Document:

exv10w12

EXHIBIT 10.12

SECOND AMENDED AND RESTATED COLLECTION BANK AGREEMENT

     This SECOND AMENDED AND RESTATED COLLECTION BANK AGREEMENT (this “AGREEMENT”) is dated as of
July 1, 2003, among __________________ (the “COLLECTION BANK”), AMERICAN HOMEPATIENT, INC.
(the “PLEDGOR”), and BANK OF MONTREAL, as agent for and representative of (the “AGENT”) the
financial institutions (the “LENDERS”) that hold a promissory note payable to such Lenders as set
forth on Exhibit A attached hereto (the “Promissory Note”) and amends and restates the Amended and
Restated Collection Bank Agreement dated as of ___, ______ among the Collection Bank, the Pledgor and
Agent.

W I T N E S S E T H :

     WHEREAS, Pledgor presently maintains, or has established concurrently herewith, at the
Collection Bank the accounts described on Schedule I hereto (each individually, a “COLLECTION
ACCOUNT” and collectively, the “COLLECTION ACCOUNTS”);

     WHEREAS, Pledgor and the Agent entered into that certain Second Amended and Restated
Assignment and [Borrower][Subsidiary] Security Agreement dated as of July 1, 2003 amending and
restating the [Borrower][Subsidiary] Security Agreement dated as of July 31, 2001 (the “COLLATERAL
AGREEMENT”), pursuant to which the Pledgor granted to the Agent a security interest in all of the
Pledgor’s right, title and interest in and to the Pledgor’s accounts receivable and the proceeds
thereof (including, without limitation, the Collection Account(s)) and all amounts from time to
time on deposit therein;

     WHEREAS, it is a requirement of the Collateral Agreement that the parties hereto execute and
deliver this Agreement;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1. The Pledgor agrees that all accounts receivable received by the Pledgor shall be deposited
by the Pledgor in the Collection Account(s) or into similar accounts subject to a Collection Bank
Agreement and that no funds from any other source other than proceeds of Accounts Receivable shall
be deposited in any such account. .

     2. The Pledgor hereby irrevocably authorizes and directs the Collection Bank to transfer the
available balance (as determined by the Collection Bank) in the Pledgor’s Collection Account(s) on
each Business Day to the concentration account (the “CONCENTRATION ACCOUNT”) at such bank
(initially, Account No. __________________ at PNC Bank, National Association, at _________), or, after
the occurrence and during the continuance of an Event of Default under the Collateral Agreement (an
“Event of Default”), as the Agent may, in its sole discretion, direct in writing. After Agent gives
written notice to the Collection Bank (with a copy to the Pledgor) that an Event of Default has
occurred and is continuing, the Pledgor hereby irrevocably authorizes and directs the Collection
Bank, and the Collection Bank hereby agrees, to comply with instructions from the Agent, without
further consent from the Pledgor, directing the disposition of the funds in the Collection
Account(s).

 

 

     3. The parties agree that all funds deposited in the Collection Account(s) from time to time
shall, as between the Pledgor and the Agent, be subject to the security interests in favor of the
Agent, shall be held by the Collection Bank subject to the security interest of the Agent and, upon
the occurrence of an Event of Default, may be withdrawn at any time or from time to time at the
direction of the Agent without further consent from the Pledgor, by check, draft, wire transfer or
otherwise as the Agent shall determine and applied by the Agent in accordance with the Collateral
Agreement. The Pledgor hereby agrees that it shall cause forwarding daily of all of the prior day’s
available funds deposited in the Collection Account(s) to the Concentration Account until such time
as the Agent gives written notice to the Collection Bank (with a copy to the Pledgor) that an Event
of Default has occurred and is continuing. After Agent gives such written notice to the Collection
Bank, the Collection Bank hereby agrees to comply with instructions from the Agent, without further
consent from the Pledgor, directing the disposition of the funds in the Collection Account(s). The
Collection Bank hereby agrees that it will provide the Agent with written notice on or before the
date that it terminates any of the Collection Account(s).

     4. The Collection Bank’s charges for the services to be performed pursuant to this Agreement
shall be at the Collection Bank’s customary rate unless and until different rates are separately
agreed to between the Collection Bank and the Pledgor. To the extent that the Collection Bank’s
charges are not paid when due and to the extent deposits made to the Collection Account(s) are
returned or otherwise not collected, the Agent and the Pledgor agree that the Collection Bank shall
have a lien and right of offset against the funds in the applicable Collection Account.

     5. The Collection Bank agrees that it shall furnish to the Agent a copy of the original of all
bank statements with respect to, and, upon Notice by the Agent, all daily debit advices of, the
Collection Account(s), and promptly upon the issuance or receipt thereof, copies of all notices and
other communications with respect to the Collection Account(s) issued or received by the Collection
Bank.

     6. This Agreement, and the covenants, agreements, authorizations and directions contained
herein, are irrevocable and cannot be changed or modified without the prior written consent of the
Agent.

     7. All checks, money orders and other evidences of payment received by the Collection Bank and
all proceeds thereof are at all times to be considered subject to the security interests granted by
the Collateral Agreements and this Agreement and are further subject to the requirement that, in
accordance with the terms hereof, such amounts shall be duly transferred to the Concentration
Account and the Collection Bank shall not have any rights or claims to, or interest in, such
property or any funds in the Collection Account(s), including any right to offset except as
provided in Section 4 hereof. The Collection Bank agrees that it will not obtain, nor seek to
obtain, any security interest or lien against the funds contained in the Collection Account(s)
except as provided in Section 4 hereof and the Pledgor agrees that it will not grant any security
interest in or lien on the funds contained in the Collection Account(s), except as provided in
Section 4 hereof. Except as otherwise required by law, any notice of legal process of any kind
relating to the Pledgor that the Collection Bank may receive shall have no effect whatsoever on
such property or the Collection Account(s) or on the Collection Bank’s

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responsibility under this Agreement unless and until the Collection Bank receives written
instructions from the Agent to the contrary; upon receipt of legal process relating to the Pledgor,
the Collection Bank promptly shall give notice thereof to the Agent.

     8. All notices, requests or other communications given to the Pledgor, the Agent or the
Collection Bank shall be given in writing (including facsimile transmission or similar writing) at
the address or telecopy number specified below:

	 	 	 	 	 	 	 
	 

	 	Agent:
	 	Bank of Montreal	 	 
	 

	 	 	 	Attn: Heather Turf	 	 
	 

	 	 	 	115 S. La Salle, 12W	 	 
	 

	 	 	 	Chicago, IL 60603	 	 
	 
	 	 	 	 	 	 
	 

	 	Collection Bank:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	Telecopy:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	Pledgor:
	 	American HomePatient, Inc.
	 

	 	 	 	5200 Maryland Way, Suite 400
	 

	 	 	 	Brentwood, TN 37027
	 

	 	 	 	Attention: Marilyn A. O’Hara

Any party may change its address or telecopy number for notices hereunder by notice to each other
party hereunder. Each notice, request or other communication shall be effective (a) if given by
mail, 48 hours after such communication is deposited in the mails with registered first class
postage prepaid, addressed as aforesaid, or (b) if given by any other means, when delivered at the
address specified in this Section 8.

     9. In case any provision in or obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality or enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.

     10. This Agreement may be executed in one or more counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be deemed an original,
but all such counterparts taken together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached physically to the same document. This
Agreement shall become effective as of the date first set forth above upon the execution of a
counterpart hereof by the Pledgor, the Collection Bank and the Agent and receipt by the Agent of
written or telephonic notification of such execution and authorization of delivery thereof.
Delivery of an executed counterpart to this Agreement by facsimile transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.

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     11. Deleted

     12. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE NASHVILLE,
DAVIDSON COUNTY, TENNESSEE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT THE PLEDGOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. The Pledgor
hereby agrees that service of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to the Pledgor at its address provided in
Section 8, such service being hereby acknowledged by the Pledgor to be sufficient for personal
jurisdiction in any action against the Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of the Agent or the Collection Bank to bring
proceedings against the Pledgor in the courts of any other jurisdiction.

     13. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in any court and 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. Each of the
parties to this Agreement acknowledges that this waiver is a material inducement to enter into a
business relationship, that each other party already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related future dealings. Each
of the parties to this Agreement further warrants and represents that it 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. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.

     14. EXCEPT TO THE EXTENT THAT THE LAWS OF THE STATE IN WHICH THE COLLECTION BANK IS LOCATED
GOVERN THE COLLECTION ACCOUNT(S),THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TENNESSEE, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The Borrower, the Agent, and the Collection Bank agree that for
purposes of Article 9, of ___’s version of the Uniform Commercial Code, [CITATION], the
jurisdiction of the Collection Bank is _____.

     15. In addition to the payment of expenses pursuant to Section 4, the Pledgor and the Agent
each agrees to indemnify and hold the officers, directors, employees and agents of the

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Collection Bank (collectively the “INDEMNITEES”) harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever (including, the reasonable fees and
disbursements of counsel for all of such Indemnitees collectively in connection with any
investigative, administrative or judicial proceeding, whether or not such Indemnitee shall be
designated a party thereto and for each of such Indemnitees whose counsel determines in good faith
that joint representation of such Indemnitee along with the other Indemnitees would or reasonably
could be expected to result in a conflict of interest under applicable laws or ethical principles)
that may be imposed on, incurred, directly or indirectly, by, or asserted against such Indemnitee,
as a consequence of the Collection Bank executing this Agreement and performing its obligations
hereunder (the “INDEMNIFIED LIABILITIES”); provided that neither the Agent nor the Pledgor shall
have any obligation to an Indemnitee hereunder with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of any such Indemnitee. Each Indemnitee, as soon as
reasonably practicable, shall notify the Pledgor and the Agent of the commencement of any legal
proceeding by a third Person under which any indemnified liability might arise. The Pledgor and the
Agent shall have the option to participate in the defense of all claims under which any indemnified
liability might arise, but neither the Pledgor nor the Agent shall have the option to compel any
Indemnitee to employ counsel not of the Indemnitee’s choosing.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, each of the parties hereto has caused this agreement to be executed and
delivered by its duly authorized officer on the date first set forth above.

	 	 	 	 	 
	PLEDGOR:	 	AMERICAN HOMEPATIENT, INC.
	 
	 

	 	By:  
	/s/ Robert L. Fringer
	 

	 	 	 
	 

	 	 	Title: 
	Vice President & Secretary
	 
	 	 	 	 
	AGENT:	 	BANK OF MONTREAL
	 	 	as the Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	Name: 	 
	 

	 	 	 	 
	 

	 	 	Title:	 
	 

	 	 	 	 
	 
	 	 	 	 
	COLLECTION BANK:
	 	 	 	 
	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	Name:	 
	 

	 	 	 	 
	 

	 	 	Title:	 
	 

	 	 	 	 

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EXHIBIT A

Lenders

See attached document.

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Allstate-AIMCO CDO Series 2000-A

Allstate Life Insurance Company

Bank of America, N.A.

Bank of Montreal

Barclays Bank PLC

Bear Stearns & Co., Inc.

Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company

Endeavor LLC

Everest Capital Master Fund L.P.

Fernwood Associates L.P.

General Electric Capital Corporation

California Public Employees’ Retirement System (Highland)

Highland Crusader Offshore Partners, L.P. (Highland)

ML CBO IV (Cayman)/Protective (Highland)

PAM Capital Funding, L.P. (Highland)

Pamco Cayman Ltd. (Highland)

HCM/Z Special Opportunities LLC a/ka/ HZ Special Opportunities, LLC (Highbridge Capital)

Long Lane Master Trust IV

Morgan Stanley Prime Income Trust

PPM America Special Investments Funds, L.P.

Fuqua Family Fund, L.P. (Tennenbaum)

Special Value Bond Fund II, LLC (Tennenbaum)

Van Kampen VKM Prime Rate Income Trust

Van Kampen Senior Income Trust

8Exhibit 10.13

Exhibit 10.13

INTERNATIONAL DISTRIBUTION AGREEMENT

Amended and Restated

THIS INTERNATIONAL DISTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of this
second day of June 2009, by and between:

MECAR S.A., a corporation organized and existing under the laws of Belgium, with its registered
office at Rue Grinfaux, 50, 7181 Petit Roeulx-lez-Nivelles, Belgium (“Supplier”), and a subsidiary
of The Allied Defense Group, Inc.; and

MECAR, LTD., (E.C.) a corporation organized and existing under the laws of the State of Bahrain,
with its registered office at P.O. Box 140 14th Floor, The Tower Sheraton Commercial
Complex, Manama, Bahrain (“Distributor”).

WHEREAS, Supplier is engaged in the design, development, manufacture, marketing, and sale of medium
and large calibre ammunition for land-based weapon systems and of other defence products; and

WHEREAS, Distributor is engaged in the marketing and sale of ammunition, systems, and other defense
products to the governments of certain countries; and

WHEREAS, Supplier and Distributor have previously entered into that certain International
Distribution Agreement, dated February 25, 2000, under which Distributor has been authorized to act
as an independent distributor of the Products (as hereinafter defined) subject to the terms and
conditions set forth therein; and

WHEREAS, Supplier and Distributor have previously amended the above-mentioned International
Distribution Agreement by letter dated June 11, 2008; and

WHEREAS, Supplier and Distributor now desire to further amend and restate in its entirety the
above-mentioned International Distribution Agreement as set forth in this Agreement;

NOW, THEREFORE, in consideration of the foregoing and the balance of the provisions of this
Agreement, Supplier and Distributor agree as follows:

ARTICLE I — DEFINITIONS

	1.1	 	Definitions. Except as otherwise specified or as the context may otherwise require,
the following terms have the meanings indicated below for all purposes of this Agreement and
the definitions of such terms are equally applicable in the singular and plural forms:

	 	(a)	 	Affiliate. The term “Affiliate” means any company or other entity
that is, directly or indirectly, owned or controlled by either party to this Agreement
or any company, other entity, or person that, directly or indirectly, owns or controls
either party to this Agreement.

	 	(b)	 	Products. The term “Products” means the products and services of
Supplier that are specified on the Product List set forth in APPENDIX A to this
Agreement.

	 	(c)	 	Territory. The term “Territory” means those countries specified in
APPENDIX B to this Agreement.

 

 

 

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	 	(d)	 	Customer. The term “Customer” means any government of a country, or any
political subdivision thereof, within the Territory, including any ministry,
department, agency or instrumentality thereof, or any person or entity purchasing the
Products for use by a Customer within the Territory.

	 	(e)	 	Trademarks. The term “Trademarks” means Supplier’s trademarks, trade
names, service marks or any similar name, or any combination thereof, or any other
trademarks, trade names, or service marks owned or claimed by Supplier or its
Affiliates.

ARTICLE II — APPOINTMENT

	2.1	 	Appointment. Supplier hereby appoints Distributor as its exclusive authorized
distributor in the Territory for the sale of Products to Customers, and Distributor hereby
accepts this appointment. Supplier will not appoint another authorized distributor in the
Territory for the sale of Products to Customers during the term of this Agreement, and
Distributor will not sell in the Territory any products competitive with the Products during
the term of this Agreement without Supplier’s prior written consent.

	2.2	 	Limitations. Distributor agrees that it shall not, directly or indirectly, market,
promote or sell the Products or offer to sell Products outside of the Territory without
Supplier’s prior written consent. Distributor agrees that it will, without compensation,
refer to Supplier all inquiries concerning the Products and received by Distributor (i) from
persons or entities located outside the Territory or (ii) in connection with the Foreign
Military Sales system of the United States Department of Defense or any successor thereof.

	2.3	 	Independent Contractor. Distributor shall conduct its business in the purchase and
resale of Products as a principal for its own account and at its own expense and risk. This
Agreement does not in any way create the relationship of principal and agent, employer and
employee, partners, joint venturers or any similar relationship between the parties.
Distributor neither has nor shall have the power, right or authority to bind Supplier or to
assume or create any obligation or responsibility, express or implied, on behalf of Supplier
or in Supplier’s name, and Distributor shall not hold itself out to others as having such
power, right or authority. Distributor has no authority to appoint an associate distributor
or sub-distributor of Products. Nothing in this Agreement is intended, nor shall it be
construed, as reserving to Supplier control over the business operations of Distributor,
except as set forth herein. Nothing herein contained, however, shall restrict Supplier in
providing instruction and guidance to Distributor in order to maintain Supplier’s standards of
representation and service for the Products offered to Customers under this Agreement and
protect the reputation of Supplier’s business and goodwill represented by the Trademarks.

ARTICLE III — SALES AND WARRANTY SERVICE

	3.1	 	Promotion of Sales. Distributor shall use its best efforts to sell and promote
the sale of Products within the Territory, and to provide prompt and competent service to
Customers in connection with such sales, both at the time of and subsequent to delivery of
Products to Customers. Distributor shall contract directly with Customers and Supplier
shall not be a party to any such Customer/Distributor contract. Distributor shall be free
to establish its own resale prices to the Customers without any limitations imposed by
Supplier.

	3.2	 	Facilities. Distributor will provide, staff, equip, and maintain facilities for the
sale of Products in the Territory, and will maintain a sales staff with an adequate number of
trained employees reasonably sufficient to meet the needs of the Territory.

 

 

 

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	3.3	 	Warranty Service. Distributor will, according to the recommendations of Supplier,
arrange for Supplier’s performance of warranty service where appropriate, both within the
Territory and/or at Supplier’s facility in Belgium. Save as provided by the Supplier’s
promotional material in relation to the Products the Distributor will not take any actions to
attempt to obligate Supplier to provide any level of warranty service beyond any warranty set
forth in the applicable purchase order.

ARTICLE IV — TERMS AND CONDITIONS OF SALE

	4.1	 	Shipment. Except as the parties may otherwise hereafter agree in writing,
Distributor shall purchase Products directly from Supplier and Supplier shall deliver such
Products directly to Customers from Supplier’s facility in Belgium.

	4.2	 	Terms of Sale. Pricing, payment, shipping, financing, and warranty terms shall be
agreed upon by the parties in writing prior to Distributor’s placing of any purchase order
with Supplier and shall be incorporated into such purchase order. All payments shall be made
in the currency stated in the purchase order. Warranties shall not apply to any Products that
have been altered after delivery to Distributor or Customers, as the case may be, without the
express written consent of Supplier.

	4.3	 	Order of Precedence. Any provision of any purchase order placed by Distributor that
is inconsistent with any term of this Agreement shall be null and void unless such
inconsistent provision is expressly accepted by Supplier in writing.

	4.4	 	Acceptance. No purchase order shall be binding on Supplier until accepted in writing
by a duly authorized employee of Supplier. Supplier may refuse to accept any purchase order
for any reason. If Supplier rejects a purchase order of Distributor or if Supplier fails to
accept a purchase order of Distributor within a reasonable period of time, Distributor may
procure the Products covered by such purchase order from an alternative source.

	4.5	 	Compliance with Laws. The parties shall comply with all applicable laws and
regulations in the conduct of its business. and pertaining to the subject matter of this
Agreement, including, without limitation, the export laws and regulations of Belgium. Should
either party be or become aware of any applicable laws or regulations that are inconsistent
with the provisions of this Agreement, such party shall promptly notify the other party in
writing of such inconsistency. Supplier may, at its option, either waive the performance of
such inconsistent provisions or terminate this Agreement. Distributor, at its sole expense,
shall be responsible for obtaining and maintaining all licenses, permits, and approvals
that are required by all appropriate governmental authorities with respect to Distributor’s
conduct of its business and its performance under this Agreement. Furthermore,
Distributor, at its sole expense, shall comply with any requirements of such governmental
authorities for the registration or recording of this Agreement and/or for any required
product registrations. Distributor shall furnish to Supplier, upon the latter’s request,
written evidence from such governmental authorities of all such licenses, permits,
clearances, authorizations, approvals, registrations, and recordings.

	4.6	 	Export Licenses. Supplier shall be responsible for obtaining any necessary export
licenses or other export approvals.

	4.7	 	Force Majeure. Unless otherwise provided in a purchase order, Supplier shall not be
liable for any failure to deliver hereunder, where such failure has been occasioned by fire,
embargo, strike, failure to secure materials from the usual source of supply, or any other
circumstance beyond Supplier’s control that prevents Supplier from making deliveries in the
normal course of its business. Supplier shall, however, promptly make the delivery, at the
agreed price, when any such cause or causes interfering with delivery shall have been removed.

 

 

 

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ARTICLE V — INDEMNIFICATION

	5.1	 	Indemnification of
Distributor. Supplier shall indemnify Distributor and its affiliates,
officers, directors, agents and employees against, and hold them harmless from, any and all
losses, liabilities, claims, damages, costs and expenses (including reasonable attorneys’
fees) in connection with (i) any breach of this Agreement by Supplier; (ii) any injury to
persons or property arising solely out of a defect in the design, manufacture or materials of
a Product; and (iii) any claims of trademark or patent infringement or other violations of
intellectual property rights made by third parties in connection with the Products as sold by
Supplier to Distributor.

	5.2	 	Indemnification of Supplier. Distributor shall indemnify Supplier and its
affiliates, officers, directors, agents and employees against, and hold them harmless from,
any and all losses, liabilities, claims, damages, costs and expenses (including reasonable
attorneys’ fees) in connection with (i) any breach of this Agreement by Distributor; and (ii)
the operation of Distributor’s business.

ARTICLE VI — TRADEMARKS

	6.1	 	Non-Exclusive License. Supplier hereby grants to Distributor a non-exclusive
license to use the trade name “MECAR” as part of its trade name during the term of this
Agreement solely in connection with the sale, distribution and marketing of the Products
within the Territory, and only in such form and manner as has been approved in advance by
Supplier in writing. Any such approval, once given, may be withdrawn by Supplier at any time.

	 	6.1.1	 	During the term of this Agreement, Supplier will not grant any license to
any other party for the use of the trade name “MECAR” within the Territory nor will
Supplier or any Affiliate compete, directly or indirectly, with the activities of
Distributor within the Territory that are conducted in accordance with this Agreement.

	6.2	 	Other Trademarks. This Agreement does not license Distributor to use any other of
the Trademarks. Distributor acknowledges and agrees that all Trademarks and the MECAR trade
name shall remain the exclusive property of Supplier. Distributor further agrees that it
shall not use any such Trademarks without the prior written consent of Supplier and, if such
consent is granted, only in the form and manner approved by Supplier in writing. Any such
consent, once granted, may be withdrawn by Supplier at any time.

	6.3	 	Benefit of Use. Distributor acknowledges that any and all use by Distributor of the
Trademarks, including, but not limited to, the use of “MECAR” as part of Distributor’s trade
name, will inure solely to the benefit of Supplier. Distributor shall not attempt to acquire
(by application to register trademarks or otherwise) or acquire any right to or under any
Trademark, patent, copyright, design, goodwill or other property of Supplier. If any such
rights should become vested in Distributor by operation of law or otherwise, Distributor will,
on Supplier’s request, immediately assign any and all such rights to Supplier.

	6.4	 	Labels and Markings. All Products shall bear the labels and marks and be contained
in the packaging prescribed by Supplier. Distributor shall not, without the prior written
consent of Supplier, remove or alter any patent numbers, trade names, trademarks, trademark
registration numbers, notices, serial numbers, labels, tags or other identifying marks,
symbols or legends affixed to any Products, containers or packages, or use any such items
other than in connection with the Products.

 

 

 

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	6.5	 	Termination of Use. Distributor agrees, upon the termination of this Agreement,
for any reason whatsoever, to discontinue immediately any and all use of the Trademarks and
the “MECAR” trade name or Distributor’s trade name incorporating the “MECAR” trade name or
close variation thereof.

ARTICLE VII — PROPRIETARY INFORMATION

	7.1	 	Obligation. Each party shall at all times safeguard and protect the proprietary
information of the other party from disclosure to third parties with the same degree of care,
which shall be no less than reasonable care, that such party uses to safeguard and protect its
own proprietary information from disclosure to third parties.

	7.2	 	Proprietary
Information of Supplier. Without limiting the foregoing, proprietary information
of Supplier shall be deemed to include all information and data relating to the design,
development, engineering, demonstration, manufacture, marketing, and sale of the Products,
including, without limitation, technical, financial, and commercial information and data
relating thereto, that is furnished by Supplier to Distributor for purposes of implementing
this Agreement and that is not in, or does not subsequently become a part of, the public
domain.

ARTICLE VIII — STANDARDS OF CONDUCT

	8.1	 	Warranties and Representations. Distributor represents, warrants and agrees that
now and hereafter, during the term of this Agreement:

	 	(i)	 	Distributor’s performance of business pursuant to this Agreement does and
will not violate the laws, rules, orders, policies or regulations of Bahrain, Belgium,
Switzerland, the United States, and any country located within the Territory;

	 	(ii)	 	Neither Distributor nor any of its Affiliates, including their officers,
employees, agents, nor anyone acting for or on their behalf, will
export or re-export
products or technology, or products manufactured from or containing Belgian or United
States origin goods or technologies, except as permitted under Belgian, United States,
and applicable local law;

	 	(iii)	 	Neither Distributor nor any of its Affiliates, including their officers,
employees and agents, nor anyone acting for or on their behalf, will make use of,
disclose, or divulge to any third person any information of a proprietary, secret, or
confidential nature relating to any business of Supplier or any of its Affiliates;

	 	(iv)	 	Neither Distributor nor any of its employees are officials of any government,
representatives of any political party, or candidates for public office; and

	 	(v)	 	Neither Distributor nor any of its Affiliates, including their officers,
employees and agents, nor anyone acting for or on their behalf, will, directly or
indirectly, make, give, offer, promise, or authorize the payment or gift of money or
anything of value to any government official or employee or to any political party or
official thereof, or to any candidate for political office, or to any other person,
while knowing or being aware of a high probability that all or a portion of such
payment or gift will be offered, given, or promised, directly or indirectly, to any
such official, employee, candidate, or political party for the purpose of influencing
any act or decision of such person or party in his or its official capacity, including
a decision to fail to perform official duties, or to induce such person or party to
use his or its influence with the government to affect or influence any act or
decision of such government to obtain, retain, or direct business to or for Supplier
or any of its Affiliates.

 

 

 

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	 	 	Certification. Distributor will from time-to-time, as requested by Supplier,
execute the Standards of Conduct Certification in the form attached as APPENDIX C to
this Agreement.

	8.2	 	Effect of Breach. Distributor further acknowledges and agrees that breach of any of
the warranties, representations, and agreements contained in this Article VIII will constitute
a material breach of this Agreement. In such an event, and in addition to any other remedies
to which Supplier may be entitled under law or this Agreement, (i) Supplier may,
notwithstanding any other provision of this Agreement and at its option and in its sole
discretion, terminate this Agreement immediately by written notice thereof to Distributor and
(ii) Distributor shall indemnify and save Supplier and its Affiliates, and their respective
officers, directors, employees, and agents, harmless from and against any liability, loss,
damages, expenses, or claim of any kind based upon or arising out of such breach, including
but not limited to, legal fees, court costs, and all other expenses incurred in connection
with legal representation of Supplier’s choosing.

ARTICLE IX — REPORTS

	9.1	 	Claims. Distributor shall promptly notify Supplier in writing of each claim of
injury or damage that comes to the attention of Distributor regarding any of the Products and
of any customer complaints regarding any Products. In addition, Distributor shall promptly
notify Supplier in writing of any change in laws or regulations affecting the transactions or
business contemplated in this Agreement.

ARTICLE X — TERM AND TERMINATION

	10.1	 	Term. The term of this Agreement shall commence on the date of this Agreement
and continue until December 31, 2011, and shall thereafter be automatically renewed for
successive three-year terms, unless sooner terminated as hereinafter provided.

	10.2	 	Unilateral Termination. Either party may terminate this Agreement as at December 31
2011 and at any time thereafter by giving notice of intent to terminate at least two hundred
and forty (240) days prior to the end of such term.

	10.3	 	Events of Default. Supplier, at its sole option, may terminate this Agreement
immediately without prejudice to any other remedy to which it may be entitled at law, in
equity, or otherwise under this Agreement, upon the occurrence of any of the following events
of default by providing written notice to Distributor:

	 	(a)	 	Any attempted transfer or assignment of this Agreement or any right or
obligation hereunder by Distributor, or any sale, transfer, relinquishment, voluntary
or involuntary, by operation of law or otherwise, of any interest in the direct or
indirect ownership, control or active management of Distributor without Supplier’s
prior written approval; or

 

 

 

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	 	(b)	 	Any formal legal dispute between or among principals, partners, managers, officers
or stockholders of Distributor which, in the opinion of Supplier, may adversely affect
the ownership, operation, management, business or interest of Distributor or Supplier;
or

	 	(c)	 	The conviction of Distributor or any principal officer of Distributor of any
crimes that, in the opinion of Supplier, may adversely affect the ownership,
operation, management, business or interest of Distributor or Supplier; or

	 	(d)	 	The failure of Distributor to pay when due any indebtedness owing by
Distributor to Supplier and such default has continued uncured for thirty (30)
days after receipt by the Distributor of written demand for payment from
Supplier, unless expressly waived in writing by Supplier; or

	 	(e)	 	Distributor becomes insolvent, is declared bankrupt, files a petition for
reorganization or bankruptcy, makes an assignment or composition for the benefit of
creditors, or has a receiver appointed for it; or

	 	(f)	 	Distributor uses one or more of the Trademarks, the “MECAR” trade name, or
Distributor’s trade name incorporating the “MECAR” trade name or close variation
thereof, except as permitted by this Agreement.

	10.4	 	Termination upon Change of Ownership or Control of Supplier.

	 	10.4.1	 	Definitions. For purposes of this section, the following definitions apply:

	 	(a)	 	“Third Party” means any person or entity other than The
Allied Defense Group, Inc., or its Affiliates.

	 
	 	(b)	 	“Change in Ownership or Control” means (i) the
acquisition by a Third Party of either all or substantially all of the
business and assets of Supplier or more than fifty percent (50%) of the
voting shares of Supplier or (ii) the occurrence of any other event or
circumstance that places actual control of the business and operations of
Supplier in the hands of a Third Party.

	 	10.4.2	 	Notice. Supplier shall provide Distributor with at least forty-five (45)
calendar days written notice in advance of any anticipated Change in Ownership or
Control; provided that, if Supplier’s giving of such notice would violate an
obligation of confidentiality imposed upon Supplier by law or contract, Supplier shall
give such notice to Distributor within five (5) business days of the occurrence of the
Change in Ownership or Control.

	 
	 	10.4.3	 	Unilateral Termination. Within thirty (30) calendar days of Distributor’s
receipt of Supplier’s notice of a Change in Ownership or Control, Distributor may, at
its option and by written notice to Supplier, terminate this Agreement.

	 
	 	10.4.4	 	Irrevocable Waiver. Distributor’s failure to exercise its right of
termination within the thirty (30) calendar day period provided for hereinabove shall,
notwithstanding any other provision of this Agreement, be deemed an irrevocable waiver
of that right.

	 
	 	10.4.5	 	Existing Purchase Orders. In the event that Distributor exercises its right
of termination under this section, purchase orders issued by Distributor and accepted
by Supplier prior to termination shall remain valid and enforceable and Supplier and
Distributor shall continue to be bound thereby and by the terms of this Agreement with
respect to such purchase orders.

 

 

 

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	10.5	 	Material Breach. Either party may terminate this Agreement upon written notice
to the other in the event that such other party has breached any of its material obligations
under this Agreement, and such default has continued uncured for thirty (30) days after
receipt by such other party of written notice of such default. Without limiting the foregoing
or the parties’ rights and obligations under Section 4.7 hereof (Force Majeure), in the event
that Supplier fails to deliver any Products in accordance with a mutually agreed upon delivery
schedule and fails to cure its default within thirty (30) days of its receipt of Distributor’s
written notice of default, Distributor may, in addition to or in lieu of any other rights and
remedies that Distributor may have at law or under this Agreement, procure such Products from
an alternative source.

	10.6	 	 Obligations upon Termination. From and after the date of termination:

	 	(a)	 	Supplier will have no obligation to make further sales to Distributor except
with respect to existing purchase orders as further described in Section 10.4.5; and

	 
	 	(b)	 	Distributor shall immediately pay to Supplier all amounts due in connection
with this Agreement except with respect to existing purchase orders as further
described in Section 10.4.5 (such purchase orders shall be paid when due under the
terms of such purchase orders); and

	 
	 	(c)	 	Distributor shall immediately return to Supplier all copies of any documents
or other materials containing any proprietary information of Supplier as described in
Article VII, Proprietary Information, of this Agreement.

	10.7	 	Waiver of Certain Claims. Distributor hereby waives any and all claims for
compensation or damages of any kind whatsoever, including any claims based in whole or in part
upon the contention that Distributor is entitled to receive any compensation for its expense
and/or efforts in connection with this Agreement or any establishment or development of
markets for the Products in the Territory hereunder.

ARTICLE XI — MISCELLANEOUS

	11.1	 	Assignment. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding the
foregoing, Distributor may not assign or otherwise transfer its rights hereunder or any
interest therein without the prior written consent of Supplier.

	11.2	 	Governing Law. This Agreement shall be deemed to have been executed and entered into
at Geneva, Switzerland, and shall be governed by and construed in accordance with the
substantive laws of the Canton of Geneva, Switzerland, without regard to its conflict-of-law
provisions. The parties expressly exclude the application of the United Nations Convention on
Contracts for the International Sale of Goods to this Agreement or any sale or purchase made
pursuant hereto.

	11.3	 	Arbitration. Any and all disputes arising out of or in connection with this
Agreement shall be finally settled in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce then in effect by an arbitration tribunal
consisting of three arbitrators and judgment upon the award rendered may entered in any court
having jurisdiction thereof. The place of arbitration shall be Geneva, Switzerland. The
language of arbitration shall be English. Nationality shall not be grounds for the
disqualification of an arbitrator. In the event of a dispute, an aggrieved party may seek
interim judicial relief to prevent irreparable harm and such action shall not be considered a
waiver of this arbitration clause. In any proceeding initiated by either party, the
prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees
in addition to any other relief that may be awarded.

 

 

 

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	11.4	 	English Language. The official language of this Agreement is expressly
stipulated to be the English language, and any notices, reports or other communications that
are required to be provided hereunder shall be in English.

	11.5	 	Consequential Damages. In no event shall Supplier be liable for any indirect,
special, incidental or consequential damages resulting from Supplier’s performance or failure
to perform under this Agreement, or for the furnishing, performance or use of any goods or
services sold pursuant hereto, whether due to a breach of contract, breach of warranty, the
negligence of Supplier, statutory liability, or otherwise and whether or not Supplier has been
advised of the possibility of damages.

	11.6	 	Notices. All notices or other documents under this Agreement shall be in writing and
delivered personally or mailed by certified mail, postage prepaid, addressed to the party at
the address set forth at the beginning of this Agreement or at such other address as a party
may designate by giving notice as provided herein.

	11.7	 	Survival. Paragraphs 5.1, 5.2, 6.3, 6.5, 9.1, 10.4.5, 10.6, and 10.7, and all of
Articles VII, VIII, and XI of this Agreement shall survive and remain in full force and effect
even after the termination of this Agreement for any reason whatsoever.

	11.8	 	Headings. Article and paragraph headings are used for convenience only, and shall
not be considered to define, limit or affect the interpretation or construction of this
Agreement.

	11.9	 	Waiver. No failure to enforce any provision of this Agreement shall be a continuing
waiver of such provision or a waiver of any subsequent breach thereof.

	11.10	 	Severability. If any provision (or portion thereof) of this Agreement is held
invalid or unenforceable, the remainder of this Agreement will be read as if the invalid or
unenforceable provision (or portion thereof) were omitted; provided that, the operation of
this sentence shall not materially frustrate the intent and purposes of the parties as
evidenced in this Agreement.

	11.11	 	Entire Agreement. This Agreement constitutes the entire understanding of the
parties with respect to its subject matter, and supersedes any prior or contemporaneous
agreements and understandings, written or oral, relating to the subject matter hereof, and any
such prior or contemporaneous written or oral agreements and understandings are expressly
cancelled.

	11.12	 	Amendment. This Agreement may not be altered, modified, terminated or discharged
except by a writing signed by the party against whom such alteration, modification,
termination or discharge is sought. Without limiting the generality of the foregoing, no
modification of or addition to this Agreement shall be effected by Supplier’s shipment of
Products following receipt of a purchase order or any other document from Distributor
containing terms and conditions conflicting with or in addition to the terms and conditions
contained in this Agreement.

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
authorized representatives in duplicate originals, one such original being delivered to each of the
parties.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	MECAR, LTD.	 	 	 	 	 	MECAR, S.A.	 	 
	 
	By:

	 	 	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 

 

 

 

International Distribution Agreement

between MECAR, S.A., and MECAR, Ltd.

APPENDIX A

PRODUCT LIST

1. Except as provided in Paragraph 2 of this APPENDIX A, the Products shall include (i) those
products and services listed in Supplier’s Ammunition Data Sheet Book 2009, a copy of which is
attached as EXHIBIT 1, and (ii) those products and services, whether manufactured or provided by
Supplier or by a third party, that Supplier has sold to Distributor within the preceding ten (10)
calendar years.

2. Notwithstanding Paragraph 1 of this APPENDIX A, products and services, whether manufactured
or provided by Supplier or by a third party, when offered for sale or sold by Supplier to Customers
within the Territory through the Foreign Military Sales system of the United States Department of
Defense, are excluded from the scope of this Agreement.

3. This APPENDIX A may be modified only in accordance with Paragraph 11.12 of this Agreement.

 

 

 

International Distribution Agreement

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APPENDIX B

TERRITORY

	1.	 	The following shall comprise
the Territory:

The Kingdom of Saudi Arabia.

	 
	2.	 	This APPENDIX B may be modified only in accordance with Paragraph 11.12 of
this Agreement.

 

 

 

International Distribution Agreement

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APPENDIX C

STANDARDS OF CONDUCT CERTIFICATION

	1	 	In the connection with performance under the International Distribution Agreement, amended
and restated and dated
         , 2009, between MECAR, S.A. (“Supplier”), a subsidiary of The Allied
Defense Group, Inc., and MECAR, LTD. (“Distributor”), and the business resulting there from,
Distributor hereby certifies that:

	 	(a)	 	Distributor is not owned by a government or government official or government
employee or by a political party or party official or candidate for political office
and does not retain or employ any such official, employee or candidate; and

	 	(b)	 	Distributor has complied and will comply with all applicable laws; and

	 	(c)	 	In accordance with the policy of Supplier and its Affiliates, neither
Distributor nor any of its Affiliates, including their officers, employees, agents, and
anyone acting for or on their behalf, will, directly or indirectly, make, give, offer,
promise, or authorize the payment or gift of money or anything of value to any
government official or employee or to any political party or official thereof, or to
any candidate for political office, or to any other person, while knowing or being
aware of a high probability that all or a portion of such payment or gift will be
offered, given, or promised, directly or indirectly, to any such official, employee,
candidate, or political party for the purpose of influencing any act or decision of
such person or party in his or its official capacity, including a decision to fail to
perform official duties, or to induce such person or party to use his or its influence
with the government to affect or influence any act or decision of such government to
obtain, retain, or direct business to or for Supplier or any of its Affiliates; and

	 	(d)	 	Distributor will immediately notify Supplier in writing if future developments
cause this Certification and the information reported herein to be no longer accurate
or complete.

	2	 	By affixing his signature to this Certification, the undersigned certifies that he is
authorized to sign this Certification on behalf of Distributor.

 

Signature

	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	Name and Title

	 	 	 	Date

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