EXHIBIT 10.1
FIRST AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is made
and entered into as of December 15, 1999 by and between Printrak
International, Inc., a Delaware corporation ("Borrower") and UNION BANK OF
CALIFORNIA, N.A., ("Bank"). This Agreement amends and restates in its
entirety that certain amended and restated loan agreement dated July 31, 1998
between Bank and Borrower.
SECTION 1. THE LOAN
1.1.1 THE REVOLVING LOAN. Bank will loan to
Borrower an amount not to exceed Twenty Five Million Dollars ($25,000,000)
outstanding in the aggregate at any one time (the "Revolving Loan"). Borrower
may borrow, repay and reborrow all or part of the Revolving Loan in
accordance with the terms of the Revolving Note. All borrowings of the
Revolving Loan must be made before January 2, 2001, at which time all unpaid
principal and interest of the Revolving Loan shall be due and payable. The
Revolving Loan shall be evidenced by a promissory note (the "Revolving Note")
on the standard form used by Bank for commercial loans. Bank shall enter each
amount borrowed and repaid in Bank's records and such entries shall be deemed
to be the amount of the Revolving Loan outstanding. Omission of Bank to make
any such entries shall not discharge Borrower of its obligation to repay in
full with interest all amounts borrowed.
1.1.2 THE STANDBY L/C SUBLIMIT. As a sublimit to
the Revolving Loan, Bank shall issue, for the account of Borrower, one or
more irrevocable, standby letters of credit (individually, an "L/C" and
collectively, the "L/Cs"). All such standby L/Cs shall be drawn on such terms
and conditions as are acceptable to Bank. The aggregate amount available to
be drawn under all outstanding L/Cs and the aggregate amount of unpaid
reimbursement obligations under drawn L/Cs shall not exceed Ten Million
Dollars ($10,000,000) and shall reduce, dollar for dollar, the maximum amount
available under the Revolving Loan. No standby L/C shall have an expiry date
more than twelve months from its date of issuance and each L/C shall be
governed by the terms of (and Borrower agrees to execute) Bank's standard
form for standby L/C applications and reimbursement agreements. No L/C shall
expire after April 2, 2001.
1.2 TERMINOLOGY.
As used herein the word "Loan" shall mean,
collectively, all the credit facilities described above.
As used herein the word "Note" shall mean,
collectively, all the promissory notes described above.
As used herein, the words "Loan Documents"
shall mean all documents executed in connection with this Agreement.
1.3 PURPOSE OF LOAN. The proceeds of the Revolving Loan
shall be used for general working capital purposes and to finance
acquisitions, subject to the criteria set forth below: (i) Borrower shall
provide satisfactory evidence to Bank that, after giving affect to any
acquisition,
(i) Borrower is in compliance, on a pro forma basis,
with all covenants set forth in this Agreement.
(ii) After giving affect to any acquisition, Borrower
shall maintain availability on the Revolving Loan of at least
Ten Million Dollars ($10,000,000).
(iii) In the event of any acquisition wherein the
aggregate consideration paid is greater than $5 million,
Borrower shall provide satisfactory evidence to Bank that the
earnings before interest, taxes, depreciation and amortization
(EBITDA) of the entity to be acquired is greater than zero.
(iv) Any amount not funded through the Revolving Loan
shall be funded through the issuance of Printrak stock or
issuance of subordinated seller or third party debt on terms
acceptable to Bank.
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1.4 INTEREST. The unpaid principal balance of the Revolving
Loan shall bear interest at the rate as more specifically provided in the
Revolving Note. The Loan may be prepaid in full or in part only in accordance
with the terms of the Revolving Note and any such prepayment shall be subject
to the prepayment fee provided for therein.
1.5 UNUSED COMMITMENT FEE. On the last calendar day of the
third month following the execution of this Agreement and on the last
calendar day of each three-month period thereafter until January 2, 2001, or
the earlier termination of the Loan, Borrower shall pay to Bank a fee of one
quarter of one percent (.25%) per year on the average unused portion of the
Loan for the preceding quarter computed on the basis of actual days elapsed
of a year of 360 days.
1.6 CONTROLLING DOCUMENT. In the event of any inconsistency
between the terms of this Agreement and any Note or any of the other Loan
Documents, the terms of such Note or other Loan Documents will prevail over
the terms of this Agreement.
SECTION 2. CONDITIONS PRECEDENT
Bank shall not be obligated to disburse all or any portion of the
proceeds of the Loan unless at or prior to the time for the making of such
disbursement, the following conditions have been fulfilled to Bank's
satisfaction:
2.1 COMPLIANCE. Borrower shall have performed and complied
with all terms and conditions required by this Agreement to be performed or
complied with by it prior to or at the date of the making of such
disbursement and shall have executed and delivered to Bank the Note and other
documents deemed necessary by Bank.
2.2 BORROWING RESOLUTION. Borrower shall have provided Bank
with certified copies of resolutions duly adopted by the Board of Directors
of Borrower, authorizing this Agreement and the Loan Documents. Such
resolutions shall also designate the persons who are authorized to act on
Borrower's behalf in connection with this Agreement and to do the things
required of Borrower pursuant to this Agreement.
2.3 CONTINUING COMPLIANCE. At the time any disbursement is
to be made, there shall not exist any event, condition or act which
constitutes an event of default under Section 6 hereof or any event,
condition or act which with notice, lapse of time or both would constitute
such event of default; nor shall there be any such event, condition, or act
immediately after the disbursement were it to be made.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
3.1 BUSINESS ACTIVITY. The principal business of Borrower
is the development, marketing, sales of public safety and civil
identification systems and related products and services.
3.2 AFFILIATES AND SUBSIDIARIES. Borrower's affiliates and
subsidiaries (those entities in which Borrower has either a controlling
interest or at least a 25% ownership interest) and their addresses, and the
names of Borrower's principal shareholders, are as provided on a schedule
delivered to Bank on or before the date of this Agreement.
3.3 AUTHORITY TO BORROW. The execution, delivery and
performance of this Agreement, the Note and all other agreements and
instruments required by Bank in connection with the Loan are not in
contravention of any of the terms of any indenture, agreement or undertaking
to which Borrower is a party or by which it or any of its property is bound
or affected.
3.4 FINANCIAL STATEMENTS. The financial statements of
Borrower,including both a balance sheet at September 30, 1999, together with
supporting schedules, and an income statement for the nine (9) months ended
September 30, 1999, have heretofore been furnished to Bank, and are true and
complete and fairly represent the financial condition of Borrower during the
period covered thereby. Since September 30, 1999, there has been no material
adverse change in the financial condition or operations of Borrower.
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3.5 TITLE. Except for assets which may have been disposed
of in the ordinary course of business, Borrower has good and marketable title
to all of the property reflected in its financial statements delivered to
Bank and to all property acquired by Borrower since the date of said
financial statements, free and clear of all liens, encumbrances, security
interests and adverse claims except those specifically referred to in said
financial statements.
3.6 LITIGATION. There is no litigation or proceeding
pending or threatened against Borrower or any of its property which is
reasonably likely to affect the financial condition, property or business of
Borrower in a materially adverse manner or result in liability in excess of
Borrower's insurance coverage.
3.7 DEFAULT. Borrower is not now in default in the payment
of any of its material obligations, and there exists no event, condition or
act which constitutes an event of default under Section 6 hereof and no
condition, event or act which with notice or lapse of time, or both, would
constitute an event of default.
3.8 ORGANIZATION. Borrower is duly organized and existing
under the laws of the state of its organization, and has the power and
authority to carry on the business in which it is engaged and/or proposes to
engage.
3.9 POWER. Borrower has the power and authority to enter
into this Agreement and to execute and deliver the Note and all of the other
Loan Documents.
3.10 AUTHORIZATION. This Agreement and all things required
by this Agreement have been duly authorized by all requisite action of
Borrower.
3.11 QUALIFICATION. Borrower is duly qualified and in good
standing in any jurisdiction where such qualification is required.
3.12 COMPLIANCE WITH LAWS. Borrower is not in violation
with respect to any applicable laws, rules, ordinances or regulations which
materially affect the operations or financial condition of Borrower.
3.13 ERISA. Any defined benefit pension plans as defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), of
Borrower meet, as of the date hereof, the minimum funding standards of
Section 302 of ERISA, and no Reportable Event or Prohibited Transaction as
defined in ERISA has occurred with respect to any such plan.
3.14 REGULATION U. No action has been taken or is currently
planned by Borrower, or any agent acting on its behalf, which would cause
this Agreement or the Note to violate Regulation U or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the
Securities and Exchange Act of 1934, in each case as in effect now or as the
same may hereafter be in effect. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock as
one of its important activities and none of the proceeds of the Loan will be
used directly or indirectly for such purpose.
3.15 CONTINUING REPRESENTATIONS. These representations
shall be considered to have been made again at and as of the date of each
disbursement of the Loan and shall be true and correct as of such date or
dates.
SECTION 4. AFFIRMATIVE COVENANTS
Until the Note and all sums payable pursuant to this Agreement or
any other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:
4.1 USE OF PROCEEDS. Borrower will use the proceeds of the
Loan only as provided in subsection 1.3 above.
4.2 PAYMENT OF OBLIGATIONS. Borrower will pay and discharge
promptly all taxes, assessments and other governmental charges and claims
levied or imposed upon it or its property, or any part thereof, provided,
however, that Borrower shall have the right in good faith to contest any such
taxes, assessments, charges or claims and, pending the outcome of such
contest, to delay or refuse payment thereof provided that adequately funded
reserves are established by it to pay and discharge any such taxes,
assessments, charges and claims.
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4.3 MAINTENANCE OF EXISTENCE. Borrower will maintain and
preserve its existence and assets and all rights, franchises, licenses and
other authority necessary for the conduct of its business and will maintain
and preserve its property, equipment and facilities in good order, condition
and repair. Bank may, at reasonable times, visit and inspect any of the
properties of Borrower.
4.4 RECORDS. Borrower will keep and maintain full and
accurate accounts and records of its operations according to generally
accepted accounting principles and will permit Bank to have access thereto,
to make examination and photocopies thereof, and to make audits during
regular business hours. Costs for such audits shall be paid by Borrower.
4.5 INFORMATION FURNISHED. Borrower will furnish to
Bank:
(a) Within forty five (45) days after the close of
each fiscal quarter, except for the final quarter of each fiscal year, its
unaudited balance sheet as of the close of such fiscal quarter, its unaudited
income and expense statement with supportive schedules and statement of
retained earnings for that fiscal quarter, prepared in accordance with
generally accepted accounting principles;
(b) Within ninety (90) days after the close of
each fiscal year, a copy of its statement of financial condition including at
least its balance sheet as of the close of such fiscal year, its income and
expense statement and retained earnings statement for such fiscal year,
examined and prepared on audited basis by independent certified public
accountants selected by Borrower and reasonably satisfactory to Bank, in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the previous year;
(c) Within forty five (45) days after the close of
each fiscal quarter, a summary report representing the aggregate dollar value
of orders with estimated shipment dates occurring within a twelve (12) month
period following the immediately preceding fiscal quarter.
(d) Such other financial statements and
information, including due diligence information and materials related to any
acquisition, as Bank may reasonably request from time to time;
(e) In connection with each financial statement
provided hereunder, a certification of compliance and a statement executed by
an authorized corporate officer of Borrower, certifying that no default has
occurred and no event exists which with notice or the lapse of time, or both,
would result in a default hereunder;
(f) Prompt written notice to Bank of all events of
default under any of the terms or provisions of this Agreement or of any
other agreement, contract, document or instrument entered, or to be entered
into with Bank; and of any litigation which, if decided adversely to
Borrower, would have a material adverse effect on Borrower's financial
condition; and of any other matter which has resulted in, or is likely to
result in, a material adverse change in its financial condition or operations;
4.6 QUICK RATIO. Borrower will all times maintain a ratio
of cash, accounts receivable and marketable securities to current
liabilities, less deferred revenues classified as current liabilities on
Borrower's balance sheet as of said period,of not less than 1.5:1.0, as such
terms are defined by generally accepted accounting principles.
4.7 TANGIBLE NET WORTH. Until March 31, 2000, Borrower will
at all times maintain Tangible Net Worth of not less than Thirty Million
Dollars ($30,000,000). Thereafter, Borrower will at all times maintain a
minimum Tangible Net Worth that increases from said amount as of the end of
Borrower's fiscal year by 100% percent (100%) of Borrower's net profit after
taxes. "Tangible Net Worth" shall mean net worth increased by indebtedness of
Borrower subordinated to Bank and decreased by patents, licenses, trademarks,
trade names, goodwill and other similar intangible assets, organizational
expenses, and monies due from affiliates (including officers, shareholders
and directors).
4.8 RATIO OF FUNDED DEBT TO EBITDA. Borrower will at all
times maintain a ratio of Funded Debt to EBITDA of not greater than 1.75:1.0.
"Funded Debt" shall mean any indebtedness of a contractual nature or
otherwise, including any loans, capital leases and any amounts outstanding on
the Revolving Loan, excluding accounts payable or accrued liabilities in the
ordinary course of business.
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4.9 EBITDA. Borrower will at all times maintain EBITDA of
not less than Nine Million Five Hundred Thousand Dollars. For the purposes of
Sections 4.8 and 4.9, "EBITDA" shall mean the sum of Borrowers earnings
before interest, taxes, depreciation and amortization for the four fiscal
quarters immediately preceding the date of such calculation.
4.10 INSURANCE. Borrower will keep all of its insurable
property, real, personal or mixed, insured by companies and in amounts
approved by Bank against fire and such other risks, and in such amounts, as
is customarily obtained by companies conducting similar business with respect
to like properties. Borrower will furnish to Bank statements of its insurance
coverage, will promptly furnish other or additional insurance deemed
necessary by and upon request of Bank to the extent that such insurance may
be available and hereby assigns to Bank, as security for Borrower's
obligations to Bank, the proceeds of any such insurance. Prior to any
disbursement of the Loan, Bank will be named loss payee on all policies
insuring collateral and such policies shall require at least ten (10) days'
written notice to Bank before any policy may be altered or cancelled.
Borrower will maintain adequate worker's compensation insurance and adequate
insurance against liability for damage to persons or property.
4.11 ADDITIONAL REQUIREMENTS. Borrower will promptly, upon
demand by Bank, take such further action and execute all such additional
documents and instruments in connection with this Agreement as Bank in its
reasonable discretion deems necessary, and promptly supply Bank with such
other information concerning its affairs as Bank may request from time to
time.
4.12 LITIGATION AND ATTORNEYS' FEES. Borrower will pay
promptly to Bank upon demand, reasonable attorneys' fees (including but not
limited to the reasonable estimate of the allocated costs and expenses of
in-house legal counsel and legal staff) and all costs and other expenses paid
or incurred by Bank in collecting, modifying or compromising the Loan or in
enforcing or exercising its rights or remedies created by, connected with or
provided for in this Agreement or any of the Loan Documents, whether or not
an arbitration, judicial action or other proceeding is commenced. If such
proceeding is commenced, only the prevailing party shall be entitled to
attorneys' fees and court costs.
4.13 BANK EXPENSES. Borrower will pay or reimburse Bank for
all costs, expenses and fees incurred by Bank in preparing and documenting
this Agreement and the Loan, and all amendments and modifications thereof,
including but not limited to all filing and recording fees, costs of
appraisals, insurance and attorneys' fees, including the reasonable estimate
of the allocated costs and expenses of in-house legal counsel and legal staff.
4.14 REPORTS UNDER PENSION PLANS. Borrower will furnish to
Bank, as soon as possible and in any event within 15 days after Borrower
knows or has reason to know that any event or condition with respect to any
defined benefit pension plans of Borrower described in Section 3 above has
occurred, a statement of an authorized officer of Borrower describing such
event or condition and the action, if any, which Borrower proposes to take
with respect thereto.
SECTION 5. NEGATIVE COVENANTS
Until the Note and all other sums payable pursuant to this Agreement
or any other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:
5.1 ENCUMBRANCES AND LIENS. Borrower will not create,
assume or suffer to exist any mortgage, pledge, security interest,
encumbrance, or lien (other than for taxes not delinquent and for taxes and
other items being contested in good faith) on property of any kind, whether
real, personal or mixed, now owned or hereafter acquired, or upon the income
or profits thereof, except to Bank and except for minor encumbrances and
easements on real property which do not affect its market value, and except
for existing liens on Borrower's personal property and future purchase money
security interests encumbering only the personal property purchased.
5.2 BORROWINGS. Borrower will not sell, discount or
otherwise transfer any account receivable or any note, draft or other
evidence of indebtedness, except to Bank or except to a financial institution
at face value for deposit or collection purposes only and without any fee
other than fees normally charged by the financial institution for deposit or
collection services. Borrower will not borrow any money, become contingently
liable to borrow money, nor enter any agreement to directly or indirectly
obtain borrowed money, except pursuant to agreements made with Bank.
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5.3 SALE OF ASSETS, LIQUIDATION OR MERGER. Borrower will
neither liquidate nor dissolve nor enter into any consolidation, merger,
partnership or other combination, nor convey, nor sell, nor lease all or the
greater part of its assets or business, nor purchase or lease all or the
greater part of the assets or business of another; provided, however,
Borrower may acquire, merge or consolidate with another corporation, subject
to the terms below and in Section 1.4 of this agreement, so long as Borrower
is the surviving corporation and the aggregate consideration paid for such
acquisition does not exceed Ten Million Dollars ($10,000,000).
5.4 LOANS, ADVANCES AND GUARANTIES. Borrower will not,
except in the ordinary course of business as currently conducted, make any
loans or advances, become a guarantor or surety, pledge its credit or
properties in any manner or extend credit.
5.5 INVESTMENTS. Borrower will not purchase the debt or
equity of another person or entity except for savings accounts and
certificates of deposit of Bank, direct U.S. Government obligations and
commercial paper issued by corporations with the top ratings of ▇▇▇▇▇'▇ or
Standard & Poor's, provided all such permitted investments shall mature
within one year of purchase.
5.6 PAYMENT OF DIVIDENDS. Borrower will not declare or pay
any dividends, other than a dividend payable in its own common stock, or
authorize or make any other distribution with respect to any of its stock now
or hereafter outstanding.
5.7 RETIREMENT OF STOCK. Borrower will not acquire or
retire any share of its capital stock for value, except to the extent that
such purchases do not exceed Two Million Dollars ($2,000,000) in the
aggregate.
5.8 PARENT AND SUBSIDIARY PROPERTY. Borrower will not
transfer any property to its parent or any affiliate of its parent, except
for value received in the normal course of business as business would be
conducted with an unrelated or unaffiliated entity. In no event shall
management fees or fees for services be paid by Borrower to any such direct
or indirect affiliate without Bank's prior written approval.
SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default")
shall terminate any obligation on the part of Bank to make or continue the
Loan and automatically, unless otherwise provided under the Note, shall make
all sums of interest and principal and any other amounts owing under the Loan
immediately due and payable, without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or any other
notices or demands:
6.1 Borrower shall default in the due and punctual payment
of the principal of or the interest on the Note or any of the other Loan
Documents; or
6.2 Any default shall occur under the Note; or
6.3 Borrower shall default in the due performance or
observance of any covenant or condition of the Loan Documents; or
6.4 Any guaranty or subordination agreement required
hereunder is breached or becomes ineffective, or any Guarantor or
subordinating creditor dies, disavows or attempts to revoke or terminate such
guaranty or subordination agreement; or
6.5 There is a change in ownership or control of ten
percent (10%) or more of the issued and outstanding stock of Borrower or any
Guarantor, or (if Borrower is a partnership) there is a change in ownership
or control of any general partner's interest.
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 ADDITIONAL REMEDIES. The rights, powers and remedies
given to Bank hereunder shall be cumulative and not alternative and shall be
in addition to all rights, powers and remedies given to Bank by law against
Borrower or any other person, including but not limited to Bank's rights of
setoff or banker's lien.
7.2 NONWAIVER. Any forbearance or failure or delay by Bank
in exercising any right, power or remedy hereunder shall not be deemed a
waiver thereof and any single or partial exercise of any right, power or
remedy shall not preclude the further exercise thereof. No waiver shall be
effective unless it is in writing and signed by an officer of Bank.
7.3 INUREMENT. The benefits of this Agreement shall inure
to the successors and assigns of Bank and the permitted successors and
assignees of Borrower, and any assignment by Borrower without Bank's consent
shall be null and void.
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7.4 APPLICABLE LAW. This Agreement and all other agreements
and instruments required by Bank in connection therewith shall be governed by
and construed according to the laws of the State of California.
7.5 SEVERABILITY. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions
nevertheless shall be effective. In the event of any conflict between the
provisions of this Agreement and the provisions of any note or reimbursement
agreement evidencing any indebtedness hereunder, the provisions of such note
or reimbursement agreement shall prevail.
7.6 INTEGRATION CLAUSE. Except for documents and
instruments specifically referenced herein, this Agreement constitutes the
entire agreement between Bank and Borrower regarding the Loan and all prior
communications verbal or written between Borrower and Bank shall be of no
further effect or evidentiary value.
7.7 CONSTRUCTION. The section and subsection headings
herein are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
7.8 AMENDMENTS. This Agreement may be amended only in
writing signed by all parties hereto.
7.9 COUNTERPARTS. Borrower and Bank may execute one or more
counterparts to this Agreement, each of which shall be deemed an original,
but when together shall be one and the same instrument.
SECTION 8. SERVICE OF NOTICES
8.1 Any notices or other communications provided for or
allowed hereunder shall be effective only when given by one of the following
methods and addressed to the respective party at its address given with the
signatures at the end of this Agreement and shall be considered to have been
validly given: (a) upon delivery, if delivered personally; (b) upon receipt,
if mailed, first class postage prepaid, with the United States Postal
Service; (c) on the next business day, if sent by overnight courier service
of recognized standing; and (d) upon telephoned confirmation of receipt, if
telecopied.
8.2 The addresses to which notices or demands are to be
given may be changed from time to time by notice delivered as provided above.
THIS AGREEMENT is executed on behalf of the parties by duly
authorized officers as of the date first above written.
UNION BANK OF CALIFORNIA, N.A.
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇, Vice President
PRINTRAK INTERNATIONAL INC.
By: _________________________________
Title _______________________________
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Controller and Corporate Secretary
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