1
EXHIBIT 10.26
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FIRST
AMENDED AND RESTATED
CREDIT AGREEMENT
among
ULTRAK OPERATING, L.P.
Borrower
ULTRAK, INC.
Parent of Borrower
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
Administrative Agent and Lender
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
Lender
MAY 17, 2000
$45,000,000
SECURED REVOLVING CREDIT FACILITY
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AMERICAN NATIONAL BANK and ▇▇▇▇▇▇ BANK -- ULTRAK OPERATING, L.P.
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND TERMS.......................................2
1.1 Definitions.................................................2
1.2 Time References............................................21
1.3 Other References...........................................21
1.4 Accounting Principles......................................21
SECTION 2. COMMITMENT.................................................21
2.1 Revolving Facility.........................................21
(a) Business Day Borrowings...........................21
(b) Minimum Borrowing Amount..........................22
(c) Maximum Borrowings from All Lenders...............22
(d) Maximum Borrowings from Each Lender...............22
(e) Reduction in Market Value of Securities...........22
(f) Eurocurrency Sublimit.............................22
(g) Unilateral Termination of Obligation To Make
Eurocurrency Borrowings...........................22
(h) Maximum of Five LIBOR Rate Tranches...............22
2.2 Emergency Advance Facility.................................22
2.3 Borrower's Loan Account....................................22
(a) Statements; Telephonic Notice.....................23
2.4 Borrowing Procedure........................................23
(a) Borrowing Request.................................23
(b) Funding...........................................24
2.5 Letters of Credit..........................................25
(a) Conditions........................................25
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(b) Participation.....................................25
(c) Reimbursement Obligation..........................25
(d) General...........................................26
(e) Obligation of Lenders.............................26
(f) Duties of Administrative Agent....................26
(g) Cash Collateral...................................26
(h) INDEMNIFICATION. .................................27
(i) LC Agreements.....................................27
2.6 Borrowing Requests and LC Requests.........................27
2.7 Termination................................................27
SECTION 3. TERMS OF PAYMENT...........................................28
3.1 Notes and Payments.........................................28
(a) Notes.............................................28
(b) Payment...........................................28
(c) Payment Assumed...................................28
(d) Currency of Payment...............................29
3.2 Interest and Principal Payments............................29
(a) Interest..........................................29
(b) Revolving Facility Principal......................29
(c) Mandatory Prepayments.............................30
3.3 Interest Options...........................................30
3.4 Collection of Accounts and Payments........................30
3.5 Appointment of Administrative Agent as Borrower's
Attorney-in-Fact.........................................31
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3.6 Instruments and Chattel Paper..............................31
3.7 Notice to Account Debtors..................................32
3.8 Quotation of Rates.........................................32
3.9 Default Rate...............................................32
3.10 Interest Recapture.........................................32
3.11 Interest Calculations......................................32
3.12 Maximum Rate...............................................32
3.13 Interest Periods...........................................33
3.14 Conversions................................................33
(a) Domestic Borrowings...............................33
(b) Eurocurrency Borrowings...........................34
3.15 Order of Application.......................................34
3.16 Sharing of Payments, Etc...................................34
3.17 Offset.....................................................34
3.18 Booking Borrowings.........................................34
3.19 Basis Unavailable or Inadequate for LIBOR Rate or
Eurocurrency Rate........................................35
3.20 Additional Costs...........................................35
(a) Reserves..........................................35
(b) Capital Adequacy..................................35
(c) Taxes.............................................35
3.21 Change in Laws.............................................36
(a) Domestic Borrowings...............................36
(b) Eurocurrency Borrowings...........................36
3.22 Funding Loss...............................................36
3.23 Foreign Lenders, Participants and Assignees................37
SECTION 4. FEES.......................................................37
4.1 Treatment of Fees..........................................37
4.2 Arrangement and Underwriting Fees..........................37
4.3 Unused Facility Fee........................................37
4.4 LC Fees....................................................37
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(a) Issuance Fee......................................37
(b) Fronting Fee......................................38
4.5 Agency Fee.................................................38
4.6 Prepayment Fee.............................................38
SECTION 5. SECURITY...................................................38
5.1 Guaranties and Security Agreement..........................38
(a) Modifications of Amended and Restated Guaranties
and Security Agreement..........................38
5.2 Collateral.................................................39
(a) Accounts, Inventory, Equipment, etc...............39
(b) Domestic Stock....................................39
(c) Foreign Stock.....................................39
(d) Notes Receivable..................................39
5.3 Creation of Liens and Further Assurances...................39
5.4 Change in Tax Laws.........................................39
5.5 Release of Collateral......................................39
SECTION 6. CONDITIONS PRECEDENT.......................................40
6.1 Initial Advances...........................................40
(a) Amended and Restated Credit Agreement.............40
(b) Notes.............................................40
(c) Amended and Restated Guaranties and Security
Agreements......................................40
(d) Contribution and Indemnification Agreement........40
(e) Account Debtor Notification.......................40
(f) Secretary Certificates............................40
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(g) Payments to the Lender............................40
(h) Opinion of Counsel................................40
(i) Amendments to TROL Financing Documents............40
(j) Lock Box Accounts.................................40
(k) Release of Hedging Agreement Collateral...........40
(l) Representations and Warranties....................40
(m) Borrowing Base Report.............................41
(n) Additional Information............................41
6.2 All Borrowings.............................................41
(a) No Default or Potential Default...................41
(b) Compliance with Credit Agreement; Delivery of
Reports.........................................41
(c) No Material Adverse Event.........................41
(d) Borrowing Request.................................41
(e) Availability......................................41
(f) Representations and Warranties....................41
SECTION 7. REPRESENTATIONS AND WARRANTIES.............................41
7.1 Purpose and Regulation U...................................41
7.2 Corporate Existence, Good Standing, Authority and
Locations................................................42
7.3 Subsidiaries and Names.....................................42
7.4 Authorization and Contravention............................42
7.5 Binding Effect.............................................42
7.6 Financials; Contingent Liabilities.........................43
7.7 Solvency...................................................43
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7.8 Litigation.................................................43
7.9 Taxes......................................................43
7.10 Environmental Matters......................................43
7.11 Employee Plans.............................................43
7.12 Properties; Liens..........................................44
7.13 Government Regulations.....................................44
7.14 Transactions with Affiliates...............................44
7.15 Debt.......................................................44
7.16 Leases.....................................................44
7.17 Labor Matters..............................................44
7.18 Intellectual Property......................................44
7.19 Insurance..................................................44
7.20 Inventory..................................................45
7.21 Full Disclosure............................................45
SECTION 8. AFFIRMATIVE COVENANTS......................................45
8.1 Monthly Reports and Collateral Reports.....................45
(a) Monthly Reports...................................45
(b) Collateral Reports................................46
(c) Electronic Transmission of Reports................46
8.2 Certain Other Items Furnished..............................47
(a) Annual Financials, Etc............................47
(b) Monthly Financials, Etc...........................47
(c) Annual Business Plans.............................47
(d) Other Reports.....................................48
(e) Employee Plans....................................48
(f) Other Notices.....................................48
(g) Other Information.................................48
8.3 Use of Credit..............................................48
8.4 Books and Records..........................................48
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8.5 Inspections................................................49
8.6 Taxes......................................................49
8.7 Payment of Obligation......................................49
8.8 Expenses...................................................49
8.9 Maintenance of Existence, Assets and Business..............49
8.10 Insurance..................................................49
8.11 Compliance with Laws.......................................50
8.12 Subsidiary Guaranties and Pledges..........................50
8.13 Indemnification............................................50
8.14 Post-Closing Covenants.....................................52
SECTION 9. NEGATIVE COVENANTS.........................................52
9.1 Payroll Taxes..............................................52
9.2 Prohibition Against Other Debt.............................53
(a) Permitted Debt....................................53
(b) Prohibition Against Redemptions and Prepayments...54
9.3 Prohibition Against Other Liens............................54
(a) Lender Liens......................................54
(b) Limited Future Liens..............................54
(c) TROL Financing Liens..............................55
(d) Landlord Liens....................................55
(e) Banker's Liens....................................55
(f) Workers Compensation..............................55
(g) Bid Deposits......................................55
(h) Zoning and easements..............................55
(i) Tax and Mechanic's Liens Not Yet Due and Payable..55
(j) Contested Tax and Mechanic's Liens................55
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(k) Belgium Facility..................................55
9.4 Employee Plans.............................................55
9.5 Transactions with Affiliates...............................56
9.6 Compliance with Laws and Documents.........................56
9.7 Investments................................................56
9.8 Distributions; Other Payments..............................57
9.8 Disposition of Assets......................................57
9.9 Mergers, Consolidations, Acquisitions, Dispositions
and Dissolutions.........................................58
9.10 Assignment.................................................58
9.11 TROL Financing Agreements..................................58
9.12 Fiscal Year and Accounting Methods.........................58
9.13 New Businesses.............................................58
9.14 Government Regulations.....................................58
9.15 Strict Compliance..........................................58
SECTION 10. FINANCIAL COVENANTS........................................59
10.1 Leverage Ratio.............................................59
10.2 Debt Service Coverage Ratio................................59
10.3 Minimum Tangible Net Worth.................................59
10.4 Capital Expenditures.......................................59
10.5 Minimum Excess Availability................................59
SECTION 11. EVENT OF DEFAULT...........................................59
11.1 Payment of Obligation......................................59
11.2 Covenants..................................................59
11.3 Debtor Relief..............................................60
11.4 Judgments and Attachments..................................60
11.5 Government Action..........................................60
11.6 Misrepresentation..........................................60
11.7 Ownership of Other Companies...............................60
11.8 Change of Control of Borrower or Parent....................60
11.9 Change in Management.......................................61
11.10 Other Funded Debt..........................................61
11.11 Validity and Enforceability................................61
11.12 Material Agreement Default or Cancellation.................61
11.13 LCs........................................................61
SECTION 12. RIGHTS AND REMEDIES........................................62
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12.1 Remedies Upon Event of Default.............................62
(a) Debtor Relief.....................................62
(b) Other Events of Default...........................62
(c) Offset............................................62
12.2 Company Waivers............................................62
12.3 Performance by Administrative Agent........................62
12.4 Not in Control.............................................63
12.5 Course of Dealing..........................................63
12.6 Cumulative Rights..........................................63
12.7 Application of Proceeds....................................63
12.8 Certain Proceedings........................................63
12.9 Expenditures by Administrative Agent or Lenders............63
12.10 Diminution in Value of Collateral..........................63
SECTION 13. ADMINISTRATIVE AGENT AND LENDERS...........................63
13.1 Administrative Agent.......................................63
(a) Appointment.......................................64
(b) Successor.........................................64
(c) Rights as Lender..................................64
(d) Other Activities..................................65
13.2 Expenses...................................................65
13.3 Proportionate Absorption of Losses.........................65
13.4 Delegation of Duties; Reliance.............................65
13.5 Limitation of Administrative Agent's Liability.............66
(a) Exculpation.......................................66
(b) Indemnity.........................................66
(c) Reliance..........................................66
13.6 Event of Default...........................................66
13.7 Collateral Matters.........................................67
(a) General Authorization.............................67
(b) Maintaining Lender Liens..........................67
(c) Limitation of Obligations.........................67
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(d) Standard of Care..................................67
(e) Release of Collateral.............................67
13.8 Limitation of Liability....................................67
13.9 Relationship of Lenders....................................67
13.10 American National Bank Option To Purchase Lender Position..67
13.11 Benefits of Agreement......................................68
SECTION 14. MISCELLANEOUS..............................................68
14.1 Nonbusiness Days...........................................68
14.2 Communications.............................................68
14.3 Form and Number of Documents...............................68
14.4 Exceptions to Covenants....................................69
14.5 Survival...................................................69
14.6 Governing Laws.............................................69
14.7 Invalid Provisions.........................................69
14.8 Conflicts Between Credit Documents.........................69
14.9 Discharge and Certain Reinstatement........................69
14.10 Amendments, Consents, Conflicts and Waivers................69
(a) Required Lenders..................................69
(b) All Lenders.......................................69
(c) Conflicts.........................................70
(d) Waivers...........................................70
14.11 Multiple Counterparts......................................70
14.12 Parties; Participations; Assignments.......................70
(a) Parties Bound.....................................70
(b) Participations....................................70
(c) Assignments.......................................70
(d) Assignment by American National to ▇▇▇▇▇▇.........72
14.13 Venue, Service of Process and Jury Trial...................73
14.14 Arbitration of Disputes....................................73
14.15 Restatement of the Prior Credit Agreement and the Existing
Credit Agreement.........................................74
14.16 Entirety...................................................74
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SCHEDULES
Schedule 2 - Lenders and Commitments
Schedule 6.1(m) - Borrowing Base as of February 29, 2000
Schedule 7.3 - Information Regarding Companies
Schedule 7.6-A - Contingent Liabilities
Schedule 7.6-B - Consolidated Financial Statements for year ended
12/31/99
Schedule 7.6-C - Financial Projections
Schedule 7.8 - Litigation
Schedule 7.20 - Inventory locations
EXHIBITS
Exhibit A - Note
Exhibit B - Amended and Restated Guaranty Agreement
Exhibit C - Amended and Restated Security Agreement
Exhibit D - Borrowing Request
Exhibit E - Conversion Notice
Exhibit F - LC Request
Exhibit G - Borrowing Base Report
Exhibit H - Compliance Certificate
Exhibit I - Contribution and Indemnification Agreement
Exhibit J - Assignment and Assumption Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT") is
entered into as of May 17, 2000 among ULTRAK OPERATING, L.P., a Texas limited
partnership ("BORROWER"), ULTRAK, INC., a Delaware corporation ("PARENT"),
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO ("AMERICAN NATIONAL"), as a
LENDER (defined below), ▇▇▇▇▇▇ TRUST AND SAVINGS BANK ("▇▇▇▇▇▇"), as a LENDER,
and AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as ADMINISTRATIVE AGENT
(defined herein) for itself and future Lenders.
PRELIMINARY STATEMENT
A. Parent is a U.S.-based multinational corporation with domestic and
foreign subsidiaries that design, manufacture, market, sell and service
electronic products and systems for use in security and surveillance, industrial
and medical video and professional audio markets worldwide. Ultrak Operating,
L.P., the "Borrower" under this Agreement, is the principal domestic operating
subsidiary of Parent.
B. Parent (as borrower), Bank One, Texas, N.A. ("BANK ONE") (as agent
and lender) and ▇▇▇▇▇ Fargo Bank (Texas), National Association ("▇▇▇▇▇ FARGO")
(as lender) (Bank One and ▇▇▇▇▇ Fargo being herein called the "PRIOR LENDERS")
were parties to the Prior Credit Agreement (defined herein) whereby Prior
Lenders extended credit to Parent to provide for, among other things, (i) a term
loan facility in the aggregate principal amount of Twenty Million Dollars
($20,000,000), and (ii) a revolving loan and standby letter of credit facility
in the aggregate principal amount of up to Thirty Million Dollars ($30,000,000).
The "Obligation", as defined in the Prior Credit Agreement, is herein called the
"PRIOR OBLIGATION".
C. Immediately prior to the Closing Time under the Existing Credit
Agreement (herein called the "INITIAL CLOSING TIME"), Parent paid to Prior
Lenders all non-principal amounts due and owing on the Prior Obligation, leaving
a "Principal Debt" due and owing under the Prior Credit Agreement at the Initial
Closing Time of no more than the lesser of (i) Forty Five Million Dollars
($45,000,000) or (ii) the Borrowing Base (herein defined), all of which
constituted "Base Rate Borrowings" under the Prior Credit Agreement. Immediately
after such paydown, American National purchased from Prior Lenders, at par, all
of the Prior Obligations, and American National received from each Prior Lender
an assignment, without recourse, representation or warranty (the "PRIOR LENDER
ASSIGNMENTS"), of (A) the Prior Obligations, (B) all Liens securing payment and
performance of the Prior Obligations or any part thereof and all guaranties,
security agreements, mortgages, pledges, assignments, deeds of trust and
documents and agreements related thereto and all Rights of Prior Lenders
thereunder, (C) the Prior Credit Agreement and all of Rights of Prior Lenders
thereunder and (D) the "Credit Documents", as defined in the Prior Credit
Agreement, and all Rights of Prior Lenders thereunder.
D. The Prior Obligations (i) were guaranteed, pursuant to the Prior
Credit Agreement, by unlimited guaranties from Ultrak Operating, L.P. and each
of Parent's other Domestic Subsidiaries (defined herein), (ii) were secured by
Liens (defined herein) on all of the assets of the Domestic Companies (defined
herein) and (iii) were secured by Liens on a certain percentage of the capital
stock of Parent's directly-owned Foreign Subsidiaries (defined herein) and by a
pledge of all notes receivable now or in the future executed by any Foreign
Subsidiary in favor of Parent or any other Domestic Company.
E. Parent, Borrower, American National and Administrative Agent entered
into an Amended and Restated Credit Agreement dated as of March 22, 2000 (the
"EXISTING CREDIT AGREEMENT") pursuant to which they agreed that, effective as of
the Initial Closing Time, (i) the Prior Credit Agreement should be amended,
modified and restated in its entirety in the form of the Existing Credit
Agreement, (ii) that Ultrak Operating, L.P., which jointly
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and severally guaranteed payment and performance of the Prior Obligations and
received the most significant benefits from the Prior Credit Agreement, should
assume primary liability and responsibility and become the Borrower under the
Existing Credit Agreement, and that (iii) Parent should become a Guarantor of
the Obligations under the Existing Credit Agreement.
F. Contemporaneously herewith, American National is selling a portion
of the Principal Debt and Commitment under the Existing Credit Agreement to
▇▇▇▇▇▇, and the parties hereto wish to amend and restate the Existing Credit
Agreement in its entirety to include ▇▇▇▇▇▇ as a named Lender and to make
certain other changes and clarifications.
ACCORDINGLY, in consideration of the premises, and for other good, fair
and valuable consideration, the receipt, adequacy and reasonable equivalency of
which are hereby acknowledged, Borrower, Parent, Lender and Administrative Agent
agree that the Prior Credit Agreement should be, and it is hereby, amended and
restated in its entirety to read as follows, effective as of the Initial Closing
Time:
SECTION 1. DEFINITIONS AND TERMS.
1.1 Definitions. As used in the Credit Documents:
"ACCOUNT DEBTOR" means the party who is obligated on or under an
Account.
"ACCOUNTS" means all present and future rights of Borrower or any
Guarantor to payment for goods sold or leased or for services rendered, which
are not evidenced by instruments or chattel paper, and whether or not they have
been earned by performance.
"ACQUISITION" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
by any Company of a significant part of the assets of a Person or of any
business or division of a Person, (b) the acquisition by any Company of fifty
percent (50%) or more of any class of Voting Stock (or similar ownership
interests) of any Person (provided that, formation or organization of any entity
shall not constitute an "Acquisition" to the extent that the amount of the loan,
advance, investment or capital contribution in such entity constitutes a
permitted investment under Section 9.7), or (c) a merger, consolidation,
amalgamation or other combination by any Company with another Person.
"ADMINISTRATIVE AGENT" means, at any time, American National Bank and
Trust Company of Chicago (or its successor appointed under Section 13), acting
as administrative, managing, syndication and collateral agent for Lenders under
the Credit Documents. References to Administrative Agent in respect of LCs and
in respect of Eurocurrency Borrowings are to that institution in its individual
capacity.
"AFFILIATE" of a Person means any other Person who directly or
indirectly controls, is controlled by, or is under common control with that
Person. For purposes of this definition (a) "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of voting securities or other interests, by contract or otherwise) and
(b) the Companies are "Affiliates" of each other.
"AMERICAN NATIONAL" means American National Bank and Trust Company of
Chicago, a national banking association, and a Lender (the initial sole Lender)
hereunder.
"APPLICABLE MARGIN" means, for any day, the percentage of interest over
the Base Rate, the LIBOR Rate or the Eurocurrency Rate, as the case may be, that
is applicable when the Base Rate, the LIBOR Rate or
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the Eurocurrency Rate, as applicable, is determined under this Agreement, which
margin of interest shall be determined in accordance with the provisions as
follows:
(a From the Initial Closing Date through the initial EBITDA
Rate Determination Date, the Applicable Margin shall be two and
three-fourths percent (2.75%) for LIBOR Rate Borrowings and
Eurocurrency Borrowings, and one-fourth of one percent (0.25%) for Base
Rate Borrowings. The "EBITDA RATE DETERMINATION Date" is as of the last
day of each fiscal quarter, beginning September 30, 2000, and any rate
adjustment will be effective as of the first day of the second month
(the "EBITDA RATE ADJUSTMENT EFFECTIVE DATE") following the applicable
EBITDA Rate Determination Date (e.g., if Borrower qualifies for a rate
adjustment based on the calculation as of September 30, 2000, the rate
adjustment will become effective on November 1, 2000). No rate
adjustment in Borrower's favor will become effective unless
Administrative Agent has received the quarterly Financials and
Compliance Certificate for the applicable EBITDA Rate Determination
Date, and has theretofore received the Financials and Compliance
Certificates for all prior quarters, in each case, the receipt of which
occurred within the time periods prescribed by this Agreement.
(b If, as of the end of any month ("DETECTION SYSTEMS RATE
DETERMINATION DATE"), (i) all of the Parent's interest (or Security
Warranty's interest if a Permitted Security Warranty Transaction has
occurred) in Detection Systems was sold during such month for cash to a
Person who is not an Affiliate, and (ii) the Net Proceeds were applied
in accordance with Section 3.2(c), and (iii) Borrower had at least Ten
Million Dollars of Excess Availability, without including any amount
for the Over-Advance Availability in the Borrowing Base, for the entire
month ending on the Detection Systems Rate Determination Date, and (iv)
the Over-Advance Availability has been cancelled and terminated at
Borrower's written request and clause (g) has been eliminated from the
definition of "Borrowing Base", and (v) no Potential Default or Event
of Default has occurred and is continuing, then, in such event, the
Applicable Margin will be reduced by one-fourth of one percent (0.25%)
on the first day of the month following the Detection Systems Rate
Determination Date, which reduction shall continue in effect until the
earlier of (A) the first EBITDA Rate Adjustment Effective Date on which
Borrower is entitled to a reduction pursuant to paragraph (d) of this
definition of "Applicable Margin" or (B) the last day of a month in
which Borrower has less than Ten Million Dollars of Excess
Availability, without including any amount for the Over-Advance
Availability in the Borrowing Base.
(c No rate adjustment in favor of Borrower will become
effective unless, on the applicable EBITDA Rate Adjustment Effective
Date, (i) the Over-Advance Availability has been cancelled and
terminated at Borrower's written request and clause (g) has been
eliminated from the definition of "Borrowing Base", and (ii) no
Potential Default or Event of Default has occurred and is continuing.
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(d After Administrative Agent's timely receipt of the
Financials and Compliance Certificates referred to in the preceding
clause (a) with respect to any EBITDA Rate Determination Date, if
Operating EBITDA is Ten Million Two Hundred Thousand Dollars
($10,200,000) or more for the nine months ending September 30, 2000
with respect to the initial EBITDA Rate Determination Date or Thirteen
Million Seven Hundred Thousand Dollars ($13,700,000) or more for the
twelve months ending on any subsequent EBITDA Rate Determination Date,
the Applicable Margin in effect for the three-month period beginning on
the applicable EBITDA Rate Adjustment Effective Date shall be adjusted
based on the average daily Excess Availability, without including any
amount for the Over-Advance Availability in the Borrowing Base, during
the quarter ended on the applicable EBITDA Rate Determination Date as
reflected in the table below. The calculations will be determined from
such Financials and related Compliance Certificate; provided, however,
at all times the foregoing shall be subject to the provisions of clause
(e) of this definition.
EXCESS AVAILABILITY (WITHOUT APPLICABLE MARGIN FOR LIBOR
OVER-ADVANCE AVAILABILITY) APPLICABLE MARGIN FOR BASE RATE AND EUROCURRENCY
FOR APPLICABLE QUARTER RATE BORROWINGS BORROWINGS
---------------------------- ---------------------------- ----------------------------
Less than $5,000,000 0.25% 2.750%
Equal to or greater than $5,000,000 but 0.25% 2.500%
less than $10,000,000
Equal to or greater than $10,000,000 0.000% 2.250%
(e If Borrower fails to furnish to Administrative Agent any
Financials and related Compliance Certificate within the time periods
and of the nature and scope required by this Agreement, then the
maximum Applicable Margin shall apply for the entirety of the
applicable quarterly period unless Administrative Agent, in its
absolute discretion, otherwise agrees with respect to a particular
quarterly period. Notwithstanding anything to the contrary contained in
any Credit Document, (i) at all times that an Event of Default shall
exist and the Default Rate shall not be in effect, the Applicable
Margin, at Administrative Agent's sole discretion, shall be increased
to the maximum Applicable Margin, and (ii) at all times that the
Default Rate shall be in effect, it shall be in effect in lieu of any
Applicable Margin.
"ASSIGNEE" is defined in Section 14.12(c).
"ASSOCIATED COSTS RATE" means, in relation to each Borrowing, the
percentage rate from time to time determined by Administrative Agent or the
Eurocurrency Lending Installation in accordance with the formula or other
guidance provided by the British Bankers Association from time to time in force,
as reflecting the average (rounded to the nearest one thirty-second of one
percent (0.03125%), of the costs, losses or differences in return which would be
suffered or incurred by each of the Lenders as a result of (i) funding (at the
Eurocurrency Rate and on a match funded basis) any special deposit or cash ratio
deposit required to be placed with the Bank of England (or any other authority
which replaces all or any of its functions), and/or (ii) any charge imposed by
the British Financial Services Authority (or any other authority which replaces
all or any of its functions).
"BANK ONE" means Bank One, Texas, N.A.
"BANK ONE LONDON" means Bank One, N.A.
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"BASE EUROCURRENCY RATE" means, with respect to a Eurocurrency
Borrowing for the relevant Interest Period, the applicable London interbank
offered rate for deposits denominated in the Eurocurrency requested in
connection with that Eurocurrency Borrowing appearing on Dow ▇▇▇▇▇ Markets
(Telerate) Pages 3740 and 3750 (or the equivalent Reuters or Bloomberg pages) as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period (or, alternatively, on the first day of the Interest Period in
the case of Eurocurrency Borrowings denominated in pounds sterling), and having
a maturity equal to such Interest Period, provided that if such rate is not
available from the above-referenced sources, then such rate shall be otherwise
independently determined by the Eurocurrency Lending Installation from an
alternate, substantially similar independent service available to the
Eurocurrency Lending Installation or shall be calculated by the Eurocurrency
Lending Installation by a substantially similar methodology as that theretofore
used to determine the Base Eurocurrency Rate.
"BASE RATE" means the per annum rate of interest announced or published
from time to time by Bank One, N.A. at its principal place of business in
Chicago, Illinois as its base or equivalent rate of interest, which rate is not
necessarily the lowest rate of interest charged by Bank One, N.A. with respect
to commercial loans. Any change in the Base Rate shall be effective as of the
effective date stated in the announcement by Bank One, N.A. of such change.
"BASE RATE BORROWING" means a Domestic Borrowing advanced to Borrower
through Administrative Agent in accordance with Sections 2.3 and 2.4, which
Borrowing bears interest at the sum of the Base Rate plus the Applicable Margin.
"BELGIUM FACILITY DEBT" means the indebtedness described in Section
9.2(a)(viii).
"BLOCKED ACCOUNTS" has the meaning stated in Section 3.4.
"BORROWER" is defined in the preamble to this Agreement.
"BORROWING" means any amount disbursed (i) by one or more Lenders or by
the Eurocurrency Lending Installation to or on behalf of Borrower under the
Credit Documents, either as an original disbursement of funds or a renewal,
extension, modification or continuation of an amount outstanding, or a payment
under an LC, or (ii) by any Lender or the Eurocurrency Lending Installation in
accordance with, and to satisfy a Company's obligations under, any Credit
Document.
"BORROWING BASE" means, at any time, the sum, without duplication, of
(a) up to eighty five percent (85%) of the face amount (less maximum discounts,
credits and allowances which may be taken by or granted to Account Debtors in
connection therewith) then outstanding under existing Eligible Accounts, less
such reserves as Administrative Agent in its sole discretion, exercised in a
commercially reasonable manner, elects to establish, plus (b) the lesser of the
Eligible Inventory Sublimit and an amount equal to up to fifty percent (50%) of
existing Eligible Inventory, valued at average cost, less such reserves as
Administrative Agent in its sole discretion, exercised in a commercially
reasonable manner, elects to establish, plus (c) fifty percent (50%) of the
Market Value of Borrower's Permitted Investment in Detection Systems so long as
Administrative Agent has a first and prior perfected security interest therein,
plus (d) fifty percent (50%) of the Market Value of Borrower's Permitted
Investment in Permitted Public Company Holdings not to exceed Two Million
Dollars ($2,000,000) so long as Administrative Agent has a first and prior
perfected security interest therein, plus (e) the lesser of the Equipment
Sublimit and an amount equal to up to eighty percent (80%) of the value ("FORCED
LIQUIDATION VALUE") of machinery and equipment which is subject to perfected
Lender Liens and is free and clear of any other Liens, which is physically
located in the United States and which is owned by one of the Domestic Companies
if sold at a forced liquidation sale, as determined by an appraiser acceptable
to Administrative Agent and reflected in an appraisal (which may be in the form
of a "desktop appraisal" acceptable to Administrative Agent) dated not more than
twelve (12) months prior to the date
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of calculation of the Borrowing Base in question and in form and content
acceptable to Administrative Agent (a "CURRENT EQUIPMENT APPRAISAL"); plus (f)
the lesser of (i) the Real Property Sublimit and (ii) an amount equal to up to
sixty percent (60%) of the value ("QUICK SALE VALUE") of Real Property which is
subject to perfected Lender Liens and is free and clear of any other Liens,
which is physically located in the United States and the fee title to which is
owned by one of the Domestic Companies if sold in a quick sale, as determined by
an appraiser acceptable to and retained by Administrative Agent and reflected in
an appraisal dated not more than twelve (12) months prior to the date of
calculation of the Borrowing Base in question and in form and content acceptable
to Administrative Agent, including conformance with FIRREA appraisal
requirements (a "CURRENT REAL PROPERTY APPRAISAL"), plus (gi the amount of any
Over-Advance Availability.
"BORROWING BASE DEFICIENCY" means the amount by which the sum of the
Principal Debt plus the LC Exposure exceeds, for any reason, the limitation in
Section 2.1(c).
"BORROWING BASE REPORT" means a report substantially in the form of
Exhibit G and otherwise in form and scope acceptable to Administrative Agent.
"BORROWING DATE" is defined in Section 2.4(a).
"BORROWING REQUEST" means a request, subject to Section 2.4(a),
substantially in the form of Exhibit D and otherwise in form and scope
acceptable to Administrative Agent.
"BUSINESS DAY" means (i) for purposes of any LIBOR Rate Borrowing, a
day when commercial banks are open for international business in London,
England, (ii) for purposes of any Eurocurrency Borrowing, a TARGET Settlement
Date in the case of Eurocurrency Borrowings denominated in euros or a day on
which commercial banks in both London, England and in the principal financial
center of the country in which the Eurocurrency Borrowing is to be denominated
are both open for substantially all of their business in the case of
Eurocurrency Borrowings denominated in any other Eurocurrency, and (iii) for all
other purposes, any day other than Saturday, Sunday and any other day that
commercial banks are authorized by applicable Laws to be closed in Illinois.
"CAPITAL LEASE" means any capital lease or sublease that is required by
GAAP to be capitalized on a balance sheet.
"CAPITAL EXPENDITURES" shall mean any and all expenditures of the
Companies, on a consolidated basis, without duplication, for fixed or capital
assets, including, without limitation, the incurrence of Capital Lease
obligations, all as determined in accordance with GAAP, and "NET CAPITAL
EXPENDITURES", for any period, means Capital Expenditures net of gains from
sales of fixed or capital assets during such period.
"▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇ Security, S.p.A., an Italian public
corporation.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" shall mean, for any applicable
computation period for the Companies, on a consolidated basis, and without
duplication, the sum of (i) Operating EBITDA, minus (ii) Net Capital
Expenditures, minus (iii) income tax payments made during such period, plus (iv)
any third party funding for Capital Expenditures which is not prohibited by this
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq.
"COLLATERAL" is defined in Section 5.2.
"COLLECTING BANKS" has the meaning stated in Section 3.4.
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"COMMITMENT" means, at any time and for any Lender, the amount stated
beside that Lender's name on the most recently amended Schedule 2 (which amount
is subject to reduction and cancellation as provided in this Agreement).
"COMMITMENT PERCENTAGE" means, for any Lender, the proportion (stated
as a percentage) that its Commitment bears to the total Commitments of all
Lenders.
"COMPANIES" means at any time, Parent, Borrower and each of their
present and future Subsidiaries, and "COMPANY" means each of them.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit H, and otherwise in form and scope satisfactory to Administrative
Agent, and signed by Borrower's president, chief financial officer or treasurer.
"CONVERSION NOTICE" means a request, subject to Section 3.10,
substantially in the form of Exhibit E and otherwise in form and scope
satisfactory to Administrative Agent.
"CREDIT DOCUMENTS" means (a) this Agreement, certificates and reports
delivered under this Agreement, and exhibits and schedules to this Agreement,
(b) all security agreements, pledges, mortgages, deeds of trust and agreements,
documents and instruments in favor of Administrative Agent or Lenders (or
Administrative Agent on behalf of Lenders and the Eurocurrency Lending
Installation) ever delivered under the Prior Credit Agreement or this Agreement
or otherwise delivered in connection with all or any part of the Obligation,
including the Confirmations of Guaranties and Confirmations of Security
Agreements referred to in Section 5.1 and Section 6.1, (c) all LCs and LC
Agreements, and (d) all renewals, extensions, modifications and restatements of,
and amendments and supplements to, any of the foregoing, which are made in
accordance with the provisions of the respective Credit Documents.
"CURRENT EQUIPMENT APPRAISAL" has the meaning stated in the definition
of "Borrowing Base".
"CURRENT FINANCIALS," unless otherwise specified, (a) means either (i)
the Companies' Consolidated Financials for the year ended December 31, 1998,
together with the Companies' Financials for the nine months ended on September
30, 1999, or (ii) at any time after annual Financials for the year ended
December 31, 1999 are delivered under Section 8.1, the Companies' annual
Financials then most recently delivered to Administrative Agent under Section
8.1(a), together with the Companies' quarterly Financials then most recently
delivered to Administrative Agent under Section 8.1(b); but (b) does not include
the results of operations and cash flows for any Company for the time period
before it becomes a member of Parent's consolidated group.
"CURRENT REAL PROPERTY APPRAISAL" has the meaning stated in the
definition of "Borrowing Base".
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (i) all obligations for borrowed money, (ii) all
obligations evidenced by bonds, debentures, notes or similar instruments, (iii)
all obligations to pay the deferred purchase price of property or services
except trade accounts payable arising in the ordinary course of business which
are paid when due in accordance with ordinary-course payment terms or which are
being contested in good faith in appropriate proceedings, (iv) all obligations
arising under acceptance facilities or facilities for the discount or sale of
accounts receivable, (v) all direct or contingent obligations in respect of
letters of credit, (vi) Capital Lease obligations, (vii) liabilities secured (or
for which the holder of any obligations or liabilities has an existing Right,
contingent or otherwise, to be so secured) by any Lien existing on property
owned or acquired by that Person, (viii) all guaranties, endorsements and other
contingent obligations for liabilities or obligations or the maintenance of
financial condition of others, including obligations to repurchase or purchase
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properties or to maintain or cause to maintain any financial condition, and (ix)
all outstanding obligations of each of the Companies under, or in respect of,
the TROL Financing.
"DEBT SERVICE REQUIREMENTS" means, for any period, the sum of (i) all
scheduled principal payments for Funded Debt (other than the TROL Financing) and
deemed principal payments with respect to Capital Leases, plus (ii) the
Companies' Interest Expense, plus (iii) cash dividends permitted by this
Agreement.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments
or similar Laws affecting creditors' Rights.
"DEFAULT RATE" means, for any day, an annual interest rate equal from
day to day to (i) for amounts owing under or in respect of Eurocurrency
Borrowings, the lesser of either (a) the Eurocurrency Rate plus two and one-half
percent (2.5%) or (b) the Maximum Rate, and (ii) for all other amounts owing
under or in respect of the Credit Documents, the lesser of either (a) the Base
Rate plus two and one-half percent (2.5%) or (b) the Maximum Rate.
"DETECTION SYSTEMS" means Detection Systems, Inc., a New York
corporation, the stock of which is traded on NASDAQ (the automated quotation
system operated by the National Association of Securities Dealers, Inc.) as of
the Initial Closing Date.
"DETECTION SYSTEMS RATE DETERMINATION DATE" is defined in the
definition of "Applicable Margin".
"DETECTION SYSTEMS SECURITIES" means the direct or beneficial ownership
interest of Parent (or Security Warranty if a Permitted Security Warranty
Transaction occurs) in securities of Detection Systems in certificated or
uncertificated form.
"DIAMOND" means Diamond Electronics, Inc., an Ohio corporation which is
a wholly owned Subsidiary of Parent.
"DISTRIBUTION" means, with respect to any shares of any common,
preferred or other capital stock or other equity securities of or interest in a
Person (i) the retirement, redemption, purchase, repurchase or other acquisition
for value of those securities, (ii) the declaration or payment of any dividend
on or with respect to those securities, (iii) any loan or advance by that Person
to, or other investment by that Person in, the holder of any of those securities
and (iv) any other payment by that Person with respect to those securities.
"DOLLAR" or "$" means United States Dollars.
"DOLLAR EQUIVALENT" of a Eurocurrency Borrowing means the Dollar
equivalent of the amount of such Eurocurrency Borrowing, determined by
Administrative Agent on the basis of its mean spot rate for the purchase of the
appropriate Eurocurrency with Dollars.
"DOMESTIC BORROWING" means a Base Rate Borrowing or a LIBOR Rate
Borrowing of Dollars through a domestic (United States) office of a Lender.
"DOMESTIC COMPANY" means all Companies other than Foreign Subsidiaries.
"DOMESTIC SUBSIDIARIES" means all Subsidiaries other than Foreign
Subsidiaries.
"EBITDA RATE ADJUSTMENT EFFECTIVE DATE" is defined in the definition of
"Applicable Margin".
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"EBITDA RATE DETERMINATION DATE" is defined in the definition of
"Applicable Margin".
"ELIGIBLE ACCOUNTS" means enforceable and outstanding Accounts of the
Domestic Companies which Administrative Agent, in its discretion, exercised in a
commercially reasonable manner, determines are eligible. Without limiting
Administrative Agent's discretion, the following Accounts shall not be Eligible
Accounts: (i) Accounts which remain unpaid one hundred twenty (120) days after
the original date of the applicable invoice; (ii) all Accounts owing by a single
Account Debtor, including a currently scheduled Account, if twenty-five percent
(25%) or more of the balance owing by such Account Debtor to all Companies
remains unpaid one hundred twenty (120) days after the original date of the
applicable invoice or invoices; (iii) Accounts with respect to which the Account
Debtor is a director, officer, employee, Subsidiary or Affiliate of a Company;
(iv) Accounts in excess of an aggregate of Three Million Dollars ($3,000,000)
with respect to which the Account Debtor is the United States or any department,
agency or instrumentality thereof, unless with respect to any such Account,
Borrower has complied to Administrative Agent's satisfaction with the provisions
of the Federal Assignment of Claims Act of 1940, including, without limitation,
executing and delivering to Administrative Agent all statements of assignment
and/or notification which are in form and substance acceptable to Administrative
Agent and which are deemed necessary by Administrative Agent to effectuate the
assignment to Administrative Agent of such Accounts; (v) Accounts with respect
to which the Account Debtor is not an Entity domiciled in and whose principal
place of business is in the United States, unless the Account Debtor has
supplied the Company which owns the Account with an irrevocable letter of credit
or a policy of credit insurance, issued by a financial institution satisfactory
to Administrative Agent, sufficient to cover such Account in form and substance
satisfactory to Administrative Agent; (vi) Accounts in excess of an aggregate of
One Million Dollars ($1,000,000) with respect to which the Account Debtor is not
an Entity domiciled in and whose principal place of business is in the United
States and no letter of credit or credit insurance has been supplied which would
satisfy clause (v) preceding; (vii) Accounts with respect to which the Account
Debtor has asserted a counterclaim or has a right of setoff; (viii) Accounts for
which the prospect of payment or performance by the Account Debtor is or may be
impaired as determined by Administrative Agent in its sole, commercially
reasonable discretion, each of which will be eliminated as an Eligible Account
on the fifteenth (15th) day after Administrative Agent has given written notice
to Borrower with respect thereto; (ix) Accounts with respect to which
Administrative Agent does not have a first and valid fully perfected security
interest; (x) Accounts with respect to which the Account Debtor is the subject
of proceedings under any Debtor Relief Laws or has made an assignment for the
benefit of creditors or whose assets have been conveyed to a receiver or
trustee; (xi) Accounts with respect to which the Account Debtor's obligation to
pay the Account is conditional upon the Account Debtor's approval or is
otherwise subject to any repurchase obligation or return right, as with sales
made on a ▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale on approval or
consignment basis; (xii) Accounts to the extent that the Account Debtor's
indebtedness to a Company exceeds a credit limit determined by Administrative
Agent in Administrative Agent's sole discretion, exercised in a commercially
reasonable manner, with any elimination as an Eligible Account to become
effective on the fifteenth (15th) day after Administrative Agent has given
written notice to Borrower with respect thereto; (xiii) Accounts with respect to
which the Account Debtor is located in any state denying creditors access to its
courts in the absence of a notice of business activities report or similar
filing, unless Borrower has either qualified as a foreign corporation to do
business in such state or has filed such notice of business activities report or
similar filing with the applicable state agency for the current year; and (xiv)
Accounts with respect to which the goods giving rise thereto have not been
shipped and delivered to and accepted as satisfactory by the Account Debtor
thereof or with respect to which the services performed giving rise thereto have
not been completed and accepted as satisfactory by the Account Debtor thereof.
In the event that a previously scheduled Eligible Account ceases to be an
Eligible Account under the above described criteria, Borrower shall notify the
Administrative Agent thereof immediately after Borrower has obtained knowledge
thereof.
"ELIGIBLE INVENTORY" means Inventory of the Domestic Companies which
Administrative Agent, in its discretion, exercised in a commercially reasonable
manner, determines to be eligible. Without limiting Administrative Agent's
discretion, the following Inventory shall not be Eligible Inventory: (i)
Inventory which is obsolete, not in good condition or not either currently
usable or currently salable in the ordinary course of the business of the
Companies; (ii) Inventory which Administrative Agent determines, in the exercise
of Administrative
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Agent's sole discretion, exercised in a commercially reasonable manner, and in
accordance with Administrative Agent's customary business practices, to be
unacceptable due to age, type, category and/or quantity; (iii) Inventory which
is not subject to internal control and management procedures acceptable to
Administrative Agent, in Administrative Agent's sole discretion, which will be
eliminated as Eligible Inventory on the fifteenth (15th) day after
Administrative Agent has given written notice to Borrower with respect thereto,
unless Administrative Agent determines that a significant change from existing
internal controls and management procedures has occurred, in which case the
elimination will become effectively immediately after notice from Administrative
Agent to Borrower; (iv) Inventory with respect to which Administrative Agent
does not have a first and valid fully perfected security interest; (v) Inventory
which is stored or placed with a bailee, consignee, warehouseman, supplier,
lessor or similar party; (vi) Inventory delivered to a Company on consignment;
(vii) Inventory owned by a Foreign Company or which is not physically located in
the United States; and (viii) Inventory which is not physically located in the
United States at one of the locations designated on Schedule 7.20. In the event
that previously scheduled Inventory ceases to be Eligible Inventory under the
above-described criteria, Borrower shall notify Administrative Agent thereof
immediately after Borrower has obtained knowledge thereof.
"ELIGIBLE INVENTORY SUBLIMIT" means Fifteen Million Dollars
($15,000,000).
"EMPLOYEE PLAN" means any employee-pension-benefit plan (i) covered by
Title IV of ERISA and established or maintained by a Company or any ERISA
Affiliate (other than a Multiemployer Plan) or (ii) established or maintained by
a Company or any ERISA Affiliate or to which a Company or any ERISA Affiliate
contributes, under the Laws of any foreign country.
"ENTITY" means a corporation, limited liability company, association,
partnership of any kind, organization, trust, joint venture or other entity or a
Governmental Authority.
"ENVIRONMENTAL INVESTIGATION" means any health, safety or environmental
site assessment, investigation, study, review, audit, compliance audit or
compliance review conducted at any time or from time to time (whether at the
request of Administrative Agent or any Lender, upon the order or request of any
Governmental Authority, at the voluntary instigation of any Company or Affiliate
of any Company or otherwise) concerning any Real Property or the business
operations or activities of any Company or Affiliate of any Company, including
(i) air, soil, groundwater or surface-water sampling and monitoring, (ii)
repair, cleanup, remediation or detoxification, (iii) preparation and
implementation of any closure, remedial, spill, emergency or other plans, and
(iv) any health, safety or environmental compliance audit or review.
"ENVIRONMENTAL LAW" means any applicable Law that relates to (a) the
condition of air, ground or surface water, soil or other environmental media,
(b) the environment or natural resources, (c) safety or health, (d) the
regulation of any contaminants, wastes and Hazardous Substances, including
CERCLA, OSHA, 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.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. Section 136 et seq.), the Emergency Planning and Community Right-to-Know
Act (42 U.S.C. Section 11001 et seq.), the Safe Drinking Water Act (42 U.S.C.
Section 201 and Section 300f et seq.), the Rivers and Harbors Act (33 U.S.C.
Section 401 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.),
and state and local Laws, and any future enacted or adopted Laws, in each case,
now existing or hereafter adopted, which are analogous to any of the preceding
referenced requirements or (e) the Release or threatened Release of Hazardous
Substances.
"ENVIRONMENTAL LIABILITY" means any liability, loss, fine, penalty,
charge, lien, damage, cost or expense of any kind to the extent that it results
directly or indirectly, in whole or in part, (i) from the violation of any
Environmental Law, (ii) from the Release or threatened Release of any Hazardous
Substance, (iii) from
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removal, remediation or other actions in response to the Release or threatened
Release of any Hazardous Substance, (iv) from actual or threatened damages to
natural resources, (v) from the imposition of injunctive relief or other orders,
(vi) from personal injury, death or property damage which occurs as a result of
any Company's use, storage or handling, or the Release or threatened Release, of
a Hazardous Substance, or (vii) from any Environmental Investigation performed
at, on or for any Real Property.
"ENVIRONMENTAL PERMIT" means any permit or license from any Person
defined in clause (i) of the definition of Governmental Authority that is
required under any Environmental Law for the lawful conduct of any business,
process or other activity.
"EQUIPMENT SUBLIMIT" means a limit established by Administrative Agent
in its sole discretion, exercised in a commercially reasonable manner, for the
amount to be included in the Borrowing Base for machinery and equipment, which
is reasonably expected to be limited to Two Million Dollars ($2,000,000).
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any Person that, for purposes of Title IV of
ERISA, is a member of Parent's controlled group or is under common control with
Parent or Borrower within the meaning of Section 414 of the IRC (which
provisions are deemed by this Agreement to apply to Foreign Persons).
"EUROCURRENCY" means any currency (other than Dollars) which is freely
transferable and convertible into Dollars and which is available in the London
interbank market.
"EUROCURRENCY BORROWING" means a Borrowing advanced to Borrower through
the Eurocurrency Lending Installation in accordance with Section 2.3, which
Borrowing is denominated in a Eurocurrency and bears interest at the
Eurocurrency Rate.
"EUROCURRENCY LENDING INSTALLATION" means Administrative Agent's
Lending Installation in London, England (or such other Lending Installation as
may be designated by Administrative Agent from time to time) that manages
fundings and payments under the Eurocurrency Sublimit.
"EUROCURRENCY RATE" means, with respect to a Eurocurrency Borrowing for
the relevant Interest Period, the sum of (i) the quotient of (a) the Base
Eurocurrency Rate applicable to such Interest Period, divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Applicable Margin, plus (iii) in the case of Eurocurrency
Borrowings denominated in pounds sterling, the Associated Costs Rate.
"EUROCURRENCY SUBLIMIT" means Twenty Two Million Dollars ($22,000,000),
until such time as (i) a different limit is established by Administrative Agent
in its sole discretion, exercised in a commercially reasonable manner, or (ii)
Administrative Agent terminates and cancels any right to make Eurocurrency
Borrowings pursuant to Section 2.1(f).
"EVENT OF DEFAULT" is defined in Section 11.
"EXCESS AVAILABILITY", for any day, means the amount, if any, by which
the lesser of (i) the Borrowing Base (less any reserves established by
Administrative Agent) or (ii) the total Commitments exceeds the sum of (A) the
Principal Debt (including the Dollar Equivalent of Eurocurrency Borrowings) plus
(B) the LC Exposure at the time.
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"EXISTING CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement dated as of March 22, 2000 among Parent, Borrower, American National
and Administrative Agent, which amended and restated the Prior Credit Agreement.
"FED FUNDS RATE" means, for any day, the annual rate (rounded upwards,
if necessary, to the nearest one-hundredth of one percent (0.01%)) determined by
Administrative Agent (which determination is conclusive and binding, absent
manifest error) to be equal to (i) the weighted average of the rates on
overnight federal-funds transactions with member banks of the Federal Reserve
System arranged by federal-funds brokers on that day, as published by the
Federal Reserve Bank of New York on the next Business Day or (ii) if the rates
referred to in the preceding clause (i) are not published for any day, the
average of the quotations at approximately 10:00 a.m. received by Administrative
Agent from three federal-funds brokers of recognized standing selected by
Administrative Agent in its sole discretion.
"FINANCIALS" of a Person means balance sheets, profit and loss
statements and statements of cash flow prepared (i) according to GAAP (subject
to year-end audit adjustments with respect to interim Financials) and (ii)
except as stated in Section 1.4, in comparative form to prior year-end figures
or corresponding periods of the preceding fiscal year or other relevant period,
as applicable. The term "Financials" shall also include the reconciliations of
capital and surplus included as part of the Companies' annual financial
statements.
"FORCED LIQUIDATION VALUE" has the meaning stated in the definition of
"Borrowing Base".
"FOREIGN" means, in respect of any Person, a Person organized under the
Laws of a jurisdiction other than, or domiciled outside of, the United States or
one of its states, territories, commonwealths or possessions.
"FOREIGN SUBSIDIARIES" means all Subsidiaries of Parent or Borrower
that are Foreign.
"FUNDED DEBT" means, with respect to any Person on any date of
determination (without duplication), the sum of all outstanding (direct or
contingent) Debt of such Person which is described by any of clauses (i), (ii),
(iv), (v), (vi) or (ix) of the definition of the term "Debt".
"FUNDING LOSS" means any loss, expense or reduction in yield (but not
any Applicable Margin) that any Lender reasonably incurs because (i) Borrower
fails or refuses (for any reason whatsoever other than a default by
Administrative Agent or the Lender claiming that loss, expense or reduction in
yield) to take any Borrowing that it has requested under this Agreement or (ii)
Borrower prepays or pays any Borrowing or converts any Borrowing to a Borrowing
of another Type, in each case, other than on the last day of the applicable
Interest Period.
"F/X CONTRACT" means, for any Person, any present or future agreement,
device or arrangement providing for payments related to fluctuations of currency
exchange rates, including forward currency exchange agreements and forward rate
currency options.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time
for SEC-reporting companies in the United States.
"GOVERNMENTAL AUTHORITY" means any (i) local, state, territorial,
federal or foreign judicial, executive, regulatory, administrative, legislative
or governmental agency, board, bureau, commission, department or other
instrumentality, (ii) private arbitration board or panel or (iii) central bank.
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"GUARANTY" means a guaranty agreement substantially in the form of
Exhibit B and otherwise in form and scope acceptable to Administrative Agent.
"GUARANTOR" means each Person that executes a Guaranty as required by
the terms of this Agreement. "▇▇▇▇▇▇" means ▇▇▇▇▇▇ Trust and Savings Bank, an
Illinois state bank, as a Lender under this Agreement.
"HAZARDOUS SUBSTANCE" means (a) any substance that is reasonably
expected to require removal, remediation or other response under any
Environmental Law, (b) any substance that is designated, defined or classified
as a hazardous waste, hazardous material, pollutant, contaminant, explosive,
corrosive, flammable, infectious, carcinogenic, mutagenic, radioactive,
dangerous or toxic or hazardous substance under any Environmental Law, including
any hazardous substance within the meaning of Section 101(14) of CERCLA, (c)
petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel
fuel, jet fuel and other petroleum hydrocarbons, (d) asbestos and
asbestos-containing materials in any form, (e) polychlorinated biphenyls, (f)
urea formaldehyde foam, or (g) any substance the presence of which on any Real
Property either (i) poses or threatens to pose a hazard to the health or safety
of persons or to the environment, or (ii) could reasonably be expected to
constitute a health or safety hazard to persons or the environment if emanated
or migrated from the Real Property.
"HEDGING AGREEMENT" means, for any Person, any present or future,
whether master or single, agreement, document or instrument providing for or
constituting an agreement to enter into interest rate swaps, floors, caps or
collars, forward-rate agreements or other similar transactions.
"INITIAL CLOSING DATE" and "INITIAL CLOSING TIME" mean March 27, 2000,
respectively, and the time of day on March 27, 2000, on which American National
paid to Bank One and ▇▇▇▇▇ Fargo the purchase price for the "Principal Debt"
under the Prior Credit Agreement and the Prior Lender Assignments were executed
and delivered by Bank One and ▇▇▇▇▇ Fargo and became effective as provided
therein.
"INTEREST EXPENSE" means, with respect to any Person and for any period
(without duplication), all interest on that Person's Debt, whether paid in cash
or accrued as a liability and payable in cash during any subsequent period
(including the interest component of Capital Leases), as determined by GAAP.
"INTEREST PERIOD" is determined in accordance with Section 3.13.
"INVENTORY" means any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by a Company, which are held for sale or lease, furnished under any contract of
service or held as raw materials, work in process or supplies, and all materials
used or consumed in the business of the Companies, and shall include such
property the sale or other disposition of which has given rise to Accounts and
which has been returned to or repossessed or stopped in transit by a Company.
"INVESTMENT" means, in respect of any Person, any loan, advance,
extension of credit or capital contribution to that Person, any investment in
that Person, or any purchase or commitment to purchase any equity securities or
Debt issued by that Person or a significant part of the assets or a division or
other business unit of that Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"LAWS" means all applicable statutes, laws, treaties, ordinances,
rules, regulations, orders, writs, injunctions, decrees, judgments, opinions and
interpretations of any Governmental Authority.
"LC" means a standby letter of credit issued by Administrative Agent
under this Agreement pursuant to an LC Agreement.
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"LC AGREEMENT" means a standby letter of credit application and
agreement (in form and substance satisfactory to Administrative Agent) submitted
by Borrower to Administrative Agent for an LC for its own account (and for its
benefit or the benefit of any other Company).
"LC EXPOSURE" means, at any time and without duplication, the sum of
(a) the aggregate face amount of all undrawn and uncancelled LCs plus (b) the
aggregate unpaid reimbursement obligations of Borrower under drawings under any
LC.
"LC REQUEST" means a request substantially in the form of Exhibit F.
"LC SUBFACILITY" means a subfacility of the Revolving Facility for the
issuance of LCs, as described in Section 2.5, under which the LC Exposure may
never exceed Five Million Dollars ($5,000,000) in the aggregate. For the
avoidance of doubt, LCs may only be requested, issued and denominated in United
States Dollars as a subfacility under the Domestic Borrowing feature of the
Revolving Facility, and all communications from Borrower in respect of LCs shall
be with Administrative Agent.
"LENDER LIEN" means any present or future first-priority Lien securing
the Obligation and assigned, conveyed or granted to or created in favor of
Administrative Agent or a Lender for the benefit of Lenders.
"LENDERS" means each present and future financial institution
(including Administrative Agent in respect of its share of Borrowings and LCs)
named on Schedule 2 or on the most recently amended Schedule 2, if any,
delivered by Administrative Agent to Borrower under this Agreement, and, subject
to this Agreement, their respective successors and assigns (but not any
Participant who is not otherwise a party to this Agreement), and Lenders shall
be deemed to be nominees for the Eurocurrency Lending Installation with respect
to any Eurocurrency Borrowings for any period during which the Eurocurrency
Lending Installation has not received fundings of a Lender's Commitment
Percentage of a Eurocurrency Borrowing from such Lender.
"LENDING INSTALLATION" means any office or branch of any Lender or
Administrative Agent (or any of their respective Affiliates).
"LIBOR RATE" means, for a LIBOR Rate Borrowing and for the relevant
Interest Period, the annual interest rate (rounded upward, if necessary, to the
nearest one-hundredth of one percent (0.01%)) equal to the quotient obtained by
dividing (i) the rate that deposits in United States dollars are offered to
Administrative Agent in the London interbank market at approximately 11:00 a.m.
London, England time two Business Days before the first day of that Interest
Period as shown on the display designated as "British Bankers Assoc. Interest
Settlement Rates" on the Telerate System ("Telerate"), Page 3750 or Page 3740,
or such other page or pages as may replace such pages on Telerate for the
purpose of displaying such rate (provided that if such rate is not available on
Telerate then such offered rate shall be otherwise independently determined by
Administrative Agent from an alternate, substantially similar independent
service available to Administrative Agent or shall be calculated by
Administrative Agent by a substantially similar methodology as that theretofore
used to determine such offered rate in Telerate) in an amount comparable to that
LIBOR Rate Borrowing and having a maturity approximately equal to that Interest
Period by (ii) one minus the Reserve Requirement (expressed as a decimal)
applicable to the relevant Interest Period.
"LIBOR RATE BORROWING" means a Domestic Borrowing advanced to Borrower
through Administrative Agent in accordance with Section 2.3, which Borrowing
bears interest at the sum of the LIBOR Rate plus the Applicable Margin.
"LIEN" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of unsecured creditors or the owners (other than title of the
lessor under an operating lease).
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"LITIGATION" means any action, proceeding, investigation or hearing by
or before any Governmental Authority.
"LOAN ACCOUNT" has the meaning stated in Section 2.3.
"LOCK BOX ACCOUNTS" has the meaning stated in Section 3.4.
"MARKET VALUE" means, at any time, a market value for a security based
upon the then-most recent quotation on a nationally recognized securities market
or over-the-counter trading market; provided, however, if such security is not
publicly traded or if trading has been suspended, then the "Market Value" for
such security shall be deemed to be zero ($0).
"MATERIAL ADVERSE EVENT" means any circumstance or event that,
individually or collectively, is reasonably expected to result (at any time
before the Commitments are fully cancelled or terminated and the Obligation is
fully paid and performed) in any (i) material impairment of (a) the ability of
Borrower or any other Company to perform any of its payment or other material
obligations under any Credit Document or (b) the ability of Administrative Agent
or any Lender to enforce any of those obligations or any of its Rights under the
Credit Documents, (ii) material and adverse effect on the business, management
or financial condition of Borrower or of the Companies as a whole, as
represented to Lenders in the Financials then most recently received by it or
(iii) Event of Default or Potential Default.
"MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for a Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
that, under applicable Laws of the State of Texas or federal laws of the United
States (as applicable), that Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC (or any similar type
of plan established or regulated under the Laws of any foreign country) to which
Parent or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
"NET INCOME" of any Person means that Person's profit or loss
determined in accordance with GAAP.
"NET PROCEEDS" means the aggregate cash proceeds received by a Company
in respect of any Permitted Asset Sale (including any cash received upon the
sale or other disposition of any non-cash consideration received in any
Permitted Asset Sale), net of the direct costs relating to such Permitted Asset
Sale (including legal, accounting and investment banking fees, and sales
commissions), any relocation expenses incurred as a result thereof, taxes paid
or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"NOTE" means each promissory note executed and delivered to a Lender by
Borrower pursuant to this Agreement substantially in the form of Exhibit A and
otherwise in form and scope acceptable to Administrative Agent.
"NOTE AND LIEN ASSIGNMENT" is defined in Section 14.12(c).
"OBLIGATION" means all present and future (i) Debts, liabilities and
obligations of any Company to Administrative Agent or any Lender and related to
any Credit Document, whether principal, interest, fees, costs,
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attorneys' fees or otherwise, and including the principal amount of any
Eurocurrency Borrowing funded by the Eurocurrency Lending Installation and
interest, fees and costs related thereto, (ii) all Debts, liabilities or
obligations, contingent or otherwise, of any Company which arises under or in
connection with a Rate Management Transaction with Administrative Agent or one
of its Affiliates, (iii) Debts, liabilities or obligations owed by any Company
to Administrative Agent or one of its Affiliates under any Hedging Agreement
(including, without limitation, with respect to any "Transaction" [as defined in
any Hedging Agreement] entered into pursuant to any Hedging Agreement, all
present and future amounts due and payable by any Company, whether such amounts
are due and payable on the date(s) scheduled therefor, on the occurrence of an
"Early Termination Date" [as defined in any Hedging Agreement], or otherwise) to
the extent relating to interest payable under this agreement, (iv) any of the
foregoing amounts that would become due but for the operation of 11 U.S.C.
Section 502 and 503 or any other provision of Title 11 of the United States
Code, (v) pre- and post-maturity interest on any of the foregoing, including all
post-petition interest if any Company voluntarily or involuntarily files for
protection under any Debtor Relief Law and (vi) renewals, extensions,
rearrangements and modifications of any character whatsoever of any the
foregoing.
"OPERATING EBITDA" means, with respect to any Person and for any period
(without duplication) the amount equal to (i) Net Income plus (ii) to the extent
deducted in calculating such Net Income, the sum of (a) Interest Expense plus
(b) Tax expense plus (c) depreciation and amortization from its continuing
operations, plus (iii) reserves booked in a period for losses expected to be
incurred in connection with discontinued operations, not to exceed Five Hundred
Thousand Dollars ($500,000) in the aggregate during the term of this Agreement,
minus (iv) to the extent included in calculating such Net Income, any gains or
losses from investments, any income or loss of Detection Systems or of any
Entity whose stock is held as a Permitted Public Company Holding which is
reported by Parent as income or loss in its financial statements, any gains or
losses from foreign currency conversion rates or translations, any gains that
are extraordinary items, any insurance proceeds included in Net Income and any
LIFO inventory changes.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for its
formation and organization, which, for example, (i) for a corporation are its
corporate charter and bylaws, (ii) for a partnership are its certificate of
partnership (if applicable) and partnership agreement, (iii) for a limited
liability company are its certificate of organization and limited liability
company agreement (regulations) and (iv) for a trust is the trust agreement or
indenture under which it is created.
"OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C.
Section 651 et seq., as amended.
"OVER-ADVANCE AVAILABILITY" means Six Million Dollars ($6,000,000) on
the Initial Closing Date, which shall be automatically and permanently reduced
by (i) Five Hundred Thousand Dollars ($500,000) on each of June 30, July 31 and
August 31, 2000, (ii) One Million Five Hundred Thousand Dollars on each of
September 30 and December 31, 2000 and March 31, 2001, and (iii) the amount of
each addition to the Borrowing Base for machinery, equipment and Real Property
pursuant to clause (d) or (e) of the definition of "Borrowing Base" at the time
Administrative Agent notifies Borrower of each addition. In the event of a
reduction or partial termination ("NON-SCHEDULED REDUCTION") of the Over-Advance
Availability other than as a result of the operation of clauses (i) and (ii)
preceding, the amounts of future scheduled reductions stated in clauses (i) and
(ii) shall be reduced pro rata, in the same proportion as the amount of the
Non-Scheduled Reduction bears to the Over-Advance Availability immediately prior
to the Non-Scheduled Reduction.
"PARENT" means Ultrak, Inc., a Delaware corporation, which is the
parent of Borrower and of Ultrak Holdings.
"PARTICIPANT" is defined in Section 14.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
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"PERMITTED ASSET SALE" means (i) any sale and disposition of inventory
in the ordinary course of business for fair and adequate consideration, (ii) any
sale of assets which are obsolete or are no longer in use and which are not
significant to the continuation of the business of the Companies, (iii) upon
prior written notice to, and completion of all actions necessary to confirm,
reaffirm or re-establish Lender Liens to the satisfaction of Administrative
Agent, any sale and disposition from any Company to any other Company provided,
in all respects, such sale and disposition is otherwise subject to and complies
with Section 9.5, (iv) any disposition of assets (other than stock or other
equity securities of a Company) where substantially similar assets have been or
are being acquired, (v) any sale of assets relating to mergers and
consolidations permitted under this Agreement, (vi) any other sales and
dispositions which, when added to the market value of all other assets sold
pursuant to this clause (vi) during the period from the date hereof through the
entire term of this Agreement, have an aggregate market value of Five Hundred
Thousand Dollars ($500,000) or less, (vii) a Permitted Security Warranty
Transaction, (viii) any sale of all of Parent's interest (or Security Warranty's
interest if a Permitted Security Warranty Transaction has occurred) in Detection
Systems, provided the Net Proceeds are applied as required by Section 3.2 and
(ix) any other sales and dispositions approved in advance by Administrative
Agent.
"PERMITTED DEBT" is defined in Section 9.2.
"PERMITTED INTERCOMPANY ADVANCES" means loans, advances or extensions
of credit by Parent or Borrower to Foreign Subsidiaries from funds loaned to
Borrower under the Eurocurrency Sublimit. For the avoidance of doubt, no loans,
advances or extensions of credit may be made by Borrower or any other Company to
any Foreign Subsidiary except for loans made with the proceeds of Eurocurrency
Borrowings.
"PERMITTED INTERCOMPANY GUARANTY" means guaranties or assurances of
payment of loans, advances or extensions of credit by Borrower to Foreign
Subsidiaries from funds loaned to Borrower as Eurocurrency Borrowings. For the
avoidance of doubt, no guaranties or assurances of payment of loans, advances or
extensions of credit may be made by Borrower or any other Company on behalf of
any Foreign Subsidiary except for guaranties of loans made with the proceeds of
Eurocurrency Borrowings.
"PERMITTED INVESTMENT" is defined in Section 9.7.
"PERMITTED LIENS" is defined in Section 9.3.
"PERMITTED PUBLIC COMPANY HOLDINGS" means (i) securities of companies
("PORTFOLIO COMPANIES") approved in advance by Administrative Agent as being
eligible for inclusion as "Permitted Public Company Holdings", (ii) amounts in a
money market account associated with any brokerage account with a substantial
and reputable brokerage firm acceptable to Administrative Agent in which
Permitted Public Company Holdings are held or (iii) securities that meet all of
the following criteria:
(a) such securities are traded on a nationally-recognized
stock exchange or are securities as to which bids and offer quotations
are reported in the automated quotation system operated by the National
Association of Securities Dealers, Inc.;
(b) the sale or other transfer of such securities is not
restricted in any way (other than restrictions imposed by applicable
securities laws);
(c) the market capitalization of each Portfolio Company that
has issued such securities must equal or exceed $1,000,000,000 (except
that Southwest Securities is exempted from the requirements of this
CLAUSE (c));
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(d) each Portfolio Company must have been in existence with
substantial operations for a period of at least five (5) years;
(e) at the time of purchase of the securities of a Portfolio
Company, the ratio of the market price at the time of purchase to the
Net Income of the Portfolio Company for the most recently completed
fiscal year must be less than 50 to1; and
(f) such agreements and documents as Administrative Agent in
its sole discretion deems appropriate have been executed by necessary
parties, pursuant to which Administrative Agent has a perfected first
and prior Lender Lien in and to the securities.
"PERMITTED SECURITY WARRANTY TRANSACTION" means a transfer to Security
Warranty by Parent of all of Parent's Detection Systems Securities, if, but only
if, (a) Parent gives at least twenty (20) days prior written notice to
Administrative Agent of its intent to make a transfer, (b) such agreements and
documents are executed by Borrower, Parent, Administrative Agent, Security
Warranty and other necessary parties as Administrative Agent in its sole
discretion deems appropriate, pursuant to which Administrative Agent will have a
perfected first and prior Lender Lien in and to the Detection Systems
Securities, and (c) Administrative Agent has a perfected first and prior Lender
Lien in and to all stock of Security Warranty pursuant to such duly executed
agreements and documents as Administrative Agent in its sole discretion deems
appropriate.
"PERMITTED TROL GUARANTIES" means unsecured guaranties by Parent and
the Domestic Subsidiaries of the obligations of Parent and Borrower with respect
to the TROL Financing.
"PERMITTED TROL LIENS" means Liens securing the TROL Financing
permitted by this Agreement.
"PERSON" means any individual or Entity.
"POTENTIAL DEFAULT" means any event, occurrence or circumstance the
existence of which, upon any required notice, time lapse, or both, could
reasonably be expected to become an Event of Default.
"PRINCIPAL DEBT" means, at any time, the unpaid principal balance of
all Borrowings (including the Dollar Equivalent of Eurocurrency Borrowings).
"PRIOR CREDIT AGREEMENT" means that certain First Amended and Restated
Credit Agreement dated as of August 12, 1999, among Parent, Bank One and ▇▇▇▇▇
Fargo, as renewed, extended and amended, including the First Amendment dated as
of November 12, 1999, the Second Amendment dated as of January 31, 2000 and the
Third Amendment dated as of February 29, 2000.
"PRIOR LENDERS" means Bank One and ▇▇▇▇▇ Fargo.
"PRIOR NOTES" means the Term Notes and the Revolving Notes evidencing
the borrowings under the Prior Credit Agreement.
"PRIOR OBLIGATION" means the "Obligation" as defined in the Prior
Credit Agreement.
"PRO RATA PART" mean, at any time and for any Lender, the proportion
(stated as a percentage) that the Principal Debt owed to it bears to the total
Principal Debt owed to all Lenders.
"RATE MANAGEMENT TRANSACTION" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
any Company and Administrative Agent or one of its Affiliates which
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is a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
"REAL PROPERTY" means any land, buildings, fixtures and other
improvements to land now or in the future directly or indirectly owned by any
Company, leased to or otherwise operated by any Company or subleased by any
Company to any other Person.
"REAL PROPERTY SUBLIMIT" means a limit established by Administrative
Agent in its sole discretion, exercised in a commercially reasonable manner, for
the amount to be included in the Borrowing Base for unencumbered Real Property
located in the United States and owned by a Domestic Company, which is
reasonably expected to be limited to Two Million Dollars ($2,000,000).
"RELEASE" has its usual meaning and also means any "release" as defined
under any Environmental Law.
"REPRESENTATIVES" means, with respect to a Person, its representatives,
officers, directors, employees, contractors, consultants, accountants,
attorneys, insurers, shareholders and agents.
"REQUIRED LENDERS" means, (i) at any time Principal Debt or LC Exposure
is outstanding, any combination of Lenders holding (directly or indirectly) at
least sixty six and two-thirds percent (66 2/3%) of the sum of the Principal
Debt and the LC Exposure at the time in question, and (ii) at any other time,
any combination of Lenders whose aggregate Commitment Percentages are at least
sixty six and two-thirds percent (66 2/3%).
"RESERVE REQUIREMENT" means, for any LIBOR Rate Borrowing or
Eurocurrency Borrowing, and for the relevant Interest Period, the total reserve
requirements (including all basic, supplemental, emergency, special, marginal
and other reserves required by applicable Laws) applicable to eurocurrency
fundings or liabilities as of the first day of that Interest Period in amount
and maturity of such Borrowing.
"RESPONSIBLE OFFICER" means Borrower's chairman, president, chief
executive officer, chief financial officer or treasurer.
"REVOLVING FACILITY" means the revolving line of credit facility
described in Section 2.1.
"REVOLVING FACILITY TERMINATION DATE" means the earlier of (i) March
31, 2002 and (ii) the date on which the commitments to lend and issue LCs under
this Agreement are fully cancelled or terminated.
"RIGHTS" means rights, remedies, powers, privileges and benefits.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECURITY AGREEMENT" means a security agreement substantially in the
form of Exhibit C and otherwise in form and scope acceptable to Administrative
Agent.
"SECURITY WARRANTY" means Security Warranty, Inc., a Texas corporation
and a wholly owned Subsidiary of Parent.
"SOLVENT" means, as to any Person, that (i) the aggregate fair market
value of such Person's assets
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exceeds its liabilities (whether contingent, subordinated, unmatured,
unliquidated or otherwise), (ii) such Person has sufficient cash flow to enable
it to pay its debts as they mature and (iii) such Person does not have
unreasonably small capital to conduct its businesses.
"SUBSIDIARY" of any Person means any other Person of which (i) more
than fifty percent (50%) (in number of votes) of the stock (or equivalent
interests) is owned of record or beneficially, directly or indirectly, by that
Person or (ii) such Person serves as a general partner or a similar capacity.
Unless otherwise specified or the context otherwise requires, "Subsidiary"
refers to a Subsidiary of Parent or Borrower.
"TANGIBLE NET WORTH" means, as of any date, the total shareholders'
equity (including common stock and preferred stock (other than mandatorily
redeemable stock) at stated value, additional paid-in capital and retained
earnings after deducting treasury stock) which appears on a consolidated balance
sheet of the Companies prepared as of such date in accordance with GAAP, minus
the sum of the following which are booked for dates or periods after December
31, 1999: (i) unrealized gains or losses from investments, (ii) income or losses
of Detection Systems or other Entities in which a Company has a minority
interest to the extent such income or losses are recorded on the books of a
Company but do not represent receipt of cash by the Companies, (iii) goodwill,
experimental expenses, intellectual property, patents, trademarks, licenses,
software and other assets which are classified as intangible assets on a balance
sheet of such Person, prepared in accordance with GAAP, and (iv) any accumulated
gains or losses from foreign currency conversion rates or translations.
"TARGET SETTLEMENT DATE" means any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.
"TAXES" means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income or any of its properties,
franchises or assets.
"TROL FACILITY" means all of the real estate and improvements at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ which are the subject of the TROL
Financing.
"TROL FINANCING" means the Tax Retention Operating Lease Financing
arrangements dated as of March 31, 1997, originally provided in favor of Parent
and Borrower by NationsBank of Texas, N.A., with Bank One and ▇▇▇▇▇ Fargo having
been substituted for NationsBank of Texas, N.A., as such financing arrangements
have been heretofore amended and may be amended contemporaneously with or after
the execution and delivery of this Agreement on terms and conditions and with
documentation acceptable to Administrative Agent to the extent such approval is
required hereunder. "TROL FINANCING" also means and includes any refinancing of
the existing TROL Financing so long as the terms of any such refinancing do not
increase the outstanding principal amount of the TROL Financing at the time of
the refinancing and do not create annual debt service requirements greater than
the present debt service requirements of the TROL Financing.
"TYPE" means any type of Borrowing determined with respect to the
applicable interest option.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
"ULTRAK HOLDINGS" means Ultrak Holdings Limited, a United Kingdom
company, which is a wholly-owned subsidiary of Parent and is the parent of all
Foreign Subsidiaries except Ultrak Europe N.V. (which is owned ninety nine
percent (99%) by Parent and one percent (1%) by Ultrak Holdings).
"ULTRAK GP" means Ultrak GP, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent.
"ULTRAK LP" means Ultrak LP, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent.
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"UNITED STATES" means the United States of America.
"VIDEOSYS" means Videosys Limited, a United Kingdom private limited
liability company.
"VOTING STOCK" means securities (as such term is defined in Section
2(1) of the Securities Act of 1933, as amended) of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"▇▇▇▇▇ FARGO" means ▇▇▇▇▇ Fargo Bank (Texas), National Association.
1.2 Time References. Unless otherwise specified, in the Credit
Documents (i) time references (e.g., 10:00 a.m.) are to time in Chicago,
Illinois, and (ii) in calculating a period from one date to another, the word
"from" means "from and including" and the word "to" or "until" means "to but
excluding."
1.3 Other References. Unless otherwise specified, in the Credit
Documents (i) where appropriate, the singular includes the plural and vice
versa, and words of any gender include each other gender, (ii) heading and
caption references may not be construed in interpreting provisions, (iii)
monetary references are to currency of the United States, (iv) section,
paragraph, annex, schedule, exhibit and similar references are to the particular
Credit Document in which they are used, (v) references to "telecopy," "telefax,"
"facsimile," "fax" or similar terms are to facsimile or telecopy transmissions,
(vi) the term "including" (or "included" or "includes") shall be deemed to be
followed by the phrase "without limitation", (vii) references to "day" and
"month" are references to a calendar day or calendar month unless the defined
term "Business Day" is used, (viii) the rule of construction that references to
general items that follow references to specific items are limited to the same
type or character of those specific items is not applicable in the Credit
Documents, (ix) references to any Person include that Person's heirs, personal
representatives, successors, trustees, receivers and permitted assigns, (x)
references to any Law include every amendment or supplement to it, rule and
regulation adopted under it, and successor or replacement for it and (xi)
references to any Credit Document or other document include every renewal and
extension of it, amendment, modification and supplement to it, and replacement
or substitution for it, as each is made in accordance with the applicable
provisions of such Credit Document.
1.4 Accounting Principles. Unless otherwise specified, in the Credit
Documents (i) GAAP determines all accounting and financial terms and compliance
with financial covenants, (ii) GAAP in effect on the date of this Agreement
determines compliance with financial covenants, (iii) otherwise, all accounting
principles applied in a current period must be comparable in all material
respects to those applied during the preceding comparable period and (iv) while
the Financials for the Companies are on a consolidated basis, (a) all accounting
and financial terms and compliance with reporting covenants must be on a
consolidated basis, as applicable and (b) compliance with financial covenants
must be on a consolidated basis.
SECTION 2. COMMITMENT. Subject to the provisions in the Credit Documents, each
Lender severally but not jointly agrees to extend credit to Borrower under the
Revolving Facility in accordance with the following provisions.
2.1 Revolving Facility. Each Lender severally but not jointly agrees to
lend to Borrower from time to time on a revolving credit basis that Lender's
Commitment Percentage of Borrowings under the Revolving Facility, all of which
Borrower may borrow, repay and reborrow under the terms and conditions contained
in this Agreement, subject further to the following conditions:
(a) Business Day Borrowings. Each Borrowing may only occur on a
Business Day on or after the Initial Closing Date and before the Revolving
Facility Termination Date.
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(b) Minimum Borrowing Amount. Except for Borrowings pursuant to Section
2.3, each Borrowing may only be in an amount (i) equal to Five Hundred Thousand
Dollars ($500,000) or a greater integral multiple of Five Hundred Thousand
Dollars ($500,000) if a LIBOR Rate Borrowing, or (ii) equal to or greater than
the Dollar Equivalent of Five Hundred Thousand Dollars ($500,000) if a
Eurocurrency Borrowing. The procedures for Base Rate Borrowings and collections
are included in Sections 2.3, 2.4, 3.4 and 3.13.
(c) Maximum Borrowings from All Lenders. The sum at any time of (i) the
outstanding Principal Debt evidencing Base Rate Borrowings and LIBOR Rate
Borrowings, plus (ii) one hundred ten percent (110%) of the outstanding
Principal Debt (including the Dollar Equivalent of Eurocurrency Borrowings)
evidencing Eurocurrency Borrowings, plus (iii) the LC Exposure may never exceed
the lesser of (A) the total Commitments of all Lenders and (B) the Borrowing
Base.
(d) Maximum Borrowings from Each Lender. The sum at any time of (i) the
outstanding Principal Debt evidencing Base Rate Borrowings and LIBOR Rate
Borrowings owed to any Lender, plus (ii) one hundred ten percent (110%) of the
Dollar Equivalent of the outstanding Principal Debt evidencing Eurocurrency
Borrowings owed to such Lender, plus (iii) the LC Exposure of such Lender may
never exceed such Lender's Commitment.
(e) Reduction in Market Value of Securities. If, at the time of any
potential advance, the Market Value of securities included within clause (c) or
clause (d) of the definition of "Borrowing Base" has declined by more than Five
Hundred Thousand Dollars ($500,000) since the last Borrowing Base Report
delivered by Borrower to Administrative Agent, then Administrative Agent may
reduce the Borrowing Base prior to making such advance by marking such
securities to Market Value, and Borrower shall deliver a Borrowing Base Report
which is not more than ten (10) days old.
(f) Eurocurrency Sublimit. The sum of all Eurocurrency Borrowings that
are outstanding at any one time may not exceed the Eurocurrency Sublimit.
(g) Unilateral Termination of Obligation To Make Eurocurrency
Borrowings. Administrative Agent reserves the right, in its sole and absolute
discretion, to terminate the obligation and commitment of all Lenders to make
future Eurocurrency Borrowings available to Borrower, to permit future renewals
of Borrowings as Eurocurrency Borrowings and to permit future conversions of
Domestic Borrowings to Eurocurrency Borrowings, upon ten (10) days prior written
notice to Borrower. After any such termination, each outstanding Eurocurrency
Borrowing tranche will be converted to a Base Rate Borrowing at the end of the
Interest Period therefor.
(h) Maximum of Five LIBOR Rate Tranches. Borrower may not have
outstanding more than five (5) outstanding LIBOR Rate Borrowing tranches at any
time.
2.2 Emergency Advance Facility. If at any time, and from time to time,
the sum of (i) the outstanding Principal Debt evidencing Base Rate Borrowings
and LIBOR Rate Borrowings, plus (ii) one hundred ten percent (110%) of the
Dollar Equivalent of the outstanding Principal Debt evidencing Eurocurrency
Borrowings, plus (iii) the LC Exposure exceeds the Borrowing Base but does not
exceed the total Commitments of all Lenders, and if Administrative Agent deems
it to be in the best interests of the Lenders, Administrative Agent may instruct
each Lender to make a Base Rate Borrowing to Borrower, and each Lender severally
but not jointly agrees to lend to Borrower, that Lender's Commitment Percentage
of up to the lesser of (A) the unused total Commitments and (B) an aggregate of
One Million Dollars ($1,000,000) at any time outstanding under this Section 2.2,
with a maturity of not more than forty-five (45) days.
2.3 Borrower's Loan Account. Administrative Agent shall maintain a loan
account (the "LOAN ACCOUNT") on its internal data control systems in which shall
be recorded (i) all loans and advances made by Lenders, or by Administrative
Agent for the account of Lenders, to Borrower pursuant to this Agreement, (ii)
all
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payments made by Borrower on all such loans and advances (including debits and
credits pursuant to Section 3.4 (Lock-Box Account) and (iii) all other
appropriate debits and credits as provided in this Agreement, including, without
limitation, all interest, unused facility fees, agency fees, LC fees and
prepayment fees, but Borrower will be entitled to fifteen (15) days written
notice prior to any debit with respect to appraisal fees, audit fees, attorneys
fees and other miscellaneous charges and expenses for which Borrower is
responsible hereunder. All entries in Borrower's Loan Account shall be made in
accordance with Administrative Agent's customary accounting practices as in
effect from time to time. Borrower promises to pay to Administrative Agent and
Lenders the amount reflected as owing by it under its Loan Account and all of
its other obligations hereunder and under any of the other Credit Documents as
such amounts become due or are declared due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) pursuant to the terms of
this Agreement and the other Credit Documents.
(a) Statements; Telephonic Notice.
(i) All advances and other financial accommodations to
Borrower, and all other debits and credits provided for in this
Agreement, may be evidenced by entries made by Administrative Agent in
its internal data control systems showing the date, amount and reason
for each such debit or credit. Until such time as Administrative Agent
shall have rendered to Borrower written statements of account as
provided herein, the balance in Borrower's Loan Account, as set forth
on Administrative Agent's most recent printout, shall be rebuttably
presumptive evidence of the amounts due and owing to Administrative
Agent and Lenders by Borrower. Not more than twenty (20) days after the
last day of each calendar month, Administrative Agent shall render to
Borrower a statement setting forth the balance of Borrower's Loan
Account, including principal, interest, expenses and fees. Each such
statement shall be subject to subsequent adjustment by Administrative
Agent but shall, absent manifest errors or omissions, be presumed
correct and binding upon Borrower and shall constitute an account
stated unless, within thirty (30) days after receipt of any statement
from Administrative Agent, Borrower shall deliver to Administrative
Agent written objection thereto specifying the error or errors, if any,
contained in such statement.
(ii) Borrower hereby authorizes Administrative Agent and each
Lender to extend advances under the Revolving Facility and to transfer
funds based on telephonic notices made by any Person or Persons
Administrative Agent in good faith believes to be acting on behalf of
Borrower, and all of such advances shall be Base Rate Borrowings
(compliance with the procedures set forth in Section 2.4 and elsewhere
herein being required for LIBOR Rate Borrowings and Eurocurrency
Borrowings). Borrower agrees to deliver promptly to Administrative
Agent a written confirmation, if such confirmation is requested by
Administrative Agent, of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs in any material respect
from the action taken by Administrative Agent, the records of
Administrative Agent shall govern absent manifest error.
2.4 Borrowing Procedure. The following procedures apply to all
Borrowings other than Base Rate Borrowings pursuant to Section 2.3:
(a) Borrowing Request. Borrower may request a Borrowing only by making
or delivering a Borrowing Request to Administrative Agent (or to the
Eurocurrency Lending Installation and to Administrative Agent in the case of
Eurocurrency Borrowings), which is irrevocable and binding on Borrower, stating
the Type, amount and Interest Period for each Borrowing and which must be
received by Administrative Agent (or the Eurocurrency Lending Installation and
Administrative Agent in the case of Eurocurrency Borrowings) no later than (i)
12:00 noon on the third Business Day before the date on which funds are
requested (the "BORROWING DATE") for any LIBOR Rate Borrowing, (ii) 10:00 a.m.
(London time) on the fourth Business Day before the Borrowing Date for any
Eurocurrency Borrowing, or (iii) 12:00 noon on the Borrowing Date for any Base
Rate Borrowing. If the Borrowing Request for a Eurocurrency Borrowing delivered
pursuant to the immediately-
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preceding sentence is sent by facsimile, Borrower shall promptly deliver the
originally-executed Borrowing Request to the Eurocurrency Lending Installation.
Administrative Agent shall promptly notify each Lender (or any Lending
Installation designated in writing by such Lender to make Eurocurrency
Borrowings on behalf of such Lender) of any Borrowing Request.
(b) Funding. If the applicable conditions precedent have been satisfied
or waived in accordance with the terms of this Agreement, each Lender shall
remit its Commitment Percentage of each requested Borrowing to Administrative
Agent's principal office in Chicago, Illinois (or, alternatively, at the
Eurocurrency Lending Installation in the case of Eurocurrency Borrowings), in
funds that are available for immediate use by Administrative Agent by 2:00 p.m.
(Chicago time), or by the Eurocurrency Lending Installation, as the case may be,
by 2:00 p.m. London time, on the applicable Borrowing Date. Subject to receipt
of those funds, Administrative Agent or the Eurocurrency Lending Installation,
as the case may be, shall (unless to its actual knowledge any of the applicable
conditions precedent have not been satisfied by Borrower or waived by the
requisite Lenders under Section 14.10) make those funds available to Borrower by
(at Borrower's option) (i) wiring the funds to or for the account of Borrower at
the direction of Borrower or (ii) depositing the funds in one of Borrower's
accounts with Administrative Agent or, in the case of Eurocurrency Borrowings,
the Eurocurrency Lending Installation. Notwithstanding the foregoing, ▇▇▇▇▇▇
will not be required to fund its Commitment Percentage of Eurocurrency
Borrowings which are outstanding on the date of this Agreement, but ▇▇▇▇▇▇ will
have a contingent risk participation obligation therein pursuant to Section
2.4(b)(ii). If, at the end of the Interest Period for each such outstanding
Eurocurrency Borrowing, Borrower continues all or part thereof as a Eurocurrency
Borrowing, ▇▇▇▇▇▇ shall be obligated to fund its Commitment Percentage of each
such continuation pursuant to the first sentence of this Section 2.4(b).
(i) Presumption of Funding by Lenders. Absent contrary written
notice from a Lender, Administrative Agent or the Eurocurrency Lending
Installation, as the case may be, may assume that each Lender has made
its Commitment Percentage of the requested Borrowing available to
Administrative Agent or the Eurocurrency Lending Installation, as the
case may be, on the applicable Borrowing Date, and Administrative Agent
or the Eurocurrency Lending Installation, as the case may be, may, in
reliance upon such assumption (but shall not be required to), make
available to Borrower a corresponding amount. If a Lender fails to make
its Commitment Percentage of any requested Borrowing available to
Administrative Agent or the Eurocurrency Lending Installation, as the
case may be, on the applicable Borrowing Date, Administrative Agent or
the Eurocurrency Lending Installation, as the case may be, may recover
the applicable amount on demand, (i) from that Lender together with
interest, commencing on the Borrowing Date and ending on (but
excluding) the date Administrative Agent or the Eurocurrency Lending
Installation, as the case may be, recovers the amount from that Lender,
at an annual interest rate equal to the Fed Funds Rate (or,
alternatively, in the case of Eurocurrency Borrowings, the Eurocurrency
Lending Installation's cost of funds for that amount and for the period
stated above), or (ii) if that Lender fails to pay its amount upon
demand, then from Borrower. No Lender is responsible for the failure of
any other Lender to make its Commitment Percentage of any Borrowing;
however, failure of any Lender to make its Commitment Percentage of any
Borrowing does not excuse any other Lender from making its Commitment
Percentage of any Borrowing.
(ii) Contingent Risk Participation in Eurocurrency Borrowings
by Lenders. Immediately upon the funding of a Eurocurrency Borrowing by
the Eurocurrency Lending Installation, automatically and without
further action required, each Lender which has not made its funds
available pursuant to Section 2.4(b)(i) preceding shall be deemed to
have agreed to purchase, and shall irrevocably and unconditionally be
obligated to purchase, from the Eurocurrency Lending Installation,
without recourse or warranty, an undivided interest and participation
in the Eurocurrency Borrowings and all applicable Rights with respect
thereto equal to such Lender's Commitment Percentage of the
Eurocurrency Borrowings. Administrative Agent may make demand upon each
Lender to consummate its purchase
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obligation with respect to any or all Eurocurrency Borrowings which
such Lender has not funded at a price of par plus interest at an annual
interest rate equal to the Fed Funds Rate (or, alternatively, in the
case of Eurocurrency Borrowings, the Eurocurrency Lending
Installation's cost of funds for that amount and for the period stated
above), at any time and from time, but, until such purchase is made,
all interest and other fees and costs will accrue to the benefit of the
Eurocurrency Lending Installation.
2.5 Letters of Credit.
(a) Conditions. Subject to the terms and conditions of this Agreement
and applicable Laws, Administrative Agent (itself or through one of its
Affiliates, and references in this Section 2.4 to "Administrative Agent" include
those Affiliates) agrees, if requested by Borrower, to issue LCs upon Borrower's
making or delivering an LC Request and delivering an LC Agreement, both of which
must be received by Administrative Agent no later than the fifth Business Day
before the Business Day on which the requested LC is to be issued, so long as
(i) no LC may have an expiration date more than one year from its date of
issuance, (ii) no LC may expire after a date 30 Business Days before the
Revolving Facility Termination Date, (iii) the LC Exposure does not exceed Five
Million Dollars ($5,000,000), (iv) the limitations in Section 2.1 are not
exceeded, and (v) each LC will be denominated in Dollars.
(b) Participation. Immediately upon Administrative Agent's issuance of
any LC, automatically and without further action required, Administrative Agent
shall be deemed to have sold and transferred to each other Lender, and each
other Lender shall be deemed irrevocably and unconditionally to have purchased
and received from Administrative Agent, without recourse or warranty, an
undivided interest and participation in the LC and all applicable Rights of
Administrative Agent in the LC (other than Rights to receive certain fees
provided in Section 4.4 to be for Administrative Agent's sole account) equal to
such Lender's Commitment Percentage.
(c) Reimbursement Obligation. To induce Administrative Agent to issue
and maintain LCs, and to induce Lenders to participate in issued LCs, Borrower
agrees to pay or reimburse Administrative Agent (i) on the date when any draft
or draw request is presented under any LC, the amount paid or to be paid by
Administrative Agent and (ii) promptly, upon demand, the amount of any
additional fees Administrative Agent customarily charges for the application and
issuance of an LC, for amending LC Agreements, for honoring drafts and draw
requests, and for taking similar action in connection with letters of credit. If
Borrower has not reimbursed Administrative Agent for any drafts or draws paid or
to be paid by the date of Administrative Agent's demand for reimbursement,
Administrative Agent is irrevocably authorized to fund Borrower's reimbursement
obligations as a Base Rate Borrowing under the Revolving Facility if proceeds
are available under the Revolving Facility and if the conditions in this
Agreement for such a Borrowing (other than any notice requirements or minimum
funding amounts) have, to Administrative Agent's knowledge, been satisfied. The
proceeds of that Borrowing shall be advanced directly to Administrative Agent to
pay Borrower's unpaid reimbursement obligations. If funds cannot be advanced
under the Revolving Facility, then Borrower's reimbursement obligation shall
constitute a demand obligation. Borrower's obligations under this Section are
part of the Obligation and are absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that Borrower may have at any time against Administrative Agent or any other
Person. From Administrative Agent's demand for reimbursement to the date paid
(including any payment from proceeds of a Base Rate Borrowing), unpaid
reimbursement amounts accrue interest that is payable on demand at the Default
Rate thereafter.
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(d) General. Administrative Agent shall promptly notify Borrower of the
date and amount of any draft or draw request presented for honor under any LC
(but failure to give notice will not affect Borrower's obligations under this
Agreement). Administrative Agent shall pay the requested amount upon presentment
of a draft or draw request unless presentment on its face does not comply with
the terms of the applicable LC. When making payment, Administrative Agent may
disregard (i) any default or potential default that exists under any other
agreement and (ii) obligations under any other agreement that have or have not
been performed by the beneficiary or any other Person (and Administrative Agent
is not liable for any of those obligations). Borrower's reimbursement
obligations to Administrative Agent and Lenders, and each Lender's obligations
to Administrative Agent, under this section are absolute and unconditional
irrespective of, and Administrative Agent is not responsible for, (i) the
validity, enforceability, sufficiency, accuracy or genuineness of documents or
endorsements (even if they are in any respect invalid, unenforceable,
insufficient, inaccurate, fraudulent or forged), (ii) any dispute by any Company
with or any Company's claims, setoffs, defenses, counterclaims or other Rights
against Administrative Agent, any Lender or any other Person, or (iii) the
occurrence of any Potential Default or Event of Default. However, nothing in
this Agreement constitutes a waiver of Borrower's Rights to assert any claim or
defense based upon the gross negligence or willful misconduct of Administrative
Agent or any Lender. Administrative Agent shall promptly distribute
reimbursement payments received from Borrower to all Lenders according to their
Pro Rata Part of the Revolving Facility.
(e) Obligation of Lenders. If Borrower fails to reimburse
Administrative Agent as provided in Section 2.4(c) within 24 hours after
Administrative Agent's demand for reimbursement, and funds cannot be advanced
under the Revolving Facility to satisfy the reimbursement obligations,
Administrative Agent shall promptly notify each Lender of Borrower's failure, of
the date and amount paid, and of each Lender's Commitment Percentage of the
unreimbursed amount. Each Lender shall promptly and unconditionally make
available to Administrative Agent in immediately available funds its Commitment
Percentage of the unpaid reimbursement obligation, subject to the limitations of
Section 2.2(d). Funds are due and payable to Administrative Agent before the
close of business on the Business Day when Administrative Agent gives notice to
each Lender of Borrower's reimbursement failure (if notice is given before 1:00
p.m.) or on the next succeeding Business Day (if notice is given after 1:00
p.m.). All amounts payable by any Lender accrue interest after the due date, and
each Lender shall pay to Administrative Agent on demand interest, at the Fed
Funds Rate from the day the applicable draft or draw is paid by Administrative
Agent to (but not including) the date the amount is paid by the Lender to
Administrative Agent.
(f) Duties of Administrative Agent. Administrative Agent agrees with
each Lender that it will exercise and give the same care and attention to each
LC as it gives to its other letters of credit. Each Lender and Borrower agree
that, in paying any draft or draw under any LC, Administrative Agent has no
responsibility to obtain any document (other than any documents expressly
required by the respective LC) or to ascertain or inquire as to any document's
validity, enforceability, sufficiency, accuracy or genuineness or the authority
of any Person delivering it. Neither Administrative Agent nor its
Representatives will be liable to any Lender or any Company for any LC's use or
for any beneficiary's acts or omissions. Any action, inaction, error, delay or
omission taken or suffered by Administrative Agent or any of its Representatives
in connection with any LC, applicable draws, drafts or documents or the
transmission, dispatch or delivery of any related message or advice, if in good
faith and in conformity with applicable Laws and in accordance with the
standards of care specified in the Uniform Customs and Practices for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
(as amended or modified), is binding upon the Companies and Lenders and does not
place Administrative Agent or any of its Representatives under any resulting
liability to any Company or any Lender. Administrative Agent is not liable to
any Company or any Lender for any action taken or omitted, in the absence of
gross negligence or willful misconduct, by Administrative Agent or its
Representatives in connection with any LC.
(g) Cash Collateral. On the Revolving Facility Termination Date, and if
requested by Required Lenders while an Event of Default or Potential Default
exists, Borrower shall provide Administrative Agent, for
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the benefit of Lenders, cash collateral in an amount to equal the then-existing
LC Exposure. After the expiration of ninety (90) days from the date on which all
existing Events of Default and Potential Defaults have been cured,
Administrative Agent will, upon request of Borrower, release the cash collateral
if no Events of Default or Potential Defaults exist at the time of the release.
(h) INDEMNIFICATION. BORROWER AND PARENT, JOINTLY AND SEVERALLY, SHALL,
AND HEREBY AGREE TO, PROTECT, INDEMNIFY, PAY AND SAVE ADMINISTRATIVE AGENT, EACH
LENDER, AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND AGAINST ANY AND
ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR OR BE SUBJECT
TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC, ANY DISPUTE ABOUT IT, OR THE
FAILURE OF ADMINISTRATIVE AGENT TO HONOR A DRAFT OR DRAW REQUEST UNDER ANY LC AS
A RESULT OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR
FUTURE GOVERNMENTAL AUTHORITY. HOWEVER, NO PERSON IS ENTITLED TO INDEMNITY UNDER
THE FOREGOING FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(i) LC Agreements. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not incorporated
into this Agreement in any manner. The fees and other amounts payable with
respect to each LC are as provided in this Agreement, drafts and draws under
each LC are part of the Obligation, only the events specified in this Agreement
as an Event of Default shall constitute a default under any LC, and the terms of
this Agreement control any conflict between the terms of this Agreement and any
LC Agreement.
2.6 Borrowing Requests and LC Requests. Each Borrowing Request and LC
Request constitutes a representation and warranty by Borrower that as of the
Borrowing Date or the date of issuance of the requested LC, as the case may be,
that all of the conditions precedent in SECTION 6 have been satisfied.
2.7 Termination. Upon giving at least five Business Days prior written
and irrevocable notice to Administrative Agent, Borrower may permanently
terminate all of the unused portion of the Revolving Facility and the Commitment
but may not terminate it in part, except as stated in the next sentence. Upon
the sale of all or a substantial part of the Detection Systems (the Net Proceeds
of which are applied to reduce the Obligation in accordance with Section
3.2(c)(iii)), Borrower may permanently terminate a portion of the Revolving
Facility and reduce the total Commitments to Thirty Five Million Dollars
($35,000,000). Each partial termination must be ratable in accordance with each
Lender's Commitment Percentage. Any partial terminations shall reduce
availability under the Eurocurrency Sublimit on a pro rata basis in the same
proportion which the Eurocurrency Sublimit at the time bears to the total
Commitments. At the time of any termination, Borrower shall pay to
Administrative Agent (or, alternatively, to the Eurocurrency Lending
Installation in the case of Eurocurrency Borrowings), for the account of each
Lender, as applicable, all accrued and unpaid fees under this Agreement, the
interest attributable to the amount of that reduction, and any related Funding
Loss. Any part of the Commitment that is terminated may not be reinstated.
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SECTION 3. TERMS OF PAYMENT.
3.1 Notes and Payments.
(a) Notes. The Revolving Notes under the Prior Credit Agreement
acquired by American National from Bank One and ▇▇▇▇▇ Fargo immediately before
the execution of the Existing Credit Agreement were, at the Initial Closing
Time, renewed and replaced by a single Note hereunder in the face amount of
Forty Five Million Dollars ($45,000,000), executed by Ultrak Operating, L.P., as
Borrower, payable to the order of American National, as Lender, to evidence the
Principal Debt (the "INITIAL CLOSING NOTE"). Contemporaneously with the
execution of this Agreement, the Initial Closing Note has been renewed and
replaced by two Notes hereunder to evidence the Principal Debt , one in the face
amount of Twenty Five Million Dollars ($25,000,000), executed by Borrower,
payable to the order of American National, as Lender, and one in the face amount
of Twenty Million Dollars ($20,000,000), executed by Borrower, payable to the
order of ▇▇▇▇▇▇. If any Lender subsequently sells a portion of the Obligation to
another Entity which assumes a portion of the Commitment, then, each time,
Administrative Agent will prepare a new Schedule 2 reflecting the post-transfer
Commitment of each Lender, and a copy thereof will be sent by Administrative
Agent to Borrower and each Lender. Administrative Agent will cause to be
prepared and delivered to Borrower replacement Notes for each Lender who made a
transfer and each Lender who was the recipient of a transfer, in the face amount
of the Commitment of each such transferee and recipient, and Borrower will
promptly execute and deliver such replacement Notes to Administrative Agent for
delivery to the Lenders who are payees thereof.
(b) Payment. Except for payment made on Base Rate Borrowings by
appropriate debits to Borrower's Loan Account pursuant to Section 2.3 and
Section 3.4, Borrower must make each payment and prepayment on the Obligation to
Administrative Agent's principal office in Chicago, Illinois (or, alternatively,
at the Eurocurrency Lending Installation in the case of payments and prepayments
made in respect of Eurocurrency Borrowings) in immediately available funds by
1:00 p.m.(local time) on the day due; otherwise, but subject to Section 3.8,
those funds continue to accrue interest as if they were received on the next
Business Day. Administrative Agent or the Eurocurrency Lending Installation, as
applicable, shall promptly pay to each Lender (or a Lending Installation of that
Lender designated in writing to Administrative Agent or the Eurocurrency Lending
Installation, as appropriate) the part of any payment or prepayment to which
that Lender is entitled under this Agreement (in the same type of funds which
the Administrative Agent or the Eurocurrency Lending Installation received) on
the same day Administrative Agent or the Eurocurrency Lending Installation, as
the case may be, receives the funds from Borrower.
(c) Payment Assumed. Unless Administrative Agent (or, alternatively,
the Eurocurrency Lending Installation in the case of Eurocurrency Borrowings)
has received notice from Borrower prior to the date on which any payment is due
under this Agreement that Borrower will not make that payment in full,
Administrative Agent (or, alternatively, the Eurocurrency Lending Installation
in the case of Eurocurrency Borrowings) may assume that Borrower has made the
full payment due and Administrative Agent (or, alternatively, the Eurocurrency
Lending Installation in the case of Eurocurrency Borrowings) may, in reliance
upon that assumption, cause to be distributed to each Lender (or a Lending
Installation of that Lender designated in writing to Administrative Agent or the
Eurocurrency Lending Installation, as appropriate) on that date the amount then
due to each Lender. If and to the extent Borrower does not make the full payment
due to Administrative Agent (or, alternatively, the Eurocurrency Lending
Installation in the case of Eurocurrency Borrowings), each Lender shall repay to
Administrative Agent (or, alternatively, the Eurocurrency Lending Installation
in the case of Eurocurrency Borrowings) on demand the amount distributed to that
Lender by Administrative Agent (or, alternatively, the Eurocurrency Lending
Installation in the case of Eurocurrency Borrowings) together with interest for
each day from the date that Lender received payment from Administrative Agent
(or, alternatively, the Eurocurrency Lending Installation in the case of
Eurocurrency Borrowings) until the date that Lender repays Administrative Agent
(or, alternatively, the Eurocurrency Lending Installation in the case of
Eurocurrency Borrowings) (unless such
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repayment is made on the same day as such distribution), at an interest rate
equal to the Fed Funds Rate (or, alternatively, in the case of Eurocurrency
Borrowings, the Eurocurrency Lending Installation's cost of funds for that
amount and for the period stated above).
(d) Currency of Payment. All payments and prepayments on the Obligation
must be made in the currency borrowed (the "SPECIFIED CURRENCY") and at the
Lending Installation specified by the Administrative Agent (the "SPECIFIED
PLACE"). The payment of the Obligation shall not be discharged by an amount paid
in another currency or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on conversion to the Specified
Currency and transfer to the Specified Place under normal banking procedures
does not yield the amount of the Specified Currency at the Specified Place due
hereunder. If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in the Specified Currency into another
currency (the "SECOND CURRENCY"), the rate of exchange which shall be applied
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the Specified Currency with the Second
Currency on the Business Day next preceding that on which such judgment is
rendered. The obligation of Borrower in respect of any such sum due from it to
the Administrative Agent or any Lender hereunder (an "ENTITLED PERSON") shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by such Entitled Person of any sum adjudged to be due hereunder or under
the other Credit Documents in the Second Currency, such Entitled Person may in
accordance with normal banking procedures purchase and transfer to the Specified
Place the Specified Currency with the amount of the Second Currency so adjudged
to be due; and Borrower hereby, as a separate part of the Obligation and
notwithstanding such judgment, agrees to indemnify such Entitled Person against,
and to pay such Entitled Person on demand, in the Specified Currency, any
difference between the sum originally due to such Entitled Person in the
Specified Currency and the amount of the Specified Currency so purchased and
transferred.
3.2 Interest and Principal Payments.
(a) Interest. Accrued interest on each LIBOR Rate Borrowing is due and
payable on the first day of each month, commencing on the first day of the month
following the Initial Closing Date, and on the last day of its respective
Interest Period. Accrued interest on each Base Rate Borrowing is due and payable
on the first day of each month, commencing on the first day of the month
following the Initial Closing Date. Accrued interest on each Eurocurrency
Borrowing is due and payable on the last day of its respective Interest Period
(provided that accrued interest on any Eurocurrency Borrowing having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period) and on any date that the
Eurocurrency Borrowing is prepaid, whether by acceleration or otherwise. Accrued
interest is also due and payable (irrespective of the Type of Borrowing) on the
Revolving Facility Termination Date.
(b) Revolving Facility Principal. The Principal Debt is due and payable
on the Revolving Facility Termination Date. Before that date, Borrower may at
any time prepay, without penalty (except as provided in this Agreement) and in
whole or in part, the Principal Debt, so long as (i) each voluntary partial
prepayment must be in a principal amount not less than Five Hundred Thousand
($500,000) (or its Dollar Equivalent) in the case or prepayments of Eurocurrency
Borrowings or LIBOR Rate Borrowings, (ii) Borrower shall pay any related Funding
Loss upon demand, and (iii) in the case of prepayments of Eurocurrency
Borrowings, Borrower has given the Eurocurrency Lending Installation five days'
advance notice of its intention to make such prepayment. Conversions under
Section 3.14 are not prepayments.
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(c) Mandatory Prepayments.
(i) At any time a Borrowing Base Deficiency exists, Borrower
shall immediately make a prepayment to Administrative Agent or the
Eurocurrency Lending Installation (with any related Funding Loss) under
the Revolving Facility (or, if deemed appropriate by Administrative
Agent or any Lender, in their sole discretion, prefund the LC Exposure
with cash collateral) so that a Borrowing Base Deficiency no longer
exists; provided that, notwithstanding the foregoing, Borrower may take
up to five (5) Business Days to cure a Borrowing Base Deficiency after
becoming aware of same so long as the amount of the Borrowing Base
Deficiency does not exceed five percent (5%) of the total Borrowing
Base.
(ii) Immediately upon a sale, lease or other disposition of
assets by any Company other than a Permitted Asset Sale, Borrower shall
make a mandatory prepayment to Administrative Agent or the Eurocurrency
Lending Installation (with any related Funding Loss) under the
Revolving Facility in an amount equal to one hundred percent (100%) of
the Net Proceeds of such sale, lease or other disposition.
(iii) Immediately upon the sale or other disposition of any of
Borrower's investment or interest in Detection Systems, Borrower shall
make a mandatory prepayment on the Obligation to Administrative Agent
or the Eurocurrency Lending Installation (with any related Funding
Loss) equal to all of the Net Proceeds of such sale(s) until such time
as the aggregate of all of such Net Proceeds from Detection Systems
sales paid hereunder equals Thirteen Million Dollars ($13,000,000).
With respect to any Net Proceeds in excess of Thirteen Million Dollars
($13,000,000), the required mandatory prepayment will be the amount
included within clause (c) of the Borrowing Base immediately prior to
the sale or other disposition in question.
(iv) If the aggregate principal amount of Eurocurrency
Borrowings outstanding (after converting each Eurocurrency to its
Dollar Equivalent) at any time exceeds the Eurocurrency Sublimit, then,
upon five Business Days' written notice from the Eurocurrency Lending
Installation, Administrative Agent or any Lender, Borrower shall prepay
an aggregate principal amount of Eurocurrency Borrowings sufficient to
bring the aggregate of the Eurocurrency Borrowings outstanding within
the Eurocurrency Sublimit.
3.3 Interest Options. Except that the LIBOR Rate and the Eurocurrency
Rate may not be selected when an Event of Default or Potential Default exists,
and except as otherwise provided in this Agreement, Borrowings bear interest at
an annual rate equal to the lesser of (a) the Base Rate plus the Applicable
Margin and (b) the Maximum Rate, unless Borrower has elected to make a LIBOR
Rate Borrowing or a Eurocurrency Borrowing or has elected to convert a portion
of the Base Rate Borrowings to a LIBOR Rate Borrowing or a Eurocurrency
Borrowing. LIBOR Rate Borrowings will bear interest at an annual rate equal to
the lesser of (i) the LIBOR Rate plus the Applicable Margin and (ii) the Maximum
Rate. Eurocurrency Borrowings will bear interest at an annual rate equal to the
lesser of (A) the Eurocurrency Rate plus the Applicable Margin and (B) the
Maximum Rate. Each change in the Base Rate, LIBOR Rate, Eurocurrency Rate or
Maximum Rate is effective, without notice to Borrower or any other Person, upon
the effective date of change.
3.4 Collection of Accounts and Payments. Borrower shall establish lock
box accounts ("LOCK BOX ACCOUNTS") and blocked accounts (the "BLOCKED ACCOUNTS")
with Administrative Agent and with such banks as are acceptable to
Administrative Agent (collectively, the "COLLECTING BANKS") to which all Account
Debtors shall directly remit all payments on Accounts and in which Borrower and
each other Company will immediately deposit all cash and other payments made for
Inventory and other payments constituting proceeds of Collateral in the
identical form in which such payment was made, whether by cash or check. The
Collecting Banks shall acknowledge and agree, in a manner satisfactory to
Administrative Agent, that all payments made to the Blocked Accounts are the
sole and exclusive property of Administrative Agent, for the benefit of Lenders,
that the Collecting Banks have no right to setoff against the Blocked Accounts
and that the Collecting Banks will wire or otherwise transfer immediately
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available funds in a manner satisfactory to Administrative Agent, funds
deposited into the Blocked Accounts to Administrative Agent on a daily basis as
soon as such funds are collected. Borrower hereby agrees that all payments made
to the Lock Box Accounts, Blocked Accounts or otherwise received by the
Collecting Banks or Administrative Agent or any Lender, whether on the Accounts
or as proceeds of Borrower's other Collateral or otherwise will be the sole and
exclusive property of Administrative Agent, for the ratable benefit of Lenders,
and will be applied on account of Borrower's Liabilities as follows: (i) when
the funds have become available, for collection of checks and other instruments
(including automatic clearing house electronic funds transfers and depository
transfer checks) received by Administrative Agent at its offices in Chicago,
Illinois, Administrative Agent will credit (conditional upon final collection)
all such payments to Borrower's Loan Account and (ii) all cash payments received
by Administrative Agent at its offices in Chicago, Illinois, including, without
limitation, payments made by wire transfer of immediately available funds
received by Administrative Agent in time for posting to the account of
Administrative Agent, for the ratable benefit of Lenders (and, in any event, not
later than 4:00 p.m. Chicago time) on the date received, will be credited to
Borrower's Loan Account immediately upon receipt. Borrower and each of its
Affiliates, Subsidiaries, members, managers, officers, employees, agents or
those Persons acting for or in concert with Borrower shall, acting as trustee
for Administrative Agent, receive, as the sole and exclusive property of
Administrative Agent, any monies, checks, notes, drafts or any other payment
relating to and/or proceeds of Borrower's Accounts or other Collateral which
come into the possession or under the control of Borrower or any of its
Affiliates, Subsidiaries, shareholders, members, managers, employees, agents or
those Persons acting for or in concert with Borrower and immediately upon
receipt thereof, Borrower shall remit the same or cause the same to be remitted,
in kind, to Administrative Agent, at Administrative Agent's address set forth
below. Borrower agrees to pay to Administrative Agent any and all fees, costs
and expenses which Administrative Agent incurs in connection with opening and
maintaining Borrower's Lock Box Accounts and Blocked Accounts and depositing for
collection by Administrative Agent any check or item of payment received and/or
delivered to any Collecting Bank or Administrative Agent, respectively, on
account of the Liabilities and Borrower further agrees to reimburse
Administrative Agent and Lenders for any claims asserted by the Collecting Banks
in connection with Borrower's Blocked Accounts and any amounts paid to any
Collecting Bank arising out of Administrative Agent's or Lenders'
indemnification of such Collecting Bank against damages incurred by the
Collecting Bank in the operation of any Blocked Account.
3.5 Appointment of Administrative Agent as Borrower's Attorney-in-Fact.
Borrower hereby irrevocably designates, makes, constitutes and appoints
Administrative Agent (and all officers, employees, agents and other Persons
designated by Administrative Agent) as Borrower's true and lawful
attorney-in-fact, and authorizes Administrative Agent, in Borrower's or
Administrative Agent's name, to: (a) following the occurrence and during the
continuance of a Default (i) demand payment of Accounts; (ii) enforce payment of
Accounts by legal proceedings or otherwise; (iii) exercise all of Borrower's
rights and remedies with respect to proceedings brought to collect an Account;
(iv) sell or assign any Account upon such terms, for such amount and at such
time or times as Administrative Agent deems advisable; (v) settle, adjust,
compromise, extend or renew any Account; (vi) discharge and release any Account;
(vii) prepare, file and sign Borrower's name on any proof of claim in bankruptcy
or other similar document against an Account Debtor; (viii) notify the post
office authorities to change the address for delivery of Borrower's mail to an
address designated by Administrative Agent, and open and deal with all mail
addressed to Borrower; and (ix) do all acts and things which are necessary, in
Administrative Agent's sole discretion, to fulfill Borrower's obligations under
this Agreement; and (b) at any time (i) take control in any manner of any item
of payment or proceeds thereof; (ii) have access to any lockbox or postal box
into which Borrower's mail is deposited; (iii) endorse Borrower's name upon any
items of payment or proceeds thereof and deposit the same in Administrative
Agent's account on account of the Liabilities; (iv) endorse Borrower's name upon
any chattel paper, document, instrument, invoice or similar document or
agreement relating to any Account or any goods pertaining thereto; and (v) sign
Borrower's name on any verification of Accounts and notices thereof to Account
Debtors.
3.6 Instruments and Chattel Paper. Immediately upon Borrower's receipt
thereof, Borrower shall deliver or cause to be delivered to Administrative
Agent, with appropriate endorsement and assignment to vest title and possession
in Administrative Agent, with full recourse to Borrower, all chattel paper and
instruments which Borrower
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now owns or may at any time or times hereafter acquire in order to permit
Administrative Agent to perfect its security interest in such property.
3.7 Notice to Account Debtors. Administrative Agent may, in its sole
discretion, exercised in a commercially reasonable manner, at any time or times
and without prior notice to Borrower if an Event of Default has occurred and is
continuing (or five (5) days prior written notice to Borrower if no Event of
Default has occurred and is continuing), notify any or all Account Debtors that
the Accounts have been assigned to Administrative Agent and that Administrative
Agent has a security interest therein. Administrative Agent may exercise any or
all of the Rights granted in Section 8(e) of the Amended and Restated Security
Agreement executed and delivered pursuant to Section 5.1 of this Agreement.
3.8 Quotation of Rates. Borrower may call Administrative Agent or the
Eurocurrency Lending Installation before delivering a Borrowing Request to
receive an indication of the interest rates then in effect, but the indicated
rates do not bind Administrative Agent, the Eurocurrency Lending Installation or
Lenders or affect the interest rate that is actually in effect when Borrower
makes a Borrowing Request, on the date any rate of interest is determined under
this Agreement, or on the applicable Borrowing Date.
3.9 Default Rate. All past-due Principal Debt and, unless prohibited by
applicable Government Requirements, past-due interest accruing on the Principal
Debt shall, at Administrative Agent's option, bear interest on the amount
thereof from time to time outstanding from the date due (stated or by
acceleration) at the Default Rate until paid, regardless whether payment is made
before or after entry of a judgment.
3.10 Interest Recapture. If the designated interest rate applicable to
any Borrowing exceeds the Maximum Rate, the interest rate on that Borrowing is
limited to the Maximum Rate, but any subsequent reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued interest equals the amount of interest that would have
accrued if that designated rate had always been in effect. If at maturity
(stated or by acceleration), or at final payment of the Obligation, the total
interest paid or accrued is less than the interest that would have accrued if
the designated rates had always been in effect, then, at that time and to the
extent not prohibited by applicable Laws, Borrower shall pay an amount equal to
the difference between (a) the lesser of the amount of interest that would have
accrued if the designated rates had always been in effect and the amount of
interest that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Obligation.
3.11 Interest Calculations. Interest on all Borrowings will be
calculated on the basis of actual number of days (including the first day but
excluding the last day) elapsed but computed as if each calendar year consisted
of (a) 360 days in the case of all Borrowings other than Eurocurrency Borrowings
denominated in pounds sterling (unless such calculation would result in the
interest on the Borrowings exceeding the Maximum Rate in which event such
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be), and (b) 365 days in the case of Eurocurrency Borrowings
denominated in pounds sterling. All interest rate determinations and
calculations by Administrative Agent are conclusive and binding absent manifest
error.
3.12 Maximum Rate. It is the intent of Administrative Agent, Lenders
and Borrower in the execution and performance of the Credit Documents to remain
in strict compliance with applicable Laws from time to time in effect, including
applicable laws limiting the amount or rate of interest. Administrative Agent,
Lenders and Borrower stipulate and agree that none of the terms and provisions
contained in the Credit Documents shall ever be construed to create a contract
to pay for the use, forbearance or detention of money with interest at a rate or
in an amount in excess of the Maximum Rate or Maximum Amount. For purposes of
the Credit Documents, "interest" shall include the aggregate of all charges
which constitute interest under applicable Laws that are contracted for,
charged, reserved, received or paid under the Credit Documents. Borrower shall
never be required to pay unearned interest and shall never be required to pay
interest at a rate or in an amount in excess of the Maximum Rate or Maximum
Amount, and the provisions of this section shall control over all other
provisions of the Credit Documents, and of any other
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instrument pertaining to or securing the Obligation, which may be in actual or
apparent conflict herewith. If the Obligation is prepaid, or if the maturity of
the Obligation is accelerated for any reason, or if under any contingency the
effective rate or amount of interest which would otherwise be payable under the
Credit Documents would exceed the Maximum Rate or Maximum Amount, or in the
event any Lender or any holder of the Obligation shall charge, contract for,
take, reserve or receive monies that are deemed to constitute interest which
would, in the absence of this provision, increase the effective rate or amount
of interest payable under the Credit Documents to a rate or amount in excess of
that permitted to be charged, contracted for, taken, reserved or received under
applicable Laws then in effect, then the principal amount of the Obligation or
the amount of interest which would otherwise be payable on the Obligation or
both shall be reduced to the amount allowed under applicable Laws as now or
hereinafter construed by the courts having jurisdiction, and all such moneys so
charged, contracted for, taken, reserved or received that are deemed to
constitute interest in excess of the Maximum Rate shall immediately be returned
to or credited to the account of Borrower upon such determination.
Administrative Agent, Lenders and Borrower further stipulate and agree that,
without limitation of the foregoing, all calculations of the rate or amount of
interest contracted for, charged, taken, reserved or received under the Credit
Documents which are made for the purpose of determining whether such rate or
amount exceeds the Maximum Rate or Maximum Amount, shall be made to the extent
not prohibited by applicable Laws, by amortizing, prorating, allocating and
spreading during the period of the full stated term of the Obligation, all
interest at any time contracted for, charged, taken, reserved or received from
Borrower or otherwise by Lenders or any other holder of the Notes. If the Laws
of the State of Texas are applicable for purposes of determining the "Maximum
Rate", such term shall mean "the "weekly rate ceiling" from time to time in
effect under Chapter 1D., Subtitle 1, Title 79, Revised Civil Statutes of Texas
(Article 5069-1D.001 et seq.), as amended, or, if permitted by applicable Law
and effective upon the giving of the notices required by such applicable Law (or
effective upon any other date otherwise specified by applicable Law), the
"monthly ceiling," the "quarterly ceiling," or "annualized ceiling" from time to
time in effect under such applicable Law whichever that the Lenders shall elect
to substitute for the "weekly rate ceiling,"
3.13 Interest Periods. When Borrower requests any LIBOR Rate Borrowing
or any Eurocurrency Borrowing, Borrower may elect the applicable interest period
(each an "INTEREST PERIOD"), which may be, at Borrower's option, one, three or
six months, subject to the following conditions: (i) the initial Interest Period
for a LIBOR Rate Borrowing or a Eurocurrency Borrowing commences on the
applicable Borrowing Date or conversion date, and each subsequent Interest
Period applicable to any Borrowing commences on the day when the next preceding
applicable Interest Period expires; (ii) if any Interest Period for a LIBOR Rate
Borrowing or a Eurocurrency Borrowing begins on a day for which no numerically
corresponding Business Day in the calendar month at the end of the Interest
Period exists, then the Interest Period ends on the last Business Day of that
calendar month; (iii) if Borrower is required to pay any portion of a LIBOR Rate
Borrowing or a Eurocurrency Borrowing before the end of its Interest Period in
order to comply with the payment provisions of the Credit Documents, Borrower
shall also pay any related Funding Loss and accrued interest on the prepaid
amount; (iv) no Interest Period for any portion of Principal Debt may extend
beyond the scheduled repayment date for that portion of Principal Debt; and (v)
no more than six Interest Periods may be in effect at one time.
3.14 Conversions.
(a) Domestic Borrowings. Subject to the limits stated in Section 2.1
and elsewhere herein and provided that Borrower may not convert to or select a
new Interest Period for a LIBOR Rate Borrowing at any time when an Event of
Default exists, Borrower may (i) convert a LIBOR Rate Borrowing on the last day
of the applicable Interest Period to a Base Rate Borrowing, (ii) convert a Base
Rate Borrowing at any time to a LIBOR Rate Borrowing, and (iii) elect a new
Interest Period for a LIBOR Rate Borrowing. That election may be made by
delivering a Conversion Notice to Administrative Agent no later than 12:00 noon
on the third Business Day before the conversion date or the last day of the
Interest Period, as the case may be (for conversion to a LIBOR Rate Borrowing or
election of a new Interest Period), and no later than 12:00 noon on the last day
of the Interest Period (for conversion to a Base Rate Borrowing), and
Administrative Agent will promptly notify each Lender of any such election. If
the Conversion
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Notice for a Eurocurrency Borrowing delivered pursuant to the
immediately-preceding sentence is delivered by facsimile, Borrower shall
promptly deliver the originally-executed Conversion Notice to the Administrative
Agent. Absent Borrower's request for conversion or election of a new Interest
Period or if an Event of Default exists, then, a LIBOR Rate Borrowing shall be
deemed converted to a Base Rate Borrowing effective when the applicable Interest
Period expires. For the avoidance of doubt, no portion of any Domestic Borrowing
may be converted to a Eurocurrency Borrowing (but, subject to compliance with
the other terms and conditions of this Agreement, a Eurocurrency Borrowing may
be made to pay all or any portion of any Domestic Borrowing).
(b) Eurocurrency Borrowings. Subject to the limits stated in Section
2.1 and elsewhere herein and provided that Borrower may not convert to or select
a new Interest Period for a Eurocurrency Borrowing at any time when an Event of
Default exists, Borrower may elect a new Interest Period for a Eurocurrency
Borrowing. That election may be made by delivering a Conversion Notice to the
Eurocurrency Lending Installation no later than 10:00 a.m. (London time) on the
fourth Business Day before the last day of the Interest Period , and
Administrative Agent will promptly notify each Lender of any such election. If
the Conversion Notice delivered pursuant to the immediately-preceding sentence
is delivered by facsimile, Borrower shall promptly deliver the
originally-executed Conversion Notice to the Eurocurrency Lending Installation.
Absent Borrower's request for election of a new Interest Period or if an Event
of Default exists, then a Eurocurrency Borrowing shall be continued for
successive one-month Interest Periods (at the option of Administrative Agent),
each beginning on the date following the last day of the immediately-preceding
Interest Period. For the avoidance of doubt, no portion of any Eurocurrency
Borrowing may be converted to a Base Rate Borrowing or a LIBOR Rate Borrowing
(but, subject to compliance with the other terms and conditions of this
Agreement, a Domestic Borrowing may be made to pay any Eurocurrency Borrowing).
3.15 Order of Application. Any payment or prepayment shall be applied
to the Obligation in such order and manner as Administrative Agent, in its sole
discretion, may elect. Each payment or prepayment shall be distributed to each
Lender in accordance with its Pro Rata Part of that payment or prepayment.
3.16 Sharing of Payments, Etc. If any Lender obtains any payment or
prepayment with respect to the Obligation (whether voluntary, involuntary or
otherwise, including as a result of exercising its Rights under Section 3.17)
that exceeds the part of that payment or prepayment that it is then entitled to
receive under the Credit Documents, then that Lender shall purchase from the
other Lenders participations that will cause the purchasing Lender to share the
excess payment or prepayment ratably with each other Lender. If all or any
portion of any excess payment or prepayment is subsequently recovered from the
purchasing Lender, then the purchase shall be rescinded and the purchase price
restored to the extent of the recovery. Borrower agrees that any Lender
purchasing a participation from another Lender under this section may, to the
fullest extent permitted by applicable Laws, exercise all of its Rights of
payment (including the Right of offset) with respect to that participation as
fully as if that Lender were the direct creditor of Borrower in the amount of
that participation.
3.17 Offset. If an Event of Default exists, to the extent not
prohibited by applicable Laws, each Lender may exercise (for the benefit of all
Lenders in accordance with Section 3.16) the Rights of offset and banker's Lien
against each and every account and other property, or any interest therein, that
any Company may now or hereafter have with, or which is now or hereafter in the
possession of, that Lender to the extent of the full amount of the Obligation
owed (directly or participated) to it.
3.18 Booking Borrowings. To the extent permitted by applicable Laws,
any Lender may make, carry or transfer its Borrowings at, to or for the account
of any of its Lending Installations, and may change such Lending Installations
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written notice to the
Administrative Agent and Borrower, designate a Lending Installation through
which Borrowings are made and for whose account loan payments and prepayments
are to be made. Unless otherwise notified to the contrary, all Eurocurrency
Borrowings shall be made by the Lending Installations of each Lender designated
on Schedule 2.
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3.19 Basis Unavailable or Inadequate for LIBOR Rate or Eurocurrency
Rate. If on or before any date when a LIBOR Rate or a Eurocurrency Rate is to be
determined for a Borrowing, Administrative Agent or any Lender determines (and
Required Lenders agree with that determination) that the basis for determining
the applicable rate is not available or that the resulting rate does not
accurately reflect the cost to Lenders of making or converting Borrowings at
that rate for the applicable Interest Period, then Administrative Agent shall
promptly notify Borrower and Lenders of that determination (which is conclusive
and binding on Borrower absent manifest error), and the applicable Borrowing
shall bear interest (i) in the case of Domestic Borrowings, at the sum of the
Base Rate plus the Applicable Margin, and (ii) in the case of Borrowings under
the Eurocurrency Sublimit, at a rate of interest for such period as is
agreed-upon by Administrative Agent, Lenders and Borrower prior to the making of
such Borrowing. Until Administrative Agent notifies Borrower that those
circumstances giving rise to such notice no longer exist, the commitments of
Lenders under this Agreement to make, or to convert to, LIBOR Rate Borrowings or
Eurocurrency Borrowings, as the case may be, shall be suspended.
3.20 Additional Costs. Each Lender severally and not jointly agrees to
notify Administrative Agent, the other Lenders, and Borrower within 180 days
after it has actual knowledge that any circumstances exist that would give rise
to any payment obligation by Borrower under clauses (a) through (c) below.
Although no Lender shall have any liability to Administrative Agent, any other
Lender or any Company for its failure to give that notice, Borrower is not
obligated to pay any amounts under those clauses that arise, accrue or are
imposed more than 180 days before that notice to the extent it is applicable to
those amounts. To demand payment under this section, any such Lender must
generally be making similar demand for similar additional costs under credit
agreements to which it is party that contain similar provisions to this section.
(a) Reserves. With respect to any LIBOR Rate Borrowing or Eurocurrency
Borrowing (i) if any change in any present Law, any change in the interpretation
or application of any present Law, or any future Law imposes, modifies or deems
applicable (or if compliance by any Lender or any applicable Lending
Installation with any requirement of any Governmental Authority results in) any
requirement that any reserves (including any marginal, emergency, supplemental
or special reserves) be maintained (other than any reserve included in the
Reserve Requirement) and if (ii) those reserves reduce any sums receivable by
that Lender or any applicable Lending Installation under this Agreement or
increase the costs incurred by Lender or any applicable Lending Installation in
advancing or maintaining any portion of any LIBOR Rate Borrowing or Eurocurrency
Borrowing, then (iii) that Lender (through Administrative Agent) shall deliver
to Borrower a certificate setting forth in reasonable detail the calculation of
the amount necessary to compensate it or the applicable Lending Installation for
its reduction or increase (which certificate is conclusive and binding absent
manifest error), and (iv) Borrower shall pay that amount to that Lender or
applicable Lending Installation within ten Business Days after demand. The
provisions of and undertakings and indemnifications in this clause (a) survive
the satisfaction and payment of the Obligation and termination of this
Agreement.
(b) Capital Adequacy. With respect to any Borrowing or LC, if any
change in any present Law, any change in the interpretation or application of
any present Law, or any future Law regarding capital adequacy, or if compliance
by Administrative Agent (as issuer of LCs) or any Lender with any request,
directive or requirement imposed in the future by any Governmental Authority
regarding capital adequacy, or if any change in its written policies or in the
risk category of this transaction, in any of the foregoing events or
circumstances, reduces the rate of return on its capital as a consequence of its
obligations under this Agreement to a level below that which it otherwise could
have achieved (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by it to be material (and it may, in determining
the amount, utilize reasonable assumptions and allocations of costs and expenses
and use any reasonable averaging or attribution method), then (unless the effect
is already reflected in the rate of interest then applicable under this
Agreement) Administrative Agent or that Lender (through Administrative Agent)
shall notify Borrower and deliver to Borrower a certificate setting
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forth in reasonable detail the calculation of the amount necessary to compensate
it (which certificate is conclusive and binding absent manifest error), and
Borrower shall pay that amount to Administrative Agent or that Lender within ten
Business Days after demand. The provisions of and undertakings and
indemnification in this clause (b) shall survive the satisfaction and payment of
the Obligation and termination of this Agreement.
(c) Taxes. Any Taxes payable by Administrative Agent, any Lender or any
applicable Lending Installation, or ruled by a Governmental Authority to be
payable by Administrative Agent, any Lender or any applicable Lending
Installation in respect of this Agreement or any other Credit Document shall, if
permitted by applicable Laws, be paid by Borrower, together with interest and
penalties, if any, except for Taxes payable on or measured by the overall net
income of Administrative Agent or that Lender (or any other Person with whom
Administrative Agent or that Lender files a consolidated, combined, unitary or
similar Tax return) and except for interest and penalties incurred as a result
of the gross negligence or willful misconduct of Administrative Agent or that
Lender. Administrative Agent or that Lender (through Administrative Agent) shall
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount of Taxes payable, which
certificate is conclusive and binding (absent manifest error), and Borrower
shall pay that amount to Administrative Agent for its account or the account of
that Lender or the applicable Lending Installation, as the case may be, within
ten Business Days after demand. If Administrative Agent, that Lender or the
applicable Lending Installation subsequently receives a refund of the Taxes paid
to it by Borrower, then the recipient shall promptly pay the refund to Borrower.
3.21 Change in Laws.
(a) Domestic Borrowings. If any Law makes it unlawful for any Lender to
make or maintain LIBOR Rate Borrowings, then that Lender shall promptly notify
Borrower and Administrative Agent, and (i) as to undisbursed funds, that
requested Borrowing shall be made as a Base Rate Borrowing and (ii) as to any
outstanding Borrowing (a) if maintaining the Borrowing until the last day of the
applicable Interest Period is unlawful, the Borrowing shall be converted to a
Base Rate Borrowing as of the date of notice, in which event Borrower will not
be required to pay any related Funding Loss or (b) if not prohibited by
applicable Laws, the Borrowing shall be converted to a Base Rate Borrowing as of
the last day of the applicable Interest Period or (c) if any conversion will not
resolve the unlawfulness, Borrower shall promptly prepay the Borrowing, without
penalty but with related Funding Loss.
(b) Eurocurrency Borrowings. If any Law makes it unlawful for any
Lender to make or maintain Eurocurrency Borrowings, then that Lender shall
promptly notify Borrower and Administrative Agent, and (i) as to undisbursed
funds, that requested Borrowing shall be made at a rate of interest for the
applicable Interest Period as is agreed-upon by Administrative Agent, Lenders
and Borrower prior to the making of such Borrowing, and (ii) as to any
outstanding Borrowing (a) if maintaining the Borrowing until the last day of the
applicable Interest Period is unlawful, the Borrowing shall be converted to a
Borrowing at a rate of interest for the applicable Interest Period as is
agreed-upon by Administrative Agent, Lenders and Borrower or (b) if
Administrative Agent, Lenders and Borrower are unable to agree on a new rate of
interest for that Borrowing, Borrower shall promptly prepay the Borrowing,
without penalty but with related Funding Loss.
3.22 Funding Loss. BORROWER AND PARENT, JOINTLY AND SEVERALLY, SHALL,
AND HEREBY AGREE TO, INDEMNIFY EACH LENDER AGAINST, AND PAY TO IT UPON DEMAND,
ANY FUNDING LOSS OF THAT LENDER. WHEN ANY LENDER DEMANDS THAT BORROWER PAY ANY
FUNDING LOSS, THAT LENDER SHALL DELIVER TO BORROWER AND ADMINISTRATIVE AGENT A
CERTIFICATE SETTING FORTH IN REASONABLE DETAIL THE BASIS FOR IMPOSING THE
FUNDING LOSS AND THE CALCULATION OF THE AMOUNT, WHICH CALCULATION IS CONCLUSIVE
AND BINDING ABSENT MANIFEST ERROR. THE PROVISIONS OF AND UNDERTAKINGS AND
INDEMNIFICATION IN THIS SECTION SURVIVE THE SATISFACTION AND PAYMENT OF THE
OBLIGATION AND TERMINATION OF THIS AGREEMENT.
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3.23 Foreign Lenders, Participants and Assignees. Each Lender,
Participant (by accepting a participation interest under this Agreement), and
Assignee (by executing a Note and Lien Assignment) that is not organized under
the Laws of the United States or one of its states (a) represents to
Administrative Agent and Borrower that (i) no Taxes are required to be withheld
by Administrative Agent or Borrower with respect to any payments to be made to
it in respect of the Obligation and (ii) it has furnished to Administrative
Agent and Borrower two duly completed copies of either U.S. Internal Revenue
Service Form 4224, Form 1001, Form W-8, or any other form acceptable to
Administrative Agent and Borrower that entitles it to a complete exemption from
U.S. federal withholding Tax on all interest or fee payments under the Credit
Documents, and (b) covenants to (i) provide Administrative Agent and Borrower a
new Form 4224, Form 1001, Form W-8 or other form acceptable to Administrative
Agent and Borrower upon the expiration or obsolescence according to applicable
Laws of any previously delivered form, duly executed and completed by it,
entitling it to a complete exemption from U.S. federal withholding Tax on all
interest and fee payments under the Credit Documents, and (ii) comply from time
to time with all applicable Laws with regard to the withholding Tax exemption.
If any of the foregoing is not true at any time or the applicable forms are not
provided, then Borrower and Administrative Agent (without duplication) may
deduct and withhold from interest and fee payments under the Credit Documents
any Tax at the maximum rate under the IRC or other applicable Law, and amounts
so deducted and withheld shall be treated as paid to that Lender, Participant or
assignee, as the case may be, for all purposes under the Credit Documents.
SECTION 4. FEES.
4.1 Treatment of Fees. The fees described in this Section 4 (i) are not
compensation for the use, detention or forbearance of money, (ii) are in
addition to, and not in lieu of, interest and expenses otherwise described in
the Credit Documents, (iii) are payable in accordance with Section 3.1, (iv) are
non-refundable, (v) to the fullest extent not prohibited by applicable Laws,
bear interest, if not paid when due, on the amount thereof from time to time
unpaid at the Default Rate and (vi) with respect to the fees referenced in
Sections 4.3 and 4.4, are calculated on the basis of the actual number of days
(including the first day but excluding the last day) elapsed, as if each
calendar year consisted of 360 days, unless such amount is determined to
constitute interest and if so, such computation would result in an interest rate
deemed to exceed (notwithstanding the foregoing) the Maximum Rate in which event
the computation is made on the basis of a year of 365 or 366 days, as the case
may be.
4.2 Arrangement and Underwriting Fees. Borrower shall pay to
Administrative Agent arrangement, structure, management, documentation, due
diligence and custodial fees in amounts and upon such payment terms as may be
separately agreed upon by Borrower and Administrative Agent in writing.
4.3 Unused Facility Fee. Borrower shall pay to Administrative Agent for
the account of each Lender, according to each Lender's Commitment Percentage on
the day the fee is payable, an unused facility fee for the Revolving Facility.
The fee accrues on the last day of each month (the "ACCRUAL MONTH"), commencing
March 31, 2000 and is due and payable in arrears on the first day of the month
following the Accrual Month and on the Revolving Facility Termination Date. The
fee is equal to the product of (i) three-eighths of one percent (0.375%) times
(ii) the amount by which the average-daily total Commitment exceeds the sum of
the average-daily Principal Debt (including the Dollar Equivalent of any
Eurocurrency Borrowings) plus the average-daily LC Exposure, times (iii) a
fraction with the number of days in the applicable Accrual Month or portion of
it as the numerator and 360 as the denominator.
4.4 LC Fees. As a condition precedent to the issuance (including the
extension) of each LC, Borrower shall pay to Administrative Agent:
(a) Issuance Fee. For the account of each Lender, according to each
Lender's Commitment Percentage on the day the fee is payable, an issuance fee,
payable monthly in arrears, equal to two percent (2%) per annum of
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the average, undrawn face amount of that LC during each applicable month; and
(b) Fronting Fee. For the account of Administrative Agent, payable on
the date of issuance, a fronting fee of the greater of (A) Three Hundred Dollars
($300) or (B) one eighth of one percent (0.125%) of the face amount of each
standby LC.
4.5 Agency Fee. Borrower shall pay an agency fee to Administrative
Agent equal to One Hundred Thousand Dollars ($100,000) for the initial two years
of the Revolving Facility, payable in advance in equal quarterly installments of
Twelve Thousand Five Hundred Dollars ($12,500) each on the Initial Closing Date
and on each July 1, October 1, January 1 and April 1 thereafter. Any unpaid
portion of the $100,000 agency fee shall be due and payable in full if the
Obligation is prepaid in full (other than from the proceeds of a refinancing
provided by an Affiliate of Administrative Agent). Although Administrative Agent
and Lenders have no obligation to extend the Revolving Facility beyond the
Revolving Facility Termination Date, if the Revolving Facility is extended by
mutual agreement of the parties, the agency fee will be $50,000 per year, or
portion thereof, payable in quarterly installments of Twelve Thousand Five
Hundred Dollars ($12,500) in advance.
4.6 Prepayment Fee. If the Obligation is entirely prepaid (at one time
or as part of a series of related transactions) at any time prior to March 31,
2002, Borrower shall pay to Administrative Agent for the account of each Lender,
according to each Lender's Commitment Percentage on the day the fee is payable,
a prepayment fee equal to one percent (1.0%) of the total Commitments of all
Lenders as of the Initial Closing Date, unless the prepayment is the direct and
immediate result of the sale of all of the Companies to a third party who is not
an Affiliate of any of the Companies, in which case the prepayment fee will be
one half of one percent (0.50%) of the total Commitments of all Lenders as of
the Initial Closing Date; provided that if the prepayment represents the
proceeds of a refinancing provided after December 31, 2000 by an Affiliate of
Administrative Agent, no prepayment fee will be payable.
SECTION 5. SECURITY.
5.1 Guaranties and Security Agreement. Borrower and Parent shall, and
shall cause each present Subsidiary to, (a) unconditionally reaffirm their
existing Guaranties of the full payment and performance of the Obligation by due
execution and delivery on the Initial Closing Date of an Amended and Restated
Guaranty substantially in the form of Exhibit B (other than any Foreign
Subsidiary the execution of a Guaranty by which would create a material Tax
obligation for the Companies that would not otherwise exist) and (b)
unconditionally reaffirm the existing Credit Documents granting Liens in all
Collateral now or hereafter owned by any of the Domestic Companies, by due
execution and delivery on the Initial Closing Date of an Amended and Restated
Security Agreement to Administrative Agent for the benefit of Lenders
substantially in the form of Exhibit C. Parent shall on the Initial Closing
Date, and Parent and Borrower shall cause each future Subsidiary at the time of
organization to, (a) execute and deliver a Guaranty unconditionally guaranteeing
the full payment and performance of the Obligation (other than any Foreign
Subsidiary the execution of a Guaranty by which would create a material Tax
obligation for the Companies that would not otherwise exist) and (b) execute and
deliver a Security Agreement granting Liens in all Collateral now or hereafter
owned by Parent and each future Subsidiary to Administrative Agent for the
benefit of Lenders.
(a) Modifications of Amended and Restated Guaranties and Security
Agreement.
(i) In Section 7(d) of the Amended and Restated Security
Agreement referred to above, (A) "$2,000,000" is hereby changed to
"$3,000,000", and (B) the expression "this clause (e)" is hereby
changed to "this clause (d)".
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(ii) In the second line of Section 8(e) of such Amended and
Restated Security Agreement, the phrase "after three days' notice to
Borrower" is hereby changed to read: "at any time or times and without
prior notice to Borrower if an Event of Default has occurred and is
continuing (or five (5) days prior written notice to Borrower if no
Event of Default has occurred and is continuing)".
(iii) In the second sentence of Section 10.i of each of the
Amended and Restated Guaranties dated as of March 22, 2000, the phrase
"in Section 3.11 of the Credit Agreement" is hereby changed to "in the
Credit Agreement".
5.2 Collateral. Borrower and Parent shall cause full payment and
performance of the Obligation to be secured, or to continue to be secured, by
first and prior Lender Liens on all of the items and types of property (together
with its proceeds, the "COLLATERAL"), described in the present and future Credit
Documents creating Lender Liens, including:
(a) Accounts, Inventory, Equipment, etc. Present and future accounts
receivable, inventory, general intangibles, contract rights, equipment,
fixtures, patents, trademarks, other intellectual property and all other
personal property of each present and future Domestic Company;
(b) Domestic Stock. One hundred percent (100%) of the present and
future issued and outstanding capital stock, partnership interests and other
equity interests of all present and future Domestic Subsidiaries;
(c) Foreign Stock. Approximately all (but not less than sixty five
percent (65%)) of the present and future issued and outstanding capital stock,
partnership interests and other equity interests of all present and future
Foreign Subsidiaries the pledge of which would not create a material Tax
obligation for the Companies that would not otherwise exist; and
(d) Notes Receivable. All present and future notes receivable executed
by a Foreign Subsidiary in favor of Parent or Borrower.
5.3 Creation of Liens and Further Assurances. Borrower covenants and
agrees that the Lender Liens described in Section 5.2 must be reaffirmed,
created and perfected as a condition to funding any Borrowings or the issuance
of any LC. Furthermore, Borrower shall, and shall cause each other appropriate
Company to, perform the acts, duly authorize, execute, acknowledge, deliver,
file and record any additional writings, and pay all filing fees and costs as
Administrative Agent or Required Lenders may reasonably deem appropriate or
necessary to perfect and maintain the Lender Liens and their priority and
preserve and protect the Rights of Administrative Agent and Lenders under any
Credit Document.
5.4 Change in Tax Laws. Notwithstanding anything to the contrary set
forth in this Section 5, in the event the Tax laws regarding Foreign
Subsidiaries are changed to remove the creation of a material Tax obligation for
the Companies, each such Foreign Subsidiary may, at Borrower's discretion,
execute a Guaranty in exchange for a release of the pledge of its securities.
5.5 Release of Collateral. Whenever Lenders no longer have any
commitment to extend credit under any Credit Document and the Obligation has
been fully paid and performed, then Administrative Agent and Lenders shall, upon
Borrower's written request and at Borrower's cost and expense, cause the Lender
Liens on all Collateral to be released and all Guaranties to be terminated and
released.
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SECTION 6. CONDITIONS PRECEDENT.
6.1 Initial Advances. The obligations of American National to accept
the Note under this Agreement in renewal and replacement for the Prior Notes and
to make the commitments contained herein were subject to the condition
precedents that, at the Initial Closing Time, Administrative Agent and the
initial Lender have received, there shall have been performed, there shall exist
and there shall have been duly executed and delivered, the documents, actions
and other matters set forth below, each in form, scope and substance, and (as
applicable) dated as of a date, satisfactory to Administrative Agent and the
initial Lender:
(a) Amended and Restated Credit Agreement. This Agreement duly executed
by Parent, Borrower, Administrative Agent and the initial Lender;
(b) Notes. The Notes duly executed and delivered by Borrower;
(c) Amended and Restated Guaranties and Security Agreements. An Amended
and Restated Guaranty substantially in the form of Exhibit B and an Amended and
Restated Security Agreement substantially in the form of Exhibit C, duly
executed and delivered by Parent, Borrower and each Domestic Subsidiary;
(d) Contribution and Indemnification Agreement. A Contribution and
Indemnification Agreement substantially in the form of Exhibit I, duly executed
by Borrower and each Guarantor.
(e) Account Debtor Notification. Evidence satisfactory to
Administrative Agent that all Account Debtors have been notified to make all
payments on Accounts to a specified Lock Box Account over which Administrative
Agent has sole and complete dominion and control.
(f) Secretary Certificates. A certificate signed by the Secretary or
Assistant Secretary of Borrower, Parent and each Domestic Subsidiary certifying
to (i) resolutions, (ii) incumbency, (iii) articles of incorporation, and (iv)
bylaws;
(g) Payments to the Lender. The payment to Administrative Agent of: (i)
all fees to be received by Administrative Agent pursuant to this Agreement or
any other Credit Documents, and (ii) all third-party costs incurred in
connection with this Agreement, including all reasonable attorneys' fees, costs
and out-of-pocket expenses of Administrative Agent's counsel incurred or
estimated to have been incurred through the Initial Closing Date in connection
with the preparation, execution and delivery of the Credit Documents and the
consummation of the transactions contemplated thereby;
(h) Opinion of Counsel. A favorable opinion addressed to Administrative
Agent and Lenders from Gardere & ▇▇▇▇▇, L.L.P., outside legal counsel to the
Companies, in form and substance satisfactory to Administrative Agent;
(i) Amendments to TROL Financing Documents. Amendments to the TROL
Financing Documents in form and substance satisfactory to Borrower,
Administrative Agent, Bank One and ▇▇▇▇▇ Fargo;
(j) Lock Box Accounts. Such agreements and other documents as
Administrative Agent shall deem appropriate to establish the Lock Box Accounts
and Blocked Accounts and implement the requirements of Section 3.4;
(k) Release of Hedging Agreement Collateral. A release of all Liens
created in favor of ▇▇▇▇▇ Fargo and its Affiliate which has entered into a
Hedging Agreement with Borrower.
(l) Representations and Warranties. The representations and warranties
contained in Section 7 and the other Credit Documents are true in all respects
at the Initial Closing Time;
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(m) Borrowing Base Report. Administrative Agent shall have received a
Borrowing Base Report revealing at least Two Million Dollars ($2,000,000) of
Excess Availability as of a date which is no more than forty five (45) days
prior to the Initial Closing Date (attached hereto as Schedule 6.1(m) is the
completed Borrowing Base Report as of February 29, 2000); and
(n) Additional Information. Such other documents, instruments, reports,
opinions and information as reasonably required by Administrative Agent, any
Lender and their respective counsel.
6.2 All Borrowings. The obligation of Lenders to extend Borrowings
under this Agreement (including the initial acceptance of the Note in renewal
and replacement of the Prior Notes) is subject to the following conditions
precedent:
(a) No Default or Potential Default. As of the date of the making of
the Borrowing, there exists no Event of Default or Potential Default;
(b) Compliance with Credit Agreement; Delivery of Reports. Each Company
has performed and complied with all agreements and conditions contained in this
Agreement and each other Credit Document that are required to be performed or
complied with by it before or at the date of the Borrowing, including timely
delivery of all required financial statements, reports, certificates, documents
and agreements;
(c) No Material Adverse Event. As of the date of making the Borrowing,
no Material Adverse Event has occurred and is continuing;
(d) Borrowing Request. Administrative Agent has timely received from
Borrower a properly completed Borrowing Request if it is required pursuant to
Section 2, executed by a Responsible Officer of Borrower;
(e) Availability. The requirements of Section 2.1 are satisfied; and
(f) Representations and Warranties. The representations and warranties
contained in Section 7 and the other Credit Documents are true in all respects
on the date of, and after giving effect to, the Borrowing, with the same force
and effect as though made on and as of that date.
SECTION 7. REPRESENTATIONS AND WARRANTIES. Borrower and Parent, jointly and
severally, represent and warrant to Administrative Agent and Lenders as follows:
7.1 Purpose and Regulation U.
(a) Subject to the other provisions in the Credit Documents, including
clause (b) below, initially, the Note delivered hereunder represents the renewal
and replacement of the Revolving Notes and Term Notes under the Prior Credit
Agreement, and the proceeds of any future borrowings hereunder will be used for
general corporate purposes, working capital uses in the ordinary course of
business and permitted stock repurchases.
(b) None of the proceeds of the Revolving Facility will be used for the
purpose of purchasing or carrying any "margin stock"as defined in Regulation U
of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221), or
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of such
Regulation U. No Company is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stocks. No Company, nor any Person
acting on behalf of any Company,
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has taken or will take any action that might cause the Notes or any other of the
Credit Documents, including this Agreement, to violate Regulations U or any
other regulations of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. For the avoidance of doubt, no proceeds of the
Revolving Facility or Term Loan may be used to purchase any securities,
including without limitation, any of the Permitted Investments described in
clauses (f) through (h) of Section 9.7.
(c) No portion of any advance or loan made hereunder shall be used
directly or indirectly to purchase ineligible securities, as defined by
applicable regulations of the Federal Reserve Board, underwritten by any
affiliate of Banc One Corporation during the underwriting period and for 30 days
thereafter.
7.2 Corporate Existence, Good Standing, Authority and Locations. Each
Company is duly organized, validly existing and in good standing under the Laws
of its jurisdiction of incorporation or formation, as applicable. Except where
the failure to qualify would not result in a Material Adverse Event, each
Company is duly qualified to transact business and is in good standing as a
foreign corporation or partnership (as applicable) in each jurisdiction where
the nature and extent of its business and properties require due qualification
and good standing (and each of such jurisdictions is identified in Schedule
7.3). Each Company possesses all requisite authority and power to conduct its
business as is now being conducted and as proposed to be conducted (including
under the Credit Documents) and to own and operate its assets as now owned and
operated and as proposed to be owned and operated (including under the Credit
Documents). Each Company's chief executive office and other principal offices
are described on Schedule 7.3. The present location of each Company's books and
records concerning accounts and accounts receivable is at its chief executive
office.
7.3 Subsidiaries and Names. Schedule 7.3 describes (i) each Company,
(ii) every name or trade name used by each Company during the five-year period
before the date of this Agreement (or during the period such Company has been a
Subsidiary, if shorter) and (iii) every change of each Company's name during the
four-month period before the date of this Agreement. All of the outstanding
shares of capital stock (or similar voting interests) of each Company are (1)
duly authorized, validly issued, fully paid and nonassessable, (2) owned of
record and beneficially as described in Schedule 7.3, free and clear of any
Liens, except Permitted Liens and (3) not subject to any warrant, option or
other acquisition Right of any Person or subject to any voting, ownership or
transfer restriction except (a) restrictions imposed by securities laws and
general corporate laws and (b) restrictions expressly noted in the certificates
evidencing such shares.
7.4 Authorization and Contravention. The execution and delivery by each
Company of each Credit Document to which it is a party and the performance by it
of its obligations under those Credit Documents (i) are within its corporate or
partnership power (as applicable), (ii) have been duly authorized by all
necessary corporate or partnership action (as applicable), (iii) require no
consent of, action by, or filing with, any Governmental Authority (except any
action or filing that has been taken or made or consent that has been received,
and is completed and in final form and full force and effect, on or before the
Initial Closing Date), (iv) do not violate any provision of its Organizational
Documents, (v) do not violate any provision of any Law applicable to it or
result in any breach of, or default under, any material agreement of the
Companies, or (vi) result in, or requires the imposition of, any Liens on any
property of any Company, other than in favor of Administrative Agent for
Lenders.
7.5 Binding Effect. Upon execution by each Company of each Credit
Document to which it is a party, each such Credit Document will constitute a
legal and binding obligation of each such party, enforceable against each such
party in accordance with that Credit Document's terms except as that
enforceability may be limited by Debtor Relief Laws and general principles of
equity.
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7.6 Financials; Contingent Liabilities. The Current Financials were
prepared in accordance with GAAP and present fairly, in all material respects,
the Companies' consolidated (if applicable) financial condition, results of
operations and cash flows as of, and for the portion of the fiscal year ending
on, their dates (subject only to normal year-end adjustments for interim
statements). Except for transactions directly related to, or specifically
contemplated or expressly permitted by, the Credit Documents, no material
adverse changes have occurred in the Companies' consolidated (if applicable)
financial condition from that shown in the Current Financials. All material
contingent liabilities of each Company are described on Schedule 7.6-A. The
Companies' Consolidated Financials for the year ended December 31, 1999 are
attached hereto as Schedule 7.6-B. The financial projections delivered by
Borrower to Administrative Agent in connection with Borrower's application for
the Revolving Credit Facility are attached hereto as Schedule 7.6-C.
7.7 Solvency. On each Borrowing Date, each of Borrower, Parent and each
other Company is, and after giving effect to the requested Borrowing will be,
Solvent.
7.8 Litigation.
(a) Except as shown on Schedule 7.8, no Company is subject to, or aware
of the threat of, any Litigation involving any Company, or any of their
respective properties, which if adversely determined against any of them,
reasonably could be expected to result in a Material Adverse Event, and
(b) No outstanding and unpaid judgments against any Company exist that
reasonably could be expected to result in a Material Adverse Event.
7.9 Taxes. Except where the non-compliance of any of the following
reasonably could not be expected to result in a Material Adverse Event, (i) all
returns, reports and other information of each Company required to be filed in
respect to a present or future liability for any Taxes have been prepared in
compliance with all requisite Laws, and as so prepared, have been properly filed
(or extensions have been granted) and (ii) all Taxes imposed upon each Company
that are due and payable have been timely and fully paid except as are being
contested as permitted by Section 8.6.
7.10 Environmental Matters.
(a) No Company has received notice from any Governmental Authority that
it has any actual or potential Environmental Liability, and no Company has
knowledge that it has any Environmental Liability, which actual or potential
Environmental Liability in either case reasonably could be expected to
constitute a Material Adverse Event.
(b) No Company has received notice from any Governmental Authority that
any Real Property is affected by, and no Company has knowledge that any Real
Property is affected by, any Release of any Hazardous Substance which reasonably
could be expected to constitute a Material Adverse Event.
7.11 Employee Plans. Except where not a Material Adverse Event (i) no
Employee Plan subject to ERISA has incurred an "accumulated funding deficiency"
(as defined in Section 302 of ERISA or Section 512 of the IRC), (ii) neither any
Company nor any ERISA Affiliate has incurred liability (except for liabilities
for premiums that have been paid or that are not past due) under ERISA to the
PBGC in connection with any Employee Plan, (iii) neither any Company nor any
ERISA Affiliate has withdrawn in whole or in part from participation in a
Multiemployer Plan in a manner that has given rise to a withdrawal liability
under Title IV of ERISA, (iv) neither any Company nor any ERISA Affiliate has
engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the IRC), (v) no "reportable event" (as defined in Section 4043
of ERISA) has occurred excluding events for which the notice requirement is
waived under applicable PBGC regulations, (vi) neither any Company nor any ERISA
Affiliate has any liability, or is subject
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to any Lien, under ERISA or the IRC to or on account of any Employee Plan, (vii)
each Employee Plan subject to ERISA and the IRC complies in all material
respects, both in form and operation, with ERISA and the IRC and (viii) no
Multiemployer Plan subject to the IRC is in reorganization within the meaning of
Section 418 of the IRC.
7.12 Properties; Liens. Each Company has good and marketable title to
all its property reflected on the Current Financials except for property that is
obsolete or that has been disposed of in the ordinary course of business between
the date of the Current Financials and the date of this Agreement or, after the
date of this Agreement, as permitted by Sections 9.9 or 9.10. No Lien exists on
any property of any Company except Permitted Liens. Except for the Credit
Documents, no Company is party or subject to any agreement, instrument or order
which in any way restricts any Company's ability to allow Liens to exist upon
any of its assets.
7.13 Government Regulations. No Company is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
7.14 Transactions with Affiliates. Except for transactions with other
Companies as permitted by Section 9.5, no Company is a party to a transaction
(other than of an inconsequential nature) with any of its Affiliates.
7.15 Debt. No Company has any Debt except Permitted Debt.
7.16 Leases. Except where it could not reasonably be expected to result
in a Material Adverse Event, (i) each Company enjoys peaceful and undisturbed
possession under all leases necessary or desirable for the operation of its
properties and assets and (ii) all material leases under which any Company is a
lessee are in full force and effect.
7.17 Labor Matters. Except where it could not reasonably be expected to
result in a Material Adverse Event (i) no actual or threatened strikes, labor
disputes, slow downs, walkouts, work stoppages or other concerted interruptions
of operations that involve any employees employed at any time in connection with
the business activities or operations at any Real Property exist, (ii) hours
worked by and payment made to the employees of any Company have not been in
violation of the Fair Labor Standards Act or any other applicable Laws
pertaining to labor matters, (iii) all payments due from any Company for
employee health and welfare insurance, including workers compensation insurance,
have been paid or accrued as a liability on its books and (iv) the business
activities and operations of each Company are in compliance with OSHA and other
applicable health and safety Laws.
7.18 Intellectual Property. Except where it could not reasonably be
expected to result in a Material Adverse Event, (i) each Company owns or has the
right to use all material licenses, patents, patent applications, copyrights,
service marks, trademarks, trademark applications, trade names, trade secrets
and other intellectual property rights necessary or desirable to continue to
conduct its businesses as presently conducted by it and proposed to be conducted
by it immediately after the date of this Agreement, (ii) each Company is
conducting its business without infringement or claim of infringement of any
license, patent, copyright, service ▇▇▇▇, trademark, trade name, trade secret or
other intellectual property right of others and (iii) no infringement or claim
of infringement by others of any material license, patent, copyright, service
▇▇▇▇, trademark, trade name, trade secret or other intellectual property of any
Company exists.
7.19 Insurance. Each Company maintains the insurance required by
Section 8.10.
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7.20 Inventory. Inventory owned by the Domestic Subsidiaries is located
at the addresses shown on Schedule 7.20.
7.21 Full Disclosure. All information furnished to Administrative Agent
or Lenders by or on behalf of any Company in connection with the Credit
Documents was, and all information furnished to Administrative Agent or Lenders
in the future by or on behalf of any Company will be, in each case, when so
furnished, true, complete and accurate in all material respects or where
estimates or projections were or will be therein made and so designated, based
on good faith, reasonable estimates or projections on the date the information
is stated or certified.
SECTION 8. AFFIRMATIVE COVENANTS. For so long as any Lender is committed to lend
or issue LCs under this Agreement and until the Obligation has been fully paid
and performed, Borrower and Parent, jointly and severally, covenant and agree
with Administrative Agent and Lenders as follows:
8.1 Monthly Reports and Collateral Reports.
(a) Monthly Reports. Borrower shall submit to Administrative Agent, not
later than the twentieth (20th) day of each month, a monthly report (the
"MONTHLY REPORT"), accompanied by a certificate in form and substance acceptable
to Administrative Agent, which shall be signed by an Responsible Officer. The
Monthly Report shall include, as of the last Business Day of the preceding
month:
(i) an aged trial balance of the Accounts of the Companies
("ACCOUNTS TRIAL BALANCE") prepared in a manner reasonably acceptable
to Administrative Agent;
(ii) a schedule of Inventory owned by the Companies and in
their possession or otherwise, by location, valued at average cost,
accompanied by a separate schedule reflecting adjustments for such
reserves as Administrative Agent has previously indicated to Borrower
are deemed by Administrative Agent, to be appropriate, in its sole,
commercially reasonable determination, and a report of any variances or
other results of inventory counts performed by Borrower since the date
of the last Monthly Report (unless the variances are not greater than
five percent (5%), in which case such variance report will be provided
by Borrower upon request by Administrative Agent);
(iii) a "contra" report prepared in a manner reasonably
acceptable to Administrative Agent and showing the name of each Account
Debtor and each Affiliate of an Account Debtor to whom a payable is due
and the amounts, including an aging thereof, owed by and to such
Account Debtor and its Affiliates, in such form as Administrative Agent
may reasonably request;
(iv) a reconciliation of the Accounts and Inventory of the
Companies between the amount shown on the books and financial
statements of the Companies, the general ledgers and Borrower's
collateral reports delivered to Administrative Agent in form and
substance acceptable to Administrative Agent;
(v) the outstanding principal balance of the Obligation;
(vi) a statement that there exists no Event of Default or
Potential Default, or, if any Event of Default or Potential Default
exists, a specific description of the nature and the period of
existence thereof and the action Borrower has taken and proposes to
take with respect thereto;
(vii) a statement that no machinery, equipment or other fixed
assets have been sold, damaged, destroyed, abandoned, become obsolete
or has otherwise diminished in value (except
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for (a) ordinary depreciation and wear and tear and (b) damage to or
the destruction or retirement of Equipment with a book value not in
excess of $50,000 in the aggregate in any one calendar year) since the
later of the date of the last Monthly Report or the schedule of
Equipment most recently delivered to Administrative Agent by Borrower
or, if any such events have occurred, describing the same with such
specificity as is satisfactory to Administrative Agent;
(viii) a summary of any pending or, to Borrower's knowledge,
threatened strike, work stoppage, material unfair labor practice claim
or other material labor dispute against or affecting Borrower or its
employees; and
(ix) such other reports or information as Administrative Agent
may from time to time reasonably request.
(b) Collateral Reports. In addition, Borrower shall provide
Administrative Agent with a written report on at least a monthly basis (or on a
weekly basis whenever Excess Availability is less than Three Million Dollars
($3,000,000)) reflecting activity for each month or week, as the case may be,
unless reasonably requested more often by Administrative Agent (the "COLLATERAL
REPORT"), in form and substance, and with such specificity, as is satisfactory
to Administrative Agent:
(i) all Eligible Accounts created or acquired by Borrower
subsequent to the immediately preceding Collateral Report; together
with copies of any other reports or information, in a form and with
such specificity as is satisfactory to Administrative Agent, concerning
Accounts included, described or referred to in the Collateral Reports
and any other documents in connection therewith requested by
Administrative Agent, including, without limitation, but only if
specifically requested by Administrative Agent, copies of all invoices
and bills of lading prepared in connection with such Accounts;
(ii) information in connection with (a) any Account which has
ceased to be an Eligible Account since the most recent Collateral
Report and (b) any other Account with respect to which any setoff,
counterclaim or dispute has been asserted by any Account Debtor or any
allegation of delayed performance or nonperformance has been made by
any Account Debtor accompanied by a statement of any modification,
adjustment or compromise with respect to any such Account which affects
the amount due or the time when payment of such Account is to be made;
(iii) information on all amounts collected by Borrower on
Accounts subsequent to the immediately preceding Collateral Report;
(iv) a calculation of the Borrowing Base, including
information on all sales of or other reductions of and all additions to
Inventory, all returns of Inventory, all credits issued by any Company
and all complaints and claims against any Company; and
(v) such additional information as Administrative Agent shall
require.
(c) Electronic Transmission of Reports. Notwithstanding anything herein
to the contrary, the Monthly Reports, Collateral Reports and other reports with
respect to Collateral delivered by Borrower to Administrative Agent may be sent,
for receipt by Administrative Agent by the time specified or required pursuant
to the terms of this Agreement, by electronic transmission (in lieu of other
written forms), provided that (i) the form of such electronic transmission shall
be reasonably acceptable to Administrative Agent; (ii) the electronic
transmission shall contain the electronically transmitted signature of a
Responsible Officer of Borrower; and (iii) the form of such electronic
transmission shall contain the following legend:
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Pursuant to, and in accordance with, the terms and
provisions of that certain First Amended and Restated
Credit Agreement (the "Agreement") dated as of May
17, 2000 among Ultrak Operating, L.P. ("Borrower"),
Ultrak, Inc. ("Parent"), the Lenders named therein
and American National Bank and Trust Company of
Chicago, as Administrative Agent for Lenders
("Administrative Agent"), Borrower is executing and
delivering by electronic transmission to
Administrative Agent this report accompanied by
supporting data (collectively referred to as the
"Report"). Borrower warrants and represents to
Administrative Agent and Lenders that the Report is
true, correct and based on information contained in
Borrower's own financial accounting records.
Borrower, by the execution of the Report, hereby
ratifies, confirms and affirms all of the terms,
conditions and provisions of the Agreement, and
further certifies on this day of , ,
that Borrower is in compliance with the Agreement.
The Responsible Officer whose name is written below
hereby adopts such written name as his signature with
present intention to authenticate a writing.
8.2 Certain Other Items Furnished. Borrower shall furnish the following
to each Lender:
(a) Annual Financials, Etc. Promptly after preparation but no later
than ninety (90) days after the last day of each fiscal year of Borrower,
audited Financials showing the Companies' consolidated financial condition and
results of operations as of, and for the year ended on, that last day (with
expenses and obligations related to the TROL Financing clearly indicated),
accompanied by (i) the opinion, without qualification, of a firm of independent
certified public accountants acceptable to Required Lenders (▇▇▇▇▇ ▇▇▇▇▇▇▇▇
L.L.P. and any "Big Five" accounting firm being expressly acceptable to Required
Lenders), based on an audit using generally accepted auditing standards, that
the consolidated portion of those Financials were prepared in accordance with
GAAP and present fairly, in all material respects, the Companies' consolidated
financial condition and results of operations and (ii) with respect to the
period covered by such Financials, a Compliance Certificate. In addition,
Borrower shall furnish to each Lender, promptly after preparation but no later
than 90 days after the last day of each fiscal year of Borrower,
company-prepared consolidating Financials showing the Companies' consolidated
financial condition and results of operations as of, and for the year ended on,
that last day. The consolidating Financials described above will also provide
reasonable detail as to the financial condition and results of operations of the
Domestic Companies as a group and the Foreign Subsidiaries as a group.
(b) Monthly Financials, Etc. Promptly after preparation but no later
than thirty (30) days after the last day of each month, Financials showing the
Companies' consolidated and consolidating financial condition and results of
operations for that month and for the period from the beginning of the current
fiscal year to the last day of that month (with expenses and obligations related
to the TROL Financing clearly indicated), accompanied by a Compliance
Certificate with respect to the period covered by such Financials. The
consolidating Financials described above will also provide reasonable detail as
to the financial condition and results of operations of the Domestic Companies
as a group and the Foreign Subsidiaries as a group.
(c) Annual Business Plans. Promptly after preparation but no later than
30 days after the last day of each fiscal year of Borrower, the annual
consolidated and consolidating business plans for the Companies prepared by
Parent or Borrower, in form reasonably acceptable to Administrative Agent,
setting forth management's projections for the next succeeding fiscal year.
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(d) Other Reports. Promptly after preparation and distribution,
accurate and complete copies of all reports and other communications about
material financial matters or material corporate plans or projections by or for
any Company for distribution to any Governmental Authority or any existing or
potential creditor including (i) each Form 10-K, 10-Q and S-8 filed with the
Securities and Exchange Commission, and (ii) each interim or special audit
report and management letter issued by the Companies' accountants with respect
to the Companies or their financial records, but excluding (x) credit, trade and
other reports prepared and distributed in the ordinary course of business and
(y) information otherwise furnished to Administrative Agent and Lenders under
this Agreement.
(e) Employee Plans. As soon as possible and within 30 days after
Borrower knows that any event which would constitute a reportable event under
Section 4043(b) of Title IV of ERISA with respect to any Employee Plan subject
to ERISA has occurred, or that the PBGC has instituted or will institute
proceedings under ERISA to terminate that plan, deliver a certificate of a
Responsible Officer of Borrower setting forth details as to that reportable
event and the action which Borrower or an ERISA Affiliate, as the case may be,
proposes to take with respect to it, together with a copy of any notice of that
reportable event which may be required to be filed with the PBGC, or any notice
delivered by the PBGC evidencing its intent to institute those proceedings or
any notice to the PBGC that the plan is to be terminated, as the case may be.
For all purposes of this section, Borrower is deemed to have all knowledge of
all facts attributable to the plan administrator under ERISA.
(f) Other Notices. Promptly after Borrower knows or receives any
notification thereof (whichever shall first occur), notice of (i) the existence
and status of any Litigation or Environmental Liability that if determined
adversely to any Company, could reasonably be expected to result in a Material
Adverse Event, (ii) any change in any fact or circumstance (other than of an
inconsequential nature) represented or warranted by any Company in any Credit
Document, and (iii) an Event of Default, Potential Default or Material Adverse
Event, specifying the nature thereof and what action the Companies have taken,
are taking and propose to take.
(g) Other Information. Promptly when reasonably requested by
Administrative Agent or any Lender, such information (not otherwise required to
be furnished under this Agreement) about any Company's business affairs, assets,
liabilities, results of operation and financial condition (all in form and
substance satisfactory to Administrative Agent or that Lender).
8.3 Use of Credit. Borrower shall use the proceeds of Borrowings only
for the purposes represented in this Agreement.
8.4 Books and Records. Each Domestic Company (including Parent
individually and on a consolidated basis) shall maintain books, records and
accounts necessary to prepare Financials in accordance with GAAP.
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8.5 Inspections. Upon reasonable request and at least 5-days' advance
notice (but during the pendency of an Event of Default, no advance notice is
required), each Company shall allow Administrative Agent or any Lender (or their
respective Representatives) to inspect any of that Company's properties, to
review reports, files and other records and to make and take away copies, to
conduct tests or investigations and to discuss any of its affairs, conditions
and finances with the Company's Representatives and with other creditors of the
Company from time to time, during reasonable business hours (but during the
pendency of an Event of Default, at any time). Without limiting the foregoing,
the Companies shall allow Administrative Agent and Lenders to perform field
examinations to test such systems and controls of the Companies as they deem
appropriate, such field examinations at any time prior to an Event of Default to
occur no more frequently than once per calendar quarter (provided that such
limitation shall not apply after the occurrence and during the continuation of
an Event of Default). Borrower shall reimburse Administrative Agent at the rate
of $750 per day per auditor and shall reimburse Administrative Agent and each
Lender for the reasonable out-of-pocket expenses incurred in connection with
each such field examination.
8.6 Taxes. Each Company shall promptly pay when due any and all Taxes
except Taxes that are being contested in good faith by lawful proceedings
diligently conducted, against which reserve or other provision required by GAAP
has been made and in respect of which levy and execution of any Lien sufficient
to be enforced has been and continues to be stayed.
8.7 Payment of Obligation. Each Company shall promptly pay (or renew
and extend) all of its obligations as they become due (unless the obligations,
other than the Obligation or any part thereof, are being contested in good faith
by appropriate proceedings).
8.8 Expenses. Within fifteen Business Days after demand accompanied by
an invoice describing the costs, fees and expenses in reasonable detail,
Borrower shall pay (i) all costs, fees and expenses paid or incurred by or on
behalf of Administrative Agent incident to any Credit Document (including the
reasonable fees and expenses of Administrative Agent's counsel in connection
with the negotiation, preparation, delivery and execution of the Credit
Documents and any related amendment, modification, waiver or consent) and (ii)
all reasonable attorneys' fees and court costs and all other reasonable costs
and expenses incurred by Administrative Agent or any Lender in connection with
the enforcement of the obligations of any Company under the Credit Documents or
the exercise of any Rights under the Credit Documents (including reasonable
allocated costs of in-house counsel), all of which are part of the Obligation,
bearing interest (if not paid within fifteen Business Days after demand
accompanied by an invoice describing the costs, fees and expenses in reasonable
detail) on the portion thereof from time to time unpaid at the Default Rate
until paid.
8.9 Maintenance of Existence, Assets and Business. Each Company shall
(i) except as permitted in Section 9.9 and Section 9.10, maintain its corporate
or partnership (as applicable) existence and good standing in its state of
incorporation or formation (as applicable) and (ii) except where the failure to
perform any of the following could not reasonably be expected to result in a
Material Adverse Event (a) maintain its authority to transact business and good
standing in all other states, (b) maintain all licenses, permits and franchises
(including Environmental Permits) necessary or desirable for its business and
(c) keep all of its assets that are useful in and necessary to its business in
good working order and condition (ordinary wear and tear excepted) and make all
necessary repairs and replacements.
8.10 Insurance. Each Company shall, at its cost and expense, maintain
with financially sound, responsible and reputable insurance companies or
associations, or as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates, insurance concerning its properties and businesses against casualties
and contingencies and of types and in amounts (and with co-insurance and
deductibles) as is customary in the case of similar businesses. In addition,
Borrower shall and shall cause each other Company to, (i) name Administrative
Agent as additional insured on
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all general and comprehensive liability insurance and as loss payee on all
insurance covering any Collateral (or any portion thereof), (ii) deliver copies
of the policies and endorsements for the insurance required by this Section 8.9
to Administrative Agent promptly after issuance and renewal of each and (iii)
cause each policy of insurance to provide that it will not be cancelled or
modified (as to term, coverage, scope, property or risks covered, change or
addition of loss payee or additional insured or otherwise) without 30 days prior
written notice to Administrative Agent.
8.11 Compliance with Laws. Each Company shall (i) operate and manage
its businesses and otherwise conduct its affairs in compliance with all Laws
(including without limitation, all Environmental Laws and Environmental Permits)
except to the extent noncompliance reasonably could be expected not to
constitute a Material Adverse Event, (ii) promptly deliver to Administrative
Agent a copy of any notice received from any Governmental Authority alleging
that any Company is not in compliance with any Laws (including any Environmental
Laws or Environmental Permits) if the allegation reasonably could constitute a
Material Adverse Event and (iii) promptly deliver to Administrative Agent a copy
of any notice received from any Governmental Authority alleging that any Company
has any potential Environmental Liability if the allegation reasonably could
constitute a Material Adverse Event.
8.12 Subsidiary Guaranties and Pledges. Borrower shall cause all
present and future Domestic Subsidiaries, whether now existing or in the future
formed or acquired as permitted by the Credit Documents, promptly and fully to
comply with Sections 5.1 and 5.2 and its capital stock or other equity
securities to become subject to first and prior Lender Liens as required by
Section 5.2.
8.13 Indemnification.
(a) AS USED IN THIS SECTION: (i) "INDEMNITOR" MEANS BORROWER AND
(PURSUANT TO ITS GUARANTY OR ITS EXECUTION AND DELIVERY OF, OR CONSENT TO, ANY
OTHER CREDIT DOCUMENT) EACH OTHER COMPANY; (ii) "INDEMNITEE" MEANS
ADMINISTRATIVE AGENT, EACH LENDER, EACH PRESENT AND FUTURE AFFILIATE OF
ADMINISTRATIVE AGENT AND EACH LENDER, EACH PRESENT AND FUTURE REPRESENTATIVE OF
ADMINISTRATIVE AGENT AND EACH LENDER OR ANY OF THOSE AFFILIATES AND EACH PRESENT
AND FUTURE SUCCESSOR AND ASSIGN OF ADMINISTRATIVE AGENT AND EACH LENDER OR ANY
OF THOSE AFFILIATES OR REPRESENTATIVES; AND (iii) "INDEMNIFIED LIABILITIES"
MEANS ALL PRESENT AND FUTURE, KNOWN AND UNKNOWN, FIXED AND CONTINGENT,
ADMINISTRATIVE, INVESTIGATIVE, JUDICIAL AND OTHER CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, INVESTIGATIONS, SUITS, PROCEEDINGS, AMOUNTS PAID IN
SETTLEMENT, DAMAGES, JUDGMENTS, PENALTIES, COURT COSTS, LIABILITIES AND
OBLIGATIONS, AND ALL PRESENT AND FUTURE COSTS, EXPENSES AND DISBURSEMENTS
(INCLUDING ALL REASONABLE ATTORNEYS' FEES AND EXPENSES WHETHER OR NOT SUIT OR
OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY SUIT OR OTHER
PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING, THAT MAY AT ANY TIME BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST, ANY INDEMNITEE AND IN ANY WAY
RELATING TO OR ARISING OUT OF ANY (1) CREDIT DOCUMENT OR TRANSACTION
CONTEMPLATED BY ANY CREDIT DOCUMENT, (2) ENVIRONMENTAL LIABILITY IN ANY WAY
RELATED TO ANY COMPANY, OR ACT, OMISSION, STATUS, OWNERSHIP OR OTHER
RELATIONSHIP, CONDITION OR CIRCUMSTANCE CONTEMPLATED BY, CREATED UNDER OR
ARISING PURSUANT TO OR IN CONNECTION WITH ANY CREDIT DOCUMENT, OR (3)
INDEMNITEE'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE.
(b) EACH INDEMNITOR AGREES, JOINTLY AND SEVERALLY, TO INDEMNIFY PROTECT
AND DEFEND EACH INDEMNITEE FROM AND AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM
AND AGAINST, AND ON DEMAND PAY OR REIMBURSE EACH INDEMNITEE FOR, ALL INDEMNIFIED
LIABILITIES.
(c) THE FOREGOING PROVISIONS (i) ARE NOT LIMITED IN AMOUNT EVEN IF THAT
AMOUNT EXCEEDS THE OBLIGATION, (ii) INCLUDE, WITHOUT LIMITATION, REASONABLE FEES
AND EXPENSES OF
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ATTORNEYS AND OTHER COSTS AND EXPENSES OF LITIGATION OR PREPARING FOR LITIGATION
AND DAMAGES OR INJURY TO PERSONS, PROPERTY OR NATURAL RESOURCES ARISING UNDER
ANY STATUTORY OR COMMON LAW, PUNITIVE DAMAGES, FINES AND OTHER PENALTIES, AND
(iii) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF ANY HAZARDOUS SUBSTANCE, AND
(iv) ARE NOT AFFECTED BY ANY INDEMNITEE'S INVESTIGATION, ACTUAL OR CONSTRUCTIVE
KNOWLEDGE, COURSE OF DEALING OR WAIVER.
(d) However, no Indemnitee is entitled to be indemnified under the
Credit Documents for its own fraud, gross negligence or wilful misconduct.
(e) Although failure to do so does not reduce or impair any
Indemnitor's obligations under this section, each Indemnitee shall promptly
notify Borrower of any event about which the Indemnitee has received written
notice and that is reasonably likely to result in any Indemnified Liability.
Each Indemnitor may, at its own cost and expense, participate in the defense in
any proceeding involving any Indemnified Liability. If no Event of Default or
Potential Default exists, Indemnitors may assume the defense in that proceeding
on behalf of the applicable Indemnitees, including the employment of counsel if
first approved (which approval may not be unreasonably withheld) by the
applicable Indemnitees. If Indemnitors assume any defense, they shall keep the
applicable Indemnitees fully advised of the status of, and shall consult with,
and receive the concurrence of, those Indemnitees before taking any material
position in respect of, that proceeding. If Indemnitors consent, if an Event of
Default, Potential Default or Material Adverse Event exists or if any Indemnitee
reasonably determines that an actual conflict of interests exists between
Indemnitors and that Indemnitee with respect to the subject matter of the
proceeding or that Indemnitors are not diligently pursuing the defense, then (i)
that Indemnitee may, at Indemnitors' joint and several expense, employ counsel
to represent that Indemnitee that is separate from counsel for Indemnitors or
any other Person in that proceeding and (ii) Indemnitors are no longer entitled
to assume the defense on behalf of that Indemnitee. No Indemnitor may agree to
the settlement of any Indemnified Liability, or any matters or issues material
to or necessary for the resolution of any such liability, without the prior
written consent of the applicable Indemnitees unless, as agreed to in writing by
an Indemnitee, that settlement fully relieves those Indemnitees of any liability
whatsoever for that Indemnified Liability. If an Indemnitee agrees to the
settlement of any Indemnified Liability without the prior written consent of
Indemnitors (which consent may not be unreasonably withheld), then Indemnitors
are no longer obligated for that Indemnified Liability in respect of that
Indemnitee.
(f) THE PROVISIONS OF AND INDEMNIFICATION AND OTHER UNDERTAKINGS UNDER
THIS SECTION SURVIVE THE FORECLOSURE OF ANY LENDER LIEN OR ANY TRANSFER IN LIEU
OF THAT FORECLOSURE, THE SALE OR OTHER TRANSFER OF ANY COLLATERAL OR REAL
PROPERTY TO ANY PERSON, THE SATISFACTION OF THE OBLIGATION, THE TERMINATION OF
THE CREDIT DOCUMENTS AND THE RELEASE OF ANY OR ALL LENDER LIENS.
(g) BORROWER AND EACH OTHER COMPANY ACKNOWLEDGE THAT THE VARIOUS
INDEMNITIES CONTAINED IN THIS AGREEMENT INCLUDE PROVISIONS INDEMNIFYING AND
HOLDING HARMLESS ADMINISTRATIVE AGENT, LENDERS, THEIR AFFILIATES AND THEIR
REPRESENTATIVES FOR, AMONG OTHER THINGS, THE ORDINARY NEGLIGENCE OF THE
INDEMNITEE. BORROWER AND EACH OTHER COMPANY AGREE THAT THE INDEMNITY PROVISIONS
CONTAINED HEREIN ARE HIGHLIGHTED TO CLEARLY IDENTIFY THE INDEMNITY PROVISIONS
AND, THEREFORE, ARE SO CONSPICUOUS THAT BORROWER AND EACH OTHER COMPANY HAVE
FAIR NOTICE OF THE EXISTENCE AND CONTENTS OF SUCH PROVISIONS AND WAIVE ANY RIGHT
THEY MAY HAVE TO CLAIM OTHERWISE.
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8.14 Post-Closing Covenants.
(a) Borrower shall cooperate with Administrative Agent's counsel in a
timely manner to obtain, complete, file or otherwise complete all collateral
documents not obtained on the Initial Closing Date.
(b) As soon as practicable, but in any event within sixty (60) days
after the date on which Borrower receives a form of Mortgage from counsel to
Administrative Agent, Borrower will provide to Administrative Agent a Mortgage
in form and substance acceptable to Administrative Agent (the "OHIO MORTGAGE"),
duly executed, acknowledged and delivered by Diamond, and duly recorded in the
appropriate real property records, creating a first and prior Lender Lien on
approximately 9.21 acres of land and the improvements located thereon, owned in
fee simple by Diamond, being ▇▇▇▇ ▇, ▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Subdivision,
Greenfield Township, Fairfield County, Ohio with addressees of ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and the main plant at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ (the "OHIO FACILITY") to secure payment and performance of the
Obligation, together with (i) a mortgagee policy of title insurance in an amount
acceptable to Administrative Agent and issued by a title insurance company
acceptable to Administrative Agent insuring that the Lien created by the Ohio
Mortgage creates a valid, first and prior Lien on the Ohio Facility, subject to
no prior or equal Liens (other than easements, building restrictions, liens for
taxes not yet due and payable and other similar encumbrances which are not of a
material nature and do not secure Debt), (ii) a current, ALTA as-built boundary
survey of the real estate and improvements comprising the Ohio Facility
reflecting no material encroachments, and (iii) a Phase I environmental
assessment by an environmental consulting firm acceptable to Administrative
Agent, reflecting no material Environmental Liability; provided that, if no
Event of Default or Potential Default has occurred and is continuing or will
occur as a result thereof, Borrower may, at its option, elect to grant a first
and prior Lien on the Ohio Facility to secure the TROL Financing if, by written
request of Borrower, all value for or with respect to the Ohio Facility has been
permanently eliminated from the Borrowing Base, in which case the Lien granted
to Administrative Agent pursuant to the preceding provisions of this Section
8.14(b) will be a second lien, inferior only to the Lien granted to secure the
TROL Financing pursuant to this proviso.
(c) Within thirty (30) days after receiving a request from
Administrative Agent, Borrower and Parent will execute, and will cause other
necessary parties to execute, a deed of trust and other documents as may be
necessary and appropriate, in the judgment of Administrative Agent, to grant to
Administrative Agent, to secure payment and performance of the Obligation, a
Lien on the TROL Facility which (i) is second and inferior to the first and
prior Liens of Bank One and ▇▇▇▇▇ Fargo pursuant to the TROL Financing, (ii)
does not impede or restrict in any way the ability of ▇▇▇▇▇ Fargo and Bank One
to enforce and realize upon their Rights with respect to the TROL Facility and
(iii) is created by documents acceptable in all respects to Administrative
Agent, Bank One and ▇▇▇▇▇ Fargo. The amendment to the TROL Financing documents
as of the Initial Closing Date will include a covenant that, within thirty (30)
days after Closing, each Domestic Company will execute such documents as may be
necessary and appropriate, in the judgment of ▇▇▇▇▇ Fargo and Bank One, to grant
to ▇▇▇▇▇ Fargo and Bank One, to secure the Obligations of the Domestic Companies
with respect to the TROL Financing, Liens on Collateral under this Agreement
which (A) are second and inferior to the first and prior Lender Liens hereunder,
(B) do not impede or restrict in any way the ability of Administrative Agent and
Lenders to enforce and realize upon the Collateral and (C) are created by
documents acceptable in all respects to Administrative Agent, Bank One and ▇▇▇▇▇
Fargo.
SECTION 9. NEGATIVE COVENANTS. For so long as any Lender is committed to lend
money or issue LCs under this Agreement and until the Obligation has been fully
paid and performed, Borrower and Parent, jointly and severally, covenant and
agree with Administrative Agent and Lenders as follows:
9.1 Payroll Taxes. No Company may directly or indirectly use any
proceeds of any Borrowing (i) for any purpose other than as represented in this
Agreement, or (ii) for the payment of wages of employees unless a
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timely payment to or deposit with the United States of all amounts of Tax
required to be deducted and withheld with respect to such wages is also made.
9.2 Prohibition Against Other Debt. No Company may:
(a) Permitted Debt. Create, incur or suffer to exist (directly or
indirectly) any direct, indirect, fixed or contingent liability for any Debt
except the following (the "PERMITTED DEBT"):
(i) the Obligation;
(ii) the TROL Financing;
(iii) Unsecured Debt of any Company not otherwise permitted by
this Section 9.2, so long as
(1) no Event of Default, Potential Default or
Material Adverse Event (y) exists on the date any such Debt is
created, incurred or assumed or (z) arises as a result of, or
after giving effect to, any such Debt incurrence,
(2) the aggregate amount of all such additional Debt
does not exceed at any time an amount equal to One Hundred
Thousand Dollars ($100,000) for any individual Debt and Five
Hundred Thousand Dollars ($500,000) in the aggregate, and
(3) such additional Debt is subordinated to the
Obligation on terms acceptable to Required Lenders;
(iv) the Permitted Intercompany Guaranties;
(v) the Permitted TROL Guaranties;
(vi) the Permitted Intercompany Advances, so long as such
Permitted Intercompany Advances are evidenced by written promissory
notes pledged to Administrative Agent for the benefit of Lenders as
contemplated by the Credit Documents, including Section 5.2(c);
(vii) Up to Two Million Dollars ($2,000,000) of overdraft
facilities for Foreign Subsidiaries, if such facilities have been
reviewed and approved by Administrative Agent;
(viii) Debt incurred by Ultrak Europe, N.V. relating to the
acquisition of land and construction of improvements for Ultrak Europe,
N.V.'s warehouse facility located in Antwerp, Belgium, such Debt to be
limited to (A) Six Hundred Twenty Five Thousand Dollars ($625,000) of
Debt owing under a promissory note dated June 4, 1999, executed by
Ultrak Europe, N.V. in favor of KBC Bank for the acquisition of the
land for such facility, (B) One Million Five Hundred Thousand Dollars
($1,500,000) of Capital Leases executed by Ultrak Europe, N.V., as
lessee, and KBC Lease Belgium, N.V., as lessor, for the construction of
improvements at such facility, (C) Six Hundred Thousand Dollars
($600,000) of Capital Leases executed by Ultrak Europe, N.V., as
lessee, and KBC Lease Belgium, N.V., as lessor, for acquisition and
installation of technology at such facility (collectively, the "BELGIUM
FACILITY DEBT"), (D) One Million Two Hundred Fifty Thousand Dollars
($1,250,000) overdraft facility executed by Ultrak Europe, N.V. with
KBC Bank, (E) Two Hundred Fifty Thousand Dollars ($250,000) bank
guarantee line for use in discounting invoices of Foreign Subsidiaries
in France, and (F) Five Million Dollars ($5,000,000) facility with KBC
Bank for use with F/X Contracts;
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(ix) Debt relating to F/X Contracts with a notional amount of
up to One Million Dollars ($1,000,000); and
(x) any Debt relating to Hedging Agreements in existence on
the date hereof with Affiliates of Administrative Agent, entered into
with respect to assets on the Companies' consolidated balance sheet or
with ▇▇▇▇▇ Fargo or one of its Affiliates provided that any Hedging
Agreement with any Entity other than an Affiliate of Administrative
Agent must be unsecured.
(b) Prohibition Against Redemptions and Prepayments. Except for the
Obligation, prepay, purchase, repurchase, defease or redeem, or cause to be
prepaid, purchased, repurchased, defeased or redeemed, any principal of, or any
premium (if any) or interest on, any of its Debt, or fund or cause to be funded
any sinking or similar fund for any such Debt; provided that Borrower or Parent
may make prepayments with respect to the TROL Financing (or, in lieu of
prepayments, may make payments into cash collateral accounts with ▇▇▇▇▇ Fargo
and Bank One to secure the TROL Financing) so long as (i) no Event of Default or
Potential Default exists on the date of such payment or prepayment or arises as
a result of, or after giving effect to, such payment or prepayment and (ii) the
Over-Advance Availability has been permanently reduced at Borrower's written
request by an amount equal to such payment or prepayment.
9.3 Prohibition Against Other Liens. No Company may (i) create, incur
or suffer or permit to be created or incurred or to exist any Lien upon any of
its properties except a Permitted Lien or (ii) enter into or permit to exist any
arrangement or agreement that directly or indirectly prohibits any Company from
creating or incurring any Lien on any of its assets or properties except (a) the
Credit Documents, (b) any lease that places a Lien prohibition on only the
property subject to that lease, and (c) arrangements and agreements that apply
only to property subject to Permitted Liens. The following are "PERMITTED
LIENS":
(a) Lender Liens. Lender Liens;
(b) Limited Future Liens. Liens not otherwise permitted by this Section
9.3, so long as
(i) no Event of Default, Potential Default or Material Adverse
Event (y) exists on the date any such Lien is created or assumed or (z)
arises as a result of, or after giving effect to, any such Lien
incurrence or assumption,
(ii) such Liens are granted on equipment, machinery or Real
Property on which no Lender Lien exists, to secure an aggregate amount
of Debt not exceeding at any time an amount equal to One Hundred
Thousand Dollars ($100,000) for any individual Debt and Five Hundred
Thousand Dollars ($500,000) in the aggregate, and
(iii) the Debt securing such additional Liens is subordinated
to the Obligation on terms acceptable to Required Lenders;
(c) TROL Financing Liens. Liens securing the TROL Financing so long as
such liens are limited to (i) the existing first and prior Liens with respect to
the Real Property located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
presently securing the TROL Financing, (ii) a first and prior Lien on the Ohio
Facility if, by written request of Borrower, all value for or with respect to
the Ohio Facility has been permanently eliminated from the Borrowing Base, (iii)
Liens on other Collateral which (A) are second and inferior to the first and
prior Lender Liens hereunder, (B) do not impede or restrict in any way the
ability of Administrative Agent and Lenders to enforce and realize upon the
Collateral and (C) are created by documents acceptable in all respects to
Administrative Agent, Bank One and ▇▇▇▇▇ Fargo and (iv) a first and prior Lien
on cash collateral accounts permitted by Section 9.2(b);
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(d) Landlord Liens. Any interest or title of a lessor in property being
leased under an operating lease that does not constitute Debt;
(e) Banker's Liens. Banker's Liens and Rights of setoff or recoupment;
(f) Workers Compensation. Pledges or deposits made to secure any
Company's payment of workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits or to participate in any fund in
connection with workers' compensation, unemployment insurance, pensions or other
social security programs which (in each case) are not made with any Collateral
other than cash proceeds thereof arising in the ordinary course;
(g) Bid Deposits. Deposits (i) to secure any Company's performance of
bids, trade contracts (except for the repayment of borrowed money) or leases
arising in the ordinary course of business, which in each case are limited to no
more than ten percent (10%) of the face amount thereof, or (ii) to secure
statutory obligations, surety or appeal bonds or indemnity, performance or other
similar bonds incurred in the ordinary course of its business which (in each
case) are not made with any Collateral other than cash proceeds thereof arising
in the ordinary course;
(h) Zoning and easements. Zoning and similar restrictions on the use
of, and easements, restrictions, covenants, title defects and similar
encumbrances on, Real Property that do not impair the use of such Real Property
(other than of an inconsequential nature) and that are not violated by existing
or proposed structures or land use;
(i) Tax and Mechanic's Liens Not Yet Due and Payable. If no Lien has
been filed in any jurisdiction or agreed to (i) claims and Liens for Taxes not
yet due and payable, (ii) statutory mechanic's Liens and materialman's Liens for
services or materials and similar statutory Liens incident to construction and
maintenance of Real Property, in each case for which payment is not yet due and
payable, (iii) statutory landlord's Liens for rental not yet due and payable and
(iv) statutory Liens of warehousemen and carriers and similar statutory Liens
securing obligations that are not yet due and payable;
(j) Contested Tax and Mechanic's Liens. The following if (i) the
validity or amount is being contested in good faith and by appropriate and
lawful proceedings diligently conducted, (ii) reserve or other appropriate
provision (if any) required by GAAP has been made, (iii) levy and execution has
not issued or continues to be stayed, (iv) they do not individually or
collectively detract from the value of the property of the Person in question or
impair the use of that property in the operation of its business (other than, in
each case, of an inconsequential nature) and (v) (other than ad valorem Tax
Liens given statutory priority) they are subordinate to the Lender Liens to the
extent that they cover Collateral: (1) Claims and Liens for Taxes; (2) claims
and Liens upon, and defects of title to, real or personal property, including
any attachment of personal or real property or other legal process before
adjudication of a dispute on the merits; (3) claims and Liens of statutory
mechanics, materialmen's, warehousemen's, carriers', landlords' or other like
Liens; (4) Liens incident to construction and maintenance of Real Property; and
(5) adverse judgments, attachments or orders on appeal for the payment of money;
and
(k) Belgium Facility. Liens securing the Belgium Facility Debt, so long
as such Liens are limited to Ultrak Europe, N.V.'s warehouse facility in
Antwerp, Belgium and the property of Ultrak Europe, N.V. located therein.
9.4 Employee Plans. No Company may permit any of the events or
circumstances described in
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Section 7.11 to exist or occur except where the failure to perform the foregoing
could not reasonably be expected to result in a Material Adverse Event.
9.5 Transactions with Affiliates. No Company may enter into any
transaction with any of its Affiliates except (i) transactions permitted under
Sections 9.7(j) and (k) and Section 9.9 and (ii) transactions (other than
Investments) in the ordinary course of business and upon fair and reasonable
terms not materially less favorable than it could obtain or could become
entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
9.6 Compliance with Laws and Documents. No Company shall (i) violate
the provisions of any Laws (including OSHA and Environmental Laws) applicable to
it or of any material agreement to which it is a party or by which any of its
property is subject or bound if that violation alone, or when aggregated with
all other violations, reasonably could be expected to result in a Material
Adverse Event, (ii) violate any provision of its Organizational Documents or
(iii) repeal, replace or amend any provision of its Organizational Documents if
that action reasonably could be expected to result in a Material Adverse Event.
9.7 Investments. No Company may make or continue to own any Investments
except the following (the "PERMITTED INVESTMENTS"):
(a) (i) Readily marketable, direct, full faith and credit obligations
of the United States or obligations guaranteed by the full faith and credit of
the United States and (ii) readily marketable obligations of an agency or
instrumentality of, or corporation owned, controlled or sponsored by, the United
States that are generally considered in the securities industry to be implicit
obligations of the United States, in each case, due within one year after the
acquisition of it (collectively, "GOVERNMENT SECURITIES");
(b) Readily marketable direct obligations of any state of the United
States given on the date of such investment a credit rating of at least Aa by
▇▇▇▇▇'▇ Investors Service, Inc. or AA by Standard & Poor's Corporation, in each
case due within one year from the making of the investment;
(c) Certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements covering
Government Securities executed by, (i) any Lender or (ii) any bank incorporated
under the Laws of the United States or any of its states and given on the date
of the investment a short-term certificate of deposit credit rating of at least
P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or A-2 by Standard & Poor's Corporation,
in each case due within one year after the date of the making of the investment;
(d) Certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements covering
Government Securities executed by, any branch or office located in the United
States of a bank incorporated under the Laws of any jurisdiction outside the
United States having on the date of the investment a short-term certificate of
deposit credit rating of a least P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or A-2
by Standard & Poor's Corporation, in each case due within one year after the
date of the making of the investment;
(e) Extensions of trade credit by any Company made in the ordinary
course of its business in a manner consistent with generally accepted industry
practices;
(f) Parent's investment (or Security Warranty's investment if a
Permitted Security Warranty Transaction occurs) in Detection Systems as of
November 12, 1999, provided that any part of such investment that is sold or
otherwise disposed of may not be subsequently reacquired;
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(g) Investments in Permitted Public Company Holdings not exceeding an
aggregate of Two Million Dollars ($2,000,000) (on a cost basis) (including
amounts in the money market account associated with any brokerage account in
which Permitted Public Company Holdings are held) owned at any time;
(h) Customary capital contributions or other similar investments by any
Company for the formation of any other Company (provided that the amount so
contributed for the formation of any Company shall not exceed One Hundred
Thousand Dollars ($100,000) for each such Company formed);
(i) Loans, advances or extensions of credit by any Domestic Company to
any other Domestic Company; and
(j) The Permitted Intercompany Advances, so long as such Permitted
Intercompany Advances are evidenced by written promissory notes pledged to
Administrative Agent for the benefit of Lenders as contemplated by the Credit
Documents, including Section 5.2(c).
9.8 Distributions; Other Payments. No Company may declare, make or pay
any Distribution except
(a) Distributions paid in the form of additional equity that is not
required to be redeemed or is redeemable at the option of the holder if certain
events or conditions occur or exist or otherwise,
(b) Distributions to Parent or Borrower from any other Company,
(c) Distributions from a Foreign Subsidiary to Ultrak Holdings,
(d) Distributions from Parent or Borrower to Ultrak GP and Ultrak LP,
(e) Distributions of up to One Hundred Seventeen Thousand Two Hundred
Ten Dollars ($117,210) per year representing preferred stock dividends from
Parent to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ made in respect of Parent's Series A Preferred
Stock; and
(f) Repurchases of common stock of Parent up to an aggregate during the
term of this Agreement up to an aggregate of One Million Dollars ($1,000,000)
during the term of this Agreement, but only if, (i) Administrative Agent has
received the Financials and other items required by Section 8.2(a) for the year
ended December 31, 1999, (ii) Borrower had at least Ten Million Dollars of
Excess Availability, without including any amount for the Over-Advance
Availability in the Borrowing Base, for the thirty (30) days preceding the day a
particular round of stock repurchases commence and is reasonably projected by
Borrower to have Ten Million Dollars of Excess Availability, without including
any amount for the Over-Advance Availability in the Borrowing Base, for the
thirty (30) days succeeding the day such round of stock repurchases is expected
to be completed, (iii) the Over-Advance Availability has been cancelled and
terminated at Borrower's written request and clause (g) has been eliminated from
the definition of "Borrowing Base", (iv) no Potential Default or Event of
Default has occurred and is continuing and none will arise as a result of such
stock repurchases and (v) the amount of Cash Flow Available for Debt Service
exceeds the Debt Service Requirements for the fiscal year ending December 31,
2000, by at least Four Million Two Hundred Thousand Dollars ($$4,200,000), as
reflected on the Financials and other items delivered to Administrative Agent
pursuant to Section 8.2(a) for the year ended December 31, 2000.
9.8 Disposition of Assets. No Company may sell, assign, lease, transfer
or otherwise dispose of any of its assets (including equity interests in any
other Company) other than a Permitted Asset Sale. Notwithstanding the foregoing,
Parent may sell its Permitted Investments described in Section 9.7(g) without
being required to prepay the Obligation unless, as a result of any sale of
Permitted Investments a Borrowing Base Deficiency exists
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and Borrower is required to make a prepayment pursuant to Section 3.2(c).
9.9 Mergers, Consolidations, Acquisitions, Dispositions and
Dissolutions. No Company may make or participate in any Acquisition, merge or
consolidate with any other Person, acquire or, in one or a series of related
transactions, dispose (by sale, lease, sale-leaseback or otherwise) of all or
substantially all of its assets and properties or dissolve except:
(a) if no Event of Default, Potential Default or Material Adverse Event
exists or will exist as a result of it, any merger or consolidation between
Companies (so long as (i) if Borrower is involved, it is the survivor, and (ii)
if both Domestic Companies (other than Borrower) and Foreign Subsidiaries are
involved, one or more Domestic Companies that have each previously executed a
Guaranty and a Security Agreement are the survivors);
(b) any disposition (by sale, lease, sale-leaseback or otherwise) of
all or substantially all of the assets and properties of, or any dissolution of,
any Domestic Company (other than Borrower) if substantially all of its assets
and properties are or have been conveyed or assigned to or vested in any other
Domestic Company that has previously executed and delivered a Guaranty and a
Security Agreement;
(c) any disposition (by sale, lease, sale-leaseback or otherwise) of
all or substantially all of the assets and properties of, or any dissolution of,
any Foreign Subsidiary if substantially all of its assets and properties are or
have been conveyed or assigned to or vested in any other Company; and
(d) any Permitted Asset Sale so long as all mandatory prepayments of
the Obligation have been made.
9.10 Assignment. No Company may assign or transfer any of its Rights,
duties or obligations under any of the Credit Documents.
9.11 TROL Financing Amendments. No Company will agree to any amendment
to the TROL Financing and the TROL Financing documents which increases the
amount of the TROL Financing or results in annual debt service requirements
greater than the present debt service requirements of the TROL Financing.
9.12 Fiscal Year and Accounting Methods. No Company may change either
its fiscal year for accounting purposes or any material aspect of its method of
accounting.
9.13 New Businesses. No Company may engage in any business except the
businesses in which it is presently engaged and any other reasonably related
business.
9.14 Government Regulations. No Company may conduct its business in a
way that it becomes regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.
9.15 Strict Compliance. No Company may indirectly do anything that it
may not directly do under any covenant in any Credit Document.
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SECTION 10. FINANCIAL COVENANTS. For so long as any Lender is committed to lend
or issue LCs under this Agreement, and until the Obligation has been fully paid
and performed, Borrower covenants and agrees with Administrative Agent and
Lenders as follows:
10.1 Leverage Ratio. The ratio of the sum of the Companies'
consolidated Funded Debt as of the last day of each fiscal quarter ending on or
after June 30, 2000 to the Companies' consolidated Operating EBITDA for the four
fiscal quarters then ended shall at no time exceed 3.75 to 1.00 as of June 30,
2000 or 3.50 to 1.00 as of the end of any fiscal quarter thereafter. The
Operating EBITDA for the two quarters ended June 30, 2000 and the three quarters
ended September 30, 2000 shall be annualized instead of using any 1999 quarters.
10.2 Debt Service Coverage Ratio. The ratio of the Companies'
consolidated Cash Flow Available for Debt Service, measured as of the last day
of each fiscal quarter (the "SUBJECT QUARTER"), for the four fiscal quarters
ending on the last day of the Subject Quarter to the Companies' consolidated
Debt Service Requirements for the same four fiscal quarters shall at all times
exceed 1.15 to 1.00. The Cash Flow Available for Debt Service and the Debt
Service Requirements for the two quarters ended June 30, 2000 and the three
quarters ended September 30, 2000 shall be annualized instead of using any 1999
quarters.
10.3 Minimum Tangible Net Worth. The Companies' consolidated Tangible
Net Worth shall not at any time be less than the sum of (a) Seventy Three
Million Dollars ($73,000,000) plus (b) an amount equal to seventy five percent
(75%) of the Companies' consolidated Net Income (without deduction for losses)
for each fiscal quarter ending after December 31, 1999, and before the date of
determination plus (c) one hundred percent (100%) of the net (i.e., gross less
usual and customary brokerage and after related costs and expenses) proceeds
from the issuance and sale of any equity securities by any Company after
December 31, 1999, other than the proceeds of any issuance and sale of any
capital stock which is required to be redeemed, or is redeemable at the option
of the holder, if certain events or conditions occur or exist or otherwise.
10.4 Capital Expenditures. For any fiscal year of Borrower, Capital
Expenditures for the acquisition, construction, improvement or replacement of
land, buildings, equipment or other fixed or capital assets or leaseholds
(excluding expenditures properly chargeable to repairs or maintenance) for the
Companies shall not exceed (a) Six Million Dollars ($6,000,000) for the fiscal
year ending December 31, 2000, and (b) Four Million Dollars ($4,000,000) for the
fiscal year ending December 31, 2001.
10.5 Minimum Excess Availability. Borrower will at all times maintain
Excess Availability of at least One Million Dollars ($1,000,000).
SECTION 11. EVENT OF DEFAULT. The term "EVENT OF DEFAULT" means the occurrence
of any one or more of the following:
11.1 Payment of Obligation. Borrower's failure or refusal to pay (i)
principal of any Note, or any part thereof, on or before the date when due
(including any required mandatory prepayment when due), or (ii) any other part
of the Obligation on or before five Business Days after the date due.
11.2 Covenants. Any Company's failure or refusal to punctually and
properly perform, observe and comply with any of the covenants in Sections 9 and
10. It shall also constitute an Event of Default if any Company fails or refuses
to punctually and properly perform, observe and comply with any covenant or
agreement in any Credit Document (other than covenants to pay the Obligation and
covenants set forth in Sections 9 and 10) applicable to it, and that failure or
refusal continues for 10 Business Days after that Company has, or with the
exercise at reasonable diligence should have had, notice of that failure or
refusal.
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11.3 Debtor Relief. Any Company (i) is not Solvent, (ii) fails to pay
its debts generally as they become due, (iii) voluntarily seeks, consents to or
acquiesces in the benefit of any Debtor Relief Law or (iv) becomes a party to or
is made the subject of any proceeding provided for by any Debtor Relief Law
(except as a creditor or claimant) that could suspend or otherwise adversely
affect the Rights of Administrative Agent or any Lender under the Credit
Documents (unless, if the proceeding is instituted by a Person other than a
Company, the applicable petition is dismissed within 60 days after its filing).
11.4 Judgments and Attachments. Where the amount in controversy or of
any judgment, as the case may be, against any Company exceeds, individually with
respect to such Company or in the aggregate with respect to all Companies, Five
Hundred Thousand Dollars ($500,000), the Companies (or any of them) fail (i) to
have discharged any attachment, sequestration or similar proceeding against any
properties of any Company prior to the realization on any property of any
Company, and in any event, within 30 days following the commencement of any such
proceedings, (ii) to pay any money judgment against any Company within 30 days
before the date on which any Company's assets may be lawfully sold to satisfy
that judgment or (iii) to pay a judgment in excess of Five Hundred Thousand
Dollars ($500,000) and such judgment remains unpaid and unstayed for more than
30 days.
11.5 Government Action. Unless otherwise covered by any event described
in Section 11.4, (i) the entry or issuance of an order by any Governmental
Authority (including the United States Justice Department) seeking to cause any
Company to divest a significant portion of its assets under any antitrust,
restraint of trade, unfair competition, industry regulation or similar Laws, or
(ii) the commencement of any action or proceeding by any Governmental Authority
(a) for the purpose of condemning, seizing or otherwise appropriating, or taking
custody or control of all or any substantial portion of, any Company's assets or
(b) which assert any material violation by, or material liability against, any
Company based on any Environmental Law.
11.6 Misrepresentation. Any representation or warranty made by any
Company in any Credit Document at any time proves to have been false or
incorrect in any material respect when made.
11.7 Ownership of Other Companies. Except as a result of transactions
permitted by this Agreement, any Company (other than Parent) fails to be a
direct or indirect wholly owned Subsidiary of Parent.
11.8 Change of Control of Borrower or Parent. Upon the occurrence of
any of the following (each a "CHANGE OF CONTROL"): (i) the individuals who, as
of the date of this Agreement, constitute the members of Parent's or Borrower's
board of directors (for purposes of this Section 11.8(i), the "INCUMBENT BOARD")
do not constitute or cease for any reason to constitute at least seventy five
percent (75%) of Parent's or Borrower's, as the case may be, board of directors;
(ii) any "person" (other than ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934,
as amended (the "EXCHANGE ACT")) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the contractual right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than twenty five percent (25%) of the total voting power of the outstanding
capital stock (having full voting power) of Parent (for the purpose of this
clause (ii), such person shall be deemed to beneficially own any such capital
stock (having full voting power) of a specified corporation held by a parent
corporation, if such person is the beneficial owner (as defined in this clause
(ii)), directly or indirectly, of more than twenty five percent (25%) of the
total voting power of the capital stock (having full voting power) of such
parent corporation); (iii) the sale, transfer, sale-leaseback or other
disposition, in one or a series of related transactions, of all or a substantial
part of the property of Parent or Borrower, or of the Companies taken as a whole
to any Person other than a Company; (iv) the merger or consolidation of Parent
or Borrower into another Person, where the other Person is the surviving and
continuing entity; or (v) the adoption of a plan relating to the liquidation or
dissolution of Parent or Borrower or of the Companies taken as a whole. For
purposes of clause (i) of this Section 11.8, any individual who becomes a member
of the board
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of directors or who obtains a voting interest after the date of this Agreement
and whose election, or nomination for election, was approved by a vote of the
individuals comprising at least seventy five percent (75%) of the incumbent
board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest, as those terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall be deemed to be a member of the incumbent board.
11.9 Change in Management. Any material change in the management of
Parent, Borrower or the Companies as a whole, including ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ no
longer serving as the chairman of the board or chief executive officer of
Borrower.
11.10 Other Funded Debt. In respect of any Funded Debt of any Company
(other than the Obligation) individually or collectively of at least Five
Hundred Thousand Dollars ($500,000) (i) any Company fails to make any payment
when due, (ii) any default or other event or condition occurs or exists beyond
the applicable grace or cure period, the effect of which is to permit any holder
of that Funded Debt to cause (whether or not it elects to cause) any of such
Funded Debt to become due before its stated maturity or regularly scheduled
payment dates, or (iii) any of that Funded Debt is declared to be due and
payable or required to be prepaid by any Company before its stated maturity.
11.11 Validity and Enforceability. This Agreement, any Note, Guaranty
or any other Credit Document ceases to be in full force and effect or is
declared to be null and void, or the validity or enforceability of any Credit
Document or Lender Lien is contested by any Company or any other Person, or any
Company or any other Person asserts the absence of, or denies that it has, any
liability or obligations under any Credit Document to which it is a party except
in accordance with that document's express provisions, or any Lender Lien shall
fail to constitute a valid, perfected-first priority lien in favor of
Administrative Agent for Lenders, except in accordance with the express
provisions of any applicable Credit Document.
11.12 Material Agreement Default or Cancellation. The default under, or
breach or cancellation of, any agreement or other contractual arrangement to
which any Company is a party or beneficiary or by which any of its property is
bound or subject, which reasonably could be expected to result in any (i)
significant impairment of (a) the ability of Borrower or any other Company to
perform any of its payment or other material obligations under any Credit
Document or (b) the ability of Administrative Agent or Lenders to enforce any of
those obligations or any of their respective Rights under the Credit Documents,
(ii) significant and adverse effect on the business, management or financial
condition of the Borrower or of the Companies as a whole, as represented to
Lenders in the Financials then most recently received by them or (iii) event or
circumstance that could result in an Event of Default or Potential Default
pursuant to Sections 11.1 through 11.13 (inclusive) or Section 11.14.
11.13 LCs. Administrative Agent is served with, or becomes subject to,
a court order, injunction or other process or decree restraining or seeking to
restrain it from paying any amount under any LC and either (a) a drawing has
occurred under the LC, and Borrower has refused to reimburse Administrative
Agent for payment, or (b) the expiration date of the LC has occurred, but the
Right of the beneficiary to draw under the LC has been extended past the
expiration date in connection with the pendency of the related court action or
proceeding, and Borrower has failed to deposit with Administrative Agent cash
collateral in an amount equal to Administrative Agent's maximum exposure under
the LC.
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SECTION 12. RIGHTS AND REMEDIES.
12.1 Remedies Upon Event of Default.
(a) Debtor Relief. If an Event of Default exists under Section 11.3,
the commitment to extend credit under this Agreement automatically terminates
and the entire unpaid principal balance of the Obligation, together with all
interest accrued thereon, and all other amounts then accrued and unpaid,
automatically become and shall be due and payable without any action of any kind
whatsoever.
(b) Other Events of Default. If any Event of Default exists,
Administrative Agent may (with the consent of, and must, upon the request of
Required Lenders), do any one or more of the following: (i) If the maturity of
the Obligation has not already been accelerated under Section 12.1(a), declare
the entire unpaid principal balance of all or any part of the Obligation,
together with all interest accrued thereon, and all other amounts then accrued
and unpaid, immediately due and payable, whereupon it is due and payable; (ii)
terminate the commitments of Lenders to extend credit under this Agreement;
(iii) reduce any claim to judgment; (iv) demand payment of an amount equal to
the LC Exposure then existing and retain as collateral for the LC Exposure any
amounts received from any Company, from any property of any Company, through
offset or otherwise; and (v) exercise any and all other legal or equitable
Rights afforded by the Credit Documents, by applicable Laws or otherwise at law
or in equity.
(c) Offset. If an Event of Default exists, to the extent not prohibited
by applicable Laws, each Lender may exercise the Rights of offset and banker's
lien against each and every account and other property, or any interest therein,
which any Company may now or hereafter have with, or which is now or hereafter
in the possession of, that Lender to the extent of the full amount of the
Obligation owed to that Lender.
12.2 Company Waivers. To the extent not prohibited by applicable Laws,
Borrower and (pursuant to its Guaranty or its execution and delivery of, or
consent to, any other Credit Document) each other Company waives, in respect to
any action taken by Administrative Agent or Lenders at any time and from time to
time pursuant to Section 12.1, presentment, demand for payment, protest,
acceleration, notice of protest and nonpayment, NOTICE OF INTENTION TO
ACCELERATE, NOTICE OF ACCELERATION, and all other notices and acts, and agrees
that its liability with respect to all or any part of the Obligation is not
affected by any renewal or extension in the time of payment of all or any part
of the Obligation, by any indulgence, increase or other modification to, or by
any release or change in any security for the payment of, all or any part of the
Obligation.
12.3 Performance by Administrative Agent. If any Company's covenant,
duty or agreement is not performed in accordance with the terms of the Credit
Documents, Administrative Agent may at its option (but subject to the approval
of Required Lenders), perform or attempt to perform that covenant, duty or
agreement on behalf of that Company, and any amount expended by or on behalf of
Administrative Agent in its performance or attempted performance is payable by
the Companies, jointly and severally, to Administrative Agent on demand, becomes
part of the Obligation, and bears interest on the portion thereof from time to
time unpaid at the Default Rate from the date of Administrative Agent's
expenditure until paid. However, Administrative Agent does not assume and shall
never have, except by its express written consent, any liability or
responsibility for the performance of any Company's covenants, duties or
agreements.
12.4 Not in Control. Nothing in any Credit Document gives or may be
deemed to give to Administrative Agent or any Lender the Right to exercise
control over any Company's Real Property, other assets, affairs or management or
to preclude or interfere with any Company's compliance with any Law or require
any act or omission by any Company that may be harmful to Persons or property.
Any "Material Adverse Event" or other materiality or substantiality qualifier of
any representation, warranty, covenant, agreement or other provision of any
Credit Document is included for credit documentation purposes only and does not
imply and should not be deemed to mean that Administrative Agent or any Lender
acquiesces in any
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non-compliance by any Company with any applicable Law, document or otherwise or
does not expect the Companies to promptly, diligently and continuously carry out
all appropriate removal, remediation, compliance, closure or other activities
required or appropriate in accordance with all Environmental Laws.
Administrative Agent's and Lenders' power is limited to the Rights provided in,
or referred to by, the Credit Documents. All of those Rights exist solely to
preserve and protect the Collateral and to assure payment and performance of the
Obligation in accordance with the terms of the Credit Documents, and may be
exercised in a manner determined to be appropriate by Administrative Agent or
Lenders in their sole respective good faith business judgment.
12.5 Course of Dealing. The acceptance by Administrative Agent or
Lenders of any partial payment on the Obligation is not a waiver of any Event of
Default then existing. No waiver by Administrative Agent, Required Lenders or
Lenders of any Event of Default is a waiver of any other then-existing or
subsequent Event of Default. No delay or omission by Administrative Agent,
Required Lenders or Lenders in exercising any Right under the Credit Documents
impairs that Right or is a waiver thereof or any acquiescence therein, nor will
any single or partial exercise of any Right preclude other or further exercise
thereof or the exercise of any other Right under the Credit Documents or
otherwise.
12.6 Cumulative Rights. All Rights available to Administrative Agent,
Required Lenders and Lenders under the Credit Documents are cumulative of and in
addition to all other Rights granted to Administrative Agent, Required Lenders
and Lenders at law or in equity, whether or not the Obligation is due and
payable and whether or not Administrative Agent, Required Lenders or Lenders
have instituted any suit for collection, foreclosure or other action in
connection with the Credit Documents.
12.7 Application of Proceeds. Any and all proceeds ever received by
Administrative Agent or Lenders from the exercise of any Rights pertaining to
the Obligation shall be applied to the Obligation according to Section 3.
12.8 Certain Proceedings. Borrower shall promptly execute and deliver,
or cause the execution and delivery of, all applications, certificates,
instruments, registration statements and all other documents and papers
Administrative Agent or Required Lenders reasonably request in connection with
the obtaining of any consent, approval, registration (other than securities law
registrations), qualification, permit, license or authorization of any
Governmental Authority or other Person necessary or appropriate for the
effective exercise of any Rights under the Credit Documents. Because Borrower
agrees that Administrative Agent's and Required Lenders' remedies under
applicable Laws for failure of Borrower to comply with the provisions of this
section would be inadequate and that failure would not be adequately compensable
in damages, Borrower agrees that the covenants of this section may be
specifically enforced.
12.9 Expenditures by Administrative Agent or Lenders. Any sums spent by
Administrative Agent or any Lender in the exercise of any Right under any Credit
Document is payable by the Companies to Administrative Agent within 15 Business
Days of written demand, becomes part of the Obligation, and bears interest on
the portion thereof from time to time unpaid at the Default Rate from the date
spent until the date repaid.
12.10 Diminution in Value of Collateral. Neither Administrative Agent
nor any Lender has any liability or responsibility whatsoever for any diminution
in or loss of value of any collateral now or in the future securing payment or
performance of any of the Obligation (other than diminution in or loss of value
caused by its own gross negligence or willful misconduct).
SECTION 13. ADMINISTRATIVE AGENT AND LENDERS.
13.1 Administrative Agent.
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(a) Appointment. Each Lender appoints Administrative Agent (including
each successor Administrative Agent in accordance with this Section 13) as its
nominee and agent to act in its name and on its behalf (and Administrative Agent
and each such successor accepts that appointment): (i) To act as its nominee and
on its behalf in and under all Credit Documents; (ii) to arrange the means
whereby its funds are to be made available to Borrower under the Credit
Documents; (iii) to take any action that it properly requests under the Credit
Documents (subject to the concurrence of other Lenders as may be required under
the Credit Documents); (iv) to receive all documents and items to be furnished
to it under the Credit Documents; (v) to be the secured party, mortgagee,
beneficiary, recipient and similar party in respect of any collateral for the
benefit of Lenders; (vi) to promptly distribute to it all material information,
requests, documents, reports and items received from Borrower under the Credit
Documents; (vii) to promptly distribute to it its ratable part of each payment
or prepayment (whether voluntary, as proceeds of collateral upon or after
foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with
the terms of the Credit Documents; and (viii) to deliver to the appropriate
Persons requests, demands, approvals and consents received from it. However,
Administrative Agent may not be required to take any action that exposes it to
personal liability or that is contrary to any Credit Document or applicable
Laws.
(b) Successor. Administrative Agent may assign all of its Rights and
obligations as Administrative Agent under the Credit Documents to any of its
Affiliates, which Affiliate shall then be the successor Administrative Agent
under the Credit Documents. Administrative Agent may also voluntarily resign and
shall resign upon the request of Required Lenders for cause (i.e.,
Administrative Agent is continuing to fail to perform its responsibilities as
Administrative Agent under the Credit Documents). If the initial or any
successor Administrative Agent ever ceases to be a party to this Agreement or if
the initial or any successor Administrative Agent ever resigns (whether
voluntarily or at the request of Required Lenders), then Required Lenders shall
(which, if no Event of Default or Potential Default exists, is subject to
Borrower's approval that may not be unreasonably withheld) appoint the successor
Administrative Agent from among Lenders (other than the resigning Administrative
Agent). If Required Lenders fail to appoint a successor Administrative Agent
within 30 days after the resigning Administrative Agent has given notice of
resignation or Required Lenders have removed the resigning Administrative Agent,
then the resigning Administrative Agent may, on behalf of Lenders, appoint a
successor Administrative Agent, which must be a commercial bank having a
combined capital and surplus of at least One Billion Dollars ($1,000,000,000)
(as shown on its most recently published statement of condition). Upon its
acceptance of appointment as successor Administrative Agent, the successor
Administrative Agent succeeds to and becomes vested with all of the Rights of
the prior Administrative Agent, and the prior Administrative Agent is discharged
from its duties and obligations of Administrative Agent under the Credit
Documents (but, when used in connection with LCs issued and outstanding before
the appointment of the successor Administrative Agent, "Administrative Agent"
shall continue to refer solely to the prior Administrative Agent, but any LCs
issued or renewed after the appointment of any successor Administrative Agent
shall be issued or renewed by the successor Administrative Agent), and each
Lender shall execute the documents that any Lender, the resigning or removed
Administrative Agent, or the successor Administrative Agent reasonably request
to reflect the change. After any Administrative Agent's resignation or removal
as Administrative Agent under the Credit Documents, the provisions of this
section inure to its benefit as to any actions taken or not taken by it while it
was Administrative Agent under the Credit Documents.
(c) Rights as Lender. Administrative Agent, in its capacity as a
Lender, has the same Rights under the Credit Documents as any other Lender and
may exercise those Rights as if it were not acting as Administrative Agent. The
term "LENDER", unless the context otherwise indicates, includes Administrative
Agent. Administrative Agent's resignation or removal does not impair or
otherwise affect any Rights that it has or may have in its capacity as an
individual Lender. Each Lender and Borrower agree that Administrative Agent is
not a fiduciary for Lenders or for Borrower but is simply acting in the capacity
described in this Agreement to alleviate administrative burdens for Borrower and
Lenders, that Administrative Agent has no duties or responsibilities to Lenders
or Borrower except those expressly set forth in the Credit Documents, and that
Administrative Agent in its capacity as a Lender has the same Rights as any
other Lender.
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(d) Other Activities. Administrative Agent or any Lender may now or in
the future be engaged in one or more loan, letter of credit, leasing, hedging
agreement or other financing transactions with Borrower or other Companies, act
as trustee or depositary for Borrower or other Companies, or otherwise be
engaged in other transactions with Borrower or other Companies (collectively,
the "OTHER ACTIVITIES") not the subject of the Credit Documents. Without
limiting the Rights of Lenders specifically set forth in the Credit Documents,
neither Administrative Agent nor any Lender is responsible to account to the
other Lenders for those other activities, and no Lender shall have any interest
in any other Lender's activities, any present or future guaranties by or for the
account of Borrower or other Companies that are not contemplated by or included
in the Credit Documents, any present or future offset exercised by
Administrative Agent or any Lender in respect of those other activities, any
present or future property taken as security for any of those other activities,
or any property now or hereafter in Administrative Agent's or any other Lender's
possession or control that may be or become security for the obligations of
Borrower or other Companies arising under the Credit Documents by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents or instruments related to any of those other
activities (but, if any payments in respect of those guaranties or that property
or the proceeds thereof is applied by Administrative Agent or any Lender to
reduce the Obligation, then each Lender is entitled to share ratably in the
application as provided in the Credit Documents).
13.2 Expenses. Each Lender shall pay its Pro Rata Part of any
reasonable expenses (including court costs, reasonable attorneys' fees and other
costs of collection) incurred by Administrative Agent (while acting in such
capacity) in connection with any of the Credit Documents if Administrative Agent
is not reimbursed from other sources within 30 days after incurrence. Each
Lender is entitled to receive its Pro Rata Part of any reimbursement that it
makes to Administrative Agent if Administrative Agent is subsequently reimbursed
from other sources.
13.3 Proportionate Absorption of Losses. Except as otherwise provided
in the Credit Documents, nothing in the Credit Documents gives any Lender any
advantage over any other Lender insofar as the Obligation is concerned or
relieves any Lender from ratably absorbing any losses sustained with respect to
the Obligation (except to the extent unilateral actions or inactions by any
Lender result in Borrower or any other Company having any credit, allowance,
setoff, defense or counterclaim solely with respect to all or any part of that
Lender's Pro Rata Part of the Obligation).
13.4 Delegation of Duties; Reliance. Lenders may perform any of their
duties or exercise any of their Rights under the Credit Documents by or through
Administrative Agent, and Lenders and Administrative Agent may perform any of
their duties or exercise any of their Rights under the Credit Documents by or
through their respective Representatives. Administrative Agent, Lenders, and
their respective Representatives (a) are entitled to rely upon (and shall be
protected in relying upon) any written or oral statement believed by it or them
to be genuine and correct and to have been signed or made by the proper Person
and, with respect to legal matters, upon opinion of counsel selected by
Administrative Agent or that Lender (but nothing in this clause (a) permits
Administrative Agent to rely on (i) oral statements if a writing is required by
this Agreement or (ii) any other writing if a specific writing is required by
this Agreement), (b) are entitled to deem and treat each Lender as the owner and
holder of its portion of the Obligation for all purposes until, written notice
of the assignment or transfer is given to and received by Administrative Agent
(and any request, authorization, consent or approval of any Lender is conclusive
and binding on each subsequent holder, assignee or transferee of or Participant
in that Lender's portion of the Obligation until that notice is given and
received), (c) are not deemed to have notice of the occurrence of an Event of
Default unless a responsible officer of Administrative Agent, who handles
matters associated with the Credit Documents and transactions thereunder, has
actual knowledge or Administrative Agent has been notified by a Lender or
Borrower, and (d) are entitled to consult with legal counsel (including counsel
for Borrower), independent accountants and other experts selected by
Administrative Agent and are not liable for any action taken or not taken in
good faith by it in accordance with the advice of counsel, accountants or
experts.
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13.5 Limitation of Administrative Agent's Liability.
(a) Exculpation. Neither Administrative Agent nor any of its Affiliates
or Representatives will be liable for any action taken or omitted to be taken by
it or them under the Credit Documents in good faith and believed by it or them
to be within the discretion or power conferred upon it or them by the Credit
Documents or be responsible for the consequences of any error of judgment
(except for fraud, gross negligence or willful misconduct), and neither
Administrative Agent nor any of its Affiliates or Representatives has a
fiduciary relationship with any Lender by virtue of the Credit Documents (but
nothing in this Agreement negates the obligation of Administrative Agent to
account for funds received by it for the account of any Lender).
(b) Indemnity. Unless indemnified to its satisfaction against loss,
cost, liability and expense, Administrative Agent may not be compelled to do any
act under the Credit Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Credit Documents. If Administrative Agent requests instructions
from Lenders, or Required Lenders, as the case may be, with respect to any act
or action in connection with any Credit Document, Administrative Agent is
entitled to refrain (without incurring any liability to any Person by so
refraining) from that act or action unless and until it has received
instructions. In no event, however, may Administrative Agent or any of its
Representatives be required to take any action that it or they determine could
incur for it or them criminal or onerous civil liability. Without limiting the
generality of the foregoing, no Lender has any right of action against
Administrative Agent as a result of Administrative Agent's acting or refraining
from acting under this Agreement in accordance with instructions of Required
Lenders.
(c) Reliance. Administrative Agent is not responsible to any Lender or
any Participant for, and each Lender represents and warrants that it has not
relied upon Administrative Agent in respect of, (i) the creditworthiness of any
Company and the risks involved to that Lender, (ii) the effectiveness,
enforceability, genuineness, validity or the due execution of any Credit
Document (except by Administrative Agent), (iii) any representation, warranty,
document, certificate, report or statement made therein (except by
Administrative Agent) or furnished thereunder or in connection therewith, (iv)
the adequacy of any collateral now or hereafter securing the Obligation or the
existence, priority or perfection of any Lien now or hereafter granted or
purported to be granted on the collateral under any Credit Document, or (v)
observation of or compliance with any of the terms, covenants or conditions of
any Credit Document on the part of any Company. EACH LENDER AGREES TO INDEMNIFY
ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND
AGAINST (BUT LIMITED TO SUCH LENDER'S COMMITMENT PERCENTAGE OF) ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST OR INCURRED BY THEM IN ANY
WAY RELATING TO OR ARISING OUT OF THE CREDIT DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY THEM UNDER THE CREDIT DOCUMENTS IF ADMINISTRATIVE AGENT AND ITS
REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY. ALTHOUGH
ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES HAVE THE RIGHT TO BE INDEMNIFIED
UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY NEGLIGENCE, ADMINISTRATIVE
AGENT AND ITS REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS
AGREEMENT FOR ITS OR THEIR OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
13.6 Event of Default. While an Event of Default exists, Lenders agree
to promptly confer in order that Required Lenders or Lenders, as the case may
be, may agree upon a course of action for the enforcement of the Rights of
Lenders. Administrative Agent is entitled to act or refrain from taking any
action (without incurring any liability to any Person for so acting or
refraining) unless and until it has received instructions from Required Lenders.
In actions with respect to any Company's property, Administrative Agent is
acting for the ratable benefit of each Lender.
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13.7 Collateral Matters.
(a) General Authorization. Each Lender authorizes and directs
Administrative Agent to enter into the Credit Documents for the Lender Liens and
agrees that any action taken by Administrative Agent concerning any Collateral
(with the consent or at the request of Required Lenders) in accordance with any
Credit Document, that Administrative Agent's exercise (with the consent or at
the request of Required Lenders) of powers concerning the Collateral in any
Credit Document and that all other reasonably incidental powers are authorized
and binding upon all Lenders.
(b) Maintaining Lender Liens. Administrative Agent is authorized on
behalf of all Lenders, without the necessity of any notice to or further consent
from any Lender, from time to time before an Event of Default or Potential
Default, to take any action with respect to any Collateral or Credit Documents
related to Collateral that may be necessary to perfect and maintain perfected
the Lender Liens upon the Collateral.
(c) Limitation of Obligations. Except to use the same standard of care
that it ordinarily uses for collateral for its sole benefit, Administrative
Agent has no obligation whatsoever to any Lender or to any other Person to
assure that the Collateral exists or is owned by any Company or is cared for,
protected or insured or has been encumbered or that the Lender Liens have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority.
(d) Standard of Care. Administrative Agent shall exercise the same care
and prudent judgment with respect to the Collateral and the Credit Documents as
it normally and customarily exercises in respect of similar collateral and
security documents.
(e) Release of Collateral. Lenders irrevocably authorize Administrative
Agent, at its option and in its discretion, to release any Lender Lien upon any
Collateral (i) upon full payment of the Obligation, (ii) constituting property
being disposed of as permitted under any Credit Document, (iii) constituting
property in which no Company owned any interest at the time the Lender Lien was
granted or at any time after that, (iv) constituting property leased to any
Company under a lease that has expired or been terminated in a transaction
permitted under the Credit Documents or is about to expire and that has not
been, and is not intended by that Company to be, renewed, (v) consisting of an
instrument evidencing Debt pledged to Administrative Agent (for the benefit of
Lenders), if the underlying Debt has been paid in full, or (vi) if approved,
authorized or ratified in writing by Lenders. Upon request by Administrative
Agent at any time, Lenders shall confirm in writing Administrative Agent's
authority to release particular types or items of Collateral under this clause
(e).
13.8 Limitation of Liability. No Lender or any Participant will incur
any liability to any other Lender or Participant except for acts or omissions in
bad faith, and neither Administrative Agent nor any Lender or Participant will
incur any liability to any other Person for any act or omission of any other
Lender or any Participant.
13.9 Relationship of Lenders. The Credit Documents do not create a
partnership or joint venture among Administrative Agent and Lenders or among
Lenders.
13.10 American National Bank Option To Purchase Lender Position. In the
event Administrative Agent recommends a course of action, amendment,
modification or waiver hereunder, and, if any Lender (a "NON-CONSENTING LENDER")
does not approve such course of action, amendment, modification or waiver within
thirty (30) days after requested to do so by Administrative Agent (the "REQUEST
PERIOD"), then, at any time during the sixty-day period (the "OPTION PERIOD")
after the end of the Request Period, American National shall the absolute
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right and option, exercised by notice to the Non-Consenting Lender given on or
before the end of the Option Period, to purchase the Note held by the
Non-Consenting Lender, and all Liens and Rights of the Non-Consenting Lender
related thereto, for an amount equal to principal, interest, fees and expenses
due and owing with respect to the Non-Consenting Lender's Note on the date of
purchase. The consummation of the purchase will be held within ten (10) days
after the exercise notice is sent to the Non-Consenting Lender and will be
subject to and governed by the last sentence of Section 14,12(c), and, at the
time of purchase, the Non-Consenting Lender, as assignor, and American National,
as assignee will execute and deliver a Note and Lien Assignment.
13.11 Benefits of Agreement. None of the provisions of this Section 13
(13.1-13.10, inclusive) inure to the benefit of any Company or any other Person
except Administrative Agent and Lenders. Therefore, no Company or any other
Person is entitled to rely upon, or entitled to raise as a defense, in any
manner whatsoever, the failure of Administrative Agent or any Lender to comply
with these provisions.
SECTION 14. MISCELLANEOUS.
14.1 Nonbusiness Days. Any payment or action that is due under any
Credit Document on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to accrue on any applicable payment
until payment is in fact made) unless the payment concerns a LIBOR Rate
Borrowing or a Eurocurrency Borrowing, in which case if the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.
14.2 Communications. Unless otherwise specifically provided, whenever
any Credit Document requires or permits any consent, approval, notice, request
or demand from one party to another, communication must be in writing (which may
be by telex or fax) to be effective and shall be deemed to have been given (i)
if by telex, when transmitted to the appropriate telex number and the
appropriate answer back is received, (ii) if by fax, when transmitted to the
appropriate fax number (and all communications sent by fax must be confirmed
promptly thereafter by telephone; but any requirement in this parenthetical
shall not affect the date when the fax shall be deemed to have been delivered),
(iii) if by mail, on the third Business Day after it is enclosed in an envelope
and properly addressed, stamped, sealed and deposited in the appropriate
official postal service, or (iv) if by any other means, when actually delivered.
Until changed by notice pursuant to this Agreement, the address (and fax number)
for Administrative Agent, each initial Lender and Borrower is stated beside
their respective signatures to this Agreement. All borrowing requests and
conversion notices relating to Eurocurrency Borrowings shall be delivered to the
address for the Eurocurrency Lending Installation, with no requirement that they
also be delivered to Administrative Agent's Chicago, Illinois office. All other
notices, certificates and other items required to be delivered under this
Agreement or the other Credit Documents shall be delivered to the address for
the Administrative Agent and Lenders as set forth herein, with no requirement
that they also be delivered to the Eurocurrency Lending Installation. Any
required or optional delivery under the Credit Documents shall only be deemed
made if delivered in accordance with the above-described requirements (i.e. no
delivery to the Eurocurrency Lending Installation of items other than borrowing
requests and conversion notices relating to Eurocurrency Borrowings shall be
deemed made in accordance with the requirements of the Credit Documents, and no
delivery to the Administrative Agent or any Lender of borrowing requests and
conversion notices relating to Eurocurrency Borrowings shall be deemed made in
accordance with the requirements of the Credit Documents). The address (and fax
number) for each Lender who becomes party to this Agreement after the Initial
Closing Date shall be stated beside its name on the then most recently amended
Schedule 2.
14.3 Form and Number of Documents. The form, substance and number of
counterparts of each writing to be furnished under this Agreement must be
reasonably satisfactory to Administrative Agent and its counsel.
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14.4 Exceptions to Covenants. No Company may take or fail to take any
action that is permitted as an exception to any of the covenants contained in
any Credit Document if that action or omission would result in the breach of any
other covenant contained in any Credit Document.
14.5 Survival. All covenants, agreements, undertakings, representations
and warranties made in any of the Credit Documents survive all closings under
the Credit Documents and, except as otherwise indicated, are not affected by any
investigation made by any party.
14.6 Governing Laws. Unless otherwise stated in any Credit Document,
the Laws of the State of Texas and of the United States govern the Rights and
duties of the parties to the Credit Documents and the validity, construction,
enforcement and interpretation of the Credit Documents.
14.7 Invalid Provisions. Any provision in any Credit Document held to
be illegal, invalid or unenforceable is fully severable; the appropriate Credit
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. Administrative Agent, Lenders
and each Company party to the affected Credit Document agree to negotiate, in
good faith, the terms of a replacement provision as similar to the severed
provision as may be possible and be legal, valid and enforceable.
14.8 Conflicts Between Credit Documents. The provisions of this
Agreement control if in conflict (i.e., the provisions contradict each other as
opposed to a Credit Document containing additional provisions not in conflict)
with the provisions of any other Credit Document.
14.9 Discharge and Certain Reinstatement. The obligations of Borrower
and the other Companies under the Credit Documents remain in full force and
effect until Lenders have no commitment to extend credit under the Credit
Documents and the Obligation is fully paid (except for provisions under the
Credit Documents which by their terms expressly survive payment of the
Obligation and termination of the Credit Documents). If any payment under any
Credit Document is ever rescinded or must be restored or returned for any
reason, then all Rights and obligations under the Credit Documents in respect of
that payment are automatically reinstated as though the payment had not been
made when due.
14.10 Amendments, Consents, Conflicts and Waivers.
(a) Required Lenders. Unless otherwise specifically provided herein (i)
the provisions of this Agreement (including provisions which state that changes
may be made "in the sole discretion of Administrative Agent" or similar
language) may be amended, modified or waived, only by one or more instruments in
writing which are collectively executed by Borrower, Administrative Agent and
Required Lenders and supplemented only by documents delivered or to be delivered
in accordance with the express terms of this Agreement, and (ii) the other
Credit Documents may only be the subject of an amendment, modification or waiver
that has been approved by Required Lenders and Borrower; provided that (A)
Administrative Agent may make changes, modifications or waivers with respect to
the Borrowing Base, and to eligibility requirements therefor, without the
consent of any Lender so long as the aggregate of all such changes,
modifications and waivers which are still in effect at the time of, and
including, the change, modification or waiver in question do not affect the
Borrowing Base by an aggregate of more than One Million Dollars ($1,000,000),
and (B) Administrative Agent may make changes, modifications or waivers with
respect to the Borrowing Base, and to eligibility requirements therefor, which
affect the Borrowing Base by an aggregate of more than One Million Dollars
($1,000,000) with the consent of Required Lenders.
(b) All Lenders. Any amendment to or consent or waiver under this
Agreement or any Credit Document that purports to accomplish any of the
following must be by an instrument in writing executed by Borrower and
Administrative Agent and executed (or approved, as the case may be) by each
Lender: (i) Extends the due date or decreases the amount of any scheduled
payment or amortization of the Obligation beyond the date
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specified in the Credit Documents; (ii) decreases any rate or amount of, or the
due date for, interest, fees or other sums payable to Administrative Agent or
Lenders under this Agreement (except such reductions as are contemplated by this
Agreement); (iii) increases the Eurocurrency Sublimit; (iv) increases the
amount, percentage or time for overadvances pursuant to Section 2.2 or 3.2(c);
(v)changes the definition of "COMMITMENT," "COMMITMENT PERCENTAGE," "REQUIRED
LENDERS" or "PRO RATA PART"; (vi) increases any one or more Lenders' Commitment;
(vii) waives compliance with, amends or fully or partially releases -- except as
expressly provided in the Credit Documents or for when a Company merges into
another Person or dissolves when specifically permitted in the Credit Documents
-- any Guaranty or Collateral; or (viii) changes this clause (b) or any other
matter specifically requiring the consent of all Lenders under this Agreement.
(c) Conflicts. Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Credit
Document is controlled by the terms and provisions of this Agreement.
(d) Waivers. No course of dealing or any failure or delay by
Administrative Agent, any Lender or any of their respective Representatives with
respect to exercising any Right of Administrative Agent or any Lender under this
Agreement operates as a waiver thereof. A waiver must be in writing and signed
by Administrative Agent and Lenders (or Required Lenders, if permitted under
this Agreement) to be effective, and a waiver will be effective only in the
specific instance and for the specific purpose for which it is given.
14.11 Multiple Counterparts. Any Credit Document may be executed in a
number of identical counterparts, and by each party thereto on separate
counterparts (including, at Administrative Agent's discretion, counterparts or
signature pages executed and transmitted by fax) with the same effect as if all
signatories had signed the same document. All counterparts must be construed
together to constitute one and the same instrument.
14.12 Parties; Participations; Assignments.
(a) Parties Bound. Each Credit Document binds and inures to the parties
to it, any intended beneficiary of it, and each of their respective successors
and permitted assigns. No Company may assign or transfer any Rights or
obligations under any Credit Document without first obtaining all Lenders'
consent, and any purported assignment or transfer without such consent is void.
(b) Participations. Any Lender may (subject to the provisions of this
section, in accordance with applicable Laws, in the ordinary course of its
business, and at any time) sell to one or more Persons (each a "PARTICIPANT")
participating interests in its portion of the Obligation. The selling Lender
remains a "Lender" under the Credit Documents, the Participant does not become a
"Lender" under the Credit Documents, and the selling Lender's obligations under
the Credit Documents remain unchanged. The selling Lender remains solely
responsible for the performance of its obligations and remains the holder of its
share of the Principal Debt for all purposes under the Credit Documents.
Borrower and Administrative Agent shall continue to deal solely and directly
with the selling Lender in connection with that Lender's Rights and obligations
under the Credit Documents, and each Lender must retain the sole right and
responsibility to enforce due obligations of the Companies. Participants have no
Rights under the Credit Documents except certain voting rights as provided
below. Subject to the following, each Lender may obtain (on behalf of its
Participants) the benefits of Section 3 with respect to all participations in
its part of the Obligation outstanding from time to time so long as Borrower is
not obligated to pay any amount in excess of the amount that would be due to
that Lender under Section 3 calculated as though no participations have been
made. No Lender may sell any participating interest under which the Participant
has any Rights to approve any amendment, modification or waiver of any Credit
Document except as to matters in Section 14.10(b)(i) and (ii).
(c) Assignments. Each Lender may make assignments to the Federal
Reserve Bank. Each Lender may also assign to one or more assignees (each an
"ASSIGNEE") all or any part of its Rights and obligations under
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the Credit Documents so long as (i) the assignor Lender and Assignee execute and
deliver to Administrative Agent for its consent and acceptance (that may not be
unreasonably withheld in any instance and is not required if the Assignee is an
Affiliate of the assigning Lender) an assignment and assumption agreement in
substantially the form of Exhibit J (a "NOTE AND LIEN ASSIGNMENT") and pays to
Administrative Agent a processing fee of Two Thousand Five Hundred Dollars
($2,500), (ii) the assignment must be for a minimum total Commitment of Five
Million Dollars ($5,000,000) and, if the assigning Lender retains any
Commitment, it must be a minimum total Commitment of Five Million Dollars
($5,000,000), and (iii) the conditions for that assignment set forth in the
applicable Note and Lien Assignment are satisfied. The "Effective Date" in each
Note and Lien Assignment must (unless a shorter period is agreeable to Borrower
and Administrative Agent) be at least five Business Days after it is executed
and delivered by the assignor Lender and the Assignee to Administrative Agent
for acceptance. Once that Note and Lien Assignment is accepted by Administrative
Agent, and subject to all of the following occurring, then, on and after the
"Effective Date" stated in it (i) the Assignee automatically becomes a party to
this Agreement and, to the extent provided in that Note and Lien Assignment, has
the Rights and obligations of a Lender under the Credit Documents, (ii) the
assignor Lender, to the extent provided in that Note and Lien Assignment, is
released from its obligations to fund Borrowings under this Agreement and its
reimbursement obligations under this Agreement and, in the case of a Note and
Lien Assignment covering all of the remaining portion of the assignor Lender's
Rights and obligations under the Credit Documents, that Lender ceases to be a
party to the Credit Documents, (iii) Borrower shall execute and deliver to the
assignor Lender and the Assignee the appropriate Notes in accordance with this
Agreement following the transfer, (iv) upon delivery of the Notes under clause
(iii) preceding, the assignor Lender shall return to Borrower all Notes
previously delivered to that Lender under this Agreement, and (v) Schedule 2 is
automatically deemed to be amended to reflect the name, address, telecopy
number, and Commitment of the Assignee and the remaining Commitment (if any) of
the assignor Lender, and Administrative Agent shall prepare and circulate to
Borrower and Lenders an amended Schedule 2 reflecting those changes. By
executing and delivering a Note and Lien Assignment, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such Note and
Lien Assignment, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Borrower or
the performance or observance by any of any Company of any of its obligations
under any Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 5.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Note
and Lien Assignment; (iv) such assignee will, independently and without reliance
upon Administrative Lender, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes Administrative Lender to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to Administrative Lender by the terms thereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
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(d) Assignment by American National to ▇▇▇▇▇▇.
(i) Effective as of May 17, 2000 (the "ASSIGNMENT EFFECTIVE
DATE"), American National sells and assigns to ▇▇▇▇▇▇ (without recourse
to American National) and ▇▇▇▇▇▇ purchases and assumes from American
National a 20/45th interest (the "ASSIGNED INTEREST") in and to all of
American National's Rights and obligations under the Existing Credit
Agreement (except any Rights and obligations pertaining to American
National's role as Administrative Agent) as of the Assignment Effective
Date, including, without limitation, the Assigned Interest in (a)
American National's Commitment as of the Assignment Effective Date, (b)
the Note held by American National as of the Assignment Effective Date
(the "AMERICAN NATIONAL NOTE"), (c) all Principal Debt owed to American
National on the Assignment Effective Date, (d) all interest accruing in
respect of the Assigned Interest after the Assignment Effective Date,
and (e) all fees accruing in respect of the Assigned Interest under
Section 4 of the Credit Agreement after the Assignment Effective Date.
(ii) American National (a) represents and warrants to ▇▇▇▇▇▇
that as of the Assignment Effective Date (i) the amount of the
Principal Debt outstanding (without reduction for the assignment to
▇▇▇▇▇▇) on the American National Note will be reflected in a separate
written communication from American National to ▇▇▇▇▇▇ (consisting of
Base Rate Borrowings, LIBOR Rate Borrowings and Eurocurrency Borrowings
in the amounts and interest periods stated in such communication), (ii)
American National is the legal and beneficial owner of the Assigned
Interest, which is free and clear of any adverse claim, and (iii)
American National has not been notified of an existing Event of Default
or Potential Default which has not been disclosed to ▇▇▇▇▇▇, and (b)
makes no representation or warranty to ▇▇▇▇▇▇ and assumes no
responsibility to ▇▇▇▇▇▇ with respect to (i) any statements, warranties
or representations made in or in connection with any Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Credit Document or (iii) the financial
condition of any Company or the performance or observance by any
Company of any of its obligations under any Credit Document.
(iii) ▇▇▇▇▇▇ (a) confirms that it has received a copy of the
Existing Credit Agreement, copies of the Current Financials, and such
other documents and information as it deems appropriate to make its own
credit analysis and decision to enter into this Agreement, (b) agrees
with American National and Administrative Agent that ▇▇▇▇▇▇ shall --
independently and without reliance upon Administrative Agent or
American National and based on such documents and information as ▇▇▇▇▇▇
▇▇▇▇▇ appropriate at the time -- continue to make its own credit
decisions in taking or not taking action under the Credit Documents,
(d) appoints and authorizes Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under
the Credit Documents as are delegated to Administrative Agent by the
terms of the Credit Documents and all other reasonably-incidental
powers and (e) agrees with American National and Administrative Agent
that ▇▇▇▇▇▇ shall perform and comply with all provisions of the Credit
Documents applicable to Lenders in accordance with their respective
terms.
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14.13 Venue, Service of Process and Jury Trial. BORROWER AND (PURSUANT
TO ITS GUARANTY OR ITS EXECUTION AND DELIVERY OF, OR CONSENT TO, ANY OTHER
CREDIT DOCUMENT) EACH COMPANY, IN EACH CASE FOR ITSELF AND ITS SUCCESSORS AND
ASSIGNS, IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS IN ILLINOIS, (b) WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAWS, ANY OBJECTION THAT IT MAY NOW OR IN THE FUTURE HAVE TO THE
LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH ANY
CREDIT DOCUMENT AND THE OBLIGATION BROUGHT IN THE FEDERAL OR STATE COURTS IN
CHICAGO, ▇▇▇▇ COUNTY, ILLINOIS, (c) WAIVES ANY CLAIMS THAT ANY LITIGATION
BROUGHT IN ANY OF THE FOREGOING COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, (d) CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THOSE COURTS IN ANY
LITIGATION BY THE MAILING OF COPIES OF THAT PROCESS BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND DELIVERY, OR BY DELIVERY BY A
NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS FOR PURPOSES OF THIS AGREEMENT, (e)
AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY CREDIT DOCUMENT
ARISING OUT OF OR IN CONNECTION WITH THE CREDIT DOCUMENTS OR THE OBLIGATION MAY
BE BROUGHT IN ONE OF THE FOREGOING COURTS, AND (f) WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAWS, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY CREDIT DOCUMENT. The scope
of each of the foregoing waivers 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 contract claims, tort claims, breach of
duty claims and all other common law and statutory claims. BORROWER AND
(PURSUANT TO ITS GUARANTY OR ITS EXECUTION AND DELIVERY OF, OR CONSENT TO, ANY
OTHER CREDIT DOCUMENT) EACH OTHER COMPANY ACKNOWLEDGES THAT THESE WAIVERS ARE A
MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT'S AND EACH LENDER'S AGREEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT ADMINISTRATIVE AGENT AND EACH LENDER
HAS ALREADY RELIED ON THESE WAIVERS IN ENTERING INTO THIS AGREEMENT, AND THAT
ADMINISTRATIVE AGENT AND EACH LENDER WILL CONTINUE TO RELY ON EACH OF THESE
WAIVERS IN RELATED FUTURE DEALINGS. BORROWER AND (PURSUANT TO ITS GUARANTY OR
ITS EXECUTION AND DELIVERY OF, OR CONSENT TO, ANY OTHER CREDIT DOCUMENT) EACH
OTHER COMPANY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THESE WAIVERS
WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY AGREES TO EACH
WAIVER FOLLOWING CONSULTATION WITH LEGAL COUNSEL. The waivers in this section
are irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions, amendments,
modifications or replacements in respect of the applicable Credit Document. In
connection with any Litigation, this Agreement may be filed as a written consent
to a trial by the court.
14.14 Arbitration of Disputes. In the event of a dispute, claim or
controversy arising out of or relating to this Agreement, or relating to any
claim or cause of action which may arise or be asserted under any federal,
state, local or foreign statutory, regulatory or common law, including, without
limitation, claims with respect to breach of contract, tort, obligation of good
faith and fair dealing and fiduciary duties, Administrative Agent, Lenders,
Parent, Borrower and each other Company (by execution of a Credit Document)
agree that upon the written demand of any party, whether made before or after
the institution of any legal proceedings, but prior to the rendering of any
judgment in that proceeding, all and all such disputes, claims and controversies
between them, whether individual, joint, or class in nature, arising from this
Agreement, any of the Credit Documents or otherwise, shall be resolved by
binding arbitration pursuant to the Commercial Rules of the American Arbitration
Association ("AAA"). Any arbitration proceeding held pursuant to this
arbitration provision shall be conducted in Dallas, Texas, or at any other place
selected by mutual agreement of the parties. No act to take or dispose of any
collateral shall constitute a waiver of this arbitration agreement or be
prohibited by this arbitration agreement. This arbitration provision shall not
limit the right of either party during any dispute, claim or controversy to
seek, use and employ ancillary or preliminary rights and/or remedies, judicial
or otherwise, for the purposes of realizing upon, preserving, protecting,
foreclosing upon or proceeding under forcible entry and detainer for possession
of,
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
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86
any real or personal property, and any such action shall not be deemed an
election of remedies. Such remedies include, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking a power of sale
under any deed of trust or mortgage, obtaining a writ of attachment or
imposition of a receivership, or exercising any rights relating to personal
property, including exercising the right of set-off, or taking or disposing of
such property with or without judicial process pursuant to the Uniform
Commercial Code. Any disputes, claims or controversies concerning the lawfulness
or reasonableness of an act, or exercise of any right or remedy concerning any
collateral, including any claim to rescind, reform or otherwise modify any
agreement relating to the collateral, shall also be arbitrated; provided,
however, that no arbitrator shall have the right or the power to enjoin or
restrain any act of either party. No punitive, exemplary or consequential
damages may ever be awarded by the arbitrator or anyone else, and each of the
parties hereby waives any and all rights to make, claim or recover any such
damages. Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. The statute of limitations, estoppel, waiver,
laches and similar doctrines which would otherwise be applicable in an action
brought by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement of
any action for these purposes. The Federal Arbitration Act (Title 9 of the
United States Code) shall apply to the construction, interpretation and
enforcement of this arbitration provision.
14.15 Restatement of the Prior Credit Agreement and the Existing Credit
Agreement. The parties to this Agreement agree that: (a) the Obligation
represents, among other things, the renewal, amendment, extension, consolidation
and modification of the "Obligation" (as defined in the Prior Credit Agreement
and in the Existing Credit Agreement); (b) this Agreement is intended to, and
does hereby, restate, renew, extend, amend, modify, consolidate, supersede and
replace the Existing Credit Agreement; (c) the Notes executed pursuant to this
Agreement amend, renew, extend, modify, replace, consolidate, substitute for and
supercede in their entirety (but do not extinguish the Debt arising under) the
promissory notes executed pursuant to the Prior Credit Agreement and the
Existing Credit Agreement; and (d) the entering into and performance of their
respective obligations under this Agreement and the transactions contemplated by
the Credit Documents do not constitute a novation.
14.16 Entirety. THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN BORROWER, THE OTHER COMPANIES, LENDERS AND ADMINISTRATIVE AGENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
DULY EXECUTED AND DELIVERED by each of the signatories hereto as of the
date first stated in this Agreement.
ADDRESS FOR NOTICE ULTRAK OPERATING, L.P., as Borrower
By ULTRAK GP, INC., General Partner
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇ ---------------------------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ULTRAK, INC., as Parent
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Page 74 AMERICAN NATIONAL BANK and ▇▇▇▇▇▇ BANK -- ULTRAK OPERATING, L.P.
87
ADDRESS FOR NOTICE AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO,
as Administrative Agent and a Lender
American National Bank and Trust
Company of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ -------------------------------------
Vice President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ADDRESS FOR NOTICE
▇▇▇▇▇▇ Trust and Savings Bank ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ as a Lender
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ --------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Page 75 AMERICAN NATIONAL BANK and ▇▇▇▇▇▇ BANK -- ULTRAK OPERATING, L.P.
88
================================================================================
To induce Administrative Agent and Lenders to enter into this First
Amended and Restated Credit Agreement (this "AGREEMENT"), each guarantor named
below (a) consents and agrees to this Agreement's execution and delivery, (b)
ratifies and confirms that all guaranties, assurances, and Liens granted,
conveyed or assigned to Administrative Agent on behalf of Lenders under the
Credit Documents are not released, diminished, impaired, reduced or otherwise
adversely affected by this or any prior amendment, shall continue to guarantee,
assure, and secure the full payment and performance of all present and future
Obligations and shall be modified as stated in Section 5.1(a) of this Agreement
(c) agrees to perform such acts and duly authorize, execute, acknowledge,
deliver, file and record such additional guaranties, assignments, security
agreements, deeds of trust, mortgages, and other agreements, documents,
instruments, and certificates as Administrative Agent may reasonably deem
necessary or appropriate in order to create, perfect, preserve, and protect
those guaranties, assurances, and Liens, and (d) waives notice of acceptance of
this consent and agreement, which consent and agreement binds each of the
undersigned and their respective successors and permitted assigns and inures to
Administrative Agent and Lenders and their respective successors and permitted
assigns.
ULTRAK GP, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
ULTRAK, LP, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
DIAMOND ELECTRONICS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
MONITOR DYNAMICS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
ABM DATA SYSTEMS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
SECURITY WARRANTY, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President - Finance
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
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89
SCHEDULE 2
LENDERS AND COMMITMENTS
NAME AND ADDRESS OF LENDER COMMITMENT COMMITMENT PERCENTAGE
-------------------------- ---------- ---------------------
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO TWENTY FIVE MILLION 0.5556 (55.56%)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ($25,000,000)
ATTENTION: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, VICE PRESIDENT
TELEPHONE: 312/▇▇▇-▇▇▇▇
FACSIMILE: 312/661-6929
EUROCURRENCY LENDING INSTALLATION:
BANK ONE, N.A.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
ATTN: DOT ▇'▇▇▇▇▇▇▇▇
FAX NO.: ▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ TRUST AND SAVINGS BANK TWENTY MILLION DOLLARS 0.4444 (44.44%)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ($20,000,000)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, VICE PRESIDENT
TELEPHONE: 312/▇▇▇-▇▇▇▇
FACSIMILE: 312/765-1641
TOTAL FORTY FIVE MILLION DOLLARS
($45,000,000)
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Page 1 AMERICAN NATIONAL BANK and ▇▇▇▇▇▇ BANK -- ULTRAK OPERATING, L.P.