a registered
national securities association and because the Reporting Persons have no
current plans or proposals to purchase Interests in the Partnership resulting in
the Partnership having fewer than three hundred (300) holders of record.
Item 5. Interest in Securities of the Issuer.
(a) Reference is hereby made to the Introduction and cover pages
3-7 attached hereto, which are incorporated hereby by reference.
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CUSIP No. 62942E308 Page 12 of 14
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As of June 30, 2000, the number of outstanding Interests of the Partnership
is 30,626. The number of Interests beneficially owned by the Reporting Persons
is 7,198, or 23.5% of the outstanding Interests.
(b) Reference is hereby made to the Introduction and cover pages 3-7
attached hereto, which are incorporated hereby by reference.
(c) On February 10, 2000, ORIG purchased 1,604 Interests from limited
partners for an average purchase price of $265.55 per Interest pursuant to the
Agreement, Bill of Sale and Assignment. From February, 2000 through September,
2000, ORIG purchased an additional 162 Interests from limited partners in a
series of transactions for an average purchase price per Interest of $230. Other
than these transactions, no transactions involving the Interests were effected
by any Reporting Person during the more recent of the past 60 days or the most
recent filing on Schedule 13D.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
The Partnership Agreement, contained in the Partnership's prospectus dated
August 1, 1984, grants the General Partner discretion to decide whether the
Partnership or any of its affiliates will purchase Interests from time to time
from limited partners. The Partnership, however, will not purchase Interests, if
as a result, the Limited Partner would continue to be a Limited Partner and
would hold fewer than five (5) Interests.
Mr. Nichols and Mr. Lavin have executed a binding Capital Contribution
Agreement which requires them to contribute the capital necessary to purchase
any and all Interests purchased by ORIG pursuant to the Offer and to pay ORIG's
proportionate share of the expenses of the Offer. Mr. Nichols anticipates
contributing approximately 90% of these funds. Mr. Lavin anticipates
contributing approximately 10% of these funds.
On August 15, 2000, ORIG and the Bank of Louisville, a Kentucky banking
corporation, entered into a Loan Agreement under which the Bank of Louisville
agreed to provide a $6,000,000 revolving line of credit to ORIG evidenced by
three separate promissory notes issued by ORIG in favor of the Bank of
Louisville in the original principal amount of $2,000,000 each (the "Loan
Agreement"). The Loan Agreement is attached hereto as Exhibit 1(b) and
incorporated herein by reference. The terms of the three separate notes are
described below:
o Revolving Credit Note A bears interest at the prime rate, as announced by
the Bank of Louisville from time to time, plus .25% per year for a term
ending on August 31, 2005. ORIG will pay the interest rate described in
Revolving Credit Note A for any outstanding
<PAGE>
CUSIP No. 62942E308 Page 13 of 14
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balance owing under the revolving line of credit if, and only if, the
outstanding balance is $2,000,000 or less.
o Revolving Credit Note B bears interest at the prime rate, as announced by
the Bank of Louisville from time to time, plus .50% per year for a term
ending on August 31, 2005. ORIG will pay the interest rate described in
Revolving Credit Note B for any outstanding balance owing under the
revolving line of credit if, and only if, the outstanding balance is
greater than $2,000,000 but less than $4,000,000.
o Revolving Credit Note C bears interest at the prime rate, as announced by
the Bank of Louisville from time to time, plus 1.00% per year for a term
ending on August 31, 2005. ORIG will pay the interest rate described in
Revolving Credit Note C for any outstanding balance owing under the
revolving line of credit if, and only if, the outstanding balance is
greater than $4,000,000.
The line of credit is secured by:
o Interests of the Partnership which are currently held or subsequently
acquired by ORIG, including any distributions which the Partnership issues
to ORIG with respect to the Interests, and also including any proceeds from
the sale of the Interests held by ORIG.
o Limited partnership interests in partnerships affiliated with the
Partnership which are currently held or subsequently acquired by ORIG,
including distributions which the partnerships issue to ORIG with respect
to the interests held by ORIG, and also including any proceeds from the
sale of the interests held by ORIG; and
o The personal guaranties of Mr. Nichols and Mr. Lavin of all indebtedness of
ORIG with respect to the Bank of Louisville under the $6,000,000 line of
credit pursuant to two separate Guaranty Agreements, each dated August 15,
2000 among the Bank of Louisville and each of Mr. Nichols and Mr. Lavin
(the "Guaranty Agreements"). Mr. Nichols and Mr. Lavin are jointly and
severally liable under each of their respective Guaranty Agreements which
are attached hereto as Exhibits 3(d) and 3(e) respectively and are
incorporated herein by reference.
Under the terms of the Loan Agreement, ORIG will repay the proceeds of the
revolving line of credit as follows:
o Commencing on September 1, 2000, ORIG will make consecutive monthly
payments of all accrued and unpaid interest on the outstanding principal
balance.
o The entire outstanding principal balance owing under the revolving line of
credit is due and payable on August 31, 2005.
<PAGE>
CUSIP No. 62942E308 Page 14 of 14
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ORIG intends to use funds from cash distributions from the Partnership and
affiliated partnerships and from capital contributions to ORIG by Mr. Nichols
and Mr. Lavin to make these payments.
Other than the agreements described under Item 6 of this Schedule 13D, and
the Business Loan Agreement described under Item 3 of this Schedule 13D, the
filers of this Schedule 13D are not aware of any other contract, arrangement,
understanding or relationship relating, directly or indirectly, to any
securities of the Partnership (whether or not legally enforceable) between ORIG,
Mr. Nichols, Mr. Lavin, Ocean Ridge or the General Partner and any person or
among themselves.
Item 7. Material to be Filed as Exhibits.
(1)(a) Business Loan Agreement dated December 28, 1999, between ORIG and
Community Trust Bank, N.A.
(1)(b) Loan Agreement dated August 15, 2000, between ORIG and the Bank of
Louisville.
(2) None.
(3)(a) Agreement, Bill of Sale and Assignment dated February, 2000 between
ORIG, LLC, Roger M. Kalar, Martha Kalar, David Warshawsky and Marilyn
Warshawsky.
(3)(b) Commercial Guaranty of Business Loan Agreement dated December 28,
1999, between J.D. Nichols and Community Trust Bank, N.A.
(3)(c) Commercial Guaranty of Business Loan Agreement dated December 28,
1999, between Brian F. Lavin and Community Trust Bank, N.A.
(3)(d) Guaranty Agreement dated August 15, 2000, between the Bank of
Louisville and J.D. Nichols.
(3)(e) Guaranty Agreement dated August 15, 2000, between the Bank of
Louisville and Brian F. Lavin.
(3)(f) Joint Filing Agreement dated October 11, 2000.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
October 11, 2000 J. D. NICHOLS
By: /s/ J. D. Nichols
------------------------------------
J. D. Nichols
OCEAN RIDGE INVESTMENTS, LTD.
By: BKK Financial, Inc.
Its: General Partner
By: /s/ J. D. Nichols
--------------------------------
J. D. Nichols
Its: Chairman of the Board
ORIG, LLC
By: /s/ J. D. Nichols
-----------------------------------
J. D. Nichols
Its: Managing Member
BRIAN F. LAVIN
By: /s/ Brian F. Lavin
-------------------------------------
Brian F. Lavin
NTS-PROPERTIES ASSOCIATES V
By: /s/ J. D. Nichols
-----------------------------------
J. D. Nichols
Its: Managing General Partner
<PAGE>
EXHIBIT 1(a)
BUSINESS LOAN AGREEMENT
<PAGE>
BUSINESS LOAN AGREEMENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$2,000,000.00 12-28-1999 01-28-2005 A4A0 5514 8410
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
Borrower:ORIG, L.L.C. (TIN: 61-1324094) Lender:Community Trust Bank, N.A.
10172 LINN STATION ROAD Louisville Loan Production Office
LOUISVILLE, KY 40223 4350 Brownsboro Road
Louisville, KY 40207
================================================================================
THIS BUSINESS LOAN AGREEMENT between ORIG, L.L.C. ("Borrower") and Community
Trust Bank, N.A. ("Lender") is made and executed on the following terms and
conditions. Borrower has received prior to commercial loans from Lender or has
applied to Lender for a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) In
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.
TERM. This Agreement shall be effective as of December 28, 1999, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement from time to time.
Borrower. The word "Borrower" means ORIG, L.L.C.. The word "Borrower" also
includes, as applicable, all subsidiaries and affiliates of Borrower as
provided below in the paragraph titled "Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real
or personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a security
interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT."
Grantor. The word "Grantor" means and includes without limitation each and
all of the persons or entities granting a Security Interest in any
Collateral for the indebtedness, including without limitation all Borrowers
granting such a Security Interest.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with any indebtedness.
Indebtedness. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by
Lender against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary, due or not due, absolute or
contingent, liquidated or unliquidated; whether Borrower may be liable
individually or jointly with others; whether Borrower may be obligated as a
guarantor, surety, or otherwise; whether recovery upon such indebtedness
may be or hereafter may become barred by any statute of limitations; and
whether such indebtedness may be or hereafter may become otherwise
unenforceable.
Lender. The word "Lender" means Community Trust Bank, N.A., its successors
and assigns.
Loan. The word "Loan" or "Loans" means and includes without limitation any
and all commercial loans and financial accommodations from Lender to
Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to this
Agreement from time to time.
Note. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing note
or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interest securing indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business
and securing obligations which are not yet delinquent (d) purchase money
liens or purchase money security interests upon or in any property acquired
or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled "Indebtedness and
Liens"; (e) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing;
and (f) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to
the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
interest.
Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended as
a security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
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SARA. The word "SARA" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to
Lender the following document for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security interests in the Collateral, (c)
Financing Statements perfecting Lender's Security Interests; (d) evidence
of insurance as required below: and (e) any other documents required under
this Agreement or by Lender or its counsel, including without limitation
any guaranties described below.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender property certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents, and such other authorizations and other documents and
instruments as Lender or its counsel, in their sole discretion, may
require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:
Organization. Borrower is a limited liability company which is duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Kentucky and is validly existing and in good standing in
all states in which Borrower is doing business. Borrower has the full power
and authority to own its properties and to transact the businesses in which
it is presently engaged or presently proposes to engage. Borrower also is
duly qualified as a foreign limited liability company and is in good
standing in all states in which the failure to so qualify would have a
material adverse effect on its businesses or financial condition.
Authorization. The execution, delivery, and performance of this Agreement
and all Related Documents by Borrower, to the extent to be executed,
delivered or performed by Borrower, have been duly authorized by all
necessary action by Borrower; do not require the consent or approval of any
other person, regulatory authority or governmental body; and do not
conflict with, result in a violation of, or constitute a default under (a)
any provision of its articles of organization, operating agreement, or any
other agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial conditions as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not
presently due and payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's legal
name, and Borrower has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
Hazardous Substances. The terms "hazardous waste," "hazardous substance, "
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and warrants that :
(a) During the period of Borrower's ownership of the properties, there has
been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any person on,
under, about or from any of the properties. (b) Borrower has no knowledge
of, or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened release
of any hazardous waste or substance on, under, about, or from the
properties by any prior owners or occupants of any of the properties, or
(ii) any actual or threatened litigation or claims of any kind by any
person relating to such matters. (c) Neither Borrower nor any tenant,
contractor, agent or other authorized user of any of the properties shall
use, generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, about or from any of the
properties; and any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations, and ordinances,
including without limitation those laws, regulations and ordinances
described above. Borrower authorizes Lender and its agents to enter upon
the properties to make such inspections and tests as Lender may deem
appropriate to determine compliance of the properties with this section of
the Agreement. Any inspections or tests made by Lender shall be at
Borrower's expense and for Lender's purposes only and shall not be
construed to create any responsibility or liability on the part of Lender
to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating the
properties for hazardous waste and hazardous substances. Borrower hereby
(a) releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower become liable for cleanup or other costs
under any such laws, and (b) agrees to indemnify and hold harmless Lender
against any and all claims, losses, liabilities, damages, penalties , and
expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release
or threatened release of a hazardous waste or substance on the properties.
The provisions of this section of the Agreement, including the obligation
to indemnify, shall survive the payment of the indebtedness and the
termination or expiration of this Agreement and shall not be affected by
Lender's acquisition of any interest in any of the properties, whether by
foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or
properties, other than litigation, claims, or other events, if any, that
have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate reserves have
been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be
superior to Lender's Security Interests and rights in and to such
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12-28-1999 BUSINESS LOAN AGREEMENT Page 3
Loan No (Continued)
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Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements directly
or indirectly securing repayment of Borrower's Loan and Note and all of the
Related Documents are binding upon Borrower as well as upon Borrower's
successors, representative and assigns, and are legally enforceable in
accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to
any such plan, (ii) Borrower has not withdrawn from any such plan or
initiated steps to do so, (iii) no steps have been taken to terminate any
such plan, and (iv) there are no unfounded liabilities other than those
previously disclosed to Lender in writing.
Location of Borrower's Offices and Records. Borrower's place of business,
or Borrower's Chief executive office, if Borrower has more than one place
of business, is located at 10172 LINN STATION ROAD, LOUISVILLE, KY 40223.
Unless Borrower has designated otherwise in writing this location is also
the office or offices where Borrower keeps its records concerning the
Collateral.
Year 2000. Borrower warrants and represents that all software utilized in
the conduct of Borrower's business will have appropriate capabilities and
compatibility for operation to handle calendar dates falling on or after
January 1, 2000, and all information pertaining to such calendar dates, in
the same manner and with the same functionally as the software does
respecting calendar dates falling on or before December 31, 1999. Further,
Borrower warrants and represents that the data-related user interface
functions, data-fields, and data-related program instructions and functions
of the software include the indication of the century.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to make
such information not misleading.
Survival of Representations and Warranties. Borrower understands and agrees
that Lender, without independent investigation, is relying upon the above
representations and warranties in making the above referenced Loan to
Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force and
effect until such time as Borrower's indebtedness shall be paid in full, or
until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all existing and all
threatened litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial
condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit Lender to examine and audit Borrower's books and records at all
reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but in no
event later than one hundred eighty (180) days after the end of each fiscal
year, Borrower's balance sheet and income statement for the year ended,
compiled by a certified public accountant satisfactory to Lender, and, as
soon as available, but in no event later than ninety (90) days after the
end of each fiscal quarter, Borrower's balance sheet and profit and loss
statement for the period ended, prepared and certified as correct to the
best knowledge and belief by Borrower's chief financial officer or other
officer or person acceptable to Lender. All financial reports required to
be provided under this Agreement shall be prepared in accordance with
generally accepted accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivable and payables,
inventory schedules, budgets, forecasts, tax returns, and other reports
with respect to Borrower's financial condition and business operations as
Lender may request from time to time.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies reasonably acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at
least thirty (30) day's prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value or replacement cost of any Collateral.
The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantors
named below, on Lender's forms, and in the amounts and under the conditions
spelled out in those guaranties.
Guarantors Amounts
NTS CORPORATION $2,000,000.00
BRIAN F. LAVIN 25.000% of all indebtedness or $500,000.00, whichever is less
J.D. NICHOLS 75.000% of all indebtedness or $1,500,000.00,whichever is less
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
Taxes, charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits. Provided however, Borrower will not be required to pay
and discharge any such assessment, tax, charge, levy, lien or claim so long
as (a) the legality of the same shall be contested in good faith by
appropriate proceedings, and (b) Borrower shall have established on its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
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12-28-1999 BUSINESS LOAN AGREEMENT Page 4
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accounting practices. Borrower, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against Borrower's properties,
income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely
manner, and promptly notify Lender if Borrower learns of the occurrence of
any even which constitutes an Event of Default under this Agreement or
under any of the Related Documents.
Operations. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive management personnel; conduct its business affairs in a
reasonable and prudent manner and in compliance with all applicable
federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, including
without limitation, compliance with the Americans With Disabilities Act and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower's books, accounts, and
records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer
software programs for the generation of such records) in the possession of
a third party, Borrower, upon request of Lender, shall notify such part to
permit Lender free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at Borrower's
expense.
Compliance Certificate. Unless waived in writing by Lender, provide Lender
at least annually and at the time of each disbursement of Loan proceeds
with a certificate executed by Borrower's chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations
and warranties set forth in this Agreement are true and correct as of the
date of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part
of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless
such environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or local
governmental authorities; shall furnish to Lender promptly and in any event
within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with any
environmental activity whether or not there is damage to the environment
and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without prior written consent of
Lender:
Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur, or assume indebtedness for borrowed money,
including capital leases, (b) except as allowed as a Permitted Lien, sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets, or (c) sell with recourse any of
Borrower's account, except to Lender.
Continuity of Operations. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged,
(b) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change ownership, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of Business, or (c)
make any distribution with respect to any capital account, whether by
reduction of capital or otherwise.
Loans, Acquisitions and Guaranties. (a) Loan, invest, in or advance money
or assets, (b) purchase, create or acquire any interest in any other
enterprise or entity, or (c) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a0 Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor become insolvent, files
a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (c)
there occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing
any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, modify
or revoke such Guarantor's guaranty of the Loan or any other loan with Lender;
or (e) Lender in good faith deems itself insecure, even though no Event of
Default shall have occurred.
ADDITIONAL PRINCIPAL PAYMENTS. ADDITIONAL PRINCIPAL PAYMENTS ARE REQUIRED IN
AMOUNTS EQUAL TO 90% OF ALL CASH DISTRIBUTIONS RECEIVED BY THE BORROWER FROM
EACH PARTNERSHIP, FROM TIME TO TIME UNTIL MATURITY.
GUARANTEED AMOUNTS. PRIOR TO DISBURSEMENT OF ANY LOAN PROCEEDS, FURNISH EXECUTED
GUARANTIES OF THE LOANS IN FAVOR OF THE LENDER, EXECUTED BY J.D. NICHOLS, BRIAN
F. LAVIN, AND NTS CORPORATION, ON LENDER'S FORMS AND IN AMOUNTS AND UNDER
CONDITIONS SPELLED OUT IN THOSE GUARANTY AGREEMENTS.
BORROWING BASE CERTIFICATE. BORROWER AGREES TO SUBMIT TO LENDER A BORROWING BASE
CERTIFICATE, THE FORM OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. SAID
BORROWING BASE CERTIFICATE SHALL BE SUBMITTED AT THE EARLIER OF EACH BORROWING
REQUEST OR MONTHLY, (NOT LATER THAN THE 10TH OF EACH MONTH HEREAFTER, CONTAINING
INFORMATION AS OF THE FIRST DAY OF EACH MONTH) UNTIL MATURITY.
GUARANTIES. NTS IS GUARANTEEING PAYMENT ONLY UP TO $2,000,000.00.
EVENTS OF DEFAULT. IN THE EVENT OF DEFAULT HEREUNDER AND LENDER'S NOTICE TO
BORROWER, BORROWER SHALL HAVE 30 DAYS IN WHICH TO CURE THE DEFAULT PRIOR TO
LENDER ENFORCING ITS RIGHTS UNDER THE LOAN DOCUMENTS.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in ,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
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Loan No (Continued)
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Default on Indebtedness. Failure of Borrower to make any payment when due
on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or failure
of Borrower to comply with or to perform any other term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Relate Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect at the time made or furnished, or becomes false or misleading at
any time thereafter.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security Interest) at any time
and for any reason.
Death or Insolvency. The dissolution (regardless of whether election to
continue is made), any member withdraws from Borrower, or any other
termination of Borrower's existence as a going business or the death of any
member, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower's property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement of any proceeding under
any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the indebtedness, or by any
governmental agency. This includes a garnishment, attachment, or levy on or
of any of Borrower's deposit accounts with Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the indebtedness.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired.
Insecurity. Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate and, at Lender's option, all
indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. NO alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the Commonwealth of Kentucky. If there is a lawsuit, Borrower
agrees upon Lender's request to submit to the jurisdiction of the courts of
PIKE County, the Commonwealth of Kentucky. Lender and Borrower hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other. This Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Kentucky.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Multiple Parties. All obligations of Borrower under this Agreement shall be
joint and several, and all references to Borrower shall mean each and every
Borrower. This means that each of the persons signing below is responsible
for all obligations in this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchases, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy it may have
with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. Borrower also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the sale
of such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loans irrespective of the failure or insolvency of any
holder of any interest in the Loans. Borrower further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
expenses, including without limitation reasonable attorneys' fees, incurred
in connection with the preparation, execution, enforcement, modification
and collection of this Agreement or in connection with the Loans made
pursuant tot this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will pay that amount.
This includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and Lender's legal expenses, whether or not
there is a lawsuit, including reasonable attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all other
sums provided by law.
Notices. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise required
by law), and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States mail, first class, postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above. Any part may change
its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. To the extent permitted by applicable law,
if there is more than one Borrower, notice to any Borrower will constitute
notice to all Borrowers. For notice purposes, Borrower will keep Lender
informed at all times of Borrower's current address(es).
<PAGE>
12-28-1999 BUSINESS LOAN AGREEMENT Page 6
Loan No (Continued)
--------------------------------------------------------------------------------
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower" as
used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other
financial accommodation to any subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by Borrower
in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any investigation made by
Lender or on Lender's behalf.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute
continuing consent in subsequent instances where such consent is required,
and ain all cases such consent may be granted or withheld in the sole
discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
DECEMBER 28, 1999.
BORROWER:
ORIG, L.L.C.
By:/s/ Brian F. Lavin By:/s/ J. D. Nichols
------------------------------ ------------------------------------
BRIAN F. LAVIN, Manager J. D. NICHOLS, Manager
LENDER:
Community Trust Bank, N.A.
By: /s/ Signature
-----------------------------
Authorized Officer
--------------------------------------------------------------------------------
<PAGE>
ORIG, LLC
BORROWING BASE CERTIFICATE
For the period ending _____________
Date of Report:_______________
I. Price Analysis: (per share amounts only):
-------------------
Trade
Range
NTS-Properties III: $________
Sources:______________________________________________________________________
Trade
Range
NTS-Properties IV: $________
Sources:_______________________________________________________________________
Trade
Range
NTS-Properties V: $________
Sources:_______________________________________________________________________
Trade
Range
NTS-Properties VI: $_________
Sources:_______________________________________________________________________
Trade
Range
NTS-Properties VII: $_________
Sources:_______________________________________________________________________
NOTE: The Maximum Borrowing Amount below shall be the average of the trade range
for the immediately prior six month period, not to exceed the value of the
current bid amount.
Attach supporting documents verifying trade range information.
<PAGE>
II. Maximum Borrowing Amount:
A. NTS-Properties III
1) # of units held by ORIG: ______________________
2) Average of Trade range: ______________________ (see above)
3) Gross Value: ______________________ (#1 times #2)
4) 50% of Gross Value: ______________________ (Loanable Amount)
B. NTS-Properties IV:
1) # of units held by ORIG: ______________________
2) Average of trade range: ______________________ (see above)
3) Gross Value: ______________________ (#1 times #2)
4) 50% of Gross Value: ______________________ (Loanable Amount)
C. NTS-Properties V:
1) # of units held by ORIG: ______________________
2) Average of trade range: ______________________ (see above)
3) Gross Value: ______________________ (#1 times #2)
4) 50% of Gross Value: ______________________ (Loanable Amount)
D. NTS-Properties VI:
1) # of units held by ORIG: ______________________
2) Average of trade range: ______________________ (see above)
3) Gross Value: ______________________ (#1 times #2)
4) 50% of Gross Value: ______________________ (Loanable Amount)
E. NTS-Properties VII:
1) # of units held by ORIG: ______________________
2) Average of trade range: ______________________ (see above)
3) Gross Value: ______________________ (#1 times #2)
4) 50% of Gross Value: ______________________ (Loanable Amount)
F. Sum of (A-E)#4 above: $_____________________
G. Current Outstandings: $_____________________ (prior to this request)
H. Amount Requested: $_____________________
I. Outstandings after request: $_____________________ (Sum of G and H)
NOTE: If item I exceeds item F, the loan must be repaid by the difference.
Repayment is not required if item F exceeds item I.
I hereby certify that there are no defaults under the Loan Agreement dated
December __, 1999 and that the above is true and correct to the best of my
knowledge and belief this ___day of ________,______.
ORIG, L.L.C.
By: _______________________
Title: _______________________
<PAGE>
Exhibit 1(b)
LOAN AGREEMENT
<PAGE>
LOAN AGREEMENT
dated as of August 15, 2000
between
BANK OF LOUISVILLE
as the Lender
and
ORIG, LLC
as the Borrower
and joined by
J. D. NICHOLS
and
BRIAN LAVIN
as the Guarantors
<PAGE>
TABLE OF CONTENTS
SECTION I DEFINITIONS..................................................1
SECTION II REVOLVING CREDIT LOAN........................................5
2.01 Amount of Revolving Credit...................................5
2.02 Term of the Revolving Credit.................................5
2.03 Revolving Credit Loans.......................................5
2.04 The Revolving Credit Notes...................................8
2.05 Interest on Revolving Credit Loans...........................8
2.06 Minimum Principal Balance....................................9
2.07 Notation of Disbursements and Payments.......................9
2.08 Principal and Interest Payments..............................9
2.09 Mandatory Prepayments........................................9
2.10 Optional Principal Payments..................................9
2.11 Application of Payments.....................................10
2.12 Application of Principal Payments...........................10
2.13 Purposes of Loans...........................................10
2.14 Certain limitations on Revolving Credit Loan Advances.......10
SECTION III SECURITY FOR THE LOANS......................................11
3.01 Right of Offset.............................................11
3.02 Security Interest in Partnership Interests..................11
3.03 Guaranties..................................................11
SECTION IV CONDITIONS PRECEDENT........................................11
4.01 Conditions Precedent to the first Revolving Credit Loan.....11
4.02 Conditions Preceding to Subsequent Revolving Credit Loans...13
SECTION V GENERAL COVENANTS...........................................13
5.01 Insurance...................................................13
5.02 Taxes and Other Payment Obligations.........................15
5.03 Financial Statements........................................15
5.04 Financial Records...........................................16
5.05 Properties..................................................16
5.06 Existence and Good Standing.................................16
5.07 Notice Requirements.........................................17
5.08 Revolving Credit Notes and Other Borrower Documents.........17
5.09 Compliance with Law.........................................17
5.10 Liens.......................................................17
5.11 Limit on Indebtedness, Guarantees, Etc......................18
5.12 Articles of Organization and Operating Agreement............18
5.13 Mergers, Sales, Transfers and Other Dispositions of Assets..18
5.14 Loans.......................................................19
- i -
<PAGE>
5.15 No Change in Ownership......................................19
5.16 Payment of Distributions....................................19
5.17 ERISA Compliance............................................19
5.18 Joinder of Subsidiaries.....................................20
SECTION VI REPRESENTATIONS AND WARRANTIES..............................20
6.01 Organization and Existence..................................20
6.02 Right to Act................................................20
6.03 No Conflicts................................................21
6.04 Authorization...............................................21
6.05 Enforceable Agreements......................................21
6.06 Contingent Obligations......................................21
6.07 Litigation..................................................21
6.08 Financial Statements........................................21
6.09 Compliance with Contractual Obligations, Laws and Judgments.22
6.10 Investment Company..........................................22
6.11 Tax Returns.................................................22
6.12 No Undisclosed Liabilities or Guaranties....................22
6.13 Title to Properties.........................................22
6.14 Trademarks and Permits......................................22
6.15 No Defaults.................................................23
6.16 Employee Benefit Plans......................................23
6.17 No Material Adverse Conditions..............................23
6.18 Regulations Q and U.........................................23
6.19 Environmental Matters.......................................23
6.20 No Public Utility Holding Company...........................24
6.21 No Subsidiaries.............................................24
6.22 Disclosure..................................................24
SECTION VII EVENTS OF DEFAULT...........................................24
7.01 Failure to Pay..............................................24
7.02 No Notice Required..........................................24
7.03 Notice Required.............................................24
7.04 Falsity of Representation or Warranty.......................25
7.05 Judgments...................................................25
7.06 Adverse Financial Change....................................25
7.07 Other Obligations...........................................25
7.08 Dissolution or Termination of Existence.....................25
7.09 Solvency....................................................25
SECTION VIII REMEDIES UPON DEFAULT.......................................26
8.01 Right to Offset.............................................26
8.02 Enforcement of Rights.......................................26
8.03 Rights Under Security Instruments...........................27
8.04 Cumulative Remedies.........................................27
- ii -
<PAGE>
SECTION IX FEES AND EXPENSES...........................................27
9.01 Transaction Expenses........................................27
9.02 Enforcement Expenses........................................27
SECTION X MISCELLANEOUS PROVISIONS....................................28
10.01 Business Days...............................................28
10.02 Term of this Agreement......................................28
10.03 No Waivers..................................................28
10.04 Course of Dealing...........................................28
10.05 Certain Waivers by the Borrower and the Guarantors..........28
10.06 Severability................................................28
10.07 Time of the Essence.........................................28
10.08 Benefit and Binding Effect..................................28
10.09 Further Assurances..........................................29
10.10 Incorporation by Reference..................................29
10.11 Entire Agreement; No Oral Modifications.....................29
10.12 Headings....................................................29
10.13 Governing Law...............................................29
10.14 Assignments.................................................29
10.15 Multiple Counterparts.......................................29
10.16 Notices.....................................................30
10.17 Survival of Covenants.......................................31
10.18. Consent to Jurisdiction.....................................31
10.20 JURY TRIAL WAIVER.........................................31-A
10.21 ACKNOWLEDGMENT............................................31-A
- iii -
<PAGE>
LOAN AGREEMENT
--------------
This is a Loan Agreement (this "Agreement") dated as of August 15, 2000, between
BANK OF LOUISVILLE
a Kentucky banking corporation
500 W. Broadway
Louisville, Kentucky 40202 (the "Lender")
and
ORIG, LLC
a Kentucky limited liability company
10172 Linn Station Road 200
Louisville, Kentucky 40223
Attn: Neil Mitchell (the "Borrower")
and joined in by
J. D. NICHOLS
10172 Linn Station Road 200
Louisville, Kentucky 40223 ("Nichols")
and
BRIAN LAVIN
10172 Linn Station Road 200
Louisville, Kentucky 40223 ("Lavin")
Recitals
--------
The Lender intends to provide to the Borrower, and the Borrower would like
to avail itself of the Revolving Credit Loan subject to the terms and conditions
of this Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION I
---------
Definitions
-----------
As used in this Agreement, the following terms shall have the following
meanings and the meanings assigned to them shall be equally applicable to both
the singular and plural forms of the terms defined:
<PAGE>
"Affiliate" shall mean any Person (a) who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, a Person, or (b) five percent (5%) or more of the equity
interests of whom is beneficially owned or held by such Person or a subsidiary
of such Person. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of equity interest, by contract or
otherwise.
"Borrower" shall mean ORIG, LLC, together with all existing, as well as
future Subsidiaries of ORIG, LLC.
"Borrower Documents" shall mean, collectively, this Agreement, the
Revolving Credit Notes, the Pledge Agreement, the Guaranty Agreements and any
and all other documents to be executed and/or delivered by the Borrower and/or
the Guarantors which relate to this Agreement.
"Business Day" shall mean any day other than a Saturday or Sunday or
legal holiday on which commercial banks are authorized or required to be closed
for business in the Commonwealth of Kentucky.
"Closing Date" shall mean August 15, 2000.
"Collateral" shall mean any and all of the property of the Borrower in
which the Borrower grants the Lender a security interest.
"CPA Firm" shall mean the Borrower's firm of certified public
accountants which regularly performs accounting services for the Borrower,
provided that such firm is reasonably satisfactory to the Lender in the Lender's
discretion.
"Distribution" shall mean any amount of money or other property
declared or paid, or set apart for the purpose of payment of, any distribution
on or in respect of any capital, income or other interest in the Borrower
(including, without limitation, any "membership interest" or similar interest
under any operating agreement) and/or the purchase, retirement, reacquisition or
redemption of any capital, income, membership or other interest (including,
without limitation, any "membership interest" or similar interest under any
operating agreement) and/or any distribution by way of reduction of capital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA as in effect
on the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"Event of Default" shall mean any one of the occurrences which are
Events of Default under Section VII of this Agreement.
"GAAP" shall mean generally accepted accounting principles applied on a
basis consistent with prior periods.
-2-
<PAGE>
"Guarantors" shall mean Nichols and Lavin.
"Guaranty Agreements" shall mean, collectively, (a) the Guaranty
Agreement dated as of August 15, 2000 among the Lender, the Borrower, and (b)
the Guaranty Agreement dated as of August 15, 2000, among the Lender, the
Borrower and Lavin. "Guaranty Agreement" shall mean either of the Guaranty
Agreements.
"Indebtedness" shall mean all obligations, contingent or otherwise,
which, in accordance with GAAP, should be classified on the Person's balance
sheet as liabilities.
"Loan" shall mean any Revolving Credit Loan, and "Loans" shall mean all
of the Revolving Credit Loans, collectively.
"Note" shall mean any of the Revolving Credit Notes and any note or
notes delivered in renewal, replacement, substitution extension or novation of
any of them.
"NTS III" shall mean NTS-Properties III, a limited partnership
organized under the laws of the State of Georgia.
"NTS IV" shall mean NTS-Properties IV, a limited partnership organized
under the laws of the Commonwealth of Kentucky.
"NTS V" shall mean NTS-Properties V, a Maryland Limited Partnership, a
limited partnership organized under the laws of the State of Maryland.
"NTS VI" shall mean NTS-Properties VI, a Maryland Limited Partnership,
a limited partnership organized under the laws of the State of Maryland.
"NTS VII" shall mean NTS-Properties VII, Ltd., a limited partnership
organized under the laws of the State of Florida.
"NTS Plus" shall mean NTS-Properties Plus, Ltd., a limited partnership
organized under the laws of the State of Florida.
"Partnership" shall mean any of NTS III, NTS IV, NTS V, NTS VI, NTS
VII, and/or NTS Plus, and "Partnerships" shall mean all of them or any
combination of them.
"Partnership Interests" shall mean all general and/or limited
partnership interest or interests of the Borrower from time to time in any one
or more of the Partnerships to the maximum extent permitted by law, including
Florida Statutes ss. 620.102, Georgia Code Ann. ss. 14-9-101, Kentucky Revised
Statutes ss. 362.401 and Maryland Code Ann. ss. 10-101, and shall include
without limitation the right to profits, distributions, return of capital,
partner loans or advances, and all rights to vote for, consent or otherwise
approve any matter. The Partnership Interests of the Borrower on the date of
this Agreement are described on Schedule 1(P) to this Agreement. Partnership
Interests in one or more of the Partnerships acquired after the date of this
Agreement are not described on Schedule 1(P) (although they may be described in
one or
-3-
<PAGE>
more Supplements to Pledge Agreements), but such failure to be described on
Schedule 1(P) does not derogate from those interests in the Partnerships being
Partnership Interests.
"Partnership Notice and Assignment" shall mean a notice to a
Partnership of the pledge of a Partnership Interest or Partnership Interests,
together with the acknowledgement by the Partnership of that pledge,
satisfactory in all respects to the Lender and generally in the form of Annex E
-------
to this Agreement.
"Prime Rate" shall mean the rate of interest announced by the Lender
from time to time as its Prime Rate, as that Prime Rate may change from time to
time, provided, however, the Prime Rate is not necessarily the best or lowest
rate offered by the Lender to its customers.
"Person" shall mean any individual, partnership, limited liability
company, association, trust, corporation or other entity.
"Plan" or "Plans" means, at any time, an employee pension or benefit
plan which is covered by Title IV of ERISA and is either (a) maintained by the
Borrower, or (b) maintained pursuant to a collective bargaining agreement or
similar arrangement under which more than one employee makes contributions and
to which the Borrower is making and accruing an obligation to make contributions
or has within the preceding five plan years made contributions.
"Pledge Agreement" shall mean the Pledge Agreement dated as of August
15, 2000, between the Borrower and the Lender, satisfactory to the Lender in its
discretion, and substantially in the form attached hereto as Annex B, as it may
be amended from time to time.
"Request for Advance" shall mean a request, written or oral, in such
form and with such information as the Lender may request or require, from the
Borrower for an advance under the Revolving Credit Loan.
"Revolving Credit" shall mean the Revolving Credit made available by
the Lender to the Borrower under Section II of this Agreement.
"Revolving Credit Notes" shall mean collectively the three promissory
notes issued by the Borrower to the order of the Lender with respect to the
Revolving Credit Loan in the face principal amount of Two Million Dollars
($2,000,000.00) each (for a total of Six Million Dollars ($6,000,000.00)), and
substantially in the form of Annexes A-1 though A-3 attached hereto, and all
notes delivered in renewal, replacement, substitution, extension or novation
thereof. "Revolving Credit Note" shall mean any of the Revolving Credit Notes.
"Subsidiary" shall mean, any Person of which the Borrower, directly or
indirectly, through one or more intermediaries, owns a Majority. Without
limiting the foregoing, if a Majority of any Person is owned, directly or
indirectly, by a Subsidiary, such Person is, itself, a Subsidiary. "Majority"
shall mean more than fifty percent (50%) of (a) the voting stock or interests
(by number of votes), and/or (b) the equity in, or equity interests of, such
Person.
-4-
<PAGE>
"Supplement to Pledge Agreement" shall have the meaning given it in the
Pledge Agreement.
"Termination Date" shall mean August 31, 2005.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect from time to time in the Commonwealth of Kentucky.
"Unmatured Default" shall mean the happening of any material breach
under this Agreement, including but not limited to failure to pay any
installment of principal or interest of the Revolving Credit Note when due, or a
breach of the financial covenants under this Agreement, or other similar
material breach the happening of which, together with the giving of any required
notice or the passage of any required period of time, would constitute an Event
of Default.
SECTION II
----------
Revolving Credit Loan
---------------------
The Lender hereby establishes the Revolving Credit Loan in favor of the
Borrower as follows:
2.01 Amount of Revolving Credit. The total principal amount available
----------------------------
under the Revolving Credit shall be Six Million Dollars and 00/100
($6,000,000.00).
2.02 Term of the Revolving Credit. The Revolving Credit is effective as
-----------------------------
of the date of this Agreement, and shall continue in effect until the
Termination Date, unless the Revolving Credit is sooner extended or terminated
as provided in this Agreement. On the Termination Date, the Revolving Credit
shall terminate and all Revolving Credit Loans shall mature and be payable in
full.
2.03 Revolving Credit Loans.
-----------------------
(a) The Borrower may request and the Lender may advance
Revolving Credit Loans during the term of Revolving Credit. Unless sooner
terminated, advances under the Revolving Credit will be available until the
maturity of the Revolving Credit on the Termination Date, after which the
Borrower shall not be entitled to obtain any additional advances under the
Revolving Credit.
(b) The Lender shall have the right, at its option, in its own
discretion, to terminate the Revolving Credit upon the occurrence of any Event
of Default by giving notice to the Borrower of such termination. Any termination
of the Revolving Credit shall not release the Borrower from its obligations
under this Agreement or any of the other Borrower Documents, nor shall it
terminate this Agreement or any of the other Borrower Documents. The provisions
of this Agreement and the other Borrower Documents shall continue in full force
and effect for the entire term of this Agreement as provided in Section 10.02.
-5-
<PAGE>
(c) Subject to the terms and conditions of this Agreement, so
long as the Revolving Credit remains in effect and is not terminated, and no
Unmatured Default or Event of Default has occurred, the Lender agrees to make
Revolving Credit Loans as the Borrower may request from time to time in
accordance with the provisions of this Agreement generally, and this Section II
in particular, provided that after giving effect to any requested Revolving
Credit Loan, the principal balance of all Revolving Credit Loans outstanding at
any one time shall not exceed the amount of the Revolving Credit as provided in
Section 2.01. Principal borrowed under the Revolving Credit and then repaid may
be reborrowed, subject to the other terms, provisions and conditions of this
Agreement and the other Borrower Documents.
(d) The Lender is under no duty to extend the period of the
Revolving Credit beyond the Termination Date. Before, at or after the
termination of the Revolving Credit, the Lender may (at its discretion, with no
obligation to do so) extend the term of the Revolving Credit, on a basis and
with terms and conditions satisfactory to the Lender. Any such extension must be
done in a writing signed by the Lender and specifically providing for an
extension of the Revolving Credit in order to be binding. If any extension of
the period of the Revolving Credit were to occur, the Pledge Agreement, and the
other Borrower Documents would remain in effect and continue to apply to the
Revolving Credit Notes, as extended (or to renewal or replacement notes for the
Revolving Credit Notes, or their replacement), until those Revolving Credit
Notes, as extended, renewed or replaced, have been paid in full.
(e) Each Revolving Credit Loan shall be subject to the
following terms and conditions, in addition to any other terms and conditions
provided in this Agreement:
(1) Each Revolving Credit Loan shall be in connection
with the acquisition of and payment for specific Partnership Interests, and
shall be in an amount no greater than the actual, out-of-pocket costs to the
Borrower to acquire those specific Partnership Interests.
(2) Before the Borrower enters into a binding contract
to acquire Partnership Interests, it shall (A) advise the Lender of its desire
to do so; (B) provide the Lender with such information as the Lender may desire
with respect to the particular Partnership Interests to be acquired and the
price that the Borrower would pay to acquire those Partnership Interests; and
(C) refrain from entering into a binding contract to acquire those Partnership
Interests until and unless the Lender shall, in its discretion, have approved
the aggregate cost to the Borrower of acquiring those Partnership Interests.
(3) Whenever the Borrower desires to obtain an
Revolving Credit Loan, it shall deliver to the Lender a Request for Advance
either orally or in writing, unless waived by the Lender in writing, on or
before the day on which it wishes to have the advance made available, together
with such other information with respect to that advance and its purpose as the
Lender may request. Without limiting the foregoing, each Request for Advance
shall specify the amount of the advance under the Revolving Credit Loan
requested and the date on which the Borrower desires the advance to be made
available.
-6-
<PAGE>
(4) Together with a Request for Advance, the Borrower
shall deliver to the Lender (A) a Supplement to Pledge Agreement in such form
and such information as the Lender may require to confirm that the Partnership
Interests to be acquired with the proceeds (in whole or in part) of that
Revolving Credit Loan shall become subject to the Pledge Agreement; (B)
Partnership Notices and Assignments with respect to all of the Partnership
Interests to be acquired with the proceeds (in whole or in part) of that
Revolving Credit Loan; (C) UCC-3 Amendments to Financing Statements describing
the Partnership Interests to be acquired (in whole or in part) with proceeds
from the Revolving Credit Loan as additional collateral for the obligations
secured by the Pledge Agreement; and (D) evidence satisfactory to the Lender
that the Partnership Interests to be acquired with proceeds (in whole or in
part) of that Revolving Credit Loan are or will be (upon completion of the
acquisition) owned by the Borrower free from any interest, claim, lien, charge,
encumbrance and/or security interest of any Person other than the Lender.
Without limiting the foregoing clause (D), such evidence shall include, but not
be limited to, (I) in the case of the Borrower's acquisition of Partnership
Interests which, when aggregated with all previous acquisitions of Partnership
Interests from the same Person, directly or indirectly, have an aggregated
acquisition cost of $25,000 or greater, (a) a search or searches of such public
records in the name of the Borrower as the Lender may specify, in its
discretion, disclosing no lien, charge, interest, encumbrance and/or security
interest in favor of any Person, other than the Lender, and (b) a search or
searches of such public records in the name of the Person from whom the Borrower
acquired or would acquire the Partnership Interests as the Lender may specify,
in its discretion, disclosing no lien, charge, interest, encumbrance and/or
security interest in favor of any Person, and (II) in all cases, delivery of any
and all certificates and/or other writings evidencing and/or representing such
Partnership Interests, together with an assignment in blank in form and
substance satisfactory to the Lender and its counsel in their discretion.
(5) The Borrower shall not be entitled to obtain any
Revolving Credit Loan if any Event of Default or Unmatured Default shall exist
or would exist upon the making of the Revolving Credit Loan requested, even if
the Lender does not elect to terminate the Revolving Credit as a result of such
Event of Default or Unmatured Default.
(6) The Borrower shall not be entitled to obtain any
Revolving Credit Loan if immediately after the advance requested were made, the
aggregate of all of the Revolving Credit Loans would exceed the maximum amount
permitted under Section 2.01.
(7) All Revolving Credit Loans shall be made in strict
compliance with the terms and provisions of this Agreement unless the Lender
elects in its discretion to waive any of those terms and conditions (which the
Lender shall not be required to do). The waiver of any terms and/or conditions
with respect to any one advance shall not constitute a course of dealing or a
waiver of the same or any other terms or conditions with respect to any other
requested advance.
(8) Each request by the Borrower for a Revolving Credit
Loan shall constitute the making of the following representations and warranties
by the Borrower and the Guarantors to the Lender:
-7-
<PAGE>
(A) That the Borrower is then, and at
the time the advance will be made will be, entitled under this Agreement to
obtain that Revolving Credit Loan; and
(B) All of the covenants, agreements,
representations and warranties made by the Borrower and the Guarantors in this
Agreement, and in the other Borrower Documents, are true, correct and complete
in all material respects and have been complied with in all material respects as
of such date (subject to only two changes of circumstances which (x) are fully
disclosed by the Borrower to the Lender in writing, describing the changed
circumstances, and (y) do not result in any violation of any condition,
provision, promise and/or covenant of this Agreement, or otherwise result in an
Unmatured Default or an Event of Default).
2.04 The Revolving Credit Notes.
---------------------------
(a) The Revolving Credit Loans shall be evidenced by and
payable in accordance with the terms of the Revolving Credit Notes and on the
terms of this Agreement. In the event of any disagreement between the terms of
the executed Revolving Credit Notes and this Agreement, the terms of the
Revolving Credit Notes shall prevail.
(b) The first Two Million Dollars ($2,000,000) of Revolving
Credit Loans shall be allocated to and evidenced by Revolving Credit Note A. The
principal balance of Revolving Credit Loans will be credited against and
evidenced by Revolving Credit Note B if, but only if, and only to the extent the
aggregate principal balance of all Revolving Credit Loans outstanding at one
time exceeds Two Million Dollars ($2,000,000), but is less than Four Million
Dollars ($4,000,000). The outstanding principal balance of Revolving Credit
Loans shall be credited against and evidenced by Revolving Credit Note C if, but
only if, and only to the extent the aggregate principal balance of all Revolving
Credit Loans outstanding at one time equals or exceeds Four Million Dollars
($4,000,000). Accordingly, the first Two Million Dollars ($2,000,000), or
portion thereof, of Revolving Credit Loans outstanding at any one time shall be
credited against and evidenced by Revolving Credit Note A; at such time as the
outstanding principal balance of the Revolving Credit Loans is greater than Two
Million Dollars ($2,000,000), but less than Four Million Dollars ($4,000,000),
Revolving Credit Loans made at such time shall be credited against and evidenced
by Revolving Credit Note B; and at such time as the outstanding principal
balance of all Revolving Credit Loans outstanding at one time equals or exceeds
Four Million Dollars ($4,000,000), Revolving Credit Loans made at such time
shall be credited against and evidenced by Revolving Credit Note C.
2.05 Interest on Revolving Credit Loans.
-----------------------------------
(a) The principal balance of the Revolving Credit Loans
outstanding from time to time shall bear interest from the date of the Revolving
Credit Notes until all principal and interest on the Revolving Credit Loans
shall have been paid in full.
(b) The outstanding principal balance of Revolving Credit
Loans from time to time evidenced by Revolving Credit Note A shall bear interest
at an annual rate equal to one quarter percent (1/4%), plus the Prime Rate as
that Prime Rate may change from time to time.
-8-
<PAGE>
The outstanding principal balance of Revolving Credit Loans from time to time
evidenced by Revolving Credit Note B shall bear interest at an annual rate equal
to one-half percent (1/2%), plus the Prime Rate as that Prime Rate may change
from time to time. The outstanding principal balance of Revolving Credit Loans
from time to time evidenced by Revolving Credit Note C shall bear interest at an
annual rate equal to one percent (1%), plus the Prime Rate as that Prime Rate
may change from time to time.
(c) All interest on the Revolving Credit Loan shall be
calculated on the basis of the actual number of days elapsed over an assumed
year of three-hundred sixty days (360).
2.06 Minimum Principal Balance. If, for any reason, after the making of
--------------------------
the first Revolving Credit Loan the principal balance of the Revolving Credit
Notes is reduced below one thousand dollars ($1,000.00), then, at the option of
the Lender the Revolving Credit may be terminated by the Lender without
necessity of notice to the Borrower.
2.07 Notation of Disbursements and Payments. Disbursements of, and
-----------------------------------------
payments of principal with respect to, Revolving Credit Loans shall be evidenced
by notations by the Lender on its electronic data processing equipment, showing
the date and amount of each advance and each payment of principal. The principal
amount outstanding under the Revolving Credit Notes from time to time shall also
be recorded by the Lender on that electronic data processing equipment. The
aggregate amount of all disbursements of Revolving Credit Loans made and shown
on the Lender's electronic data processing equipment, over all of the payments
of principal made by the Borrower and recorded on the Lender's electronic data
processing equipment, shall be prima facie evidence of the outstanding principal
balance due under the Revolving Credit Notes.
2.08 Principal and Interest Payments. Commencing on September 1, 2000,
--------------------------------
and continuing on the first (1st) day of each calendar month occurring through
and including August 1, 2005, the Borrower shall pay to the Lender all accrued
and unpaid interest on the Revolving Credit Loans. On the Termination Date, the
Borrower shall pay to the Lender all of the outstanding principal balance of,
and all accrued but unpaid interest on, the Revolving Credit Loans.
2.09 Mandatory Prepayments. If the Borrower sells, transfers or
-----------------------
otherwise disposes of any of the Partnership Interests, then the Borrower shall
make a prepayment of the Revolving Credit Loans in an amount calculated in
accordance with this Section. The amount of the prepayment shall be not less
than the amount of proceeds of the Revolving Credit Loan or Loans which the
Borrower received and applied (in whole or in part) towards the acquisition of
the Partnership Interest or Partnership Interests sold, transferred, or
otherwise disposed of. Mandatory prepayments under this Section shall be applied
in accordance with Section 2.10 of this Agreement.
2.10 Optional Principal Payments. The Borrower may make optional
------------------------------
prepayments of principal of the Revolving Credit Loan from time to time. Each
prepayment shall be accompanied by written statement that it is in prepayment of
the Revolving Credit Loan.
-9-
<PAGE>
2.11 Application of Payments. The Lender shall apply all payments of
-------------------------
Revolving Credit Loans received when no Event of Default has occurred and is
continuing first to any late fees or other charges, then to accrued but unpaid
interest, and then to principal. The Lender may apply all payments of Revolving
Credit Loans received after an Event of Default has occurred and is continuing
among late fees and other charges, interest and principal as the Lender may
determine, in its discretion.
2.12 Application of Principal Payments. Unless otherwise agreed by the
----------------------------------
Lender and the Borrower in writing, all payments of principal, whether mandatory
or optional, received by the Lender when no Event of Default has occurred and is
continuing shall be applied first to the principal of Revolving Credit Loans
evidenced by Revolving Credit Note C until all of the Revolving Credit Loans
evidenced thereby shall have been paid in full, then to the principal of
Revolving Credit Loans evidenced by Revolving Credit Note B, until all of the
Revolving Credit Loans evidenced thereby shall have been paid in full, then to
the principal of Revolving Credit Loans evidenced by Revolving Credit Note A.
All payments of principal on Revolving Credit Loans, whether mandatory or
optional, received by the Lender after an Event of Default has occurred and is
continuing may be applied by the Lender among Revolving Credit Notes A, B and C
as the Lender may determine, in its discretion.
2.13 Purposes of Loans. The Borrower shall use the proceeds of all Loan
------------------
solely to acquire Partnership Interests, provided, that, the Borrower may not
apply any proceeds from any Revolving Credit Loan to the purchase of any
Partnership Interests unless the Borrower shall first have advised the Lender of
the specific Partnership Interests that the Borrower intends to acquire with the
proceeds of that Revolving Credit Loan, and the Lender shall, in its discretion,
have approved the purchase price of those Partnership Interests.
2.14 Certain limitations on Revolving Credit Loan Advances.
------------------------------------------------------
Without limiting Section 2.13,
(a) the Borrower may not use any proceeds of any Revolving
Credit Loan to acquire any Partnership Interest or Partnership Interests from
(1) any Affiliate of the Borrower, (2) either Guarantor, and/or (3) any member
of the family of either of the Guarantors (for purposes of this provision,
"family" means (A) mother or father of the subject Person, (B) any brother or
sister (or brother-in-law or sister-in-law) of such mother or father, (C) any
son or daughter (or son-in-law or daughter-in-law) of any such brother or sister
of such mother or father, and (D) any son or daughter (or son-in-law or
daughter-in-law) and/or grandson or granddaughter (and/or grandson-in-law or
granddaughter-in-law) of such Person).
(b) the Borrower shall not use the proceeds of any Revolving
Credit Loan to pay any interest that has accrued on the Revolving Credit Loans.
-10-
<PAGE>
SECTION III
-----------
Security for the Loans
----------------------
The Revolving Credit Notes and the Revolving Credit Loans evidenced
thereby, as well as all of the Borrower's obligations under all of the Borrower
Documents are and shall be secured by and entitled to the benefits of all of the
following:
3.01 Right of Offset. The right of offset provided in Section VIII
----------------
of this Agreement.
3.02 Security Interest in Partnership Interests. A first priority
-------------------------------------------
perfected security interest in the Partnership Interests pursuant to the Pledge
Agreement.
3.03 Guaranties. The guaranties of the Guarantors pursuant to the
-----------
Guaranty Agreements.
SECTION IV
----------
Conditions Precedent
--------------------
4.01 Conditions Precedent to the first Revolving Credit Loan. The
------------------------------------------------------------
Lender's obligation to provide the Borrower with the Revolving Credit and the
first Revolving Credit Loan shall be conditioned upon the fulfillment of all the
following conditions in form and substance, and in appropriate cases through
documents, in each case satisfactory to the Lender and its counsel in their
discretion:
(a) Resolutions. The Borrower shall have furnished the Lender
------------
with certified copies of appropriate resolutions of the Borrower (1) authorizing
the execution of the following documents: this Agreement, the Revolving Credit
Notes, the Pledge Agreement, financing statements and any other documents,
instruments and agreements referred to herein which are required to be executed
and/or delivered by the Borrower and (2) authorizing consummation of the
transactions contemplated by, and performance of this Agreement.
(b) Articles of Organization and Operating Agreement. The
--------------------------------------------------
Borrower shall have furnished the Lender with a copy of the Borrower's Articles
of Organization and Operating Agreement and all amendments to each.
(c) Certificates of Existence. The Borrower shall have
----------------------------
furnished the Lender with a certificate of existence of recent date issued by
the Secretary of State of the Commonwealth of Kentucky, certifying that it is
duly organized and validly existing under the laws of the Commonwealth of
Kentucky. The Borrower shall also have furnished the Lender with certificates of
existence with respect to the Partnerships from appropriate offices in Georgia,
Kentucky, Maryland and Florida.
-11-
<PAGE>
(d) Opinion of Counsel for the Borrower and the Guarantors.
----------------------------------------------------------
The Borrower and the Guarantors shall have furnished the Lender, at the
Borrower's expense, with the legal opinion of Greenebaum, Doll & McDonald PLLC,
as counsel for the Borrower, addressed to the Lender, dated the date of this
Agreement, addressing the matters set forth in Annex C, and otherwise
satisfactory to the Lender and its counsel.
(e) Certificates of Incumbency of the Borrower. The Borrower
-------------------------------------------
shall have furnished the Lender with a certificate of its secretary certifying
the names of the officers of the Borrower authorized to sign the Borrower
Documents, together with the true signatures of such officers.
(f) Executed Documents. The Borrower shall have duly executed
-------------------
and shall have delivered to the Lender each of the following documents in
subparagraphs (1) through (5), and the Guarantors shall have executed and
delivered to the Lender the documents set forth in paragraphs (1) and (4) below:
(1) this Agreement;
(2) the three Revolving Credit Notes;
(3) the Pledge Agreement;
(4) the Guaranty Agreements; and
(5) such UCC-1 financing statements or other
documents for filing with public officials with respect to the Pledge Agreement
as the Lender may request.
(g) Partnership Notices and Acknowledgements. The Borrower
-------------------------------------------
shall have caused each Partnership to have countersigned and delivered to the
Lender Partnership Notices and Acknowledgements with respect to each, every and
all of the Partnership Interests described on Schedule 1(P) to this Agreement.
(h) Representations and Warranties. Each and every
-----------------------------------
representation and warranty made by or on behalf of the Borrower at the time of
or after the execution of this Agreement relating to the Borrower Documents or
the transactions contemplated thereby shall be true, complete and correct in all
material respects on and as of the date such Loan is to be made.
(i) No Defaults. There shall exist no Event of Default or
-------------
Unmatured Default which has not been cured to the Lender's satisfaction.
(j) No Change in the Borrower's Condition. There shall have
---------------------------------------
been no material adverse change in the condition, financial or otherwise of the
Borrower from that existing on the date of the financial statements described in
Section 6.08 of this Agreement.
-12-
<PAGE>
(k) Recordings and Filings. The Lender shall have received
------------------------
evidence satisfactory to it that all financing statements or other instruments,
as the Lender may reasonably request, have been executed and delivered by the
Borrower and filed or recorded in such public offices as the Lender may request
to perfect and maintain the perfection of the security interests which secure
the Loan, and to release any security interests, financing statements and/or
other liens or encumbrances on any of the Collateral other than such interests,
liens or encumbrances in favor of the Lender.
(l) Counsel Fees. The Borrower shall have paid the Lender's
-------------
counsel fees and expenses in accordance with Section 9.01 of this Agreement.
(m) Results of Records Searches. The Borrower shall have
------------------------------
delivered to the Lender results of searches of the records of such public
offices as the Lender may require with respect to liens, encumbrances or other
interests with respect to all existing Partnership Interests, disclosing no
liens, encumbrances or interests with respect to all existing Partnership
Interests other than those in favor of the Lender.
(n) Evidence of Ownership. The Borrower shall have delivered
----------------------
to the Lender evidence satisfactory to the Lender of the Borrower's ownership of
the Partnership Interests described on Schedule 1(P) to this Agreement. Without
limiting the generality of the preceding sentence, the Borrower shall have
delivered to the Lender any and all certificates and/or other writings
evidencing and/or representing those Partnership Interests, together with
assignments in blank in form and substance satisfactory to the Lender and its
counsel in their discretion.
(o) Compliance with Section 2.03. The Borrower shall have
-------------------------------
complied with Section 2.03 of this Agreement in all respects regarding such
Revolving Credit Loan.
4.02 Conditions Preceding to Subsequent Revolving Credit Loans. The
-------------------------------------------------------------
Lender's obligation to provide the Borrower with Revolving Credit Loans after
the first Revolving Credit Loan shall be conditioned upon the fulfillment of the
conditions in Sections 4.01(g) with respect to the Partnership Interests being
acquired, in whole or in part with the proceeds of such Revolving Credit Loan or
Loans, and upon fulfillment of the conditions in Sections 4.01 (h), (i), (j),
(k), (n) and (o) with respect to such Revolving Credit Loans.
SECTION V
---------
General Covenants
-----------------
During the term of this Agreement, the Borrower shall comply with all
of the following provisions:
5.01 Insurance. The Borrower shall maintain insurance as follows:
----------
(a) Liability Insurance. The Borrower at its own cost and
---------------------
expense, shall procure, maintain and carry in full force and effect general
liability, public liability, workers'
-13-
<PAGE>
compensation liability, environmental hazard liability and property damage
insurance with respect to the actions and operations of the Borrower to such
extent, in such amounts and with such deductibles as are carried by prudent
businesses similarly situated, but in any event not less than the amounts of
coverage per person and per occurrence, and with the deductibles, as are
provided in the Borrower's insurance in effect on the date of this Agreement.
Without limiting the foregoing, such insurance shall insure against any
liability for loss, injury, damage or claims caused by or arising out of or in
connection with the operation of the Borrower's business including injury to or
death of the Borrower's employees, agents or any other persons and damage to or
destruction of public or private property.
(b) Physical Damage Insurance. The Borrower at its own cost
----------------------------
and expense, shall insure all of its insurable properties to such extent,
against such hazards (including, without limitation, environmental hazards), in
the amount of coverage and with such deductibles as are carried by prudent
businesses similarly situated, but in any event insuring against such hazards
and with such coverages and deductibles as are provided in the Borrower's
insurance in effect on the date of this Agreement, and in any event in amounts
of coverage not less than the insurable value of the property insured. Without
limiting the foregoing, such insurance shall name the Lender as an additional
insured and shall provide for payment of the proceeds thereof to the Borrower
and to the Lender as their interests may appear.
(c) General Insurance Requirements.
------------------------------
(1) All insurance which the Borrower is required to
maintain shall be satisfactory to the Lender in form, amount and insurer. Such
insurance shall provide that any loss thereunder shall be payable
notwithstanding any action, inaction, breach of warranty or condition, breach of
declarations, misrepresentation or negligence of the Borrower. Each policy shall
contain an agreement by the insurer that, notwithstanding lapse of a policy for
any reason, or right of cancellation by the insurer or any cancellation by the
Borrower such policy shall continue in full force for the benefit of the Lender
for at least thirty (30) days after written notice thereof to the Lender and the
Borrower, and no alteration in any such policy shall be made except upon thirty
(30) days written notice of such proposed alteration to the Lender and the
Borrower and written approval by the Lender. At or before the making of the
first Loan, the Borrower shall provide the Lender with certificates evidencing
its due compliance with the requirements of this Section.
(2) Prior to the expiration date of any policy of
insurance maintained pursuant to this Agreement, the Borrower shall provide the
Lender with a certificate of insurance evidencing the acquisition of a new
policy, or an extension or renewal of an existing policy, evidencing the
Borrower's due compliance with this Section.
(3) If the Borrower fails to acquire any policy of
insurance required to be maintained pursuant to this Section, or fails to renew
or replace any such policy at least ten (10) days prior to the expiration
thereof, or fails to keep any such policy in full force and effect, the Lender
shall have the option (but not the obligation) to pay the premiums on any such
policy of insurance or to take out new insurance in amount, type, coverage and
terms satisfactory to the Lender, after first notifying the Borrower of the
Lender's intent to pay it. Any amounts paid
-14-
<PAGE>
therefor by the Lender shall be immediately due and payable to the Lender by the
Borrower upon demand. No exercise by the Lender of such option shall in any way
affect the provisions of this Agreement, including the provision that failure by
the Borrower to maintain the prescribed insurance shall constitute an Event of
Default.
5.02 Taxes and Other Payment Obligations.
------------------------------------
(a) The Borrower shall pay and discharge, or cause to be paid
and discharged, before any of them become in arrears, all taxes, assessments,
governmental charges, levies, and claims for labor, materials or supplies which
if unpaid might become a lien or charge upon any of their property, and all of
their other debts, obligations and liabilities.
(b) The Borrower may refrain from paying any amount it would
be required to pay pursuant to subparagraph (a) of this Section 5.02 if the
validity or amount thereof is being contested in good faith by appropriate
proceedings timely instituted which shall operate to prevent the collection or
enforcement of the obligation contested, provided that if the Borrower is
engaged in such a contest, it shall have set aside on its books appropriate
reserves with respect thereto. If the validity or amount of any such obligations
in excess of One Hundred Thousand Dollars ($100,000.00) shall be contested
pursuant to the provisions of this subparagraph, the Borrower shall notify the
Lender immediately upon the institution of the proceedings contesting the
obligation.
5.03 Financial Statements. The Borrower shall deliver to the Lender:
---------------------
(a) Annual Statements of the Borrower. As soon as available,
-----------------------------------
and in any event within one hundred twenty (120) days after the end of each
fiscal year, the Borrower shall furnish to the Lender an audited balance sheet,
income statement, statement of cash flows, for such fiscal year, prepared by the
Borrower or the CPA Firm. Together with such annual financial statements, if the
CPA Firm prepared the annual financial statements, the Borrower shall furnish
the Lender with the CPA Firm's statement that the CPA Firm has reviewed the
provisions of this Agreement and nothing has come to the CPA Firm's attention to
cause it to believe that any Event of Default or Unmatured Default exists as of
the date of the statement, or, if such is not the case, specifying such Event of
Default or Unmatured Default and the nature thereof, and the action the Borrower
has taken or will take to correct it.
(b) Annual Statements of the Guarantors. On or before June 1
-------------------------------------
of each year, each Guarantor shall provide their financial statements to the
Lender as at the preceding December 31, in such form, with such detail and of
such scope as the Lender may determine in its discretion.
(c) Additional Financial Information. The Borrower shall
--------------------------------
deliver to the Lender:
(1) Promptly upon receipt thereof, all detailed
reports, management letters and the like, if any (excluding working drafts),
submitted to the Borrower by the CPA Firm if the CPA Firm audited the books of
the Borrower.
-15-
<PAGE>
(2) Within thirty (30) days after the respective dates
of filing the corporate federal income tax returns of the Borrower for each
year, a written statement signed by the CPA Firm that the firm has prepared or
reviewed the federal income tax returns of the Borrower for such year and in the
firm's opinion the provisions for federal taxes based on the income of the
Borrower, as recorded in the accounts, represents an adequate estimate of the
liability of the Borrower for federal taxes based on income.
(3) Promptly upon their becoming available, copies of
all financial statements, reports, notices of meetings and proxy statements
which the Borrower shall send to its members.
(4) Within thirty (30) days after the filing thereof in
the office of the Secretary of State of the Commonwealth of Kentucky, certified
copies of all amendments to the Borrower's Articles of Organization and
Operating Agreement.
(5) Such additional information with respect to the
Borrower's financial condition (including, without limitation, information
regarding the Collateral) as may be reasonably requested by the Lender from time
to time.
(e) All financial statements required under this Agreement
shall be prepared on a consolidated and consolidating basis (regardless whether
permitted or required under GAAP) for the Borrower and any Subsidiary which the
Borrower acquires or forms at any time.
5.04 Financial Records. The Borrower shall maintain a standard modern
-------------------
system of accounting in which full, true and correct entries shall be made of
all dealings or transactions in relation to its business and affairs in
accordance with GAAP applied on a basis consistent with prior years and, without
limitation, making appropriate accruals for estimated contingent losses and
liabilities.
5.05 Properties. The Borrower shall maintain its plants and other fixed
-----------
assets in good condition, subject only to normal wear and tear, and make all
necessary and proper repairs, renewals and replacements. The Borrower shall
comply with all material leases and other material agreements in order to
prevent loss or forfeiture, unless compliance is being contested in good faith
by appropriate proceedings timely instituted which shall operate to prevent
enforcement of the loss or forfeiture. The Lender shall have the right to
inspect the Borrower's plants and other fixed assets at all reasonable times,
and from time to time.
5.06 Existence and Good Standing. The Borrower shall preserve its
------------------------------
existences in good standing and shall be and remain qualified to do business and
in good standing in all states and countries in which failure to so qualify
would have a material adverse effect upon the Borrower.
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5.07 Notice Requirements.
--------------------
(a) Default. The Borrower shall cause its chief officer, or in
--------
his absence an officer of the Borrower designated by it, to notify the Lender in
writing within three (3) Business Days, after the Borrower, or any of the
Borrower's members or officers, has notice of any Event of Default or Unmatured
Default or has notice that any representation or warranty made in this
Agreement, or in any related document or instrument, for any reason was not true
and complete and not misleading in any material respect when made. Such notice
shall specify the nature of such Event of Default or Unmatured Default and the
action the Borrower has taken or will take to correct it.
(b) Material Litigation. The Borrower promptly shall notify
---------------------
the Lender in writing of the institution or existence of any litigation or
administrative proceeding to which the Borrower may be or become a party which
might involve any material risk of any judgment or liability which (1) would be
in excess of One Hundred Thousand Dollars ($100,000.00), or (2) would otherwise
result in any material adverse change in the Borrower's business, assets or
condition, financial or otherwise.
(c) Other Information. From time to time, upon request by the
------------------
Lender, the Borrower shall furnish to the Lender such information regarding the
Borrower's business, assets and condition, financial or otherwise, as the Lender
may reasonably request. The Lender shall have the right during reasonable
business hours to examine all of the Borrower's business and financial books and
records and to make notes and abstracts therefrom, to make an independent
examination of the Borrower's books and records for the purpose of verifying the
accuracy of reports delivered by the Borrower and ascertaining compliance with
this Agreement.
5.08 Revolving Credit Notes and Other Borrower Documents. The Borrower
----------------------------------------------------
shall pay the Revolving Credit Notes in accordance with their respective terms,
and the Borrower shall comply with the provisions of the other Borrower
Documents.
5.09 Compliance with Law. The Borrower shall comply in all material
---------------------
respects with (a) all valid and applicable statutes, rules and regulations of
the United States of America, of the States thereof and their counties,
municipalities and other subdivisions and of any other jurisdiction applicable
to the Borrower, including, but not limited to all applicable state and federal
environmental laws and ERISA; (b) the valid and applicable orders, judgments and
decrees of all courts or administrative agencies with jurisdiction over the
Borrower; or its business; and (c) the applicable provisions of licenses issued
to the Borrower except where compliance therewith shall be currently contested
in good faith by appropriate proceedings, timely instituted, which shall operate
to stay any order with respect to such non-compliance.
5.10 Liens. Except for security interests previously granted by the
------
Borrower to the Lender contemporaneously with the execution of this Agreement
(including, without limitation, those permitted in Section 5.02(b) and those
disclosed in Section 6.13 of this Agreement), and except for liens permitted in
this Agreement, the Borrower shall not (a) create or incur or suffer to be
created or incurred or to exist any encumbrance, mortgage, pledge, lien, charge,
restriction or other security interest of any kind upon any of the Collateral,
whether owned or held on the
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date of this Agreement or acquired thereafter, or upon the proceeds therefrom,
or (b) transfer any Collateral or the proceeds therefrom for the purpose of
subjecting the same to payment of indebtedness or performance of any other
obligation except payments made in accordance with Section 5.02 of this
Agreement or payments made to the Lender in accordance with the terms and
provisions of this Agreement, or (c) acquire, or agree or have an option to
acquire, any Collateral upon conditional sale or other title retention or
purchase money security agreement, device or arrangement, or (d) sell or
transfer, assign, or pledge any Collateral, with or without recourse. The
Borrower may incur or create, or suffer to be incurred or created or to exist,
the following liens without violating the provisions of this Section 5.10:
(1) Statutory liens to secure claims for labor, material or
supplies to the extent that payment thereof shall not at the time be required to
be made in accordance with Section 5.02 of this Agreement.
(2) Deposits or pledges made in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pensions or
other social security, or in connection with contests, to the extent that
payment thereof shall not at that time be required to be made in accordance with
Section 5.02 of this Agreement.
(3) Statutory liens for taxes or assessments or governmental
charges or levies if payment shall not at the time be required to be made in
accordance with Section 5.02 of this Agreement.
(4) Statutory liens (and contractual liens that provide to the
secured party no greater rights than equivalent statutory liens) to secure
payment of rent or lease payments with respect to leases of real property to the
extent that such payments shall not at the time be required to be made in
accordance with Section 5.02 of this Agreement.
5.11 Limit on Indebtedness, Guarantees, Etc. The Borrower shall not, in
---------------------------------------
the absence of prior written consent from the Lender, incur, assume, guarantee,
or otherwise be or become liable in respect of any Indebtedness except for those
matters described in Schedule 6.12 to this Agreement, if after giving pro forma
effect to the Indebtedness, the Indebtedness would result in an Unmatured
Default or an Event of Default.
5.12 Articles of Organization and Operating Agreement. Without the
----------------------------------------------------
Lender's prior written consent, which shall not be withheld or delayed
unreasonably, the Borrower shall not make any changes in or amendments to its
Articles of Organization or Operating Agreement.
5.13 Mergers, Sales, Transfers and Other Dispositions of Assets.
-------------------------------------------------------------
Without the Lender's prior written consent, which shall not be withheld
unreasonably, the Borrower shall not:
(a) Be a party to any consolidation, reorganization (including
without limitation those types referred to in Section 368 of the United States
Internal Revenue Code of 1986, as amended), "stock-swap" or merger;
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<PAGE>
(b) Sell or otherwise transfer any material part of either its
tangible or intangible assets (except for assets that are worn out or no longer
used or useful in the Borrower's business), provided that Lender shall not
withhold its consent if Borrower demonstrates to the satisfaction of the Lender,
pursuant to pro forma financial statements and other relevant information based
on assumptions acceptable to the Lender that after giving effect to the proposed
sale or transfer no Event of Default or Unmatured Event of Default shall exist
under this Agreement;
(c) Purchase all or a substantial part of the capital
stock or assets of any corporation or other business enterprise;
(d) Effect any change in its capital structure; or
(e) Liquidate or dissolve or take any corporate action
with a view toward liquidation or dissolution.
5.14 Loans. The Borrower shall not make any loan or advance any funds
------
whatsoever to any business, entity, party or individual, except advances not to
exceed Five Hundred Thousand Dollars ($500,000.00), in the aggregate at any one
time outstanding.
5.15 No Change in Ownership. The Borrower shall not permit the
--------------------------
ownership interest of the Guarantors (and/or any Person who becomes an owner of
an interest in the Borrower upon the death of one of the Guarantors through
bequest or devise) to be reduced to less than one hundred percent (100%) of the
outstanding membership interests of the Borrower.
5.16 Payment of Distributions. In any fiscal year, the Borrower shall
--------------------------
not pay out any Distributions in excess of the Borrower's Net Income for that
fiscal year and in no event shall the Borrower pay out any Distribution while
any Unmatured Default or Event of Default is in existence.
5.17 ERISA Compliance.
-----------------
(a) Relationship of Vested Benefits to Pension Plan Assets.
---------------------------------------------------------
The Borrower will at all times maintain the qualified status of its Plans. The
Borrower will not at any time terminate any Plan unless on the date of such
termination the present value of all employee benefits vested under such Plan
does not exceed the present value of the assets allocable to such vested
benefits.
(b) Valuations. All assumptions and methods used to determine
-----------
the actuarial valuation of vested employee benefits under Plans at any time
maintained by the Borrower and the present value of assets of such Plans shall
be reasonable in the good faith judgment of the Borrower and shall comply with
all requirements of law in all material respects.
(c) Prohibited Actions. Neither the Borrower nor any Plan at
-------------------
any time maintained by the Borrower will:
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<PAGE>
(1) engage in any "prohibited transactions" (as such
term is defined in Section 406 or Section 2003(a) of ERISA);
(2) incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could
result in the imposition of a Lien on the property of the Borrower pursuant to
Section 4006 of ERISA.
5.18 Joinder of Subsidiaries. If the Borrower creates or acquires any
-------------------------
Subsidiary, the Borrower shall cause such subsidiary to execute and deliver to
the Lender an agreement (a "Joinder Agreement") substantially in the form
attached as Annex D pursuant to which such Subsidiary shall join as a Borrower
hereunder and under each document to which the Borrower is named as a party. The
Borrower shall cause the Joinder Agreement to be delivered to the Lender within
five (5) Business Days after the date of the filing of such Subsidiary's
articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership,
or the date of its organization if it is an entity other than a corporation or a
limited partnership.
SECTION VI
----------
Representations and Warranties
------------------------------
To induce the Lender to enter into this Agreement and the Lender to
make the Revolving Credit Loan, the Borrower and the Guarantors represent and
warrant to the Lender as follows, (which warranties and representations shall be
deemed to be remade and restated in full (subject only to changes of
circumstances which (1) are fully disclosed by the Borrower to the Lender in
writing, describing the changed circumstances, and (2) do not result in any
violation of any condition, provision, promise and/or covenant of this
Agreement, or otherwise result in an Unmatured Default or an Event of Default)
whenever an advance under the Revolving Credit Loan is requested by the
Borrower):
6.01 Organization and Existence. The Borrower is a limited liability
---------------------------
company duly organized, validly existing, and in good standing under the laws of
the Commonwealth of Kentucky. The Borrower has all necessary power and authority
to carry on its business conducted on the date of this Agreement. The Borrower
is qualified to do business as a foreign limited partnership, and is in good
standing, in all states and in all foreign countries in which it owns any
property or carries on substantial activities or is otherwise required to be so
qualified, and is duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities to carry on its business
in the places and in the manner conducted on the date of this Agreement.
6.02 Right to Act. No registration with or consent or approval of any
-------------
governmental agency of any kind is required for the execution, delivery,
performance and enforceability of the Borrower Documents. The Borrower has full
power and authority, corporate and otherwise, to execute, deliver and perform
the Borrower Documents.
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<PAGE>
6.03 No Conflicts. The Borrower's execution, delivery and performance
-------------
of the Borrower Documents do not, and will not, (a) violate any existing
provision Articles of Organization or Operating Agreement of the Borrower or any
law, rule, regulation, or judgment, order or decree applicable to the Borrower
or (b) otherwise constitute a default, or result in the imposition of any lien
under (1) any material existing contract or other obligation binding upon the
Borrower or its property, with or without the passage of time or the giving of
notice or both; (2) any law, rule or regulation applicable to the Borrower or
its business; or (3) any judgment, order or decree of any court or
administrative agency applicable to the Borrower or its business.
6.04 Authorization. The execution, delivery and performance by the
--------------
Borrower of the Borrower Documents has been duly authorized, and the Borrower
Documents have been duly executed and delivered.
6.05 Enforceable Agreements. This Agreement and the other Borrower
------------------------
Documents are legally valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors rights or equitable
principals generally.
6.06 Contingent Obligations. The Borrower does not have any material
------------------------
contingent obligations, material liabilities for taxes, material long-term
leases or unusual material forward or long-term commitments, which have not been
disclosed to the Lender.
6.07 Litigation. Except for those matters described in the financial
-----------
statements referenced in Section 6.08 of this Agreement or otherwise disclosed
in writing by the Borrower to Lender, there is no litigation, at law or in
equity, or any proceeding before any federal, state or municipal court, board or
other governmental or administrative agency pending, or to the knowledge of the
Borrower, threatened which is likely to involve any material judgment or
liability against the Borrower or which might otherwise result in any material
adverse change in the Borrower's business, assets or condition, financial or
otherwise. No judgment, decree or order of any federal, state or municipal
court, board or other governmental or administrative agency has been issued
against the Borrower or any of its assets which has, or will likely have, a
material adverse effect on the Borrower's business, assets or condition,
financial or otherwise.
6.08 Financial Statements. The Borrower's financial statements dated
----------------------
April 30, 2000, have been furnished to the Lender. Those financial statements
are true and complete in all material respects, have been prepared in accordance
with GAAP, do not omit reference to any material contingent liabilities of any
kind not otherwise disclosed by Borrower to the Lender in writing, and fairly
present the financial condition of the Borrower as of the date of those
financial statements. Nichols' financial statements dated December 31, 1999, and
Lavin's financial statements dated March 31, 2000, have been furnished to the
Lender. Those financial statements are true and complete in all material
respects, do not omit reference to any material contingent liabilities of any
kind not otherwise disclosed by Borrower to the Lender in writing and fairly
present the financial condition of the Nichols and Lavin, respectively, as of
the date of the financial statements.
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<PAGE>
6.09 Compliance with Contractual Obligations, Laws and Judgments.
------------------------------------------------------------
(a) The Borrower is not in default in the payment,
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any lease, indenture, mortgage, deed of
trust, promissory note, agreement or undertaking to which it is a party or by
which its assets are bound.
(b) The Borrower has not violated any applicable statute,
regulation or ordinance of the United States of America or of any state,
municipality or any other subdivision, jurisdiction or agency thereof, in any
respect materially and adversely affecting the Borrower's business, property,
assets, operations or conditions, financial or otherwise.
(c) The Borrower is not in default with respect to any
judgment, order, writ, injunction, decree or demand of any court, arbitrator or
governmental agency or body.
6.10 Investment Company. The Borrower is not an "investment company"
-------------------
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
6.11 Tax Returns. The Borrower has filed all tax returns which are
-------------
required to be filed and has paid, or made adequate provision for the payment
of, all taxes which have or may become due pursuant to such returns or pursuant
to assessments received. The Borrower knows of no material additional
assessments for which adequate reserves have not been established, and the
Borrower has made adequate provision for all current taxes.
6.12 No Undisclosed Liabilities or Guaranties. The Borrower does not
-------------------------------------------
have any material liabilities, direct or contingent, except as disclosed or
referred to in the financial statements referred to in Section 5.03 of this
Agreement or otherwise disclosed to Lender in writing or incurred by Borrower
after such date and not prohibited by the express terms of this Agreement, nor
has the Borrower guaranteed, or otherwise become responsible for, the material
obligations of any person, firm or corporation, other than as set out on
Schedule 10.12 of this Agreement or otherwise not in contravention of any of the
Borrower Documents.
6.13 Title to Properties. The Borrower has good and marketable title to
--------------------
all of its property and assets of all character, free and clear of all
mortgages, liens, interests, and encumbrances except (a) encumbrances granted to
the Lender, (b) minor irregularities in title which do not materially interfere
with the use and enjoyment by the Borrower of such properties and assets in the
normal course of business as presently conducted, or materially impair the value
thereof for such business, (c) those encumbrances described on Schedule 6.13 to
this Agreement, and (d) any other encumbrances permitted under the express terms
of the Borrower Documents.
6.14 Trademarks and Permits. The Borrower possesses adequate licenses,
-----------------------
patents, copyrights, trademarks and trade names to conduct their businesses as
now conducted. Neither the Borrower nor any of its officers, directors or
employees has received notice or has knowledge of any claim that the Borrower
has violated any other person's license, patent, copyright,
-22-
<PAGE>
trademark or trade name, or that the Borrower's licenses, patents, copyrights,
trademarks or trade names are currently being infringed. The Borrower has all
governmental permits, certificates, consents and franchises necessary to carry
on their businesses as now conducted and to own or lease and operate their
properties as now owned, leased or operated. All such governmental permits,
certificates, consents and franchises are valid, and in effect, and the Borrower
is not in violation thereof, and none of them contains any term, provision,
condition or limitation more burdensome than generally applicable to persons
engaged in the same or similar business.
6.15 No Defaults. The Borrower is not in default in the payment or
-------------
performance of any of its obligations or in the performance of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which it is a party or by which it or any of its assets may be bound, which
default would have a material adverse effect on the business operations, assets
or condition, financial or otherwise, of the Borrower, taken as a whole. No
Unmatured Default or Event of Default hereunder or under the other Borrower
Documents has occurred and is continuing. The Borrower is not in default under
any order, award or decree of any court, arbitrator or governmental authority
binding upon or affecting it or by which any of its assets may be bound or
affected which default would have a material adverse effect on the business of
such Borrower. The Borrower is not subject to any order, award or decree which
is likely to materially adversely affect the ability of the Borrower to carry on
its business as currently conducted or the ability of the Borrower to perform
its obligations under this Agreement and/or the other Borrower Documents to
which it is a party.
6.16 Employee Benefit Plans. Except as have been otherwise disclosed in
-----------------------
writing to the Lender, any Plans in existence are in substantial compliance with
ERISA, no Plan is insolvent or in reorganization, no Plan has an accumulated or
waived funding deficiency within the meaning of Section 412 of the Code, the
Borrower has not incurred any material liability (including any material
contingent liability) to or on account of a Plan pursuant to Sections 4062,
4063, 4064, 4201 or 4204 of ERISA, no proceedings have been instituted to
terminate any Plan, and no condition exists which presents a material risk to
the Borrower of incurring a liability to or on account of a Plan pursuant to any
of the foregoing sections of ERISA.
6.17 No Material Adverse Conditions. There is no fact known to the
----------------------------------
Borrower (other than matters of a general economic or political nature) which
materially adversely affects the business, property, assets or financial
condition of the Borrower which has not been disclosed to the Lender or set
forth in the other documents, certificates and statements furnished to the
Lender by or on behalf of the Borrower prior to the date hereof in connection
with the transactions contemplated hereby.
6.18 Regulations Q and U. The Borrower is not engaged principally, or
--------------------
as one of the Borrower's important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation Q of the Board of Governors of the Federal Reserve
System), and will not use the proceeds of the Loans so as to violate Regulation
U as it may be amended or interpreted from time to time by the Board of
Governors of the Federal Reserve System.
6.19 Environmental Matters. Except as otherwise disclosed in
------------------------
writing to the Lender,
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<PAGE>
the Borrower fully complies with all federal, state and local environmental
laws, rules, regulations, ordinances and other requirements including, without
limitation, those which relate to the production, storage, disposal or use of
any and all hazardous or toxic wastes, and including, without limitation, the
provisions of 42 U.S.C.ss.ss.9601 et seq. (CERCLA, Super Fund); and 42
U.S.C.ss.ss.6901 et seq. (RCRA). --------
-------
6.20 No Public Utility Holding Company. The Borrower is not a
----------------------------------
"holding company," or a "subsidiary company" of a "holding company," or an
affiliate of either, within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.21 No Subsidiaries. The Borrower has no Subsidiaries.
----------------
6.22 Disclosure. Neither this Agreement, nor any agreement, document,
-----------
certificate or statement furnished to the Lender by or on behalf of the Borrower
in connection with the transactions contemplated by this Agreement contains any
untrue statement of any material fact or, except in the case of budgets and
forward financial forecasts, omits to state any material fact necessary to make
the statements contained herein or therein not misleading as of the time the
Borrower makes the statement; provided however, that the Borrower has an
immediate and continuing obligation to supplement any of the foregoing if it
should subsequently contain an untrue statement of any material fact or omits to
state any material fact necessary to make the statements contained herein or
therein not misleading. There is no fact known to the Borrower which materially
and adversely affects, or in the future is likely to materially and adversely
affect, the Borrower's business, operations, affairs or condition, financial or
otherwise, which has not been disclosed to the Lender.
SECTION VII
-----------
Events of Default
-----------------
The occurrence of any one or more of the following shall constitute an
Event of Default under this Agreement (an "Event of Default"):
7.01 Failure to Pay. If the Borrower shall fail to pay in full any
----------------
installment of principal or interest on any of the Notes, or payments required
by this Agreement, within five (5) days after such payment first became due.
7.02 No Notice Required. If the Borrower with respect to the following
-------------------
provisions shall fail to observe, perform or comply with any term, obligation,
covenant, agreement, condition or other provision contained in Sections 5.02,
5.04, 5.07, 5.10, 5.12, 5.13, 5.15, or 5.18 of this Agreement, or any Event of
Default occurs under any of the other Borrower Documents.
7.03 Notice Required. If the Borrower with respect to any term,
-----------------
obligation, covenant, agreement, condition or other provision (other than those
referred to in Sections 9.01 or 9.02 hereof) contained or referred to in any of
the Borrower Documents shall fail to observe, perform or comply with those
provisions, and such failure shall not have been fully corrected within thirty
(30) days after the Lender has given written notice thereof to such obligor.
-24-
<PAGE>
7.04 Falsity of Representation or Warranty. If any representation or
---------------------------------------
warranty or other statement of fact contained in any of the Borrower Documents
or in any writing, certificate, report or statement at any time furnished the
Lender by or on behalf of the Borrower pursuant to or in connection with this
Agreement shall have been false or misleading in any material respect or which
shall omit a material fact, whether or not made with knowledge, at the time it
was made.
7.05 Judgments. If a final judgment or judgments for the payment of
----------
money in excess of the sum of One Hundred Thousand Dollars ($100,000.00), in the
aggregate, or with respect to property with a value in excess of such amount,
shall be rendered against the Borrower and such judgment or judgments shall
remain unsatisfied for a period of thirty (30) consecutive days after the entry
thereof and within that thirty (30) days has not been (a) stayed pending appeal,
or (b) discharged.
7.06 Adverse Financial Change. If there should be any material adverse
--------------------------
change in the financial condition of the Borrower as determined in Lender's
discretion, from its financial condition as shown on the financial statements
referred to in Section 6.08 of this Agreement, and such adverse change is not
fully corrected to Lender's reasonable satisfaction within sixty (60) days after
notice with respect thereto from the Lender.
7.07 Other Obligations. Subject to the exception contained in Section
------------------
5.02(b) of this Agreement, if the Borrower shall fail to observe, perform or
comply with the terms, obligations, covenants, agreements, conditions or other
provisions of any agreement, document or instrument (including leases) other
than this Agreement and the other Borrower Documents which (a) the Lender or any
of its Affiliates has entered into with the Borrower and which involves any
Indebtedness to the Lender and/or any of its Affiliates in any amount or (b) any
other Person has entered into with the Borrower and/or any of its Affiliates
which involves Indebtedness (or in the case of leases, in total lease
obligations under any single lease) in any single instance exceeding Five
Hundred Thousand Dollars ($500,000.00).
7.08 Dissolution or Termination of Existence. If the Borrower, either
----------------------------------------
Guarantor and/or any Affiliate of the Borrower takes any action that is intended
to result in the termination, dissolution or liquidation of the Borrower.
7.09 Solvency.
---------
(a) If the Borrower or either Guarantor shall (1) have an
order of relief entered in any proceeding filed by it under the federal
bankruptcy laws (as in effect on the date of this Agreement or as they may be
amended from time to time); (2) admit its inability to pay its debts generally
as they become due; (3) become insolvent in that its total assets are in the
aggregate worth less than all of its liabilities or it is unable to pay its
debts generally as they become due; (4) make a general assignment for the
benefit of creditors; (5) file a petition, or admit (by answer, default or
otherwise) the material allegations of any petition filed against it, in
bankruptcy under the federal bankruptcy laws (as in effect on the date of this
Agreement or as they may be amended from time to time), or under any other law
for the relief of debtors, or for
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<PAGE>
the discharge, arrangement or compromise of their debts; or (6) consent to the
appointment of a receiver, conservator, trustee or liquidator of all or part of
its assets.
(b) If a petition shall have been filed against the Borrower
or either Guarantor in proceedings under the federal bankruptcy laws (as in
effect on the date of this Agreement, or as they may be amended from time to
time), or under any other laws for the relief of debtors, or for the discharge,
arrangement or compromise of their debts, or an order shall be entered by any
court of competent jurisdiction appointing a receiver, conservator, trustee or
liquidator of all or part of the Borrower's assets, and such petition or order
is not dismissed or stayed within sixty (60) consecutive days after entry
thereof.
SECTION VIII
------------
Remedies Upon Default
---------------------
Notwithstanding anything to the contrary, if any Event of Default
occurs under Section 7.09 of this Agreement, the Revolving Credit shall
automatically terminate (if not previously terminated or expired), and the
entire unpaid balance of all Revolving Credit Loans and Revolving Credit Notes,
and all other obligations of the Borrower under and/or in connection with the
Borrower Documents, shall automatically, without requirement of any presentment,
demand or notice of any kind (all of which are hereby waived by the Borrower),
become immediately due and payable in full. Also notwithstanding any other
provision of this Agreement, if any other Event of Default under this Agreement
occurs, the Lender, in its individual discretion, and without notice to the
Borrower, may terminate the Revolving Credit, in which case the Lender shall be
under no further obligation to grant any Revolving Credit Loans to the Borrower.
In addition, upon the occurrence of any Event of Default, and at any time
thereafter, unless all Events of Default have been waived in a writing signed by
the Lender specifically providing the waiver, the Lender shall have all of the
following rights and remedies and it may exercise one or more of them, singly or
in conjunction with others.
8.01 Right to Offset. The Lender shall have the right to set off
-----------------
against, or appropriate and apply toward the payment of, the obligations of the
Borrower to that Lender, pursuant to this Agreement or as evidenced by the
Revolving Credit Notes whether such obligations shall have matured in due course
or by acceleration, any and all deposit balances and other sums and indebtedness
then held or owed by that Lender to or for the credit or account of the Borrower
and/or either Guarantor. For such purpose the Borrower and each Guarantor hereby
pledges to and grants a security interest in such deposit balances, other sums
and indebtedness of the Lender to secure all of the Borrower's obligations under
this Agreement and the Revolving Credit Notes. Such offsets following an Event
of Default may occur without notice to or demand upon the Borrower, either
Guarantor or any other Person, all of such notices and demands being hereby
waived.
8.02 Enforcement of Rights. The Lender shall have the right, to proceed
----------------------
to protect and enforce its rights by suit in equity, action at law or other
appropriate proceedings either for specific performance of any covenant or
condition contained in any of the Borrower Documents, or in aid of the exercise
of any power granted in any of the Borrower Documents.
-26-
<PAGE>
8.03 Rights Under Security Instruments. The Lender shall also have all
----------------------------------
rights and remedies granted it under the Pledge Agreement, the Guaranty
Agreements and any and all other Borrower Documents securing or intending to
secure the Borrower's obligations under the Revolving Credit Notes, or any other
indebtedness or obligation of the Borrower under the Borrower Documents.
8.04 Cumulative Remedies. All of the rights and remedies of the Lender
--------------------
upon occurrence of an Event of Default shall be cumulative to the greatest
extent permitted by law, may be exercised successively or concurrently, from
time to time, and shall be in addition to all of those rights and remedies
afforded the Lender at law, or in equity, or in bankruptcy. Notwithstanding the
foregoing, the Lender shall be entitled to recover from the cumulative exercise
of all remedies an amount no greater than the sum of (a) the aggregate
outstanding principal amount of the Loan, (b) all accrued but unpaid interest
with respect to the aggregate principal amount of the Loan, (c) any other
amounts that the Borrower is required by this Agreement to pay to the Lender
(for example, and without limitation, the reimbursement of expenses and legal
fees, and late charges), and (d) any costs, expenses or damages which the Lender
is otherwise permitted to recover by the terms of this Agreement. Any exercise
of any right or remedy shall not be deemed to be an election of that right or
remedy to the exclusion of any other right or remedy.
SECTION IX
----------
Fees and Expenses
-----------------
9.01 Transaction Expenses. The Borrower shall pay to the Lender upon
----------------------
demand all out-of-pocket expenses incurred by the Lender in connection with the
transactions contemplated by this Agreement, including, but not limited to the
Lender's reasonable attorneys' fees incurred in preparing, negotiating and
closing the Borrower Documents and any and all costs and fees incurred in
connection with the recording or filing of any documents or instruments, and/or
in searches of, any public office, pursuant to or as a consequence of this
Agreement, or to perfect or protect any security for the Loans. The Borrower
shall also pay to the Lender, promptly following the Lender's request, all
out-of-pocket expenses incurred by the Lender from time to time in the
administration of the Loans, including, without limitation, any out-of-pocket
expenses (including, but not limited to, attorneys' fees) incurred by the Lender
if any of the Borrower Documents should be amended, extended and/or renewed from
time to time, or if additional Borrower Documents are prepared.
9.02 Enforcement Expenses. If any Event of Default shall occur under
----------------------
this Agreement, or any default shall occur under any of the Borrower Documents
or any related documents, the Borrower shall pay to the Lender, to the extent
allowable by applicable law, such amounts as shall be sufficient to reimburse
the Lender fully for all of its costs and expenses incurred in enforcing and/or
protecting its rights and remedies under the Borrower Documents and any related
documents, including without limitation its reasonable attorneys' fees and court
costs. Such amounts shall be deemed to be included in the obligations secured by
the Security Agreement.
-27-
<PAGE>
SECTION X
---------
Miscellaneous Provisions
------------------------
10.01 Business Days. If any provision of this Agreement or any of the
---------------
other Borrower Documents requires that the Borrower make any payment, or
otherwise perform any act, on a day on which the Lender is not open for
business, then that payment or action shall be deemed to be due on the first day
thereafter that the Lender is open for business.
10.02 Term of this Agreement. The term of this Agreement shall commence
-----------------------
as of the date hereof, and continue until all Loans and accrued but unpaid
interest thereon shall have been paid in full and the Borrower shall have paid
or performed all of its obligations hereunder.
10.03 No Waivers. Failure or delay by the Lender in exercising any
------------
rights shall not be deemed to be or operate as a waiver of that right, nor shall
any right be exclusive of any other right referred to in this Agreement, or in
any other related document, or available at law or in equity, by statute or
otherwise. Any single or partial exercise of any right shall not preclude the
further exercise of that right. Every right of the Lender shall continue in full
force and effect until such right is specifically waived in a writing signed by
the Lender.
10.04 Course of Dealing. No course of dealing between the Borrower, the
------------------
Guarantors and the Lender shall operate as a waiver of any of the Lender's
rights under any of the Borrower Documents.
10.05 Certain Waivers by the Borrower and the Guarantors. The Borrower
---------------------------------------------------
and each Guarantor hereby waives, to the extent permitted by applicable law, (a)
all presentments, demands for performances, notices of nonperformance (except to
the extent specifically required by this Agreement or any other of the Borrower
Documents), protests, notices of protest and notices of dishonor in connection
with the Notes (b) any requirement of diligence or promptness on the part of the
Lender in enforcement of rights under the provisions of any of the Borrower
Documents, and (c) any requirement of marshaling assets or proceeding against
persons or assets in any particular order.
10.06 Severability. If any part, term or provision of this Agreement is
-------------
held by any court to be unenforceable or prohibited by any law applicable to
this Agreement, the rights and obligations of the parties shall be construed and
enforced with that part, term or provision limited so as to make it enforceable
to the greatest extent allowed by law, or, if it is totally unenforceable, as if
this Agreement did not contain that particular part, term or provision.
10.07 Time of the Essence. Time shall be of the essence in the
--------------------
performance of all of the Borrower's and the Guarantors' obligations under the
Borrower Documents.
10.08 Benefit and Binding Effect. This Agreement shall inure to the
----------------------------
benefit of the Lender, its successors and assigns, and all obligations of the
Borrower and the Guarantors shall bind their heirs, executors, successors and,
if and to the extent assignment is otherwise permitted
-28-
<PAGE>
by this Agreement, assigns.
10.09 Further Assurances. The Borrower shall sign such financing
--------------------
statements or other documents or instruments as the Lender may request from time
to time more fully to create, perfect, continue, maintain or terminate the
rights and security interests intended to be granted or created pursuant to this
Agreement, the Security Agreement, and any other Borrower Documents.
10.10 Incorporation by Reference. All schedules, annexes or other
-----------------------------
attachments to this Agreement are incorporated into this Agreement as if set out
in full at the first place in this Agreement that reference is made thereto.
10.11 Entire Agreement; No Oral Modifications. This Agreement, the
-------------------------------------------
schedules and annexes hereto, and the documents and instruments referred to
herein constitute the entire agreement of the parties with respect to the
subject matter hereof, and supersede all prior understandings with respect to
the subject matter hereof. No change, modification, addition or termination of
this Agreement or any of the Borrower Documents shall be enforceable unless in
writing and signed by the party against whom enforcement is sought.
10.12 Headings. The headings used in this Agreement are included for
---------
ease of reference only and shall not be considered in the interpretation or
construction of this Agreement.
10.13 Governing Law. This Agreement and the related documents and
---------------
instruments shall be governed by and construed in accordance with the laws of
the Commonwealth of Kentucky without regard to conflicts of laws unless, except
to the extent that the laws of any other state, province or country where the
Collateral is located require that the laws of such other state, province or
country shall govern the creation, perfection or enforcement of the Lender's
rights and security interests in such Collateral.
10.14 Assignments. Neither the Borrower nor either Guarantor may assign
------------
any rights under this Agreement to any other party. Any attempted assignment
shall be a default under this Agreement and shall be null and void.
10.15 Multiple Counterparts.
----------------------
(a) This Agreement may be signed by each party upon a separate
copy, and in such case one counterpart of this Agreement shall consist of enough
of such copies to reflect the signature of each party.
(b) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or the terms thereof to produce or
account for more than one of such counterparts.
-29-
<PAGE>
10.16 Notices.
--------
(a) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such notice is given at
least ten (10) Business Days before the time of sale, disposition or other event
or thing giving rise to the requirement of notice.
(b) Except as provided in subsection (c) below, all notices or
communications under this Agreement shall be in writing and shall be
hand-delivered, sent by courier, or mailed to the parties addressed to the
addresses as follows and any notice so addressed and (1) hand-delivered, shall
be deemed to have been given when so delivered, or (2) mailed by registered or
certified mail, return receipt requested, shall be deemed to have been given
when mailed, or (3) delivered to a recognized small package overnight courier
service to the address of the intended recipient with shipping prepaid, shall be
deemed to have been given when so delivered to such courier. Addresses for
notices are as follows:
(1) If to the Lender: BANK OF LOUISVILLE
500 W. Broadway
Louisville, Kentucky 40202
with a courtesy copy to: BROWN, TODD & HEYBURN PLLC
400 West Market Street, 32nd Floor
Louisville, Kentucky 40202-3363
Attn: Charles R. Keeton, Esq.
(2) If to the Borrower: ORIG, LLC
10172 Linn Station Road 200
Louisville, Kentucky 40223
Attn: Neil Mitchell
with a courtesy copy to: GREENBAUM DOLL & MCDONALD PLLC
3300 National City Tower
Louisville, Kentucky 40202
Attn: Tandy C. Patrick, Esq.
(3) If to the Guarantor: J. D. NICHOLS
10172 Linn Station Road 200
Louisville, Kentucky 40223
with a courtesy copy to: GREENBAUM DOLL & MCDONALD PLLC
3300 National City Tower
Louisville, Kentucky 40202
Attn: Tandy C. Patrick, Esq.
-30-
<PAGE>
(4) If to the Guarantor: BRIAN LAVIN
10172 Linn Station Road 200
Louisville, Kentucky 40223
with a courtesy copy to: GREENBAUM DOLL & MCDONALD PLLC
3300 National City Tower
Louisville, Kentucky 40202
Attn: Tandy C. Patrick, Esq.
(c) The parties may at any time, and from time to time,
change the address or addresses to which notice shall be mailed by written
notice setting forth the changed address or addresses.
10.17 Survival of Covenants. All covenants, agreements, warranties and
----------------------
representations made by the Borrower herein shall survive the making of each
Revolving Credit Loan and the execution and delivery of the Borrower Documents,
and shall be deemed to be remade and restated by the Borrower each time the
Borrower requests a Revolving Credit Loan.
10.18. Consent to Jurisdiction. THE BORROWER AND THE GUARANTORS CONSENT
------------------------
TO ONE OR MORE ACTIONS BEING INSTITUTED AND MAINTAINED IN THE JEFFERSON COUNTY,
KENTUCKY, CIRCUIT COURT AND/OR THE UNITED STATES DISTRICT COURT FOR THE WESTERN
DISTRICT OF KENTUCKY (AT LENDER'S DISCRETION) TO ENFORCE THIS AGREEMENT AND/OR
ONE OR MORE OF THE OTHER BORROWER DOCUMENTS, AND WAIVE ANY OBJECTION TO ANY SUCH
ACTION BASED UPON LACK OF PERSONAL OR SUBJECT MATTER JURISDICTION OR IMPROPER
VENUE. THE PARTIES AGREE THAT ANY PROCESS OR OTHER LEGAL SUMMONS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED BY MAILING A COPY THEREOF BY
CERTIFIED MAIL, OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, ADDRESSED TO THE
ADDRESSES PROVIDED IN THE PREAMBLE TO THIS AGREEMENT. THE BORROWER AND THE
GUARANTORS ALSO AGREE THAT NONE OF THEM SHALL COMMENCE OR MAINTAIN ANY ACTION IN
ANY COURT, ADMINISTRATIVE AGENCY OR OTHER TRIBUNAL OTHER THAN THE JEFFERSON
COUNTY, KENTUCKY, CIRCUIT COURT OR THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY WITH RESPECT TO THIS AGREEMENT, ANY OTHER OF THE
BORROWER DOCUMENTS, ANY OF THE TRANSACTIONS PROVIDED FOR OR CONTEMPLATED IN ANY
OF THE BORROWER DOCUMENTS, OR ANY CAUSE OF ACTION OR ALLEGED CAUSE OF ACTION
ARISING OUT OF OR IN CONNECTION WITH ANY DEBTOR AND CREDITOR RELATIONSHIP AMONG
THE PARTIES THAT MAY EXIST FROM TIME TO TIME.
-31-
<PAGE>
10.20 JURY TRIAL WAIVER. THE BORROWER AND EACH GUARANTOR HEREBY WAIVES
------------------
ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE PLEDGE AGREEMENT, THE
GUARANTY AGREEMENTS AND/OR ANY OTHER OF THE BORROWER DOCUMENTS. THIS WAIVER IS
INTENDED TO APPLY TO ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THE BORROWER AND EACH GUARANTOR ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO A BUSINESS
RELATIONSHIP, AND THAT THE LENDER HAS ALREADY RELIED ON THIS WAIVER IN ITS
DEALINGS WITH THE BORROWER AND THE GUARANTORS. THE BORROWER AND EACH GUARANTOR
FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE PLEDGE AGREEMENT, THE
GUARANTY AGREEMENTS AND/OR THE OTHER BORROWER DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE
COURT.
10.21 ACKNOWLEDGEMENT. THE BORROWER ACKNOWLEDGES THAT IT HAS RECEIVED A
----------------
COPY OF THIS AGREEMENT AND EACH OF THE OTHER BORROWER DOCUMENTS, AS FULLY
EXECUTED BY THE PARTIES THERETO. THE BORROWER ACKNOWLEDGES THAT IT (A) HAS READ
THIS AGREEMENT AND THE OTHER BORROWER DOCUMENTS OR HAS CAUSED SUCH DOCUMENTS TO
BE EXAMINED BY ITS REPRESENTATIVES OR ADVISORS; (B) IS THOROUGHLY FAMILIAR WITH
THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND THE OTHER BORROWER
DOCUMENTS; AND (C) HAS HAD THE OPPORTUNITY TO ASK SUCH QUESTIONS TO
REPRESENTATIVES OF THE LENDER, AND RECEIVE ANSWERS THERETO, CONCERNING THE TERMS
AND CONDITIONS OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND THE OTHER
BORROWER DOCUMENTS AS IT DEEMS NECESSARY IN CONNECTION WITH THE ITS DECISION TO
ENTER INTO THIS AGREEMENT.
[THIS BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
31-A
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date set forth in the preamble hereto, but actually on the dates set forth
below.
Lender:
BANK OF LOUISVILLE
By /s/ Richard Bean
----------------------------------------
Richard Bean, Senior Vice President
Date: August 15, 2000
Borrower:
ORIG, LLC
By /s/ J.D. Nichols
----------------------------------------
J. D. Nichols, Manager
Date: August 15, 2000
/s/ J.D. Nichols
------------------------------------------
J. D. NICHOLS
Date: August 15, 2000
/s/ Brian Lavin
------------------------------------------
BRIAN LAVIN
Date: August 15, 2000
-32-
<PAGE>
Annexes
Annexes A-1 - A-3 Forms of Revolving Credit Notes in favor of the
Lender
Annex B Form of Pledge Agreement
Annex C Paragraphs for Opinion of Counsel for the Borrower
and Guarantor
Annex D Form of Joinder Agreement
Annex E Form of Partnership Notice and Acknowledgement
Schedules
Schedule 1(P) Partnership Interests
Schedule 10.12 Permitted Liabilities
Schedule 10.13 Permitted Encumbrances
<PAGE>
EXHIBIT 3(a)
AGREEMENT, BILL OF SALE
AND ASSIGNMENT
<PAGE>
AGREEMENT, BILL OF SALE AND ASSIGNMENT
THIS AGREEMENT, BILL OF SALE AND ASSIGNMENT (the "Agreement") is made and
entered into this ___ day of February, 2000, by and among (i) ROGER M. KALAR and
MARTHA KALAR, his wife, with mailing address at Old Avon Village, P.O. Box 788,
Building 39, Avon, Connecticut 06001 (collectively, "Kalar") and DAVID
WARSHAWSKY and MARILYN WARSHAWSKY, his wife, with mailing address at 1506
Berwick Road, Baltimore, Maryland 21204 (collectively, "Warshawsky") (Kalar and
Warshawsky are hereinafter collectively referred to herein as the "Sellers"),
and (ii) ORIG, LLC, a Kentucky limited liability company, with principal office
and place of business at 10172 Linn Station Road, Louisville, Kentucky 40223
(the "Buyer").
PRELIMINARY STATEMENT
The Sellers own certain limited partnership interests (the "Units") in the
"NTS Public Partnerships" (as that term is hereinafter defined) and desire to
sell the same to the Buyer, and the Buyer desires to purchase the same from the
Sellers, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Sellers hereby sell, transfer, convey and assign to the Buyer those
Units in the NTS Public Partnerships owned by the Sellers as set forth on
Exhibit A attached hereto and made a part hereof (all of the entities referred
to on Exhibit A are hereinafter collectively referred to as the "NTS Public
Partnerships" and each is individually referred to as a "NTS Public
Partnership").
2. Each of the Sellers represents and warrants that he or she owns the
respective Units in the NTS Public Partnerships as identified on Exhibit A
hereto, free and clear of all liens, encumbrances and security interests
whatsoever, and that he or she will defend title to the Units hereby conveyed
against the claims and demands of all persons. Each of the Sellers further
represents and warrants that he or she has had the opportunity to ask questions
and receive answers concerning the NTS Public Partnerships, to inspect and copy
material documents relating to the NTS Public Partnerships, and to obtain all
additional information necessary to verify the accuracy of such information.
Each of the Sellers further represents and warrants that he or she, either alone
or with his or her purchaser representative, has such knowledge and experience
in financial matters that he or she is capable of evaluating the merits and
risks of this sale. Each of the Sellers further represents and warrants that as
of the date hereof, none of them own, either individually or jointly with
another, or as a beneficiary, any other limited partnership interests in any of
the NTS Public Partnerships, and the Sellers further warrant and agree that from
and after the date hereof, they shall not acquire a partnership interest in any
form whatsoever in any of the NTS Public Partnerships.
3. Each of the Sellers hereby agrees to execute and deliver to the Buyer,
or if such Units are held in trust for the benefit of a Seller, the respective
Seller shall cause the trustee or
1
<PAGE>
custodian to execute and deliver to the Buyer, contemporaneously with the
execution and delivery of this Agreement, the following documents:
(A) A Partnership Transfer Form, a form of which is attached
hereto and made a part hereof as Exhibit B, with respect to the Units
in each of the NTS Public Partnerships which the respective Seller
owns; and
(B) The original Certificates, if any, representing the Units
owned in each of the NTS Public Partnerships duly assigned to the
Buyer. If the Certificates have been lost, then the Sellers will
execute and deliver an Affidavit of Loss and Indemnity Agreement, a
form of which is attached hereto and made a part hereof as Exhibit C,
with respect to the lost Certificates.
4. As payment for the assignment of the Sellers' Units in the NTS Public
Partnerships pursuant to Paragraph 1 hereof, the Buyer hereby agrees (a) to pay
Kalar the sum of Six Hundred Seventy-Five Thousand and 00/100 Dollars
($675,000.00) and (b) to pay Warshawsky the sum of Two Hundred Twenty-Five
Thousand and 00/100 Dollars ($225,000.00) (collectively, the "Purchase Price").
The Purchase Price for the Units shall be wire transferred by Buyer to Sellers,
pursuant to written wire instructions received from Sellers, within three (3)
business days of receipt by Buyer of all transfer documents necessary,
appropriate or required in order to evidence the transfer of the Units to Buyer
as contemplated herein. Upon the payment of the Purchase Price by Buyer to
Sellers and delivery by Sellers to Buyer of the documents evidencing the
transfer of the Units as contemplated in Paragraph 3 hereof, the Buyer shall be
entitled to receive all benefits and cash distributions and otherwise exercise
all rights of beneficial ownership of the Units herein conveyed.
5. The Purchase Price shall be allocated to the different Units in the NTS
Public Partnerships as is specified opposite each of those NTS Public
Partnerships on Exhibit A.
6. The Sellers and their respective heirs, personal representatives,
successors and assigns, hereby agree from and after the date hereof to keep
confidential and not disclose without the prior written consent of the Buyer (a)
the existence of this Agreement, or (b) the terms and conditions of this
Agreement. The foregoing restriction shall not apply to disclosures and
information which (i) are required to comply with any applicable court or
administrative order, law, statute or regulation, (ii) are required to enforce
this Agreement, or (iii) are already in the public domain or enter the public
domain through a third party who does not thereby breach an obligation of
confidentiality required by this Agreement.
7. The Sellers and the Buyer hereby release any and all claims,
liabilities, actions, causes of action, demands, lawsuits, losses, damages and
the like, whatsoever that each may have against the other and Buyer's affiliates
and their officers, directors and employees, whether known or unknown, matured
or unmatured, contingent or absolute, except that the obligations of the Sellers
and the Buyer under this Agreement are not released.
8. The parties hereto hereby appoint the respective general partner of each
of the NTS Public Partnerships to transfer ownership of the Units conveyed
herein on the books and records of the respective NTS Public Partnership, and
the parties hereto further agree to execute
2
<PAGE>
and deliver any and all additional documents required by such general partner in
order to effect the transfer of the Units contemplated herein.
9. The parties hereto hereby agree that if any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached, irreparable damage would occur. Without limiting any rights
or remedies available to the Buyer, upon the violation of any provision hereof,
each of the Sellers hereby acknowledge that the Buyer is entitled to institute
and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, to obtain damages for any willful breach of this Agreement or to
enforce specific performance of this Agreement.
10. All notices and other communications hereunder shall be given in
writing and shall be sufficiently given when personally delivered, delivered by
a nationally recognized overnight courier service, or when sent in the U.S.
mail, registered or certified, return receipt requested, postage prepaid,
addressed as follows (or to such other address or to such other person as to
which any party hereto shall have given the other parties hereto written
notice):
If to Kalar: Mr. and Mrs. Roger M. Kalar
Old Avon Village
P.O. Box 788, Building 39
Avon, CT 06001
If to Warshawsky: Mr. and Mrs. David Warshawsky
1506 Berwick Road
Baltimore, MD 21204
If to Buyer: ORIG, LLC
10172 Linn Station Road
Louisville, KY 40223
Attention: Neil A. Mitchell
11. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky, without regard to its conflicts of law
rules.
12. This Agreement may not be amended or modified, unless in writing signed
by all parties.
13. This Agreement shall be binding upon the parties hereto, and their
respective legal representatives, heirs, successors and assigns.
14. This Agreement contains the entire understanding between the parties
hereto pertaining to its subject matter and supersedes all other agreements and
understandings, both oral and written, between the parties hereto concerning the
subject matter hereof.
3
<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the day, month and year first above written.
/s/ Roger M. Kalar
-----------------------------------
ROGER M. KALAR
/s/ Martha C. Kalar
-----------------------------------
MARTHA KALAR
(collectively, "Kalar")
/s/ David Warshawsky
-----------------------------------
DAVID WARSHAWSKY
/s/ Marilyn Warshawsky
-----------------------------------
MARILYN WARSHAWSKY
(collectively, "Warshawsky")
ORIG, LLC
By:
--------------------------------
Title:
------------------------------
(the "Buyer")
<PAGE>
EXHIBIT 3(b)
J.D. NICHOLS' COMMERCIAL GUARANTY
OF BUSINESS LOAN AGREEMENT
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
A4A0 5514 8410
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
Borrower:ORIG, L.L.C. (TIN: 61-1324094) Lender:Community Trust Bank, N.A.
10172 LINN STATION ROAD Louisville Loan Production Office
LOUISVILLE, KY 40223 4350 Brownsboro Road
Louisville, KY 40207
Guarantor: J.D. NICHOLS
8917 CROMWELL HILL ROAD
LOUISVILLE, KY 40222
================================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is 75.000% of all amounts due
from Borrower to Lender as provided below, however in no event to exceed One
Million Five Hundred Thousand & 00/100 Dollars ($1,500,000.00).
GUARANTY. For good and valuable consideration, J. D. NICHOLS ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to Community Trust
Bank, N.A. ("Lender") or its order, in legal tender of the Unites States of
America, 75.000% of the indebtedness (as that term is defined below) of ORIG, L.
L. C. ("Borrower") to Lender on the terms and conditions set forth in this
Guaranty. Guarantor agrees that Lender, in its sole discretion, may determine
which portion of Borrower's indebtedness to Lender is covered by Guarantor's
percentage guaranty.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means ORIG, L.L.C..
Guarantor. The word "Guarantor" means J. D. NICHOLS.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated December 28, 1999.
Indebtedness. The word "Indebtedness" means the Note, including (a) all
principal, (b) all interest, (c) all late charges, (d) all loan fees and
loan charges, and (e) all collection costs and expenses relating to the
Note or to any collateral for the Note. Collection costs and expenses
include without limitation all of Lender's reasonable attorneys' fees and
Lender's legal expenses, whether or not suit is instituted, and reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgement collection services.
Lender. The word "Lender" means Community Trust Bank, N.A., its successors
and assigns.
Note. The word "Note" means the promissory note or credit agreement dated
December 28, 1999, in the original principal amount of $2,000,000.00 from
Borrower to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for
the promissory note or agreement.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time 75.000% of all indebtedness; however, in no event to
exceed $1,500,000.00 plus all costs and expenses of (a) enforcement of this
Guaranty and (b) collection and sale of any collateral securing this Guaranty.
The above limitation on liability is not a restriction on the amount of the
indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all guaranties
shall be cumulative. This Guaranty shall not (unless specifically provided below
to the contrary) affect or invalidate any such other guaranties. The liability
of Guarantor will be the aggregate liability of Guarantor under the terms of
this Guaranty and any such other unterminated guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times the performance
and prompt payment when due, whether at maturity or earlier by reason of
acceleration or otherwise, of all indebtedness within the limits set forth in
the preceding section of this Guaranty.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and, subject to the provisions set forth below in the section
titled "DATE ON WHICH THE GUARANTY TERMINATES," will continue in full force
until all indebtedness shall have been fully and finally paid and satisfied and
all other obligations of Guarantor under this Guaranty shall have been performed
in full. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice
or demand and without lessening Guarantor's liability under this Guaranty, from
time to time: (a) to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (b) to alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of the indebtedness or any part of the indebtedness, including increases
and decreases of the rate of interest on the indebtedness; extensions may be
repeated and may be for longer than the original loan term; (c) to take and hold
security for the payment of this Guaranty or the indebtedness, and exchange,
enforce, waive, subordinate, fall or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (d) to release,
substitute, agree not to sue, or deal with any one ore more of Borrower's
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (e) to determine how, when and what application of payments and
credits shall be made on the indebtedness; (f) to apply such security and direct
the order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security agreement or
deed of trust, as Lender in its discretion may determine; (g) to sell, transfer,
assign, or grant participations in all or any part of the indebtedness; and (h)
to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor: (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information
<PAGE>
12-28-1999 COMMERCIAL GUARANTY Page 2
Loan No (Continued)
--------------------------------------------------------------------------------
which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
the dates the financial information is provided; (g) no material adverse change
has occurred in Guarantor's financial condition since the date of the most
recent financial statements provided to Lender and no event has occurred which
may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that , absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the indebtedness or of any non
payment related to any collateral, or notice of any action or nonaction on the
part of Borrower, Lender, any surety, endorser, or other guarantor in connection
with the indebtedness or in connection with the creation of new or additional
loans or obligations; (c) to resort for payment or to proceed directly or at
once against any person, including Borrower or any other guarantor; (d) to
proceed directly against or exhaust any collateral held by Lender from Borrower,
any other guarantor, or any other person; (e) to give notice of the terms, time,
and place of any public or private sale of personal property security held by
Lender from Borrower or to comply with any other applicable provisions of the
Uniform Commercial Code; (f) to pursue any other remedy within Lender's power;
or (g) to commit any act of omission of any kind, or at any time , with respect
to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise adversely affects
guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the indebtedness; (d) any right to claim discharge of the indebtedness on the
basis of unjustified impairment of any collateral for the indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deduction st to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether such
claim, demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determinedto be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual security
interest in and a right of setoff against, and Guarantor hereby assigns,
conveys, delivers, pledges, and transfers to Lender all of Guarantor's right,
title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty. No alteration of or amendment to this Guaranty
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and accepted by
Lender in the Commonwealth of Kentucky. If there is a lawsuit, Guarantor
agrees upon Lender's request to submit to the jurisdiction of the courts of
PIKE County, Commonwealth of Kentucky. Lender and Guarantor hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Guarantor against the other. This Guaranty
shall be governed by and construed in accordance with the laws of the
Commonwealth of Kentucky.
<PAGE>
12-28-1999 COMMERCIAL GUARANTY Page 3
Loan No (Continued)
--------------------------------------------------------------------------------
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including reasonable attorneys' fees and
Lender's legal expenses, incurred n connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender's reasonable attorneys' fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys' fees and
legal expenses for bankruptcy proceedings (and including efforts to modify
or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Guarantor also shall pay all court costs
and such additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile
(unless otherwise required by law), and shall be effective when actually
delivered or when deposited with a nationally recognized overnight courier,
or when deposited in the United States mail, first class postage prepaid,
addressed to the party to whom the notice is to be given at the address
show above or to such other addresses as either party may designate to the
other in writing. If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor's
current address.
Interpretation. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. The words "Guarantor," "Borrower, " and "Lender" include the
heirs, successors, assigns, and transferees of each of them. Caption
headings in Guaranty are for convenience purposes only and are not to be
used to interpret or define the provisions of this Guaranty. If a court of
competent jurisdiction finds any provision of this Guaranty to be invalid
or unenforceable as to any person or circumstance, such finding shall not
render that provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty in all other respects
shall remain valid and enforceable. If any one or more of Borrower or
Guarantor are corporations or partnerships, it is not necessary for Lender
to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, or agents acting or purporting to act on their behalf,
and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a wavier of such right or any other right. A waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lender, nor any
course of dealing between Lender and Guarantor, shall constitute a waiver
of any of Lender's rights or of any of Guarantor's obligations as to any
future transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
MAXIMUM AMOUNT OF GUARANTY. NOTWITHSTANDING THE TERMS OF THIS GUARANTY TO THE
CONTRARY, IN THE EVENT THAT THE OUTSTANDING PRINCIPAL BALANCE IS LESS THAN
$2,000,000.00 AT THE TIME OF ACCELERATION OR MATURITY BY LENDER, J. D. NICHOLS'
LIABILITY HEREUNDER SHALL BE LIMITED TO 75% OF THE THEN-OUTSTANDING PRINCIPAL
BALANCE.
ASSET CONVEYANCE LIMITATION. NOTWITHSTANDING THE FOREGOING, THIS GUARANTY SHALL
NOT PRECLUDE GUARANTOR'S CONVEYING ASSETS IN RELATION TO ESTATE PLANNING,
PROVIDED, HOWEVER, THAT ANY SUCH CONVEYANCE SHALL RESULT IN GUARANTOR RETAINING
OPERATIONAL AND LEGAL CONTROL OF THE UNDERLYING ASSET(S).
MISCELLANEOUS PROVISIONS. THE PARTIES HERETO HAVE ELECTED TO ELIMINATE THE
FOLLOWING FROM THE COMMERCIAL GUARANTY: 1.) AMOUNT OF GUARANTY SECTION 2.) ITEM
C, UNDER GUARANTOR'S AUTHORIZATION TO LENDER AND 3.) LENDER'S RIGHT OF SETOFF.
DATE ON WHICH THE GUARANTY TERMINATES. Notwithstanding any other provision of
this Guaranty, this Guaranty shall terminate no later than January 28, 2005,
provided however that, pursuant to KRS 371.065, such termination shall not
affect Guarantor's liability with respect to obligations created or incurred
propr to such date, or extensions or renewals of, interest accruing on, or fees,
costs or expenses incurred with respect to, such obligations on or after such
date.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED DECEMBER 28, 1999.
GUARANTOR:
X /s/ J.D. Nichols
---------------------------
J. D. NICHOLS
--------------------------------------------------------------------------------
<PAGE>
EXHIBIT 3(c)
BRIAN F. LAVIN'S COMMERCIAL GUARANTY
OF BUSINESS LOAN AGREEMENT
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
A4A0 5514 8410
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
Borrower:ORIG, L.L.C. (TIN: 61-1324094) Lender:Community Trust Bank, N.A.
10172 LINN STATION ROAD Louisville Loan Production Office
LOUISVILLE, KY 40223 4350 Brownsboro Road
Louisville, KY 40207
Guarantor: BRIAN F. LAVIN
9402 US HWY 42
PROSPECT, KY 40059
================================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is 25.000% of all amounts due
from Borrower to Lender as provided below, however in no event to exceed Five
Hundred Thousand & 00/100 Dollars ($500,000.00).
GUARANTY. For good and valuable consideration, BRIAN F. LAVIN ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to Community Trust
Bank, N.A. ("Lender") or its order, in legal tender of the Unites States of
America, 25.000% of the indebtedness (as that term is defined below) of ORIG, L.
L. C. ("Borrower") to Lender on the terms and conditions set forth in this
Guaranty. Guarantor agrees that Lender, in its sole discretion, may determine
which portion of Borrower's indebtedness to Lender is covered by Guarantor's
percentage guaranty.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means ORIG, L.L.C..
Guarantor. The word "Guarantor" means BRIAN F. LAVIN.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated December 28, 1999.
Indebtedness. The word "Indebtedness" means the Note, including (a) all
principal, (b) all interest, (c) all late charges, (d) all loan fees and
loan charges, and (e) all collection costs and expenses relating to the
Note or to any collateral for the Note. Collection costs and expenses
include without limitation all of Lender's reasonable attorneys' fees and
Lender's legal expenses, whether or not suit is instituted, and reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgement collection services.
Lender. The word "Lender" means Community Trust Bank, N.A., its successors
and assigns.
Note. The word "Note" means the promissory note or credit agreement dated
December 28, 1999, in the original principal amount of $2,000,000.00 from
Borrower to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for
the promissory note or agreement.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time 25.000% of all indebtedness; however, in no event to
exceed $500,000.00 plus all costs and expenses of (a) enforcement of this
Guaranty and (b) collection and sale of any collateral securing this Guaranty.
The above limitation on liability is not a restriction on the amount of the
indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all guaranties
shall be cumulative. This Guaranty shall not (unless specifically provided below
to the contrary) affect or invalidate any such other guaranties. The liability
of Guarantor will be the aggregate liability of Guarantor under the terms of
this Guaranty and any such other unterminated guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times the performance
and prompt payment when due, whether at maturity or earlier by reason of
acceleration or otherwise, of all indebtedness within the limits set forth in
the preceding section of this Guaranty.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and, subject to the provisions set forth below in the section
titled "DATE ON WHICH THE GUARANTY TERMINATES," will continue in full force
until all indebtedness shall have been fully and finally paid and satisfied and
all other obligations of Guarantor under this Guaranty shall have been performed
in full. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice
or demand and without lessening Guarantor's liability under this Guaranty, from
time to time: (a) to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (b) to alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of the indebtedness or any part of the indebtedness, including increases
and decreases of the rate of interest on the indebtedness; extensions may be
repeated and may be for longer than the original loan term; (c) to take and hold
security for the payment of this Guaranty or the indebtedness, and exchange,
enforce, waive, subordinate, fall or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (d) to release,
substitute, agree not to sue, or deal with any one ore more of Borrower's
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (e) to determine how, when and what application of payments and
credits shall be made on the indebtedness; (f) to apply such security and direct
the order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security agreement or
deed of trust, as Lender in its discretion may determine; (g) to sell, transfer,
assign, or grant participations in all or any part of the indebtedness; and (h)
to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor: (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information
<PAGE>
12-28-1999 COMMERCIAL GUARANTY Page 2
Loan No (Continued)
--------------------------------------------------------------------------------
which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
the dates the financial information is provided; (g) no material adverse change
has occurred in Guarantor's financial condition since the date of the most
recent financial statements provided to Lender and no event has occurred which
may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that , absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the indebtedness or of any non
payment related to any collateral, or notice of any action or nonaction on the
part of Borrower, Lender, any surety, endorser, or other guarantor in connection
with the indebtedness or in connection with the creation of new or additional
loans or obligations; (c) to resort for payment or to proceed directly or at
once against any person, including Borrower or any other guarantor; (d) to
proceed directly against or exhaust any collateral held by Lender from Borrower,
any other guarantor, or any other person; (e) to give notice of the terms, time,
and place of any public or private sale of personal property security held by
Lender from Borrower or to comply with any other applicable provisions of the
Uniform Commercial Code; (f) to pursue any other remedy within Lender's power;
or (g) to commit any act of omission of any kind, or at any time , with respect
to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise adversely affects
guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the indebtedness; (d) any right to claim discharge of the indebtedness on the
basis of unjustified impairment of any collateral for the indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deduction st to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether such
claim, demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determinedto be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual security
interest in and a right of setoff against, and Guarantor hereby assigns,
conveys, delivers, pledges, and transfers to Lender all of Guarantor's right,
title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty. No alteration of or amendment to this Guaranty
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and accepted by
Lender in the Commonwealth of Kentucky. If there is a lawsuit, Guarantor
agrees upon Lender's request to submit to the jurisdiction of the courts of
PIKE County, Commonwealth of Kentucky. Lender and Guarantor hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Guarantor against the other. This Guaranty
shall be governed by and construed in accordance with the laws of the
Commonwealth of Kentucky.
<PAGE>
12-28-1999 COMMERCIAL GUARANTY Page 3
Loan No (Continued)
--------------------------------------------------------------------------------
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including reasonable attorneys' fees and
Lender's legal expenses, incurred n connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender's reasonable attorneys' fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys' fees and
legal expenses for bankruptcy proceedings (and including efforts to modify
or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Guarantor also shall pay all court costs
and such additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile
(unless otherwise required by law), and shall be effective when actually
delivered or when deposited with a nationally recognized overnight courier,
or when deposited in the United States mail, first class postage prepaid,
addressed to the party to whom the notice is to be given at the address
show above or to such other addresses as either party may designate to the
other in writing. If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor's
current address.
Interpretation. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. The words "Guarantor," "Borrower, " and "Lender" include the
heirs, successors, assigns, and transferees of each of them. Caption
headings in Guaranty are for convenience purposes only and are not to be
used to interpret or define the provisions of this Guaranty. If a court of
competent jurisdiction finds any provision of this Guaranty to be invalid
or unenforceable as to any person or circumstance, such finding shall not
render that provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty in all other respects
shall remain valid and enforceable. If any one or more of Borrower or
Guarantor are corporations or partnerships, it is not necessary for Lender
to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, or agents acting or purporting to act on their behalf,
and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a wavier of such right or any other right. A waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lender, nor any
course of dealing between Lender and Guarantor, shall constitute a waiver
of any of Lender's rights or of any of Guarantor's obligations as to any
future transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
MAXIMUM AMOUNT OF GUARANTY. NOTWITHSTANDING THE TERMS OF THIS GUARANTY TO THE
CONTRARY, IN THE EVENT THAT THE OUTSTANDING PRINCIPAL BALANCE IS LESS THAN
$2,000,000.00 AT THE TIME OF ACCELERATION OR MATURITY BY LENDER, BRIAN LAVIN'S
LIABILITY HEREUNDER SHALL BE LIMITED TO 25% OF THE THEN-OUTSTANDING PRINCIPAL
BALANCE.
ASSET CONVEYANCE LIMITATION. NOTWITHSTANDING THE FOREGOING, THIS GUARANTY SHALL
NOT PRECLUDE GUARANTOR'S CONVEYING ASSETS IN RELATION TO ESTATE PLANNING,
PROVIDED, HOWEVER, THAT ANY SUCH CONVEYANCE SHALL RESULT IN GUARANTOR RETAINING
OPERATIONAL AND LEGAL CONTROL OF THE UNDERLYING ASSET(S).
MISCELLANEOUS PROVISIONS. THE PARTIES HERETO HAVE ELECTED TO ELIMINATE THE
FOLLOWING FROM THE COMMERCIAL GUARANTY: 1.) AMOUNT OF GUARANTY SECTION 2.) ITEM
C, UNDER GUARANTOR'S AUTHORIZATION TO LENDER AND 3.) LENDER'S RIGHT OF SETOFF.
DATE ON WHICH THE GUARANTY TERMINATES. Notwithstanding any other provision of
this Guaranty, this Guaranty shall terminate no later than January 28, 2005,
provided however that, pursuant to KRS 371.065, such termination shall not
affect Guarantor's liability with respect to obligations created or incurred
propr to such date, or extensions or renewals of, interest accruing on, or fees,
costs or expenses incurred with respect to, such obligations on or after such
date.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED DECEMBER 28, 1999.
GUARANTOR:
X /s/ Brian F. Lavin
--------------------------
BRIAN F. LAVIN
--------------------------------------------------------------------------------
<PAGE>
EXHIBIT 3(d)
J.D. NICHOLS' GUARANTY AGREEMENT
<PAGE>
GUARANTY AGREEMENT
dated as of August 15, 2000
among
BANK OF LOUISVILLE
as the Lender
ORIG, LLC
as the Borrower
and
J. D. NICHOLS
as the Guarantor
<PAGE>
GUARANTY AGREEMENT
This is a Guaranty Agreement dated as of August 15, 2000, (this
"Agreement"), among BANK OF LOUISVILLE (the "Lender"); ORIG, LLC (the
"Borrower"); J. D. NICHOLS (the "Guarantor").
SECTION 1
Recitals and Definitions
------------------------
This Agreement is entered into concurrently with and pursuant to a Loan
Agreement (the "Loan Agreement"), dated as of August 15, 2000, between the
Lender and the Borrower and joined in by the Guarantor. Capitalized terms not
otherwise defined herein shall have the meanings given them in the Loan
Agreement. Pursuant to the Loan Agreement, the Borrower has executed and
delivered to the Lender three Revolving Credit Notes each dated August 15, 2000
and in the principal amount Two Million Dollars ($2,000,000) (for a total of Six
Million Dollars ($6,000,000.00)) and payable to the order of the Lender (such
three Revolving Credit Notes, including any notes or other instruments issued in
renewal, replacement, extension, modification, novation and/or revival thereof,
the "Revolving Credit Notes") and various other Borrower Documents (as that term
is defined in the Loan Agreement).
SECTION 2
Guaranty of Payment and Performance
-----------------------------------
The Guarantor, intending to be bound as an accommodation party for the
Borrower, jointly and severally, absolutely and unconditionally guarantees the
following obligations and/or liabilities (collectively, the "Guaranteed
Principal"): (a) the prompt payment in full by the Borrower of all obligations
under the Revolving Credit Notes; and (b) the punctual and faithful performance
and observance by the Borrower of all other obligations and undertakings to be
performed or observed pursuant to the Loan Agreement and the other Borrower
Documents. In addition to the Guaranteed Principal, the Guarantor, intending to
be bound as an accommodation party for the Borrower, jointly and severally,
absolutely and unconditionally guarantee the following obligations and/or
liabilities (collectively, the "Other Guaranteed Amounts"): (x) any and all
interest accruing on the Guaranteed Principal under the Revolving Credit Notes,
the Loan Agreement, and/or any other of the Borrower Documents; and (y) that the
Guarantor will, upon demand, pay to the Lender any and all fees, charges and
costs of collecting the Guaranteed Principal or otherwise enforcing the Lender's
rights under this Agreement, including without limitation the reasonable fees
and expenses of the Lender's counsel. Notwithstanding the foregoing, the maximum
aggregate liability of the Guarantor under this Agreement for the Guaranteed
Principal shall not exceed the Guarantor Maximum. (For purposes of this Section,
"Guarantor Maximum" at any time shall mean the lesser of (i) $6,000,000.00, or
(ii) the greater of (A) the Guaranteed Principal multiplied by the percentage of
the equity interests of the Borrower owned by the Guarantor (directly or
indirectly, and legally or beneficially) on either (I) the date of an Event of
Default under the Loan Agreement or (II) the date on which the Lender makes a
demand for payment from the Guarantor under this Agreement (it being within the
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<PAGE>
discretion of the Lender to choose between the dates in (I) and (II)), or (B)
$4,500,000.00). The Guaranteed Principal, limited to the Guarantor Maximum, and
the Other Guaranteed Amounts are sometimes referenced in this Agreement as the
"Guaranteed Obligations." The Guaranteed Obligations under this Agreement shall
be in addition to the maximum aggregate liability of the Guarantor or any other
guarantor to the Lender under any guaranty agreement of the Guarantor or any
other guarantor heretofore or hereafter given.
SECTION 3
Obligations Unconditional
-------------------------
This is an unconditional and absolute guaranty of payment and performance.
If for any reason, the Borrower fails to observe or perform any obligation,
undertaking or condition (whether affirmative or negative) in the Loan Agreement
or any other of the Borrower Documents, to be performed or observed by the
Borrower or if any amounts payable by the Borrower pursuant to the Revolving
Credit Note or the Loan Agreement are not paid promptly when due or any Event of
Default occurs, the Guarantor shall promptly perform or observe or cause to be
performed or observed each such obligation, undertaking or condition and
forthwith shall pay such amount at the place and to the person entitled thereto
pursuant to the Revolving Credit Note or the Loan Agreement, regardless of any
set-off or counterclaim which the Borrower may have or assert, and regardless of
whether or not the Lender or anyone on behalf of the Lender shall have
instituted any suit, action or proceeding or exhausted their remedies or taken
any steps to enforce any rights against the Borrower or any other person to
compel such performance or to collect all or any part of such amount pursuant to
the provisions of the Revolving Credit Note, the Loan Agreement or any other of
the Borrower Documents, or at law or in equity, or otherwise, and regardless of
any other condition or contingency. The liability of the Guarantor shall be for
the payment in full of the entire amount of the Guaranteed Obligations, jointly
and severally with that of the Borrower, any co-maker, or accommodation party,
or other guarantor, subject to the Maximum Liability Amount. This Agreement
shall not, however, be construed to require the Guarantor to make any payment
which is duplicative of a payment already made by the Guarantor or by the
Borrower, any co-maker, accommodation party, or any other guarantor, except as
provided in Section 8 of this Agreement.
SECTION 4
Waivers and Agreements
----------------------
The Guarantor hereby unconditionally:
4.01 Waives any requirement that the Lender first seek to enforce remedies
against the Borrower or any other person or entity before seeking to enforce
this Agreement against either Guarantor.
4.02 Waives any requirement that the Lender first make demand upon, or seek
to enforce remedies against, to Guarantor, or against any other guarantor of any
of the Guaranteed Obligations in any particular order, before demanding payment
from, or seeking to enforce this
2
<PAGE>
Agreement against, the Guarantor or any other guarantor. The Guarantor
acknowledges that the Lender, in the Lender's sole discretion, may enforce
remedies against the Guarantor pursuant to this Agreement and not enforce
similar remedies against any other guarantor with respect to the Guaranteed
Obligations or vice versa. The Guarantor further acknowledges that the
enforcement of remedies against the Guarantor in lieu of enforcing remedies
against any other guarantor, or vice versa, shall not affect the validity or
enforceability of the Lender's rights and/or remedies under this Agreement or
any other guaranty agreement guarantying any of the Guaranteed Obligations.
4.03 Waives any requirement that the Lender first seek to enforce remedies
against any property in which the Lender may have any interest securing any (a)
indebtedness which either Guarantor has guaranteed under this Agreement, or (b)
guaranty obligations of any other guarantor, or enforcing any such rights in any
particular order, before demanding payment from, or seeking to enforce this
Agreement against, either Guarantor.
4.04 Covenants that the Guarantor's obligation under this Agreement will
not be discharged except by complete payment and performance of all of the
Guaranteed Obligations, including, without limitation, all obligations of the
Borrower under the Revolving Credit Note, and all other obligations of the
Borrower under the Loan Agreement and the other Borrower Documents, or by
payment in full by the Guarantor of the Guaranteed Obligations in accordance
with the terms of this Agreement.
4.05 Agrees that this Agreement shall remain in full force and effect
without regard to, and shall not be affected or impaired by any invalidity,
irregularity or unenforceability in whole or in part of the Revolving Credit
Note, the Loan Agreement, any other of the Borrower Documents, or any limitation
of the liability of the Borrower thereunder, or any limitation on the method or
terms of payment thereunder which may now or hereafter be caused or imposed in
any manner whatsoever.
4.06 Waives any obligation that the Lender might otherwise have to marshal
assets or to proceed against any particular persons or assets in any particular
order.
4.07 Waives any defenses either Guarantor may have arising out of or in any
way related to any or all of the following:
(a) Any failure on the part of the Lender to perfect the Lender's
security interest in or lien against, or any lack of diligence in
connection with or failure to foreclose or realize upon, any property,
whether real or personal, tangible or intangible, now or hereafter granted
to the Lender as collateral security for any of (1) the Borrower's
liabilities or obligations, or (2) either Guarantor's liabilities or
obligations hereunder, or (3) any other guarantor's liabilities or
obligations under any other guaranty agreement relating to all or any part
of the Guaranteed Obligations.
(b) The voluntary or involuntary discharge or release of any of the
Guaranteed Obligations, or of any co-maker, accommodation party, surety or
any other person or entity,
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<PAGE>
including but not limited to, any other guarantor, whether voluntarily or
by reason of bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or otherwise.
(c) The receipt by the Lender of any provisional, invalid or
refundable payment if such payment is thereafter revoked or if such payment
is returned by the Lender to or for the benefit of the Borrower, either
Guarantor or any other guarantor or the creditors of either.
(d) Any right of set-off or counterclaim against the Lender which
would otherwise impair the Lender's rights against either Guarantor or any
other guarantor.
(e) Any change in the composition, ownership or business of the
Borrower, the Guarantor or any other guarantor.
SECTION 5
Obligations Not Impaired
------------------------
The obligations of the Guarantor under this Agreement are joint and
several, and intended to be in addition to and independent of those of the
Borrower under the Guaranteed Obligations. In addition, the Guarantor
acknowledge that the Guarantor's obligations under this Agreement are
independent of and in addition to the obligations of any other guarantor(s)
under any other guaranty agreement(s) related to all or any part of the
Guaranteed Obligations. To that end, the obligations, undertakings and
conditions to be performed or observed by the Guarantor under this Agreement
shall not be affected or impaired by reason of the happening from time to time
and one or more times of any of the following with respect to the Revolving
Credit Note, the Loan Agreement, or any assignment of the rights of the Lender
under this Agreement whether or not with notice to, or further consent of, the
Guarantor:
5.01 Waiver by the Lender or any other person(s) of the observance or
performance by (a) the Borrower of any obligation, undertaking or condition
contained in the Revolving Credit Note, the Loan Agreement or any other of the
Borrower Documents, or (b) any other guarantor of any liability or obligation
contained in its guaranty agreement (except for the particular observance or
performance so waived).
5.02 Extension of the time for payment by the Borrower or any guarantor of
any amount owing or payable under the Revolving Credit Note, the Loan Agreement,
or any other guaranty agreement or of the time for payment or performance by the
Borrower, any other guarantor(s) or any other person of any other obligation
under or arising out of the Guaranteed Obligations, or otherwise under or with
respect to the Revolving Credit Note, the Loan Agreement, any other of the
Borrower Documents, or any other guaranty agreement related to all or any part
of the Guaranteed Obligations or the extension or the renewal of any thereof
(except for the particular extension or renewal so granted).
5.03 Modification or amendment (whether material or otherwise) of any term,
obligation, undertaking or condition to be performed by the Borrower or any
other guarantor(s) under the Guaranteed Obligations, or otherwise under or with
respect to the Revolving Credit
4
<PAGE>
Note, the Loan Agreement, any other of the Borrower Documents, or any other
guaranty agreement.
5.04 Taking or omitting to take any action referred to in the Revolving
Credit Note, the Loan Agreement, any other of the Borrower Documents, or any
other guaranty agreement.
5.05 Any failure, omission, delay or lack on the part of the Lender or any
other person, to enforce, assert or exercise any right, power or remedy
conferred on the Lender or any other person in the Revolving Credit Note, the
Loan Agreement, any other of the Borrower Documents, or any other guaranty
agreement, or any action on the part of the Lender or any other person granting
indulgence or extension in any form, or suspending any such right, power or
remedy as to any person or entity.
5.06 Voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of assets and
liability, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting the Borrower or any other guarantor(s), or the
assets of the Borrower or any other guarantor(s), or the disaffirmance,
rejection or postponement in any such proceeding of any other obligations or
undertakings of the Borrower or any other guarantor(s) set forth in the
Revolving Credit Note, the Loan Agreement, any of the Borrower Documents or any
other guaranty agreement.
5.07 Release or discharge of the Borrower or any other guarantor(s)
from the performance or observance of any obligation, undertaking or condition
to be performed by the Borrower or any other guarantor(s) under the Revolving
Credit Note, the Loan Agreement, any other of the Borrower Documents or any
other guaranty agreement by operation of law or otherwise.
5.08 Release, substitution, exchange, dissipation, surrender or replacement
of any collateral security for any liability or obligation of the Borrower or
any other guarantor(s), with respect to all or any part of the Guaranteed
Obligations or otherwise, under or with respect to the Borrower Documents or any
other guaranty agreement, whether or not permitted in any of the Borrower
Documents.
5.09 Receipt and acceptance by the Lender or any other person or entity of
notes, checks or other instruments for the payment of money made by the Borrower
or other person or entity, and extension or renewals of such instrument (except
to the extent that such instruments are paid or converted into cash).
5.10 Any failure of title with respect to the interest of the Borrower or
Lender in the collateral security for any liability or obligation of the
Borrower for any other guarantor(s) or any parts or components thereof.
5.11 The dissolution, merger or consolidation of the Borrower, either
Guarantor or any other guarantor(s) or the sale, divesture or other disposition
of any or all of the interest of the Borrower, either Guarantor or any other
guarantor(s) in any collateral.
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<PAGE>
5.12 Any action or inaction (including, without limitation, the election of
the Lender to proceed with a judicial or nonjudicial foreclosure against any
real or personal property security it holds) by the Lender or any other persons
which results in any impairment or destruction of (a) any subrogation or rights
of either Guarantor, (b) any rights of either Guarantor to proceed against the
Borrowers, and other guarantor(s) or any other person for reimbursement, or (c)
any rights of Lender with respect to any collateral security for any liability
or obligation of the Borrowers with respect to all or any part of the Guaranteed
Obligations, or otherwise under or with respect to the Borrower Documents, or
for any obligation under any other guaranty agreement.
5.13 Any action taken by the Lender or any other person or entity against
the Borrower or Guarantor which would afford the Borrower or any guarantor a
defense based on any anti-deficiency protection under the laws of any
jurisdiction.
5.14 Change, exchange, waiver, release or subordination, in whole or in
part, of any security interest, mortgage, pledge or other lien now or hereafter
held by the Lender as collateral security for any of the Guaranteed Obligations,
or any other liability or obligation of the Borrower under the Borrower
Documents, or for any obligations under any other guaranty agreement and the
justifiable or unjustifiable impairment of any such collateral security, or
suspension of the right to enforce against any such collateral security.
5.15 Grant of indulgences, forbearances or compromises with respect to, and
any settlement made with, Borrower, or any co-maker, accommodation party,
surety, any other guarantor(s) or any other person or entity, or with respect to
any of the Guaranteed Obligations or the obligations under any other guaranty
agreement.
5.16 Extension of loans, credit, advances, discounts and other
financial accommodations to the Borrower by the Lender in addition to, or in
excess of, the amount of the Guaranteed Obligations.
5.17 Acceptance by the Lender of any late, partial or interest-only payment
with respect to the Guaranteed Obligations.
5.18 Lack of diligence by the Lender in collecting, or attempting to
collect, the Guaranteed Obligations, the obligations under any other guaranty
agreement or any other obligations or liabilities or in otherwise dealing with
the Borrower, the Guaranteed Obligations or any co-maker, accommodation party,
surety, or any other guarantor(s), or any other person or entity.
5.19 The calling for and accepting, at any time the Lender deems necessary
or appropriate, as additional security, the signature or signatures of
additional parties, or a security interest in property of any kind or
description, or both.
5.20 Any other cause, whether similar or dissimilar to the foregoing. It is
the intention of the Guarantor that this Agreement constitutes an absolute and
unconditional guaranty in any
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and all circumstances, and this Agreement shall be discharged only by the
payment in full of all sums guaranteed and by the performance in full of all of
the Guaranteed Obligations.
SECTION 6
Waiver of Notice
----------------
The Guarantor waives notice of acceptance of this Agreement by the Lender,
notice of execution and delivery of the Revolving Credit Note, the Loan
Agreement any other of the Borrower Documents, and any other guaranty agreement,
or any instrument referred to in such documents. The Guarantor further waives,
to the fullest extent permitted by applicable law, each and every notice to
which the Guarantor would otherwise be entitled under principles of guaranty or
suretyship law. Without limiting the generality of the foregoing, the Guarantor
hereby expressly waive all notices and defenses whatsoever with respect to this
Agreement or with respect to the Guaranteed Obligations, including, but not
limited to, notice of the Lender's acceptance of the Agreement or its intention
to act, or its action, in reliance upon this Agreement; notice of the present
existence or future incurring by the Borrower of any Guaranteed Obligations or
any other obligations or liability or any terms or amount thereof or any change
therein; notice of any default or nonpayment (whether to the Guaranteed
Obligations or of any other obligation or liability) by the Borrower or any
accommodation party, co-maker, surety, pledgor, mortgagor, grantor of security,
any other guarantor(s) or any other person or entity; notice of the obtaining or
release of any guaranty or surety agreement (in addition to this Agreement),
pledge, mortgage, security interest, assignment, or other security for any of
the Guaranteed Obligations; notice of dishonor; notice of nonpayment; notice of
acceleration of the Guaranteed Obligations; notice of the making of a demand for
payment of the liability or obligations of the Borrower; presentment and notice
of presentment; protest and notice of protest; demand and notice of demand;
nonpayment and notice of nonpayment; notice of the disposition of any collateral
held to secure the Guaranteed Obligations; and any other notice required by law
or otherwise. The Guarantor recognizes and hereby guarantees a Revolving Credit
Note which may vary in the amount of aggregate principal outstanding, and waives
notice of all disbursements made to the Borrower pursuant to the Loan Agreement.
In any event, the Guarantor's obligations under this Agreement shall not exceed
the limitations provided in Section 2 of this Agreement.
SECTION 7
Waiver of Subrogation
---------------------
The Guarantor hereby unconditionally waives any right of subrogation which
they might have acquired by way of any payment made under this Agreement or
otherwise. Accordingly, the Guarantor shall not become a creditor of the
Borrower as a result of the payment made by any Guarantor under this agreement.
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SECTION 8
Rescission of Payment
---------------------
Notwithstanding Section 9 below, this Agreement shall continue to be
effective, or be reinstated as the case may be, as though such payment had not
been made, if any payment by the Borrower pursuant to the terms and conditions
of the Revolving Credit Note, the Loan Agreement, this Agreement or any other of
the Borrower Documents is rescinded or must otherwise be restored or returned by
the Lender for any reason, including, without limitation (a) the invalidity or
unenforceability of the obligation paid, for any reason; (b) failure or
insufficiency of consideration for the obligation paid, or (c) the insolvency,
bankruptcy or reorganization of the Borrower or any of any other guarantor(s).
SECTION 9
Termination
-----------
This Agreement shall remain in full force and effect until, and shall
terminate (as "terminate" is used in Kentucky Revised Statutes ss. 371.065) on
the earlier of (a) the day following the date of (1) payment in full upon
maturity of all sums payable by the Borrower under, and (2) performance in full
of all other obligations of the Borrower in accordance with the provisions of,
the Revolving Credit Note, the Loan Agreement, this Agreement, all of the other
Borrower Documents, and any extension and renewals thereof; or (b) August 31,
2006; provided, however, that termination of this Agreement on such termination
date shall not affect in any manner the liability of the Guarantor with respect
to (1) the Guaranteed Obligations which are created or incurred prior to such
termination date ("Prior Obligations"), or (2) extension or renewals of,
interest accruing on, or fees, costs or expenses incurred with respect to, such
Prior Obligations prior to, on or after such termination date.
SECTION 10
Acknowledgment
--------------
The Guarantor acknowledges that (a) pursuant to Section 2.02 of the Loan
Agreement, the Revolving Credit (as that term is defined in the Loan Agreement)
shall be effective as of the date of the Loan Agreement, and unless the
Revolving Credit is sooner terminated (or extended in the Lender's sole
discretion) as provided in the Loan Agreement, shall continue in effect until
August 31, 2005; (b) the Lender is under no duty to extend the period of the
Revolving Credit beyond August 31, 2005; (c) neither the Borrower nor the
Guarantor is relying upon or anticipating any such extension; and (d) if the
Lender chooses to extend the Revolving Credit pursuant to Section 2.03(d) of the
Loan Agreement, the Lender may require as a condition precedent to any
extension, such modification(s), or amendment(s) of any kind or nature
whatsoever, as the Lender determines in its sole discretion, to the Loan
Agreement and/or any other Borrower Documents, including, but not limited to,
the grant or increase of collateral security for the obligations of the
Guarantor under the Agreement. The Guarantor further acknowledges that upon any
extension of the period of the Revolving Credit, this Agreement
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<PAGE>
shall remain in full force and effect and shall continue to apply to the
Revolving Credit Notes, as extended (and to any renewal or replacement note or
notes for one or more of the Revolving Credit Notes, or any replacement for all
or any of them), until that Revolving Credit Notes, as extended, renewed or
replaced, shall have been paid in full.
SECTION 11
Miscellaneous
-------------
11.01 This Agreement shall be binding upon the Guarantor and the
Guarantor's heirs, personal representatives, successors and assigns, and shall
inure to the benefit of, and be enforceable by, the Lender and the Lender's
successors, transferees and assigns, including each and every holder of any
indebtedness, obligation or liability of the Borrower constituting all or a
portion of the Guaranteed Obligations.
11.02 The Lender may enforce this Agreement with respect to one or more
breaches either separately or cumulatively.
11.03 This Agreement may not be modified or amended without the prior
written consent of the Lender, and any attempted modification or amendment
without such consent shall be void.
11.04 This Agreement shall in all respects be governed by, and construed
and enforced in accordance with, the laws (without regard to the conflicts of
laws rules) of the Commonwealth of Kentucky.
11.05 If any part, term or provision of this Agreement is unenforceable or
prohibited by any law applicable to this Agreement the rights and obligations of
the parties shall be construed and enforced with that part, term or provision
limited so as to make it enforceable to the greatest extent allowed by law, or
if it is totally unenforceable, as if this did not contain that particular part,
term or provision. A determination in one jurisdiction that any part, term or
provision of this Agreement is unenforceable or prohibited by law does not
affect the validity of such part, term or provision in any other jurisdiction.
11.06 The headings in this Agreement have been included for ease of
reference only, and shall not be considered in the construction or
interpretation of this Agreement.
11.07 This Agreement may be signed by each party hereto upon a separate
copy, and in such case one counterpart of this Agreement shall consist of enough
of such copies to reflect the signature of each party.
11.08 This Agreement may be executed by each party in multiple
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement or its terms to account for more
than one such counterpart.
9
<PAGE>
11.09 THE GUARANTOR CONSENTS TO ONE OR MORE ACTIONS BEING INSTITUTED AND
MAINTAINED IN THE JEFFERSON COUNTY, KENTUCKY, CIRCUIT COURT AND/OR THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY (AT THE LENDER'S
DISCRETION) TO ENFORCE THIS AGREEMENT AND/OR ONE OR MORE OF THE OTHER BORROWER
DOCUMENTS, AND WAIVES ANY OBJECTION TO ANY SUCH ACTION BASED UPON LACK OF
PERSONAL OR SUBJECT MATTER JURISDICTION OR IMPROPER VENUE. THE GUARANTOR AGREE
THAT ANY PROCESS OR OTHER LEGAL SUMMONS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING MAY BE SERVED BY MAILING A COPY THEREOF BY CERTIFIED MAIL, OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL, ADDRESSED TO THE BORROWER AS PROVIDED IN
SECTION 12.12 BELOW. THE BORROWER ALSO AGREES THAT IT SHALL NOT COMMENCE OR
MAINTAIN ANY ACTION IN ANY COURT, ADMINISTRATIVE AGENCY OR OTHER TRIBUNAL OTHER
THAN THE JEFFERSON COUNTY, KENTUCKY, CIRCUIT COURT OR THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT OF KENTUCKY WITH RESPECT TO THIS AGREEMENT, ANY
OTHER OF THE BORROWER DOCUMENTS, ANY OF THE TRANSACTIONS PROVIDED FOR OR
CONTEMPLATED IN ANY OF THE BORROWER DOCUMENTS, OR ANY CAUSE OF ACTION OR ALLEGED
CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH ANY DEBTOR AND CREDITOR
RELATIONSHIP BETWEEN OR AMONG THE GUARANTOR, THE BORROWER AND/OR THE LENDER THAT
MAY EXIST FROM TIME TO TIME.
11.10 In the event that any of the Guaranteed Obligations arise out of or
are evidenced by more than one obligation or liability of the Borrower to the
Lender, this Agreement may be enforced as to each separate liability or
obligation constituting one of the Guaranteed Obligations, either separately or
cumulatively.
11.11 The use of any gender in this Agreement shall be deemed to include
each other gender to the extent the context requires.
11.12 (a) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such notice is given at
least ten (10) business days before the time of sale, disposition or other event
or thing giving rise to the requirement of notice.
(b) All notices or communications under this Agreement shall be in
writing and shall be (1) mailed by registered or certified mail, return
receipt requested, (2) hand delivered, or (3) delivered by overnight
carrier, to the parties at the addresses set forth below their names on the
signature page(s) to this Agreement, and any notice so addressed and mailed
or delivered to and/or deposited with such carrier, freight prepaid, shall
be deemed to have been given when so mailed if mailed; or delivered if
hand-delivered; or delivered to such overnight courier if delivered by
overnight courier.
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(c) The parties hereto may at any time, and from time to time, change
the address(es) to which notice shall be mailed, transmitted or otherwise
delivered by written notice setting forth the changed address(es).
11.13 THE BORROWER AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE LOAN AGREEMENT, THE REVOLVING CREDIT NOTE, THE PLEDGE AGREEMENT
AND/OR ANY OTHER OF THE BORROWER DOCUMENTS. THIS WAIVER IS INTENDED TO APPLY TO
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THE BORROWER AND GUARANTOR ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO A BUSINESS RELATIONSHIP, AND THAT THE
LENDER HAS ALREADY RELIED ON THIS WAIVER IN ITS DEALINGS WITH THE BORROWER AND
THE GUARANTOR. THE BORROWER AND GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN AGREEMENT,
THE REVOLVING CREDIT NOTE, THE PLEDGE AGREEMENT AND/OR THE OTHER BORROWER
DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY THE COURT.
11.14 The Guarantor acknowledges that the Guarantor has received a copy of
the Loan Agreement and each of the other Borrower Documents, as fully executed
by the parties thereto. The Guarantor represent and warrants that the Guarantor
(a) HAS READ THE LOAN AGREEMENT AND THE OTHER BORROWER DOCUMENTS OR HAS CAUSED
SUCH DOCUMENTS TO BE EXAMINED BY THE GUARANTOR'S REPRESENTATIVES OR ADVISORS;
(b) is thoroughly familiar with the transactions contemplated in the Loan
Agreement and the other Borrower Documents; and (c), together with the
Guarantor's representatives or advisors, if any, has had the opportunity to ask
such questions to representatives of the Borrower and the Lender, respectively,
and receive answers thereto, concerning the terms and conditions of the
transactions contemplated in the Loan Agreement and the other Borrower Documents
as the Guarantor deem necessary in connection with the Guarantor's decision to
enter into this Agreement.
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IN WITNESS WHEREOF, the parties have executed this as of the date set out
on the preamble hereto, but actually on the date(s) set forth below.
GUARANTOR: /s/ J. D. Nichols
--------------------------------------------------
J. D. NICHOLS
Date: August 15, 2000
---------------------------------------------
Address:
10172 Linn Station Road
Louisville, KY 40223
Attn: Neil Mitchell
BORROWER: ORIG, LLC
By /s/ J. D. Nichols
------------------------------------------------
J. D. NICHOLS, MANAGER
Date: August 15, 2000
-------------------------------------------
Address:
10172 Linn Station Road #200
Louisville, KY 40223
Attn: Neil Mitchell
12
<PAGE>
LENDER: BANK OF LOUISVILLE
By /s/ Richard Bean
-----------------------------------------------
Richard Bean, Senior Vice President
Date: August 15, 2000
---------------------------------------------
Address:
500 W. Broadway
Louisville, KY 40202
Attn: Richard Bean, Senior Vice President
13
<PAGE>
EXHIBIT 3(e)
BRIAN F. LAVIN'S GUARANTY AGREEMENT
<PAGE>
GUARANTY AGREEMENT
dated as of August 15, 2000
among
BANK OF LOUISVILLE
as the Lender
ORIG, LLC
as the Borrower
and
BRIAN F. LAVIN
as the Guarantor
<PAGE>
GUARANTY AGREEMENT
------------------
This is a Guaranty Agreement dated as of August 15, 2000, (this
"Agreement"), among BANK OF LOUISVILLE (the "Lender"); ORIG, LLC (the
"Borrower"); BRIAN F. LAVIN (the "Guarantor").
SECTION 1
Recitals and Definitions
------------------------
This Agreement is entered into concurrently with and pursuant to a Loan
Agreement (the "Loan Agreement"), dated as of August 15, 2000, between the
Lender and the Borrower and joined in by the Guarantor. Capitalized terms not
otherwise defined herein shall have the meanings given them in the Loan
Agreement. Pursuant to the Loan Agreement, the Borrower has executed and
delivered to the Lender three Revolving Credit Notes each dated August 15, 2000
and in the principal amount Two Million Dollars ($2,000,000) (for a total of Six
Million Dollars ($6,000,000.00)) and payable to the order of the Lender (such
three Revolving Credit Notes, including any notes or other instruments issued in
renewal, replacement, extension, modification, novation and/or revival thereof,
the "Revolving Credit Notes") and various other Borrower Documents (as that term
is defined in the Loan Agreement).
SECTION 2
Guaranty of Payment and Performance
-----------------------------------
The Guarantor, intending to be bound as an accommodation party for the
Borrower, jointly and severally, absolutely and unconditionally guarantees the
following obligations and/or liabilities (collectively, the "Guaranteed
Principal"): (a) the prompt payment in full by the Borrower of all obligations
under the Revolving Credit Notes; and (b) the punctual and faithful performance
and observance by the Borrower of all other obligations and undertakings to be
performed or observed pursuant to the Loan Agreement and the other Borrower
Documents. In addition to the Guaranteed Principal, the Guarantor, intending to
be bound as an accommodation party for the Borrower, jointly and severally,
absolutely and unconditionally guarantee the following obligations and/or
liabilities (collectively, the "Other Guaranteed Amounts"): (x) any and all
interest accruing on the Guaranteed Principal under the Revolving Credit Notes,
the Loan Agreement, and/or any other of the Borrower Documents; and (y) that the
Guarantor will, upon demand, pay to the Lender any and all fees, charges and
costs of collecting the Guaranteed Principal or otherwise enforcing the Lender's
rights under this Agreement, including without limitation the reasonable fees
and expenses of the Lender's counsel. Notwithstanding the foregoing, the maximum
aggregate liability of the Guarantor under this Agreement for the Guaranteed
Principal shall not exceed the Guarantor Maximum. (For purposes of this Section,
"Guarantor Maximum" at any time shall mean the lesser of (i) $6,000,000.00, or
(ii) the greater of (A) the Guaranteed Principal multiplied by the percentage of
the equity interests of the Borrower owned by the Guarantor (directly or
indirectly, and legally or beneficially) on either (I) the date of an Event of
Default under the Loan Agreement or (II) the date on which the Lender makes a
demand for payment from the Guarantor under this Agreement (it being within the
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<PAGE>
discretion of the Lender to choose between the dates in (I) and (II)), or (B)
$600,000.00). The Guaranteed Principal, limited to the Guarantor Maximum, and
the Other Guaranteed Amounts are sometimes referenced in this Agreement as the
"Guaranteed Obligations." The Guaranteed Obligations under this Agreement shall
be in addition to the maximum aggregate liability of the Guarantor or any other
guarantor to the Lender under any guaranty agreement of the Guarantor or any
other guarantor heretofore or hereafter given.
SECTION 3
Obligations Unconditional
-------------------------
This is an unconditional and absolute guaranty of payment and performance.
If, for any reason, the Borrower fails to observe or perform any obligation,
undertaking or condition (whether affirmative or negative) in the Loan Agreement
or any other of the Borrower Documents, to be performed or observed by the
Borrower or if any amounts payable by the Borrower pursuant to the Revolving
Credit Note or the Loan Agreement are not paid promptly when due or any Event of
Default occurs, the Guarantor shall promptly perform or observe or cause to be
performed or observed each such obligation, undertaking or condition and
forthwith shall pay such amount at the place and to the person entitled thereto
pursuant to the Revolving Credit Note or the Loan Agreement, regardless of any
set-off or counterclaim which the Borrower may have or assert, and regardless of
whether or not the Lender or anyone on behalf of the Lender shall have
instituted any suit, action or proceeding or exhausted their remedies or taken
any steps to enforce any rights against the Borrower or any other person to
compel such performance or to collect all or any part of such amount pursuant to
the provisions of the Revolving Credit Note, the Loan Agreement or any other of
the Borrower Documents, or at law or in equity, or otherwise, and regardless of
any other condition or contingency. The liability of the Guarantor shall be for
the payment in full of the entire amount of the Guaranteed Obligations, jointly
and severally with that of the Borrower, any co-maker, or accommodation party,
or other guarantor, subject to the Maximum Liability Amount. This Agreement
shall not, however, be construed to require the Guarantor to make any payment
which is duplicative of a payment already made by the Guarantor or by the
Borrower, any co-maker, accommodation party, or any other guarantor, except as
provided in Section 8 of this Agreement.
SECTION 4
Waivers and Agreements
----------------------
The Guarantor hereby unconditionally:
4.01 Waives any requirement that the Lender first seek to enforce remedies
against the Borrower or any other person or entity before seeking to enforce
this Agreement against either Guarantor.
4.02 Waives any requirement that the Lender first make demand upon, or seek
to enforce remedies against, to Guarantor, or against any other guarantor of any
of the Guaranteed Obligations in any particular order, before demanding payment
from, or seeking to enforce this
2
<PAGE>
Agreement against, the Guarantor or any other guarantor. The Guarantor
acknowledges that the Lender, in the Lender's sole discretion, may enforce
remedies against the Guarantor pursuant to this Agreement and not enforce
similar remedies against any other guarantor with respect to the Guaranteed
Obligations or vice versa. The Guarantor further acknowledges that the
enforcement of remedies against the Guarantor in lieu of enforcing remedies
against any other guarantor, or vice versa, shall not affect the validity or
enforceability of the Lender's rights and/or remedies under this Agreement or
any other guaranty agreement guarantying any of the Guaranteed Obligations.
4.03 Waives any requirement that the Lender first seek to enforce remedies
against any property in which the Lender may have any interest securing any (a)
indebtedness which either Guarantor has guaranteed under this Agreement, or (b)
guaranty obligations of any other guarantor, or enforcing any such rights in any
particular order, before demanding payment from, or seeking to enforce this
Agreement against, either Guarantor.
4.04 Covenants that the Guarantor's obligation under this Agreement will
not be discharged except by complete payment and performance of all of the
Guaranteed Obligations, including, without limitation, all obligations of the
Borrower under the Revolving Credit Note, and all other obligations of the
Borrower under the Loan Agreement and the other Borrower Documents, or by
payment in full by the Guarantor of the Guaranteed Obligations in accordance
with the terms of this Agreement.
4.05 Agrees that this Agreement shall remain in full force and effect
without regard to, and shall not be affected or impaired by any invalidity,
irregularity or unenforceability in whole or in part of the Revolving Credit
Note, the Loan Agreement, any other of the Borrower Documents, or any limitation
of the liability of the Borrower thereunder, or any limitation on the method or
terms of payment thereunder which may now or hereafter be caused or imposed in
any manner whatsoever.
4.06 Waives any obligation that the Lender might otherwise have to marshal
assets or to proceed against any particular persons or assets in any particular
order.
4.07 Waives any defenses either Guarantor may have arising out of or in any
way related to any or all of the following:
(a) Any failure on the part of the Lender to perfect the Lender's security
interest in or lien against, or any lack of diligence in connection with or
failure to foreclose or realize upon, any property, whether real or personal,
tangible or intangible, now or hereafter granted to the Lender as collateral
security for any of (1) the Borrower's liabilities or obligations, or (2) either
Guarantor's liabilities or obligations hereunder, or (3) any other guarantor's
liabilities or obligations under any other guaranty agreement relating to all or
any part of the Guaranteed Obligations.
(b) The voluntary or involuntary discharge or release of any of the
Guaranteed Obligations, or of any co-maker, accommodation party, surety or any
other person or entity,
3
<PAGE>
including but not limited to, any other guarantor, whether voluntarily or by
reason of bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or otherwise.
(c) The receipt by the Lender of any provisional, invalid or refundable
payment if such payment is thereafter revoked or if such payment is returned by
the Lender to or for the benefit of the Borrower, either Guarantor or any other
guarantor or the creditors of either.
(d) Any right of set-off or counterclaim against the Lender which would
otherwise impair the Lender's rights against either Guarantor or any other
guarantor.
(e) Any change in the composition, ownership or business of the Borrower,
the Guarantor or any other guarantor.
SECTION 5
Obligations Not Impaired
------------------------
The obligations of the Guarantor under this Agreement are joint and
several, and intended to be in addition to and independent of those of the
Borrower under the Guaranteed Obligations. In addition, the Guarantor
acknowledges that the Guarantor's obligations under this Agreement are
independent of and in addition to the obligations of any other guarantor(s)
under any other guaranty agreement(s) related to all or any part of the
Guaranteed Obligations. To that end, the obligations, undertakings and
conditions to be performed or observed by the Guarantor under this Agreement
shall not be affected or impaired by reason of the happening from time to time
and one or more times of any of the following with respect to the Revolving
Credit Note, the Loan Agreement, or any assignment of the rights of the Lender
under this Agreement whether or not with notice to, or further consent of, the
Guarantor:
5.01 Waiver by the Lender or any other person(s) of the observance or
performance by (a) the Borrower of any obligation, undertaking or condition
contained in the Revolving Credit Note, the Loan Agreement or any other of the
Borrower Documents, or (b) any other guarantor of any liability or obligation
contained in its guaranty agreement (except for the particular observance or
performance so waived).
5.02 Extension of the time for payment by the Borrower or any guarantor of
any amount owing or payable under the Revolving Credit Note, the Loan Agreement,
or any other guaranty agreement or of the time for payment or performance by the
Borrower, any other guarantor(s) or any other person of any other obligation
under or arising out of the Guaranteed Obligations, or otherwise under or with
respect to the Revolving Credit Note, the Loan Agreement, any other of the
Borrower Documents, or any other guaranty agreement related to all or any part
of the Guaranteed Obligations or the extension or the renewal of any thereof
(except for the particular extension or renewal so granted).
5.03 Modification or amendment (whether material or otherwise) of any term,
obligation, undertaking or condition to be performed by the Borrower or any
other guarantor(s) under the Guaranteed Obligations, or otherwise under or with
respect to the Revolving Credit
4
<PAGE>
Note, the Loan Agreement, any other of the Borrower Documents, or any other
guaranty agreement.
5.04 Taking or omitting to take any action referred to in the Revolving
Credit Note, the Loan Agreement, any other of the Borrower Documents, or any
other guaranty agreement.
5.05 Any failure, omission, delay or lack on the part of the Lender or any
other person, to enforce, assert or exercise any right, power or remedy
conferred on the Lender or any other person in the Revolving Credit Note, the
Loan Agreement, any other of the Borrower Documents, or any other guaranty
agreement, or any action on the part of the Lender or any other person granting
indulgence or extension in any form, or suspending any such right, power or
remedy as to any person or entity.
5.06 Voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of assets and
liability, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting the Borrower or any other guarantor(s), or the
assets of the Borrower or any other guarantor(s), or the disaffirmance,
rejection or postponement in any such proceeding of any other obligations or
undertakings of the Borrower or any other guarantor(s) set forth in the
Revolving Credit Note, the Loan Agreement, any of the Borrower Documents or any
other guaranty agreement.
5.07 Release or discharge of the Borrower or any other guarantor(s) from
the performance or observance of any obligation, undertaking or condition to be
performed by the Borrower or any other guarantor(s) under the Revolving Credit
Note, the Loan Agreement, any other of the Borrower Documents or any other
guaranty agreement by operation of law or otherwise.
5.08 Release, substitution, exchange, dissipation, surrender or replacement
of any collateral security for any liability or obligation of the Borrower or
any other guarantor(s), with respect to all or any part of the Guaranteed
Obligations or otherwise, under or with respect to the Borrower Documents or any
other guaranty agreement, whether or not permitted in any of the Borrower
Documents.
5.09 Receipt and acceptance by the Lender or any other person or entity of
notes, checks or other instruments for the payment of money made by the Borrower
or other person or entity, and extension or renewals of such instrument (except
to the extent that such instruments are paid or converted into cash).
5.10 Any failure of title with respect to the interest of the Borrower or
Lender in the collateral security for any liability or obligation of the
Borrower for any other guarantor(s) or any parts or components thereof.
5.11 The dissolution, merger or consolidation of the Borrower, either
Guarantor or any other guarantor(s) or the sale, divesture or other disposition
of any or all of the interest of the Borrower, either Guarantor or any other
guarantor(s) in any collateral.
5
<PAGE>
5.12 Any action or inaction (including, without limitation, the election of
the Lender to proceed with a judicial or nonjudicial foreclosure against any
real or personal property security it holds) by the Lender or any other persons
which results in any impairment or destruction of (a) any subrogation or rights
of either Guarantor, (b) any rights of either Guarantor to proceed against the
Borrowers, and other guarantor(s) or any other person for reimbursement, or (c)
any rights of Lender with respect to any collateral security for any liability
or obligation of the Borrowers with respect to all or any part of the Guaranteed
Obligations, or otherwise under or with respect to the Borrower Documents, or
for any obligation under any other guaranty agreement.
5.13 Any action taken by the Lender or any other person or entity against
the Borrower or Guarantor which would afford the Borrower or any guarantor a
defense based on any anti-deficiency protection under the laws of any
jurisdiction.
5.14 Change, exchange, waiver, release or subordination, in whole or in
part, of any security interest, mortgage, pledge or other lien now or hereafter
held by the Lender as collateral security for any of the Guaranteed Obligations,
or any other liability or obligation of the Borrower under the Borrower
Documents, or for any obligations under any other guaranty agreement and the
justifiable or unjustifiable impairment of any such collateral security, or
suspension of the right to enforce against any such collateral security.
5.15 Grant of indulgences, forbearances or compromises with respect to, and
any settlement made with, Borrower, or any co-maker, accommodation party,
surety, any other guarantor(s) or any other person or entity, or with respect to
any of the Guaranteed Obligations or the obligations under any other guaranty
agreement.
5.16 Extension of loans, credit, advances, discounts and other financial
accommodations to the Borrower by the Lender in addition to, or in excess of,
the amount of the Guaranteed Obligations.
5.17 Acceptance by the Lender of any late, partial or interest-only payment
with respect to the Guaranteed Obligations.
5.18 Lack of diligence by the Lender in collecting, or attempting to
collect, the Guaranteed Obligations, the obligations under any other guaranty
agreement or any other obligations or liabilities or in otherwise dealing with
the Borrower, the Guaranteed Obligations or any co-maker, accommodation party,
surety, or any other guarantor(s), or any other person or entity.
5.19 The calling for and accepting, at any time the Lender deems necessary
or appropriate, as additional security, the signature or signatures of
additional parties, or a security interest in property of any kind or
description, or both.
5.20 Any other cause, whether similar or dissimilar to the foregoing. It is
the intention of the Guarantor that this Agreement constitutes an absolute and
unconditional guaranty in any
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and all circumstances, and this Agreement shall be discharged only by the
payment in full of all sums guaranteed and by the performance in full of all of
the Guaranteed Obligations.
SECTION 6
Waiver of Notice
----------------
The Guarantor waives notice of acceptance of this Agreement by the Lender,
notice of execution and delivery of the Revolving Credit Note, the Loan
Agreement any other of the Borrower Documents, and any other guaranty agreement,
or any instrument referred to in such documents. The Guarantor further waives,
to the fullest extent permitted by applicable law, each ande very notice to
which the Guarantor would otherwise be entitled under principles of guaranty or
suretyship law. Without limiting the generality of the foregoing, the Guarantor
hereby expressly waives all notices and defenses whatsoever with respect to this
Agreement or with respect to the Guaranteed Obligations, including, but not
limited to, notice of the Lender's acceptance of the Agreement or its intention
to act, or its action, in reliance upon this Agreement; notice of the present
existence or future incurring by the Borrower of any Guaranteed Obligations or
any other obligations or liability or any terms or amount thereof or any change
therein; notice of any default or nonpayment (whether to the Guaranteed
Obligations or of any other obligation or liability) by the Borrower or any
accommodation party, co-maker, surety, pledgor, mortgagor, grantor of security,
any other guarantor(s) or any other person or entity; notice of the obtaining or
release of any guaranty or surety agreement (in addition to this Agreement),
pledge, mortgage, security interest, assignment, or other security for any of
the Guaranteed Obligations; notice of dishonor; notice of nonpayment; notice of
acceleration of the Guaranteed Obligations; notice of the making of a demand for
payment of the liability or obligations of the Borrower; presentment and notice
of presentment; protest and notice of protest; demand and notice of demand;
nonpayment and notice of nonpayment; notice of the disposition of any collateral
held to secure the Guaranteed Obligations; and any other notice required by law
or otherwise. The Guarantor recognizes and hereby guarantees a Revolving Credit
Note which may vary in the amount of aggregate principal outstanding, and waives
notice of all disbursements made to the Borrower pursuant to the Loan Agreement.
In any event, the Guarantor's obligations under this Agreement shall not exceed
the limitations provided in Section 2 of this Agreement.
SECTION 7
Waiver of Subrogation
---------------------
The Guarantor hereby unconditionally waives any right of subrogation which
they might have acquired by way of any payment made under this Agreement or
otherwise. Accordingly, the Guarantor shall not become a creditor of the
Borrower as a result of the payment made by any Guarantor under this agreement.
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SECTION 8
Rescission of Payment
---------------------
Notwithstanding Section 9 below, this Agreement shall continue to be
effective, or be reinstated as the case may be, as though such payment had not
been made, if any payment by the Borrower pursuant to the terms and conditions
of the Revolving Credit Note, the Loan Agreement, this Agreement or any other of
the Borrower Documents is rescinded or must otherwise be restored or returned by
the Lender for any reason, including, without limitation (a) the invalidity or
unenforceability of the obligation paid, for any reason; (b) failure or
insufficiency of consideration for the obligation paid, or (c) the insolvency,
bankruptcy or reorganization of the Borrower or any of any other guarantor(s).
SECTION 9
Termination
-----------
This Agreement shall remain in full force and effect until, and shall
terminate (as "terminate" is used in Kentucky Revised Statutes ss. 371.065) on
the earlier of (a) the day following the date of (1) payment in full upon
maturity of all sums payable by the Borrower under, and (2) performance in full
of all other obligations of the Borrower in accordance with the provisions of,
the Revolving Credit Note, the Loan Agreement, this Agreement, all of the other
Borrower Documents, and any extension and renewals thereof; or (b) August 31,
2006; provided, however, that termination of this Agreement on such termination
date shall not affect in any manner the liability of the Guarantor with respect
to (1) the Guaranteed Obligations which are created or incurred prior to such
termination date ("Prior Obligations"), or (2) extension or renewals of,
interest accruing on, or fees, costs or expenses incurred with respect to, such
Prior Obligations prior to, on or after such termination date.
SECTION 10
Acknowledgment
--------------
The Guarantor acknowledges that (a) pursuant to Section 2.02 of the Loan
Agreement, the Revolving Credit (as that term is defined in the Loan Agreement)
shall be effective as of the date of the Loan Agreement, and unless the
Revolving Credit is sooner terminated (or extended in the Lender's sole
discretion) as provided in the Loan Agreement, shall continue in effect until
August 31, 2005; (b) the Lender is under no duty to extend the period of the
Revolving Credit beyond August 31, 2005; (c) neither the Borrower nor the
Guarantor is relying upon or anticipating any such extension; and (d) if the
Lender chooses to extend the Revolving Credit pursuant to Section 2.03(d) of the
Loan Agreement, the Lender may require as a condition precedent to any
extension, such modification(s), or amendment(s) of any kind or nature
whatsoever, as the Lender determines in its sole discretion, to the Loan
Agreement and/or any other Borrower Documents, including, but not limited to,
the grant or increase of collateral security for the obligations of the
Guarantor under the Agreement. The Guarantor further acknowledges that upon any
extension of the period of the Revolving Credit, this Agreement
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shall remain in full force and effect and shall continue to apply to the
Revolving Credit Notes, as extended (and to any renewal or replacement note or
notes for one or more of the Revolving Credit Notes, or any replacement for all
or any of them), until that Revolving Credit Notes, as extended, renewed or
replaced, shall have been paid in full.
SECTION 11
Miscellaneous
-------------
11.01 This Agreement shall be binding upon the Guarantor and the
Guarantor's heirs, personal representatives, successors and assigns, and shall
inure to the benefit of, and be enforceable by, the Lender and the Lender's
successors, transferees and assigns, including each and every holder of any
indebtedness, obligation or liability of the Borrower constituting all or a
portion of the Guaranteed Obligations.
11.02 The Lender may enforce this Agreement with respect to one or more
breaches either separately or cumulatively.
11.03 This Agreement may not be modified or amended without the prior
written consent of the Lender, and any attempted modification or amendment
without such consent shall be void.
11.04 This Agreement shall in all respects be governed by, and construed
and enforced in accordance with, the laws (without regard to the conflicts of
laws rules) of the Commonwealth of Kentucky.
11.05 If any part, term or provision of this Agreement is unenforceable or
prohibited by any law applicable to this Agreement the rights and obligations of
the parties shall be construed and enforced with that part, term or provision
limited so as to make it enforceable to the greatest extent allowed by law, or
if it is totally unenforceable, as if this did not contain that particular part,
term or provision. A determination in one jurisdiction that any part, term or
provision of this Agreement is unenforceable or prohibited by law does not
affect the validity of such part, term or provision in any other jurisdiction.
11.06 The headings in this Agreement have been included for ease of
reference only, and shall not be considered in the construction or
interpretation of this Agreement.
11.07 This Agreement may be signed by each party hereto upon a separate
copy, and in such case one counterpart of this Agreement shall consist of enough
of such copies to reflect the signature of each party.
11.08 This Agreement may be executed by each party in multiple
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement or its terms to account for more
than one such counterpart.
9
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11.09 THE GUARANTOR CONSENTS TO ONE OR MORE ACTIONS BEING INSTITUTED AND
MAINTAINED IN THE JEFFERSON COUNTY, KENTUCKY, CIRCUIT COURT AND/OR THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY (AT THE LENDER'S
DISCRETION) TO ENFORCE THIS AGREEMENT AND/OR ONE OR MORE OF THE OTHER BORROWER
DOCUMENTS, AND WAIVES ANY OBJECTION TO ANY SUCH ACTION BASED UPON LACK OF
PERSONAL OR SUBJECT MATTER JURISDICTION OR IMPROPER VENUE. THE GUARANTOR AGREE
THAT ANY PROCESS OR OTHER LEGAL SUMMONS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING MAY BE SERVED BY MAILING A COPY THEREOF BY CERTIFIED MAIL, OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL, ADDRESSED TO THE BORROWER AS PROVIDED IN
SECTION 12.12 BELOW. THE BORROWER ALSO AGREES THAT IT SHALL NOT COMMENCE OR
MAINTAIN ANY ACTION IN ANY COURT, ADMINISTRATIVE AGENCY OR OTHER TRIBUNAL OTHER
THAN THE JEFFERSON COUNTY, KENTUCKY, CIRCUIT COURT OR THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT OF KENTUCKY WITH RESPECT TO THIS AGREEMENT, ANY
OTHER OF THE BORROWER DOCUMENTS, ANY OF THE TRANSACTIONS PROVIDED FOR OR
CONTEMPLATED IN ANY OF THE BORROWER DOCUMENTS, OR ANY CAUSE OF ACTION OR ALLEGED
CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH ANY DEBTOR AND CREDITOR
RELATIONSHIP BETWEEN OR AMONG THE GUARANTOR, THE BORROWER AND/OR THE LENDER THAT
MAY EXIST FROM TIME TO TIME.
11.10 In the event that any of the Guaranteed Obligations arise out of or
are evidenced by more than one obligation or liability of the Borrower to the
Lender, this Agreement may be enforced as to each separate liability or
obligation constituting one of the Guaranteed Obligations, either separately or
cumulatively.
11.11 The use of any gender in this Agreement shall be deemed to include
each other gender to the extent the context requires.
11.12 (a) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such notice is given at
least ten (10) business days before the time of sale, disposition or other event
or thing giving rise to the requirement of notice.
(b) All notices or communications under this Agreement shall be in
writing and shall be (1) mailed by registered or certified mail, return receipt
requested, (2) hand delivered, or (3) delivered by overnight carrier, to the
parties at the addresses set forth below their names on the signature page(s) to
this Agreement, and any notice so addressed and mailed or delivered to and/or
deposited with such carrier, freight prepaid, shall be deemed to have been given
when so mailed if mailed; or delivered if hand-delivered; or delivered to such
overnight courier if delivered by overnight courier.
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(c)The parties hereto may at any time,and from time to time,change the
address(es) to which notice shall be mailed, transmitted or otherwise delivered
by written notice setting forth the changed address(es).
11.13 THE BORROWER AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE LOAN AGREEMENT, THE REVOLVING CREDIT NOTE, THE PLEDGE AGREEMENT
AND/OR ANY OTHER OF THE BORROWER DOCUMENTS. THIS WAIVER IS INTENDED TO APPLY TO
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THE BORROWER AND GUARANTOR ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO A BUSINESS RELATIONSHIP, AND THAT THE
LENDER HAS ALREADY RELIED ON THIS WAIVER IN ITS DEALINGS WITH THE BORROWER AND
THE GUARANTOR. THE BORROWER AND GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN AGREEMENT,
THE REVOLVING CREDIT NOTE, THE PLEDGE AGREEMENT AND/OR THE OTHER BORROWER
DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY THE COURT.
11.14 The Guarantor acknowledges that the Guarantor has received a copy of
the Loan Agreement and each of the other Borrower Documents, as fully executed
by the parties thereto. The Guarantor represent and warrants that the Guarantor
(a) HAS READ THE LOAN AGREEMENT AND THE OTHER BORROWER DOCUMENTS OR HAS CAUSED
SUCH DOCUMENTS TO BE EXAMINED BY THE GUARANTOR'S REPRESENTATIVES OR ADVISORS;
(b) is thoroughly familiar with the transactions contemplated in the Loan
Agreement and the other Borrower Documents; and (c), together with the
Guarantor's representatives or advisors, if any, has had the opportunity to ask
such questions to representatives of the Borrower and the Lender, respectively,
and receive answers thereto, concerning the terms and conditions of the
transactions contemplated in the Loan Agreement and the other Borrower Documents
as the Guarantor deem necessary in connection with the Guarantor's decision to
enter into this Agreement.
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IN WITNESS WHEREOF, the parties have executed this as of the date set out
on the preamble hereto, but actually on the date(s) set forth below.
GUARANTOR: /s/ Brian F. Lavin
-----------------------------------------------
BRIAN F. LAVIN
Date: August 15, 2000
------------------------------------------
Address:
10172 Linn Station Road
Louisville, KY 40223
Attn: Neil Mitchell
BORROWER: ORIG, LLC
By /s/ J. D. Nichols
--------------------------------------------
J. D. NICHOLS, MANAGER
Date: August 15, 2000
------------------------------------------
Address:
10172 Linn Station Road #200
Louisville, KY 40223
Attn: Neil Mitchell
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LENDER: BANK OF LOUISVILLE
By /s/ Richard Bean
--------------------------------------------
Richard Bean, Senior Vice President
Date: August 15, 2000
-----------------------------------------
Address:
500 W. Broadway
Louisville, KY 40202
Attn: Richard Bean, Senior Vice President
<PAGE>
EXHIBIT 3(f)
JOINT FILING AGREEMENT
<PAGE>
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D filed herewith
relating to limited partnership interests of NTS-Properties V, a Maryland
Limited Partnership is being filed jointly with the Securities and Exchange
Commission pursuant to Rule 13d-1(k)(1) on behalf of each such person.
October 11, 2000 J. D. NICHOLS
By: /s/ J. D. Nichols
-----------------------------------
J. D. Nichols
OCEAN RIDGE INVESTMENTS, LTD.
By: BKK Financial, Inc.
Its: General Partner
By: /s/ J. D. Nichols
------------------------------
J. D. Nichols
Its: Chairman of the Board
ORIG, LLC
By: /s/ J. D. Nichols
-----------------------------------
J.D. Nichols
Its: Managing Member
BRIAN F. LAVIN
By: /s/ Brian F. Lavin
----------------------------------
Brian F. Lavin
NTS-PROPERTIES ASSOCIATES V
By: /s/ J. D. Nichols
-----------------------------------
J. D. Nichols
Its: Managing General Partner
