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FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
among
ULTRAK, INC.,
Borrower
BANK ONE, TEXAS, N.A.,
Administrative Agent
and
CERTAIN LENDERS,
Lenders
AUGUST 12, 1999
[BANK ONE LOGO]
$20,000,000 TERM LOAN
$30,000,000 REVOLVING FACILITY
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND TERMS.......................................................1
1.1 Definitions.................................................................1
1.2 Time References............................................................17
1.3 Other References...........................................................17
1.4 Accounting Principles......................................................18
SECTION 2. COMMITMENT.................................................................18
2.1 Term Loan..................................................................18
2.2 Revolving Facility.........................................................18
2.3 Borrowing Procedure........................................................19
2.4 Letters of Credit..........................................................20
2.5 Borrowing Requests and LC Requests.........................................22
2.6 Termination................................................................22
SECTION 3. TERMS OF PAYMENT...........................................................22
3.1 Notes and Payments.........................................................22
3.2 Interest and Principal Payments............................................23
3.3 Interest Options...........................................................25
3.4 Quotation of Rates.........................................................25
3.5 Default Rate...............................................................25
3.6 Interest Recapture.........................................................25
3.7 Interest Calculations......................................................26
3.8 Maximum Rate...............................................................26
3.9 Interest Periods...........................................................27
3.10 Conversions................................................................27
3.11 Order of Application.......................................................28
3.12 Sharing of Payments, Etc...................................................28
3.13 Offset.....................................................................28
3.14 Booking Borrowings.........................................................28
3.15 Basis Unavailable or Inadequate for LIBOR Rate or Eurocurrency Rate........28
3.16 Additional Costs...........................................................29
3.17 Change in Governmental Requirements........................................30
3.18 Funding Loss...............................................................30
3.19 Foreign Lenders, Participants, and Assignees...............................31
SECTION 4. FEES.......................................................................31
4.1 Treatment of Fees..........................................................31
4.2 Arrangement and Underwriting Fees..........................................31
4.3 Unused Facility Fee........................................................31
4.4 LC Fees....................................................................32
4.5 Prepayment Fee.............................................................32
SECTION 5. SECURITY...................................................................32
5.1 Guaranty...................................................................32
5.2 Collateral.................................................................32
5.3 Creation of Liens and Further Assurances...................................33
5.4 Change in Tax Laws.........................................................33
5.5 Release of Collateral......................................................33
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SECTION 6. CONDITIONS PRECEDENT.......................................................33
6.1 Initial Advances...........................................................33
6.2 All Borrowings.............................................................34
6.3 Permitted Acquisitions.....................................................34
SECTION 7. REPRESENTATIONS AND WARRANTIES.............................................34
7.1 Purpose and Regulation U...................................................34
7.2 Corporate Existence, Good Standing, Authority and Locations................35
7.3 Subsidiaries and Names.....................................................35
7.4 Authorization and Contravention............................................35
7.5 Binding Effect.............................................................36
7.6 Financials.................................................................36
7.7 Solvency...................................................................36
7.8 Litigation.................................................................36
7.9 Taxes......................................................................36
7.10 Environmental Matters......................................................36
7.11 Employee Plans.............................................................36
7.12 Properties; Liens..........................................................37
7.13 Government Regulations.....................................................37
7.14 Transactions with Affiliates...............................................37
7.15 Debt.......................................................................37
7.16 Leases.....................................................................37
7.17 Labor Matters..............................................................37
7.18 Intellectual Property......................................................37
7.19 Insurance..................................................................38
7.20 Year 2000 Issues...........................................................38
7.21 Full Disclosure............................................................38
SECTION 8. AFFIRMATIVE COVENANTS......................................................38
8.1 Certain Items Furnished....................................................38
8.2 Use of Credit..............................................................40
8.3 Books and Records..........................................................40
8.4 Inspections................................................................40
8.5 Taxes......................................................................40
8.6 Payment of Obligation......................................................40
8.7 Expenses...................................................................40
8.8 Maintenance of Existence, Assets and Business..............................40
8.9 Insurance..................................................................41
8.10 Compliance with Governmental Requirements..................................41
8.11 Subsidiary Guaranties and Pledges..........................................41
8.12 Indemnification............................................................41
8.13 Post-Closing Covenants.....................................................42
SECTION 9. NEGATIVE COVENANTS.........................................................43
9.1 Payroll Taxes..............................................................43
9.2 Debt.......................................................................43
9.3 Liens......................................................................44
9.4 Employee Plans.............................................................45
9.5 Transactions with Affiliates...............................................45
9.6 Compliance with Governmental Requirements and Documents....................45
9.7 Investments................................................................46
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9.8 Distributions; Other Payments..............................................47
9.9 Disposition of Assets......................................................47
9.10 Mergers, Consolidations, Dispositions and Dissolutions.....................47
9.11 Assignment.................................................................47
9.12 Fiscal Year and Accounting Methods.........................................48
9.13 New Businesses.............................................................48
9.14 Government Regulations.....................................................48
9.15 Strict Compliance..........................................................48
SECTION 10. FINANCIAL COVENANTS........................................................48
10.1 Leverage Ratio.............................................................48
10.2 Fixed Charge Coverage Ratio................................................48
10.3 Minimum Net Worth..........................................................48
10.4 Capital Expenditures.......................................................49
10.5 Liquidity Ratio............................................................49
10.6 Special Charges Affecting Covenant Calculations............................49
SECTION 11. EVENT OF DEFAULT...........................................................49
11.1 Payment of Obligation......................................................49
11.2 Covenants..................................................................49
11.3 Debtor Relief..............................................................49
11.4 Judgments and Attachments..................................................49
11.5 Government Action..........................................................50
11.6 Misrepresentation..........................................................50
11.7 Ownership of Other Companies...............................................50
11.8 Change of Control of Borrower..............................................50
11.9 Change in Management.......................................................50
11.10 Other Funded Debt..........................................................50
11.11 Hedging Agreements.........................................................51
11.12 Validity and Enforceability................................................51
11.13 Material Agreement Default or Cancellation.................................51
11.14 LCs........................................................................51
SECTION 12. RIGHTS AND REMEDIES........................................................51
12.1 Remedies Upon Event of Default.............................................51
12.2 Company Waivers............................................................52
12.3 Performance by Administrative Agent........................................52
12.4 Not in Control.............................................................52
12.5 Course of Dealing..........................................................52
12.6 Cumulative Rights..........................................................53
12.7 Application of Proceeds....................................................53
12.8 Certain Proceedings........................................................53
12.9 Expenditures by Administrative Agent or Lenders............................53
12.10 Diminution in Value of Collateral..........................................53
SECTION 13. ADMINISTRATIVE AGENT AND LENDERS...........................................53
13.1 Administrative Agent.......................................................53
13.2 Expenses...................................................................55
13.3 Proportionate Absorption of Losses.........................................55
13.4 Delegation of Duties; Reliance.............................................55
13.5 Limitation of Administrative Agent's Liability.............................55
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13.6 Event of Default...........................................................56
13.7 Collateral Matters.........................................................56
13.8 Limitation of Liability....................................................57
13.9 Relationship of Lenders....................................................57
13.10 Benefits of Agreement......................................................57
SECTION 14. MISCELLANEOUS..............................................................58
14.1 Nonbusiness Days...........................................................58
14.2 Communications.............................................................58
14.3 Form and Number of Documents...............................................58
14.4 Exceptions to Covenants....................................................58
14.5 Survival...................................................................58
14.6 Governing Governmental Requirements........................................58
14.7 Invalid Provisions.........................................................59
14.8 Conflicts Between Credit Documents.........................................59
14.9 Discharge and Certain Reinstatement........................................59
14.10 Amendments, Consents, Conflicts, and Waivers...............................59
14.11 Multiple Counterparts......................................................60
14.12 Parties....................................................................60
14.13 Venue, Service of Process, and Jury Trial..................................61
14.14 Restatement of Existing Agreement..........................................62
14.15 Entirety...................................................................62
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SCHEDULES
Schedule 2 - Lenders and Commitments
Schedule 7.3 - Information Regarding Companies
Schedule 7.8 - Litigation
EXHIBITS
Exhibit A - Term Note
Exhibit B - Revolving Note
Exhibit C - Guaranty Agreement
Exhibit D - Security Agreement
Exhibit E - Borrowing Request
Exhibit F - Conversion Notice
Exhibit G - LC Request
Exhibit H - Borrowing Base Report
Exhibit I - Compliance Certificate
Exhibit J - Permitted Acquisition Compliance Certificate
Exhibit K - Opinion of Borrower's Counsel
Exhibit L - Assignment and Assumption Agreement
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
August 12, 1999, among ULTRAK, INC., a Delaware corporation ("BORROWER"),
certain Lenders (defined below), and BANK ONE, TEXAS, N.A., as Administrative
Agent (defined below) for itself and the other Lenders.
PRELIMINARY STATEMENT
A. Borrower is a U.S.-based multinational corporation that designs,
manufactures, markets, sells and services electronic products and systems for
use in security and surveillance, industrial and medical video and professional
audio markets worldwide.
B. Borrower, Administrative Agent and Lenders are party to the Existing
Agreement whereby Lenders have extended credit to Borrower to provide for, among
other things, (i) a term loan facility in the aggregate principal amount of
$20,000,000, and (ii) a revolving loan and standby letter of credit facility in
the aggregate principal amount of up to $30,000,000.
C. The credit facilities described above (i) are secured by unlimited
guaranties from each of Borrower's Domestic Subsidiaries (defined below), (ii)
are further secured by Lender Liens (defined below) on all of the assets of the
Domestic Companies (defined below), and (iii) are further secured by Lender
Liens on a certain percentage of the capital stock of Borrower's directly-owned
Foreign Subsidiaries (defined below) and by a pledge of all notes receivable now
or in the future executed by any Foreign Subsidiary in favor of Borrower or any
other Domestic Company (defined below).
D. Borrower has requested that the Existing Agreement be amended,
modified and restated in the form of this agreement.
E. Upon and subject to the terms and conditions of this agreement,
Administrative Agent and Lenders are willing to entirely amend and restate the
Existing Agreement in the form of this agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrower,
Lenders and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS AND TERMS.
1.1 Definitions. As used in the Credit Documents:
"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 all or substantially all of the assets of a Person or of any
business or division of a Person, (b) the acquisition by any Company of more
than 50% 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.
"ADJUSTED CURRENT ASSETS" means, at any time, for the Companies on a
consolidated basis, (i) current assets as defined by GAAP, minus (ii) prepaid
expenses, minus (iii) investments in discontinued operations, minus (iv)
advances for inventory purchases, minus (v) marketable securities (including,
without limitation,
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the Permitted Investments described in CLAUSES (f) through (h) of SECTION 9.7),
minus (vi) Non-Qualifying Accounts Receivable.
"ADJUSTED CURRENT LIABILITIES" means, at any time, for the Companies on
a consolidated basis, (i) current liabilities as defined by GAAP (including,
without limitation, all outstanding indebtedness under the Revolving Facility),
minus (ii) CMLTD.
"ADJUSTED FIXED ASSETS" means the fixed plant and equipment located in
the United States owned by any Domestic Company, but which excludes (i) the
fixed plant and equipment subject to the TROL Financing, (ii) the Companies'
"SAP" accounting software and all related implementation costs, and (iii) any
other computer software and related implementation costs that have been
capitalized for financial reporting purposes in accordance with GAAP (provided
that, notwithstanding the exclusions described in this clause (iii), up to
$1,000,000 in Book Value of the types of assets described in this clause (iii)
may be included in the definition of "Adjusted Fixed Assets").
"ADMINISTRATIVE AGENT" means, at any time, Bank One, Texas, N.A. (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 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.
"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 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 Closing Date through the quarterly period for
which Administrative Agent has received the corresponding quarterly
Financials and Compliance Certificate, and (without duplication) has
therefor received the Financials and Compliance Certificate for the
fiscal quarter ending June 30, 1999, in each case, the receipt of which
occurred within the time periods prescribed by this agreement, the
Applicable Margin shall be 2.125% for LIBOR Rate Borrowings and
Eurocurrency Borrowings, and 0.000% for Base Rate Borrowings and the
Applicable Percentage shall be 0.375%.
(b) After Administrative Agent's timely receipt of the
Financials and Compliance Certificates referred to in the preceding
CLAUSE (a), (i) the Applicable Margin and Applicable Percentage in
effect for the quarterly (the "INITIAL RESET PERIOD") period
immediately following the most recent quarterly period covered by such
Financials shall be based upon the ratio of the Companies' Funded Debt
to EBITDA as determined from such Financials and related Compliance
Certificate and (ii) the Applicable Margin and Applicable Percentage in
effect for each successive quarterly period (an "APPLICABLE PERIOD")
subsequent to the Initial Reset Period shall be based upon the ratio of
the Companies' Funded Debt to EBITDA as determined from the quarterly
Financials and related Compliance Certificate covering the quarterly
period immediately preceding such Applicable Period, in each case, such
Applicable Margin shall conform to the corresponding margin set forth
in the table in the following CLAUSE (d) of this definition, and such
Applicable Percentage shall conform to the corresponding margin set
forth in the table contained in the definition of the term Applicable
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Percentage; provided, however, at all times the foregoing shall be
subject to the provisions of CLAUSE (e) of this definition.
(c) For purposes of the definitions of the terms Applicable
Margin and Applicable Percentage, EBITDA is calculated for the
Companies' most recently-completed-four-fiscal quarters, and Funded
Debt is determined as of the last day of that four-fiscal-quarter
period.
(d) The Applicable Margin is based on the corresponding ratio
of the Companies' Funded Debt to EBITDA as stated in the table below.
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APPLICABLE MARGIN FOR BASE APPLICABLE MARGIN FOR LIBOR
RATIO OF FUNDED DEBT TO EBITDA RATE BORROWINGS RATE AND EUROCURRENCY
BORROWINGS
------------------------------------------ ------------------------------- --------------------------------
Less than or equal to 5.00 to 1.00, but 0.000% 2.750%
greater than or equal to 4.50 to 1.00
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Less than 4.50 to 1.00, but greater than 0.000% 2.125%
or equal to 4.00 to 1.00
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Less than 4.00 to 1.00, but greater than 0.000% 1.500%
or equal to 3.50 to 1.00
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Less than 3.50 to 1.00, but greater than 0.000% 1.250%
or equal to 3.00 to 1.00
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Less than 3.00 to 1.00, but greater than 0.000% 1.000%
or equal to 2.00 to 1.00
------------------------------------------ ------------------------------- --------------------------------
Less than 2.00 to 1.00 0.000% 0.750%
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(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 and Applicable Percentage 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 and the Applicable Percentage shall be the maximum
Applicable Margin and Applicable Percentage, respectively and (ii) at
all times that the Default Rate shall be in effect, it shall be in
effect in lieu of any Applicable Margin, and the Applicable Percentage
shall be the maximum Applicable Percentage.
"APPLICABLE PERCENTAGE" means, for any day, a percentage applicable
under SECTION 4.3, subject to adjustment (upwards or downwards, as appropriate),
which is calculated and determined as provided in the definition of the term
Applicable Margin and is based on the corresponding ratio of the Companies'
Funded Debt to EBITDA, as follows:
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RATIO OF FUNDED DEBT TO EBITDA APPLICABLE PERCENTAGE
---------------------------------------------------------------------------- ------------------------------
Less than or equal to 5.00 to 1.00, but greater than or equal to 4.50 to 0.500%
1.00
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Less than 4.50 to 1.00, but greater than or equal to 4.00 to 1.00 0.375%
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Less than 4.00 to 1.00, but greater than or equal to 3.50 to 1.00 0.375%
---------------------------------------------------------------------------- ------------------------------
Less than 3.50 to 1.00, but greater than or equal to 3.00 to 1.00 0.250%
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Less than 3.00 to 1.00, but greater than or equal to 2.00 to 1.00 0.125%
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Less than 2.00 to 1.00 0.125%
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"APPROVED FOREIGN CREDIT INSURANCE" means a policy of private insurance
that (a) insures the payment and collection of individual accounts on which the
account debtor is Foreign, (b) is issued by one or more Persons acceptable to
Administrative Agent in its sole discretion, (c) is in form and substance
acceptable to Administrative Agent in its sole discretion, including, without
limitation, containing provisions for the payment of claims within 120 days of
the request therefor, and (d) has been pledged and assigned to Administrative
Agent for Lenders in a manner acceptable to Administrative Agent in its sole
discretion.
"ASSIGNEE" is defined in SECTION 14.12(c).
"ASSIGNMENTS" 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 1/32 of 1%), 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).
"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 Xxxxx Markets
(Telerate) Page 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, for any day, the greater of (i) an annual interest
rate equal from day to day to the floating annual interest rate established by
Administrative Agent from time to time as its base rate of interest, which may
not be the lowest or best interest rate charged by Administrative Agent on loans
similar to the Borrowings and (ii) the sum of the Fed Funds Rate plus 0.5%.
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"BASE RATE BORROWING" means a Borrowing under the Domestic Sublimit
advanced to Borrower through Administrative Agent in accordance with SECTION
2.3, 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)(vii).
"BOOK VALUE" means for any asset, as of any particular date, the value
(net of accumulated depreciation) at which that asset is properly reflected on
the books of the Companies in accordance with GAAP.
"BORROWER" is defined in the preamble to this agreement.
"BORROWING" means any amount disbursed (i) by one or more Lenders 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 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) 80% of Eligible Accounts plus (b) 50% of Eligible Inventory, plus (c) 50% of
the Market Value of Borrower's Permitted Investment in Detection Systems, Inc.,
plus (d) 80% of the Market Value of Borrower's Permitted Public Company
Holdings, plus (e) 100% of the then-current account balance in the Money Market
Account, plus (f) 50% of the aggregate Book Value of the Adjusted Fixed Assets.
"BORROWING BASE DEFICIENCY" means the amount by which Principal Debt
outstanding under the Revolving Facility and the Term Loan exceeds, for any
reason, the limitation in SECTION 2.2(d).
"BORROWING BASE REPORT" means a report substantially in the form of
EXHIBIT H and otherwise in form and scope acceptable to Administrative Agent.
"BORROWING DATE" is defined in SECTION 2.3(a).
"BORROWING REQUEST" means a request, subject to SECTION 2.3(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 Governmental Requirements to be
closed in Texas.
"CAPITAL LEASE" means any capital lease or sublease that is required by
GAAP to be capitalized on a balance sheet.
"CASAROTTO" means Casarotto Security, S.p.A., an Italian public
corporation.
"CASAROTTO AGREEMENT" means that certain Acquisition Agreement dated
April 9, 1997, among Xxxx Xxxxxxxxx, Patrizia Monaro, Casarotto, Videosys,
Albenita Enterprises Limited, an Irish private limited liability company,
Borrower, and Ultrak Holdings, relating to the acquisition by Ultrak Holdings of
Casarotto and Videosys.
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"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq.
"CHANGE DATE" means the date of the first Eurocurrency Borrowing made
in accordance with the procedures set forth in this agreement.
"CLOSING DATE" means August 12, 1999.
"CMLTD" means, for any Person, the current maturities of long-term Debt
(inclusive of the term Debt extended under this agreement) plus the current
maturities of Capital Leases.
"COLLATERAL" is defined in SECTION 5.2.
"COMMITMENT" means, at any time and for any Lender, the amounts stated
beside that Lender's name on the most recently amended SCHEDULE 2 for the
Revolving Facility (which amount is subject to reduction and cancellation as
provided in this agreement) and the Term Loan.
"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, Borrower and each of its Subsidiaries.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT I, 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 F 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 agreements, documents, and instruments in favor of Administrative Agent
or Lenders (or Administrative Agent on behalf of Lenders) ever delivered under
this agreement or otherwise delivered in connection with all or any part of the
Obligation (other than Assignments), (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 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 six months ended on June 30, 1999, or (ii) at any
time after annual Financials are first 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 operation and cash flows
for any Company for the time period before it becomes a member of
Borrower's consolidated group.
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"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 and (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 properties or to maintain or cause to maintain any financial condition.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Governmental Requirements affecting creditors' Rights.
"DEBT SERVICE REQUIREMENTS" means, for any period, the sum of (i) the
Companies' CMLTD plus (ii) the Companies' Interest Expense, plus (iii) rental
payments in respect of the Companies' operating leases.
"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 the Eurocurrency
Sublimit, the lesser of either (a) the Eurocurrency Rate plus 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 2.5% or (b) the
Maximum Rate.
"DISTRIBUTION" means, with respect to any shares of any capital stock
or other equity securities issued by 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 COMPANY" means all Companies other than Foreign Subsidiaries.
"DOMESTIC SUBLIMIT" means (i) at any time prior to the Change Date,
$30,000,000, and (ii) at all times thereafter, $7,500,000.
"DOMESTIC SUBSIDIARY" means all Subsidiaries other than Foreign
Subsidiaries.
"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
minus (iii) to the extent included in calculating such Net Income, any gains
that are extraordinary items.
"EBITR" 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
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Expense plus (b) Tax expense plus (c) rental payments in respect of that
Person's operating leases minus (iii) to the extent included in calculating such
Net Income, any gains that are extraordinary items.
"ELIGIBLE ACCOUNTS" means the aggregate amount of enforceable and
outstanding accounts of the Domestic Companies except:
(a) the portion of any account remaining unpaid more than 120
days from the date it was initially invoiced;
(b) any account on which the account debtor is an Affiliate or
shareholder of Borrower; and
(c) all of the accounts owed by an account debtor if more than
25% of the accounts owed by that account debtor are outstanding more
than 120 days after the respective invoice dates.
"ELIGIBLE INVENTORY" means the finished goods, work in progress (the
amount of work in progress that can be included in Eligible Inventory is limited
to $2,000,000), and raw materials of the Domestic Companies that are usable or
saleable by the Domestic Companies in the ordinary course of business, so long
as those items are not designated by Borrower as "slow-moving or obsolete."
"EMPLOYEE PLAN" means any employee-pension-benefit plan (i) covered by
Title IV of ERISA and established or maintained by Borrower or any ERISA
Affiliate (other than a Multiemployer Plan) or (ii) established or maintained by
Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
contributes, under the Governmental Requirements of any foreign country.
"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,
without limitation, (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 GOVERNMENTAL REQUIREMENT" means any applicable
Governmental Requirement 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, without limitation, 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 Governmental Requirements, and any future enacted or adopted Governmental
Requirements, 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
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of any Environmental Governmental Requirement, (ii) from the Release or
threatened Release of any Hazardous Substance, (iii) from 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, 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 Governmental Requirement for the lawful conduct
of any business, process or other activity.
"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 Borrower's controlled group or is under common control
with 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 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 Additional Costs Rate.
"EUROCURRENCY BORROWING" means a Borrowing under the Revolving Facility
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 SUBLIMIT" means (i) at any time prior to the Change Date,
$0, and (ii) at all times thereafter, $22,500,000.
"EVENT OF DEFAULT" is defined in SECTION 11.
"EXISTING AGREEMENT" means that certain Credit Agreement (as renewed,
extended and amended) dated as of February 16, 1999, among Borrower,
Administrative Agent and certain initial Lenders.
"FED FUNDS RATE" means, for any day, the annual rate (rounded upwards,
if necessary, to the nearest 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.
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"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.
"FOREIGN" means, in respect of any Person, a Person organized under the
Governmental Requirements of a jurisdiction other than, or domiciled outside of,
the United States of America or one of its states, territories, commonwealths,
or possessions.
"FOREIGN SUBSIDIARIES" means all Subsidiaries that are Foreign.
"FUNDED DEBT" means, with respect to any Person on any date of
determination (without duplication), the sum of (a) all outstanding (direct or
contingent) Debt of such Person which is described by any of CLAUSES (i), (ii),
(iv), (v) or (vi) of the definition of the term Debt, plus (b) all of Borrower's
and Borrower's Affiliates' outstanding obligations under, or in respect of, the
TROL Financing.
"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, without limitation, 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.
"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.
"GOVERNMENTAL REQUIREMENTS" means all applicable statutes, laws,
treaties, ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions and interpretations of any Governmental Authority.
"GUARANTY" means a guaranty agreement substantially in the form of
EXHIBIT C 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.
"HAZARDOUS SUBSTANCE" means (a) any substance that is reasonably
expected to require removal, remediation, or other response under any
Environmental Governmental Requirement, (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 Governmental Requirement, including, without limitation, any
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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, including,
without limitation, any "ISDA Master Agreement" between Borrower and any other
Person contemplated by SECTION 8.13.
"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, without limitation, the interest component of Capital Leases), as
determined by GAAP.
"INTEREST PERIOD" is determined in accordance with SECTION 3.9.
"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 substantially all of the assets or a division or
other business unit of that Person.
"IRC" means the Internal Revenue Code of 1986.
"LC" means a standby letter of credit issued by Administrative Agent
under this agreement pursuant to an LC Agreement.
"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 G.
"LC SUBFACILITY" means a subfacility of the Revolving Facility for the
issuance of LCs, as described in SECTION 2.4, under which the LC Exposure may
never exceed $5,000,000 in the aggregate. For the avoidance of doubt, LCs may
only be requested or issued under the Domestic Sublimit 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 for the benefit of Lenders.
"LENDERS" means the financial institutions (including, without
limitation, 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 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).
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"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 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 Borrowing under the Domestic Sublimit
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 other creditors or the owners (other than title of the lessor
under an operating lease).
"LITIGATION" means any action, proceeding, investigation or hearing by
or before any Governmental Authority.
"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, then the "Market Value" for such security shall be deemed to be
$0. For the avoidance of doubt, for securities to be eligible for inclusion in
the Borrowing Base they must satisfy all of the requirements set forth in the
definition of "Permitted Public Company Holdings," including, without
limitation, being traded on a nationally-recognized stock exchange or consisting
of securities as to which bids and offer quotations are reported in the
automated quotation system operated by the National Association of Securities
Dealers, Inc.
"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 Governmental
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Requirements of the State of Texas or federal laws of the United States of
America (as applicable), that Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation.
"MONEY MARKET ACCOUNT" means that certain money market account
maintained by Borrower with Bank One, Texas, N.A., numbered account 604515707.
"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 Governmental Requirements of any
foreign country) to which Borrower 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 Borrower
or any of its Subsidiaries in respect of any Permitted Asset Sale (including,
without limitation, 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, without limitation,
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.
"NON-QUALIFYING ACCOUNTS RECEIVABLE" means any account or any portion
of any account remaining unpaid more than 120 days from the date it was
initially invoiced.
"NOTES" means all of the Revolving Notes and Term Notes.
"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, attorneys' fees
or otherwise, (ii) Debts, liabilities, or obligations owed by any Company to
Administrative Agent or any Lender or their respective 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, (iii) Debts, liabilities, or obligations owed by any
Company to Administrative Agent or any Lender or their respective affiliates
under or in respect of any F/X Contract, (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.
"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 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.
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"PARTICIPANT" is defined in SECTION 14.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED ACQUISITION" means:
(a) any Acquisition by a Company with respect to which each of
the following requirements shall have been satisfied:
(i) as of the closing of any Acquisition, the
Acquisition has been approved and recommended by the board of
directors or other similar governing body of the Person to be
acquired or from which such business is to be acquired;
(ii) the Purchase Price for the Acquisition is less
than or equal to $3,000,000, and the aggregate Purchase Price
for all Acquisitions during the period from February 16, 1999
through the entire term of this agreement is less than or
equal to $5,000,000;
(iii) not less than 7 Business Days prior to
consummation of any Acquisition, Borrower shall have delivered
to Administrative Agent a written description of the targeted
entity to be acquired and its operations and a copy of the
related purchase agreement, to the extent available (and, upon
the request of Administrative Agent, all of the schedules and
exhibits thereto);
(iv) as of the closing of any Acquisition, after
giving effect to such Acquisition, the acquiring party must be
Solvent and the Companies, on a consolidated basis, must be
Solvent;
(v) prior to consummation of any Acquisition,
Borrower shall have satisfied the conditions precedent to a
Permitted Acquisition as set forth in SECTION 6.3;
(vi) as of the closing of any Acquisition, no Event
of Default or Potential Default shall exist or occur as a
result of, and after giving effect to, such Acquisition; and
(viii) as of the closing of any Acquisition, if such
Acquisition is structured as a merger, Borrower (or if such
merger is with any Company other than Borrower, then such
Company) must be the surviving entity after giving effect to
such merger (provided that, if such merger is with a
Subsidiary formed solely for the purpose of consummating the
merger, then the target entity may be the surviving entity
after giving effect to such merger so long as all other
requirements in the Credit Documents are satisfied
concurrently with such merger); and
(b) any other Acquisition for which the prior written consent
of Required Lenders has been obtained; provided that at the request of
Administrative Agent, Borrower shall have delivered to Administrative
Agent the following (i) three-year income and balance sheet projections
in respect of the Companies and the entity to be acquired, after giving
effect to such Acquisition; and (ii) such other information in respect
of such Acquisition as Administrative Agent or Required Lenders shall
have reasonably requested.
"PERMITTED ACQUISITION COMPLIANCE CERTIFICATE" means a certificate
signed by a Responsible Officer of Borrower, substantially in the form of
EXHIBIT J.
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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 Companies' business, (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 SECTION 9.5, (iv)
any disposition of assets 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 February 16, 1999 through the entire term of this
agreement, have a market value of $5,000,000 or less, and (vii) 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 Borrower to its 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 Domestic Company to any
Foreign Subsidiary except for loans made with the proceeds of Eurocurrency
Borrowings.
"PERMITTED INTERCOMPANY GUARANTY" means a guaranty by Borrower of a
payment or other obligation of a Subsidiary owing to a third party, provided
that the aggregate contingent liability under all such guaranties outstanding at
any one time cannot exceed $1,000,000.
"PERMITTED INVESTMENT" is defined in SECTION 9.7.
"PERMITTED LIENS" is defined in SECTION 9.3.
"PERMITTED PUBLIC COMPANY HOLDINGS" means securities of companies
approved in advance by Administrative Agent as being eligible for inclusion as
"Permitted Public Company Holdings" or 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); and
(c) the market capitalization of each 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)).
"PERSON" means any individual, entity or Governmental Authority.
"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.
"PRO RATA" and "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.
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"PURCHASE PRICE" means with respect to any Acquisition, the total
consideration paid for such Acquisition, which may in many instances be the
"purchase price" as specified and determined in accordance with the purchase
agreement or other related acquisition documents evidencing such Acquisition
(including, without limitation, cash paid and debt assumed).
"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.
"REFINANCED DEBT" means the Debt of Borrower which was repaid on the
closing date of the Existing Agreement.
"RELEASE" means any "release" as defined under any Environmental
Governmental Requirement.
"REPRESENTATIVES" means, with respect to a Person, its representatives,
officers, directors, employees, accountants, attorneys, insurers, shareholders
and agents.
"REQUIRED LENDERS" means, at any time, (a) while there are no more than
two Lenders, 100% of the Lenders, and (b) while there are more than two Lenders,
any combination of Lenders holding (directly or indirectly) at least either (i)
66 2/3% of the total Commitments while there is no Principal Debt or LC Exposure
or (ii) 66 2/3% of the Principal Debt plus the LC Exposure while there is any
Principal Debt or LC Exposure.
"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 Governmental Requirements) 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 2.2.
"REVOLVING FACILITY TERMINATION DATE" means the earlier of (i) the
Stated Termination Date and (ii) the effective date that Lender's commitments to
lend and issue LCs under this agreement are fully cancelled or terminated.
"REVOLVING NOTE" means one of the promissory notes substantially in the
form of EXHIBIT B and otherwise in form and scope acceptable to Administrative
Agent.
"RIGHTS" means rights, remedies, powers, privileges and benefits.
"SECURITY AGREEMENT" means a security agreement substantially in the
form of EXHIBIT D and otherwise in form and scope acceptable to Administrative
Agent.
"SOLVENT" means, as to any Person, that (i) the aggregate fair market
value of such Person's assets 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.
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"STATED TERMINATION DATE" means February 16, 2002.
"SUBSIDIARY" of any Person means any other Person of which (i) more
than 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 Borrower.
"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.
"TERM LOAN" means the term loan described in SECTION 2.1.
"TERM NOTE" means one of the promissory notes substantially in the form
of EXHIBIT A and otherwise in form and scope satisfactory to Administrative
Agent.
"TROL FINANCING" means the Tax Retention Operating Lease Financing
arrangements dated as of March 31, 1997, originally provided in favor of Ultrak
Operating and Borrower by NationsBank of Texas, N.A., as such financing
arrangements are amended and assigned contemporaneously with the execution and
delivery of this agreement.
"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 and wholly-owned subsidiary of Borrower.
"ULTRAK GP" means Ultrak GP, Inc., a Delaware corporation and
wholly-owned subsidiary of Borrower.
"ULTRAK LP" means Ultrak LP, Inc., a Delaware corporation and
wholly-owned subsidiary of Borrower.
"ULTRAK OPERATING" means Ultrak Operating, L.P., a Texas limited
partnership.
"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).
1.2 Time References. Unless otherwise specified, in the Credit
Documents (i) time references (e.g., 10:00 a.m.) are to time in Dallas, Texas,
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
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currency of the United States of America, (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)
references to "including" mean including without limiting the generality of any
description preceding that word, (vii) 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, (viii) references to any Person include that Person's heirs, personal
representatives, successors, trustees, receivers and permitted assigns, (ix)
references to any Governmental Requirement include every amendment or supplement
to it, rule and regulation adopted under it, and successor or replacement for it
and (x) 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
Term Loan and under the Revolving Facility in accordance with the following
provisions.
2.1 Term Loan. Each initial Lender under the Existing Agreement loaned
to Borrower that Lender's Commitment Percentage of the Term Loan in a single
Borrowing on the closing date of the Existing Agreement. If Borrower pays or
prepays any portion of the Term Loan under this agreement, that portion may not
be reborrowed.
2.2 Revolving Facility. Each Lender severally but not jointly agrees to
lend to Borrower from time to time that Lender's Commitment Percentage of
Borrowings under the Revolving Facility which Borrower may borrow, repay and
reborrow under this agreement subject further to the following conditions:
(a) Each Borrowing may only occur on a Business Day on or
after the Closing Date and before the Revolving Facility Termination
Date;
(b) Each Borrowing may only be in an amount (i) equal to
$50,000 or a greater integral multiple of $50,000 if a Base Rate
Borrowing, (ii) equal to $500,000 or a greater integral multiple of
$500,000 if a LIBOR Rate Borrowing, or (iii) greater than the Dollar
Equivalent of $1,000,000 if a Eurocurrency Borrowing;
(c) The sum of (i) the Principal Debt outstanding under the
Revolving Facility plus (ii) the LC Exposure may never exceed the total
Commitments for the Revolving Facility;
(d) The sum of (i) the Principal Debt under the Revolving
Facility, plus (ii) the LC Exposure, plus (iii) the Principal Debt
under the Term Loan may never exceed the lesser of (A) the total
Commitments and (B) the Borrowing Base;
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(e) The sum of the Principal Debt under the Revolving Facility
plus the LC Exposure (in each case whether direct or participated) owed
to any Lender may never exceed that Lender's Commitment for the
Revolving Facility;
(f) The sum of all Eurocurrency Borrowings that are
outstanding at any one time may not exceed the Eurocurrency Sublimit;
and
(g) The sum of (i) all Borrowings under the Revolving Facility
(other than Eurocurrency Borrowings) outstanding at any one time, plus
(ii) the LC Exposure may never exceed the Domestic Sublimit.
2.3 Borrowing Procedure. The following procedures apply to all
Borrowings:
(a) Borrowing Request. Borrower may request a Borrowing only
by making or delivering a Borrowing Request to Administrative Agent
(or, alternatively, to the Eurocurrency Lending Installation 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,
alternatively, the Eurocurrency Lending Installation in the case of
Eurocurrency Borrowings) no later than (i) 12:00 noon on the 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-preceding sentence is sent by
facsimile, Borrower shall promptly deliver the originally-executed
Borrowing Request to the Eurocurrency Lending Installation.
Administrative Agent (or, alternatively, the Eurocurrency Lending
Installation in the case of Eurocurrency Borrowings) 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. Each Lender (or its applicable Lending
Installation) shall remit its Commitment Percentage of each requested
Borrowing to Administrative Agent's principal office in Dallas, Texas
(or, alternatively, at the Eurocurrency Lending Installation in the
case of Eurocurrency Borrowings), in funds that are available for
immediate use by Administrative Agent or the Eurocurrency Lending
Installation, as the case may be, by 2:00 p.m. (local 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.
(c) Funding Assumed. 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
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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.
2.4 Letters of Credit.
(a) Conditions. Subject to the terms and conditions of this
agreement and applicable Governmental Requirements, 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 second
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 $5,000,000, and (iv) the limitations in
SECTION 2.2 are not exceeded.
(b) Participation. Immediately upon Administrative Agent's
issuance of any LC, 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 to the extent of such Lender's Commitment
Percentage under the Revolving Facility 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).
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(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 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.
(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(b) 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
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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 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 Governmental Requirements 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
exists, Borrower shall provide Administrative Agent, for the benefit of
Lenders, cash collateral in an amount to equal the then-existing LC
Exposure.
(h) INDEMNIFICATION. BORROWER SHALL 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.
2.5 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.
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2.6 Termination. Upon giving at least five Business Days prior written
and irrevocable notice to Administrative Agent, Borrower may terminate all or
part of the unused portion of the Revolving Facility. Each partial termination
must be in an amount of not less than $1,000,000 or a greater integral multiple
of $1,000,000, and must be ratable in accordance with each Lender's Commitment
Percentage. Any partial terminations shall reduce availability under the
Eurocurrency Sublimit before any reductions are made against the Domestic
Sublimit. 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 for the Revolving Facility that is terminated may not be reinstated.
SECTION 3. TERMS OF PAYMENT.
3.1 Notes and Payments.
(a) Notes. The Term Loan is evidenced by the Term Notes, one
payable to each Lender in the stated amount of its Commitment for the
Term Loan. Principal Debt under the Revolving Facility is evidenced by
the Revolving Notes, one payable to each Lender in the stated amount of
its Commitment for the Revolving Facility.
(b) Payment. Borrower must make each payment and prepayment on
the Obligation to Administrative Agent's principal office in Dallas,
Texas (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
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such 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 Eurocurrency 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 15th day of each January, April, July and
October, commencing on the first of those dates that follows the
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
15th day of each January, April, July and October, commencing on the
first of those dates that follows the 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) (i) on the Revolving Facility Termination Date
in respect of accrued interest on the Revolving Facility, and (ii) on
the final maturity date of the Term Loan as set forth in CLAUSE (D)
below in respect of accrued interest on the Term Loan.
(b) Revolving Facility Principal. The Principal Debt under the
Revolving Facility 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 under the Revolving Facility, so long as
(i) each voluntary partial prepayment must be in a principal amount not
less than (a) $50,000, or a greater integral multiple of $50,000, in
the case of prepayments under the Domestic Sublimit and (b) $500,000
(or its Dollar Equivalent) in the case or prepayments under the
Eurocurrency Sublimit, (ii) Borrower shall pay any related Funding Loss
upon demand, and (iii) in the case of prepayments under the
Eurocurrency Sublimit, Borrower has given
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the Eurocurrency Lending Installation four days' advance notice of its
intention to make such prepayment. Conversions under SECTION 3.10 are
not prepayments.
(c) Revolving Facility 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 so that a
Borrowing Base Deficiency no longer exists; provided that,
notwithstanding the foregoing, Borrower may take up to 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 5% of the total Borrowing
Base.
(ii) Immediately upon a Permitted Asset Sale as
described in CLAUSE (v) or (vi) of the definition of
"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 80% of the Net
Proceeds of such Permitted Asset Sale, but only to the extent
Borrower is not able to use such proceeds to prepay the Term
Loan as required by CLAUSE (f)(ii) below.
(iii) 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.
(d) Term Loan Principal. The Principal Debt under the Term
Loan is due and payable in installments of $833,333.33 on the 15th day
of each January, April, July and October, commencing April 15, 2000,
and ending on January 15, 2002, the a final payment of all remaining
Principal Debt under the Term Loan being due and payable on February
16, 2002.
(e) Term Loan Voluntary Prepayments. Borrower may, by giving
notice to Administrative Agent no later than five Business Days before
the date of the prepayment, prepay, without penalty (except as provided
in this agreement) and in whole or part, the Principal Debt under the
Term Loan, so long as (i) the notice by Borrower specifies the amount
to be prepaid, (ii) each voluntary partial prepayment must be in a
principal amount of not less than $250,000, or a greater integral
multiple of $250,000, plus accrued interest on the amount prepaid to
the date of the prepayment and (iii) Borrower shall pay any related
Funding Loss upon demand. Conversions under SECTION 3.10 are not
prepayments. No voluntary prepayment of the Term Loan may be
reborrowed. Voluntary prepayments of the Term Loan shall be applied to
installments in order of maturity.
(f) Term Loan Mandatory Prepayments.
(i) At any time a Borrowing Base Deficiency exists
that cannot be cured by making mandatory prepayments under the
Revolving Facility pursuant to CLAUSE (c) above, Borrower
shall immediately make a prepayment to Administrative Agent
(with any related Funding Loss) on the Term Loan so that a
Borrowing Base Deficiency no longer exists; provided that,
notwithstanding the foregoing, Borrower may take up to 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 5% of the total Borrowing
Base. No such mandatory prepayment of the Term Loan may be
reborrowed.
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(ii) Immediately upon a Permitted Asset Sale as
described in CLAUSE (v) or (vi) of the definition of
"Permitted Asset Sale," Borrower shall make a mandatory
prepayment to Administrative Agent (with any related Funding
Loss) on the Term Loan in an amount equal to 80% of the Net
Proceeds of such Permitted Asset Sale. No such mandatory
prepayment of the Term Loan may be reborrowed.
(iii) All prepayments under this CLAUSE (f) shall be
applied to installments in inverse order of maturity.
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 (i) the Base Rate plus the Applicable
Margin or the LIBOR Rate plus the Applicable Margin or the Eurocurrency Rate (in
each case as designated or deemed designated by Borrower), as the case may be
and (ii) 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 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.
3.5 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.
3.6 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 Notes, 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 Governmental Requirements, 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 Notes.
3.7 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 LIBOR Borrowings or Eurocurrency Borrowings
(other than Eurocurrency Borrowings denominated in pounds sterling), or Base
Rate Borrowings calculated with reference to the Fed Funds Rate (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), (b) 365 days in the case of Eurocurrency
Borrowings denominated in pounds sterling, and (c) 365 or 366 days, as the case
may be, in the case of Base Rate Borrowings calculated with reference to
Administrative Agent's base rate of interest. All interest rate determinations
and calculations by Administrative Agent are conclusive and binding absent
manifest error.
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3.8 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 Governmental Requirements 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 Governmental
Requirements 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
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 Notes 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 Governmental Requirements then in effect, then the principal amount
of the Obligation or the amount of interest which would otherwise be payable
under the Notes or both shall be reduced to the amount allowed under applicable
Governmental Requirements 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 Governmental Requirements, by
amortizing, prorating, allocating and spreading during the period of the full
stated term of the Notes, 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 Governmental Requirements of the State of Texas are
applicable for purposes of determining the "Maximum Rate" or the "Maximum
Amount," then those terms mean the indicated rate ceiling from time to time in
effect under Chapter 1D, Subtitle 1, Title 79, Revised Civil Statutes of Texas,
as amended.
3.9 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.
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3.10 Conversions.
(a) Domestic Sublimit. Subject to the dollar limits of SECTION
2.2(B) 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 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). If
the Conversion 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 Base Rate
Borrowing or LIBOR Rate Borrowing under the Domestic Sublimit may be
converted to a Eurocurrency Borrowing under the Eurocurrency Sublimit.
(b) Eurocurrency Sublimit. Subject to the dollar limits of
SECTION 2.2(B) 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. 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 under the Eurocurrency Sublimit
may be converted to either a Base Rate Borrowing or a LIBOR Rate
Borrowing under the Domestic Sublimit.
3.11 Order of Application.
(a) No Event of Default. If no Event of Default exists, any
payment shall be applied to the Obligation in the order and manner as
Borrower directs except as otherwise specifically provided in the
Credit Documents.
(b) Event of Default or No Direction. If an Event of Default
exists, or if Borrower fails timely to give direction, any payment
(including proceeds from the exercise of any Rights) shall be applied
in the following order: (i) To all fees and expenses for which
Administrative Agent or Lenders have not been paid or reimbursed in
accordance with the Credit Documents (and if such payment is less than
all unpaid or unreimbursed fees and expenses, then the payment shall be
paid against unpaid and unreimbursed fees and expenses in the order of
incurrence or due date); (ii) to accrued interest on the Principal
Debt; (iii) to any LC reimbursement obligations that are due and
payable and that remain unfunded by any Borrowing under the Revolving
Facility; (iv) to the remaining Principal Debt in the order as Required
Lenders may elect (but Required Lenders agree to apply proceeds in an
order that will minimize any Funding Loss); (v) to the remaining
Obligation in
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the order and manner Required Lenders deem appropriate; (vi) as a
deposit with Administrative Agent, for the benefit of Lenders, as
security for and payment of any subsequent LC reimbursement
obligations.
(c) Pro Rata. Each payment or prepayment shall be distributed
to each Lender in accordance with its Pro Rata Part of that payment or
prepayment
3.12 Sharing of Payments, Etc. If any Lender obtains any payment or
prepayment with respect to the Obligation (whether voluntary, involuntary, or
otherwise, including, without limitation, as a result of exercising its Rights
under SECTION 3.13) 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 Governmental Requirements,
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.
3.13 Offset. If an Event of Default exists, to the extent not
prohibited by applicable Governmental Requirements, each Lender may exercise
(for the benefit of all Lenders in accordance with SECTION 3.12) 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.
3.14 Booking Borrowings. To the extent permitted by applicable
Governmental Requirements, 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.
3.15 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 Borrowings under the Domestic Sublimit,
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, Lenders'
commitments under this agreement to make, or to convert to, LIBOR Rate
Borrowings or Eurocurrency Borrowings, as the case may be, shall be suspended.
3.16 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.
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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 Governmental
Requirement, any change in the interpretation or application of any
present Governmental Requirement, or any future Governmental
Requirement 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, without limitation, 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 Governmental Requirement, any change in the
interpretation or application of any present Governmental Requirement,
or any future Governmental Requirement 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 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 Governmental Requirements, 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
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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.
3.17 Change in Governmental Requirements.
(a) Domestic Sublimit. If any Governmental Requirement 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 Governmental Requirements, 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 Sublimit. If any Governmental Requirement
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.
3.18 Funding Loss. BORROWER SHALL 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 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.
3.19 Foreign Lenders, Participants, and Assignees. Each Lender,
Participant (by accepting a participation interest under this agreement), and
Assignee (by executing an Assignment) that is not organized under the
Governmental Requirements of the United States of America 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,
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Form 1001, Form W-8, or other form acceptable to Administrative Agent and
Borrower upon the expiration or obsolescence according to applicable
Governmental Requirements 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 Governmental Requirements 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 Governmental Requirement, 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
Governmental Requirements, 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 December, March, June and September, and
is due and payable on the 15th day of each January, April, July and October,
commencing on October 15, 1999, and on the Revolving Facility Termination Date.
Each payment of the fee is equal to the following, determined for the calendar
quarter (or portion of a calendar quarter ending on the Revolving Facility
Termination Date) preceding and including the date it accrues: From the closing
date under the Existing Agreement until the Revolving Facility Termination Date,
the product of (i) the Applicable Percentage times (ii) the amount by which the
average-daily total Commitment for only the Revolving Facility exceeds the sum
of the average-daily Principal Debt (including the Dollar Equivalent of any
Eurocurrency Borrowings) under only the Revolving Facility plus the
average-daily LC Exposure for standby LCs, times (iii) a fraction with the
number of days in the applicable quarter or portion of it as the numerator and
365 as the denominator.
4.4 LC Fees. As a condition precedent to the issuance (including,
without limitation, the extension) of each LC, Borrower shall pay to
Administrative Agent:
(a) For the account of each Lender, according to each Lender's
Commitment Percentage on the day the fee is payable, an issuance fee,
payable quarterly in arrears, equal to a percentage of the average-face
amount of that LC during each applicable quarterly period, which
percentage is equal to the Applicable Margin in effect for LIBOR Rate
Borrowings on the first day of the quarterly period for which a payment
is payable; and
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(b) For the account of Administrative Agent, payable on the
date of issuance, a fronting fee of the greater of (A) $300 or (B)
0.125% of the face amount of each standby LC.
4.5 Prepayment Fee. If the Obligation is entirely prepaid at any time
prior to February 16, 2000, 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 0.250% multiplied by the total
Commitments of all Lenders as of the Closing Date. Notwithstanding the
foregoing, no prepayment fee will be assessed against Borrower if the Obligation
is prepaid solely from the proceeds of an underwritten public offering of
Borrower's stock or debt securities, or from the proceeds of an acquisition of
Borrower by an unrelated third party.
SECTION 5. SECURITY.
5.1 Guaranty. Borrower shall cause each of its present and future
Subsidiaries to (a) unconditionally guarantee the full payment and performance
of the Obligation by execution of a Guaranty (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) grant liens in all
Collateral now or hereafter owned by any of the Domestic Companies, by due
execution and delivery of a Security Agreement to Administrative Agent for
Lenders.
5.2 Collateral. Borrower shall cause full payment and performance of
the Obligation to be secured by 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, without
limitation:
(a) 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) 100% of the present and future issued and outstanding
capital stock, partnership interests, and other equity interests of all
of Borrower's present and future Domestic Subsidiaries;
(c) Approximately all (but not less than 65%) of the present
and future issued and outstanding capital stock, partnership interests,
and other equity interests of all of Borrower's 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) All present and future notes receivable executed by a
Foreign Subsidiary in favor of Borrower.
5.3 Creation of Liens and Further Assurances. Borrower covenants and
agrees that the Lender Liens described in SECTION 5.2 shall be 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 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
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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.
SECTION 6. CONDITIONS PRECEDENT.
6.1 Initial Advances. The obligation of Lenders to make the initial
advances under this agreement is subject to the condition precedent that, on or
before the date of such advance, Administrative Agent and Lenders have received,
there shall have been performed and there shall exist, 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
Lenders:
(a) Amended and Restated Credit Agreement. This agreement duly
executed by Borrower, Administrative Agent and each initial Lender;
(b) Revolving Notes. The Revolving Notes duly executed and
delivered by Borrower;
(c) Term Notes. The Term Notes duly executed and delivered by
Borrower;
(d) Addendum to Security Agreement. An Addendum to Security
Agreement executed by Borrower's Subsidiary, ABM Data Systems, Inc.,
together with financing statements executed by such Subsidiary for
filing with the Texas Secretary of State.
(e) Confirmation of Guaranties and Security Interests. A
Confirmation of Guaranties and Security Interests duly executed and
delivered by Borrower and each of Borrower's Domestic Subsidiaries;
(f) Secretary's Certificate. A certificate signed by the
Secretary or Assistant Secretary of Borrower 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 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. Favorable opinions addressed to
Administrative Agent and Lenders as to the matters set forth in EXHIBIT
K hereto from Borrower's General Counsel and from Gardere & Xxxxx,
L.L.P., outside legal counsel to the Companies;
(i) Amendments to TROL Financing Documents. Amendments to the
TROL Financing Documents in form and substance satisfactory to
Borrower, Administrative Agent and Lenders; and
(j) Additional Information. Such other documents, instruments,
reports, opinions and information as reasonably required by
Administrative Agent, any Lender and their respective counsel.
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6.2 All Borrowings. The obligation of Lenders to extend Borrowings
under this agreement (including the initial advances) 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. 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;
(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, executed
by a Responsible Officer of Borrower; and
(e) 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.
6.3 Permitted Acquisitions. Prior to the consummation of any
Acquisition (whether or not the purchase price for such Acquisition is funded by
Borrowings), Borrower shall deliver to Administrative Agent the following items:
(a) all supplements to, or revisions of, SCHEDULES 7.3 and 7.8
which are required to make the disclosures in such Schedules accurate
after giving effect to such Acquisition, so long as, on or prior to the
date of consummation of such Acquisition, the consent of Required
Lenders with respect to such revised or supplemental Schedules have
been obtained; and
(b) a Permitted Acquisition Compliance Certificate in form and
substance acceptable to Administrative Agent.
SECTION 7. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Administrative Agent and Lenders as follows:
7.1 Purpose and Regulation U.
(a) Subject to the other provisions in the Credit Documents,
including, without limitation, CLAUSE (b) below, the proceeds of the
Term Loan have been used to refinance the term loan portion of the
Refinanced Debt and for general corporate purposes, and the proceeds of
the Revolving Facility have been used to refinance the revolving loan
portion of the Refinanced Debt, and will be used for general corporate
purposes, working capital uses in the ordinary course of business,
Permitted Acquisitions, and permitted stock repurchases.
(b) The proceeds of the Revolving Facility and Term Loan will
be used by Borrower solely for the purposes specified in SECTION
7.1(a). None of such proceeds will be used for the purpose of
purchasing or carrying any "margin stock"as defined in Regulation U or
G of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 221 and 207), 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
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meaning of such Regulation U or G. 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, has taken or will take any action that might cause the Notes
or any other of the Credit Documents, including this Credit Agreement,
to violate Regulations U or G 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.
7.2 Corporate Existence, Good Standing, Authority and Locations. Each
Company is duly organized, validly existing and in good standing under the
Governmental Requirements 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
Closing Date), (iv) do not violate any provision of its Organizational
Documents, (v) do not violate any provision of any Governmental Requirement
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.
7.6 Financials. 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
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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.
7.7 Solvency. On each Borrowing Date, each 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 Governmental Requirements, 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 8.5.
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 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.
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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 Governmental
Requirements pertaining to labor matters, (iii) all payments due from any
Company for employee health and welfare insurance, including, without
limitation, 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
Governmental Requirements.
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 xxxx, 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
xxxx, trademark, trade name, trade secret or other intellectual property of any
Company exists.
7.19 Insurance. Each Company maintains the insurance required by
SECTION 8.9.
7.20 Year 2000 Issues. Borrower has implemented a Year 2000 compliance
program to ensure that the Companies' computer systems and applications will
function properly beyond 1999. Borrower believes that it has allocated adequate
resources for this purpose and expects its Year 2000 date conversion program to
be successfully completed on a timely basis. To the knowledge of Borrower, the
ability of the Companies' significant suppliers, customers and others with which
they conduct business to identify and resolve their own Year 2000 issues can not
reasonably be expected to have a material adverse effect on the
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Companies or their business. Prior to the date hereof, Borrower has disclosed in
writing to Administrative Agent and Lenders the steps that Borrower has taken to
become Year 2000 compliant and the costs Borrower expects to incur in connection
therewith. Borrower does not expect that the Companies will have to incur
expenditures in excess of $750,000 after the Closing Date to address this issue.
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 covenants and agrees with Administrative Agent and
Lenders as follows:
8.1 Certain Items Furnished. Borrower shall furnish the following to
each Lender:
(a) Annual Financials, Etc. Promptly after preparation but no
later than 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, accompanied by (i) the opinion, without qualification,
of a firm of independent certified public accountants acceptable to
Required Lenders (Xxxxx Xxxxxxxx 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) Quarterly Financials, Etc. Promptly after preparation but
no later than 45 days after the last day of each fiscal quarter of
Borrower, Financials showing the Companies' consolidated and
consolidating financial condition and results of operations for that
fiscal quarter and for the period from the beginning of the current
fiscal year to the last day of that fiscal quarter, 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) Monthly Borrowing Base Reports and Accounts Receivable
Agings. Promptly after preparation but no later than 30 days after the
last day of each month, a Borrowing Base Report, accompanied by a
summary accounts receivable aging (with a more detailed accounts
receivable aging to be promptly provided upon the request of
Administrative Agent or any Lender), each in form and detail reasonably
satisfactory to Administrative Agent.
(d) Inventory Listings. Promptly upon Administrative Agent's
or any Lender's request, an inventory listing for the Companies in form
and detail reasonably satisfactory to Administrative Agent.
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(e) Annual Business Plans. Promptly after preparation but no
later than 30 days after the last day of each fiscal year of Borrower,
the annual business plan for the Companies prepared by Borrower, in
form reasonably acceptable to Administrative Agent, setting forth
management's projections for the next succeeding fiscal year.
(f) 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,
without limitation, (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.
(g) 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.
(h) 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.
(i) 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).
8.2 Use of Credit. Borrower shall use the proceeds of Borrowings only
for the purposes represented in this agreement.
8.3 Books and Records. Each Company shall maintain books, records and
accounts necessary to prepare Financials in accordance with GAAP.
8.4 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 its other creditors, directors, officers, employees, outside
accountants or representatives from time to time, during reasonable business
hours (but during the
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pendency of an Event of Default, at any time). Without limiting the foregoing,
the Companies shall allow Administrative Agent to perform field examinations to
test such systems and controls of the Companies as it deems appropriate.
Borrower shall reimburse Administrative Agent for the reasonable expenses of one
such field exam every twelve months (the expected expense relating to each such
annual field exam is $10,000). Additional field exams may be conducted at the
sole expense of Administrative Agent and Lenders; provided, however, that
Borrower shall reimburse Administrative Agent for the reasonable expenses of
follow-up examinations by Administrative Agent that are reasonably required by
Administrative Agent to address matters of concern arising as a result of any
prior field exam.
8.5 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.
8.6 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).
8.7 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,
without limitation, 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, waiver or consent) and (ii)
all reasonable costs and expenses incurred by Administrative Agent 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,
without limitation, reasonable allocated costs of in-house counsel, other
reasonable attorneys' fees and court costs), 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.
8.8 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, without limitation, 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.
8.9 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 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.
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8.10 Compliance with Governmental Requirements. Each Company shall (i)
operate and manage its businesses and otherwise conduct its affairs in
compliance with all Governmental Requirements (including without limitation, all
Environmental Governmental Requirements 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 Governmental Requirements (including any Environmental
Governmental Requirements 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.
8.11 Subsidiary Guaranties and Pledges. Borrower shall cause all of its
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 Lender Liens as required by SECTION 5.2.
8.12 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 ATTORNEYS AND OTHER COSTS
AND EXPENSES OF LITIGATION OR PREPARING FOR LITIGATION AND DAMAGES OR
INJURY TO PERSONS, PROPERTY, OR NATURAL RESOURCES
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ARISING UNDER ANY STATUTORY OR COMMON LAW GOVERNMENTAL REQUIREMENT,
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.
8.13 Post-Closing Covenants. Notwithstanding any other provision of
this agreement or any other Credit Document:
(a) Interest Rate Hedging Agreement. Within 90 days of the
Closing Date, Borrower shall enter into a Hedging Agreement with
Administrative Agent, any Lender, or any other bank incorporated under
the Governmental Requirements of the United States of America or any of
its states with a short-term certificate of deposit credit rating of at
least P-2 by Xxxxx'x Investors Service, Inc., or A-2 by Standard &
Poor's Corporation, on terms acceptable to Administrative Agent and
Borrower, regarding the hedging of Borrower's interest rate risk with
respect to a $20,000,000 portion of the Obligation.
(b) Delivery of Account Control Agreements. Within 30 days of
the Closing Date, Borrower shall cause to be executed and delivered to
the Administrative Agent such documentation
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as is reasonably requested by Administrative Agent to perfect Lender
Liens in the Money Market Account.
(c) Other Deliveries. 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
Closing Date.
SECTION 9. NEGATIVE 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:
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 timely payment
to or deposit with the United States of America of all amounts of Tax required
to be deducted and withheld with respect to such wages is also made.
9.2 Debt. No Company may:
(a) 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 $5,000,000 minus the outstanding Belgium
Facility Debt, and
(3) such additional Debt is subordinated to
the Obligation on terms acceptable to Required
Lenders;
(iv) any Debt relating to Hedging Agreements entered
into with respect to assets on the Companies' consolidated
balance sheet;
(v) the Permitted Intercompany 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, without limitation, SECTION 5.2(c);
(vii) 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 (i) $400,000 of
Debt owing under a promissory
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note dated June 2, 1999, executed by Ultrak Europe, N.V. in
favor of KBC Bank for the acquisition of the land for such
facility, (ii) $1,800,000 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,
and (iii) $500,000 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"); and
(viii) Debt relating to F/X Contracts with a notional
amount of up to $1,000,000.
(b) 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.
9.3 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;
(b) Liens securing the TROL Financing so long as such liens
are limited to the Real Property located at 0000 Xxxxxx Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxx;
(c) Liens arising under Debt related to any Hedging Agreements
permitted by this agreement;
(d) Any interest or title of a lessor in property being leased
under an operating lease that does not constitute Debt;
(e) Banker's Liens and Rights of setoff or recoupment;
(f) 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) 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 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 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;
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(i) 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) 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) 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 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 Governmental Requirements and Documents. No Company
shall (i) violate the provisions of any Governmental Requirements (including,
without limitation, OSHA and Environmental Governmental Requirements) 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 any Investments except the
following (the "PERMITTED INVESTMENTS"):
(a) (i) Readily marketable, direct, full faith and credit
obligations of the United States of America or obligations guaranteed
by the full faith and credit of the United States of America and (ii)
readily marketable obligations of an agency or instrumentality of, or
corporation owned, controlled or sponsored by, the United States of
America that are generally considered in the securities industry
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to be implicit obligations of the United States of America, 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 of America given on the date of such investment a credit
rating of at least Aa by Xxxxx'x 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 Governmental Requirements of
the United States of America 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 Xxxxx'x 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 America of a bank incorporated
under the Governmental Requirements of any jurisdiction outside the
United States of America having on the date of the investment a
short-term certificate of deposit credit rating of a least P-2 by
Xxxxx'x 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) Up to $18,000,000 (at cost) of Permitted Public Company
Holdings, provided that the cost basis of such investment, when added
to the cost basis of the Permitted Investments described in CLAUSES (g)
and (h) of this SECTION 9.7, may never exceed $18,000,000 in the
aggregate;
(g) Borrower's investment from time to time in Detection
Systems, Inc., provided that the cost basis of such investment, when
added to the cost basis of the Permitted Investments described in
CLAUSES (f) and (h) of this SECTION 9.7, may never exceed $18,000,000
in the aggregate;
(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 $100,000 for each such Company formed);
(i) Loans, advances, or extensions of credit by any Domestic
Company to any other Domestic Company;
(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, without limitation,
SECTION 5.2(c);
(k) Permitted Acquisitions; and
(l) Borrower's investment in the Money Market Account.
9.8 Distributions; Other Payments. No Company may declare, make or pay
any Distribution except (i) 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,
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(ii) Distributions to Borrower from any other Company, (iii) Distributions from
a Foreign Subsidiary to Ultrak Holdings, (iv) Distributions from Ultrak
Operating to Ultrak GP and Ultrak LP, (v) Distributions of up to $117,210 per
year representing preferred stock dividends from Borrower to Xx. Xxxxxx X.
Xxxxxx made in respect of Borrower's Series A Preferred Stock, (vi) up to
$4,000,000 in stock repurchases by Borrower relating to the "put rights" under
the Xxxxxxxxx Agreement (which are exercisable under certain circumstances
during the period from April 9, 1999 to April 9, 2000), and (vii) during the
period from February 16, 1999 through the entire term that this agreement is in
effect, up to an aggregate of $2,000,000 in other stock repurchases by the
Companies (for the avoidance of doubt, the restriction set forth in this clause
(vii) shall apply to the Companies taken as a whole and is not meant to apply to
each Company individually).
9.9 Disposition of Assets. No Company may sell, assign, lease, transfer
or otherwise dispose of any of its assets (including, without limitation, equity
interests in any other Company) other than a Permitted Asset Sale.
Notwithstanding the foregoing, Borrower may sell its Permitted Investments
described in SECTIONS 9.7(f)-(h) without being required to prepay the
Obligation.
9.10 Mergers, Consolidations, Dispositions and Dissolutions. No Company
may 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) if no Event of Default, Potential Default or Material
Adverse Event exists or will exist as a result of it, any Permitted
Acquisition;
(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 Domestic Company (other than Borrower) if
substantially all of its assets and properties have been conveyed to
any other Domestic Company that has previously executed and delivered a
Guaranty and a Security Agreement;
(d) 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 have been conveyed to any other Company; and
(e) any Permitted Asset Sale so long as all mandatory
prepayments of the Obligation have been made.
9.11 Assignment. No Company may assign or transfer any of its Rights,
duties or obligations under any of the Credit Documents.
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.
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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.
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 Companies' consolidated Funded
Debt as of the last day of each fiscal quarter to the Companies' consolidated
EBITDA for the four fiscal quarters then ended shall at no time exceed:
=============================================================================
FOR QUARTER(S) ENDED RATIO
--------------------------------------------- -------------------------------
12/31/98 through 3/31/99 4.00 to 1.00
--------------------------------------------- -------------------------------
6/30/99 3.75 to 1.00
--------------------------------------------- -------------------------------
9/30/99 3.50 to 1.00
12/31/99 3.00 to 1.00
3/31/2000 and each fiscal quarter ending 2.75 to 1.00
thereafter
=============================================================================
10.2 Fixed Charge Coverage Ratio. The ratio of the Companies'
consolidated EBITR for the four fiscal quarters ending on the dates set forth
below to the Companies' consolidated Debt Service Requirements for the four
fiscal quarters then ended shall at all times exceed:
=============================================================================
FOR QUARTER(S) ENDED RATIO
--------------------------------------------- -------------------------------
12/31/98 3.00 to 1.00
--------------------------------------------- -------------------------------
3/31/99 through 6/30/2000 2.00 to 1.00
9/30/2000 2.25 to 1.00
12/31/2000 and each fiscal quarter ending thereafter 2.50 to 1.00
=============================================================================
10.3 Minimum Net Worth. The Companies' consolidated stockholders'
equity shall not at any time be less than the sum of (a) $135,200,000 plus (b)
an amount equal to 75% of the Companies' consolidated Net Income (without
deduction for losses) for each fiscal quarter ending after September 30, 1998,
and before the date of determination plus (c) 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
September 30, 1998, 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
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otherwise, less (d) the amount of any stock purchases permitted by SECTION
9.8(vi) or (vii) which occur after September 30, 1998.
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) $5,500,000 for Borrower's fiscal year ending
December 31, 1999, and (b) $4,000,000 for any fiscal year thereafter.
10.5 Liquidity Ratio. The ratio of the Companies' consolidated Adjusted
Current Assets to the Companies' consolidated Adjusted Current Liabilities shall
at all times exceed 1.25 to 1.00.
10.6 Special Charges Affecting Covenant Calculations. For purposes of
the covenant calculations set forth in this SECTION 10 (but not for the purpose
of the calculation of the Applicable Margin or Applicable Percentage), EBITDA
and EBITR shall be calculated by adding to such amounts (a) $750,000 in
non-recurring special charges recognized by the Companies during the fiscal
quarter ending March 31, 1999, and (b) $3,125,000 in non-recurring special
charges recognized by the Companies during the fiscal quarter ending June 30,
1999. For the avoidance of doubt, these non-recurring special charges shall not
be added back to EBITDA for the purpose of the calculation of the Applicable
Margin or Applicable Percentage.
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.
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,
$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 $500,000 and such judgment remains unpaid
and unstayed for more than 30 days.
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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
Governmental Requirements, 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
Governmental Requirement.
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 Borrower) fails to
constitute the direct or indirect wholly owned Subsidiary of Borrower.
11.8 Change of Control of Borrower. 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 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 75% of Borrower's board of
directors; (ii) any "person" (other than Xx. Xxxxxx X. Xxxxxx) 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 25% of the total voting power of the outstanding
capital stock (having full voting power) of Borrower (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 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 substantially all of the property of Borrower,
or of Borrower and its Subsidiaries taken, as a whole, to any Person other than
a Company; (iv) the merger or consolidation of 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 Borrower or of
Borrower and its Subsidiaries taken as a whole. For purposes of CLAUSE (i) of
this SECTION 11.8, any individual who becomes a member of the board 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 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
Borrower or the Companies as a whole, including, without limitation, Xx. Xxxxxx
X. Xxxxxx 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 $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
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(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 Hedging Agreements. Any default or event of default occurs in
respect of any Hedging Agreement entered into by any Company.
11.12 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.
11.13 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.
11.14 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.
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
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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 Governmental
Requirements or otherwise at law or in equity.
(c) Offset. If an Event of Default exists, to the extent not
prohibited by applicable Governmental Requirements, 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
Governmental Requirements, 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 Governmental
Requirement 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 non-compliance by any
Company with any applicable Governmental Requirement, 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 Governmental
Requirements. 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
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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 Governmental Requirements 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.
(a) Appointment. Each Lender appoints Administrative Agent
(including, without limitation, 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, 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
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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 Governmental
Requirements.
(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 $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.
(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, act as trustee or depositary for Borrower, or otherwise be
engaged in other transactions with Borrower (collectively, the "OTHER
ACTIVITIES") not the subject of the Credit Documents. Without limiting
the Rights of Lenders specifically set forth in the Credit Documents,
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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 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
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, without limitation, 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 obliger on the Obligation 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.
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
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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 Benefits of Agreement. None of the provisions of this section
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.
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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 Dallas, Texas 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 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.
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 Governmental Requirements. Unless otherwise stated in
any Credit Document, the Governmental Requirements of the State of Texas and of
the United States of America govern the Rights and duties of the parties to the
Credit Documents and the validity, construction, enforcement, and interpretation
of the Credit Documents.
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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. Borrower's obligations 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
(i) the provisions of this agreement may be amended, modified, or
waived, only by an instrument in writing 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.
(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 specified in the Credit Documents; (ii) decreases any
rate or amount of interest, fees, or other sums payable to
Administrative Agent or Lenders under this agreement (except such
reductions as are contemplated by this agreement); (iii) changes the
definition of "COMMITMENT," "COMMITMENT PERCENTAGE," "REQUIRED
LENDERS," or "PRO RATA PART," or the percentages in the definition of
"BORROWING BASE"; (iv) increases any one or more Lenders' Commitment;
(v) 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
(vi) 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
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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.
(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. No Lender may transfer, pledge,
assign, sell any participation in, or otherwise encumber its portion of
the Obligation except as permitted by CLAUSES (b) or (c) below.
(b) Participations. Any Lender may (subject to the provisions
of this section, in accordance with applicable Governmental
Requirements, 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 the Credit Documents so long as (i) the assignor
Lender and Assignee execute and deliver to Administrative Agent and
Borrower for their 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 L (an "ASSIGNMENT") and
pay to Administrative Agent a processing fee of $2,500, (ii) the
assignment is for an identical percentage of the assignor Lender's
Rights and obligations under the Term Loan and the Revolving Facility,
(iii) the assignment must be for a minimum total Commitment of
$5,000,000 and, if the assigning Lender retains any Commitment, it must
be a minimum total Commitment of $5,000,000, and (iv) the conditions
for that assignment set forth in the applicable Assignment are
satisfied. The "Effective Date" in each 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 and Borrower
for acceptance. Once
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that Assignment is accepted by Administrative Agent and Borrower, 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 Assignment,
has the Rights and obligations of a Lender under the Credit Documents,
(ii) the assignor Lender, to the extent provided in that Assignment, is
released from its obligations to fund Borrowings under this agreement
and its reimbursement obligations under this agreement and, in the case
of an 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.
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 TEXAS, (b) WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE GOVERNMENTAL REQUIREMENTS, 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 DISTRICT
COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, (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 GOVERNMENTAL REQUIREMENTS, 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, without
limitation, 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
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Credit Document. In connection with any Litigation, this agreement may be filed
as a written consent to a trial by the court.
14.14 Restatement of Existing Agreement. The parties to this agreement
agree that, on the Closing Date, after all conditions precedent set forth in
SECTION 6.1 have been satisfied or waived: (a) the Obligations represents, among
other things, the renewal, amendment, extension, consolidation and modification
of the "Obligation" (as defined in the Existing Agreement); (b) this agreement
is intended to, and does hereby, restate, renew, extend, amend, modify,
consolidate, supersede and replace the Existing 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
Existing 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.
14.15 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.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS]
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DULY EXECUTED AND DELIVERED by each of the signatories hereto as of the
date first stated in this agreement.
Address for Notice ULTRAK, INC., as Borrower
Ultrak, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attn: Xx. Xxx X. Xxxxx,
Vice President - Finance By:
---------------------------------------
Fax No.: (000) 000-0000 Xxx X. Xxxxx, Vice President - Finance
Address for Notice BANK ONE, TEXAS, N.A.,
as Administrative Agent and a Lender
Bank One, Texas, N.A.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx, By:
Vice President ---------------------------------------
Xxxx X. Xxxxxx, Vice President
Fax No.: (000) 000-0000
Address for Notice XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION,
Xxxxx Fargo Bank (Texas), as a Lender
National Association
0000 Xxxx @ Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxx, By:
Vice President ---------------------------------------
Fax No.: (000) 000-0000 Xxxx Xxxxxxxx, Vice President
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SCHEDULE 2
LENDERS AND COMMITMENTS
===========================================================================================================
COMBINED
NAME AND ADDRESS OF LENDER REVOLVING FACILITY TERM LOAN COMMITMENT
============================================== ==================== =================== xxxxxxxxxxxxxxxxxxx
XXXX XXX, XXXXX, N.A.
0000 XXXX XXXXXX, 0XX XXXXX
XXXXXX, XX 00000 $21,900,000 $14,600,000 $36,500,000
ATTENTION: XXXX X. XXXXXX, VICE PRESIDENT
TEL 214/000-0000
FAX 214/000-0000
LENDING INSTALLATION FOR EUROCURRENCY
BORROWINGS
THE FIRST NATIONAL BANK OF CHICAGO
0 XXXXXX XXXXXX
XXXXXX
XX0 0XX
ATTN: DOT X'XXXXXXXX
FAX NO.: 00 000 0000000
---------------------------------------------- -------------------- ------------------- -------------------
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
0000 XXXX @ XXXXX, 0XX XXXXX $ 8,100,000 $ 5,400,000 $13,500,000
XXXXXX, XXXXX 00000
ATTENTION: XXXX XXXXXXXX, VICE PRESIDENT
TEL 214/000-0000
FAX 214/000-0000
LENDING INSTALLATION FOR EUROCURRENCY
BORROWINGS
XXXXX XXXX
XXXXX FARGO BANK, N.A.
000 XXXXXX XX., 00XX XXXXX
XXX XXXXXXXXX, XX 00000
FAX NO.: 415/000-0000
---------------------------------------------- -------------------- ------------------- -------------------
TOTAL $30,000,000 $20,000,000 $50,000,000
============================================== ==================== =================== ===================
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SCHEDULE 7.3
INFORMATION REGARDING COMPANIES
==========================================================================================================
INFORMATION REGARDING COMPANIES
==========================================================================================================
STATE OF STATES QUALIFIED
NAME/ INCORPORATION/ AS FOREIGN TRADE NAMES USED IN
OWNERSHIP FORMATION CORP./ENTITY LAST FOUR MONTHS
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak, Inc. Delaware None None
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak Operating, L.P. Texas Nevada International
Ultrak GP, Inc. is the Business
1% General Partner of Development
Ultrak Operating, L.P. Groupe Bisset USA
MAXPRO USA
Ultrak LP, Inc. is the Ultrak Special Projects
99% Limited Partner of GPS Standard
Ultrak Operating, L.P. Ultrak International;
Ultrak OEM
Ultrak Financial Services
Mobile Video Products
The Focus Company
Smart Choice
Exxis Security
Closed Circuit Service
Industrial Vision Source
CCTV Source
Loss Prevention Electronics
Ultrak - Denver
Ultrak
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak GP, Inc. Delaware Texas None
100% owned by Ultrak,
Inc.
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak LP, Inc. Delaware None None
100% owned by
==============================================================================================================
INFORMATION REGARDING COMPANIES
==============================================================================================================
STILL USING
NAME/ NAME? CHIEF EXECUTIVE
OWNERSHIP Y/N OFFICE OTHER PRINCIPAL OFFICES
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak, Inc. Not 0000 Xxxxxx Xxxxx Xx. None
applicable Xxxxxxxxxx, Xxxxx 00000
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak Operating, L.P. Y 1301 Waters Ridge Dr. 4301 South Cameron
Ultrak GP, Inc. is the Xxxxxxxxxx, Xxxxx 00000 Suite 12
1% General Partner of Y Las Vegas, Nevada 89103
Ultrak Operating, L.P. Y
Y 0000 Xxxx 00xx Xxx.
Ultrak LP, Inc. is the Y Xxxxxxxxxxx, Xxxxxxxx 00000
99% Limited Partner of Y
Ultrak Operating, L.P. Y 0000 Xxxxxxxxx Xx.
X Xxxxx 000
X Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Y
Y
Y
Y
Y
Y
Y
Y
Y
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak GP, Inc. Not applicable 0000 Xxxxxx Xxxxx Xx. None
100% owned by Ultrak, Xxxxxxxxxx, Xxxxx 00000
Inc.
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak LP, Inc. Not 0000 Xxxxx Xxxxxx Xxxxxx None
100% owned by Suite 1300
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73
Ultrak, Inc.
------------------------------ ------------------- -------------------- ----------------------------------
Diamond Electronics, Inc. Ohio Texas Diamond
100% owned by Ultrak, Diamond Electronics
Inc. Ultrak Ohio
------------------------------ ------------------- -------------------- ----------------------------------
Monitor Dynamics, Inc. California Texas Monitor
100% owned by Ultrak, Virginia MDI
Inc. Ultrak California
------------------------------ ------------------- -------------------- ----------------------------------
ABM Data Systems, Inc. Texas None ABM Data Systems
100% owned by Ultrak, Phoenix Software
Inc.
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak Holdings Limited United Kingdom None None
100% owned by Ultrak,
Inc.
------------------------------ ------------------- -------------------- ----------------------------------
Groupe Xxxxxx, X.X. France None Ultrak France
100% owned by Ultrak Bisset
Holdings Limited
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak Asia Pty., Ltd. Australia None Ultrak Australia
100% owned by Ultrak, MAXPRO
Inc. MAXPRO Systems
------------------------------ ------------------- -------------------- ----------------------------------
VideV GmbH Germany None Ultrak Germany
100% owned by Ultrak VideV
Holdings Limited
------------------------------ ------------------- -------------------- ----------------------------------
Intervision Express Limited England None Ultrak U.K.
100% owned by Ultrak Intervision
Holdings Limited Intervision Express
------------------------------ ------------------- -------------------- ----------------------------------
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
applicable Attn: Xxxxxxx Kudarczuk
------------------------------ --------------- ----------------------------- ---------------------------------
Diamond Electronics, Inc. Y 0000 Xxxxxxxx Xxxx None
100% owned by Ultrak, Y Xxxxxxx, Xxxx 00000
Inc.
------------------------------ --------------- ----------------------------- ---------------------------------
Monitor Dynamics, Inc. Y 0000 Xxxxx Xxxxxx 00000 Xxxxxx Xxxx Xx.
100% owned by Ultrak, Y Xxxxxx Xxxxxxxxx, XX 00000 Suite 1B
Inc. Xxxxxxx, Xxxxxxxx 00000
------------------------------ --------------- ----------------------------- ---------------------------------
ABM Data Systems, Inc. Not applicable 0000 Xxxxxxx xx Xxxxx None
100% owned by Ultrak, Xxxxxxx Xxxxx
Xxx. Xxxxx 000
Xxxxxx, Xxxxx 00000
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak Holdings Limited Not applicable MSP Secretaries, Ltd. None
100% owned by Ultrak, 00 Xxxxxx Xxxxxx
Xxx. Xxxxxx
XX0 0XX
XX
------------------------------ --------------- ----------------------------- ---------------------------------
Groupe Xxxxxx, X.X. Y 98 Ter, Boulevard Heloise None
100% owned by Ultrak Y X-00000 Xxxxxxxxxx XXXXX
Xxxxxxxx Xxxxxxx Xxxxxx
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak Asia Pty., Ltd. Y 1/25 Irving Dr. Xxxxx 00, 000 Xxxxxx Xxxxxx
100% owned by Ultrak, Y Malaga, WA 6090 Xxxxx Xxxxxx, XXX 00000
Inc. Y Australia Australia
------------------------------ --------------- ----------------------------- ---------------------------------
VideV GmbH Y Xxx(xxxx)xxxxxxxx Xxx 00 Xxxx
000% owned by Ultrak Y X-00000 Xxxxxxxxxx
Holdings Limited Germany
------------------------------ --------------- ----------------------------- ---------------------------------
Intervision Express Limited Y Xxxx 000 Xxxxxxx Xxxxx Xxxx
000% owned by Ultrak Y Xxxxxx Summit
Holdings Limited Y Xxxxxxx, Xxxxxxx
XX0 0XX
2
74
------------------------------ ------------------- -------------------- ----------------------------------
Limited
------------------------------ ------------------- -------------------- ----------------------------------
Casarotto Security S.p.A. Italy None Ultrak Italy
100% owned by Ultrak Xxxxxxxxx
Holdings Limited Casarotto Security
------------------------------ ------------------- -------------------- ----------------------------------
Philtech Electronic Services South Africa None Ultrak South Africa
(Proprietary) Limited Philtech
100% owned by Ultrak, Philtech Electronic
Inc. Philtech Electronic Services
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak (Asia) Pte. Ltd. Republic of None Ultrak Asia
100% owned by Ultrak, Singapore
Inc.
Security Procurement, X.X. Xxxxxxxxxxx Xxxx Xxxx
000% owned by Groupe
Xxxxxx, X.X.
------------------------------ ------------------- -------------------- ----------------------------------
Security Procurement-France France None None
100% owned by Groupe
Xxxxxx, X.X.
------------------------------ ------------------- -------------------- ----------------------------------
Videosys Limited United Kingdom None None
100% owned by Ultrak
Holdings Limited
------------------------------ ------------------- -------------------- ----------------------------------
Ultrak Europe N.V. Belgium None Ultrak Europe
99% owned by Ultrak, Ultrak Belgium
Inc.
1% owned by Ultrak
Holdings Limited
U.K.
------------------------------ --------------- ----------------------------- ---------------------------------
Casarotto Security S.p.A. Y Xxx Xxxxxxx 0/0 Xxxx
000% owned by Ultrak Y I-31020 San Vendemiano
Holdings Limited Y (Treviso)
Italy
------------------------------ --------------- ----------------------------- ---------------------------------
Philtech Electronic Services Y Quality House None
(Proprietary) Limited Y Saint Xxxxxxxxxxx House
100% owned by Ultrak, X Xxxxx Xxxxxxx
Xxx. X Xxxxxxxxxxx 0000
Xxxxx Xxxxxx
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak (Asia) Pte. Ltd. Y 000 Xxxxxxxxx Xxxx None
100% owned by Ultrak, #00-00 Xxxxxxxxx Xxxx.
Xxx. Xxxxxxxxx 000000
Security Procurement, B.V. Not applicable Forum Administrations, B.V. None
100% owned by Groupe Weena 336
Xxxxxx, X.X. 3012 NJ Xxxxxxxxx
X.X. Xxx 00000
0000 XX Xxxxxxxxx
Xxxxxxxxxxx
------------------------------ --------------- ----------------------------- ---------------------------------
Security Procurement-France Not applicable 00 Xxx, Xxxxxxxxx Xxxxxxx Xxxx
100% owned by Groupe F-95103 Argenteuil
Xxxxxx, X.X. CEDEX
France
------------------------------ --------------- ----------------------------- ---------------------------------
Videosys Limited Not applicable Xxxxx House None
100% owned by Ultrak 000-000 Xxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx Xxxxxx, XX XX0 0XX
------------------------------ --------------- ----------------------------- ---------------------------------
Ultrak Europe N.V. Y Xxxxx Xxxxxx Park Plaza None
99% owned by Ultrak, Y Xxxxxxxx Xxxxxxxxxxx 0
Inc. Antwerp B-2018
1% owned by Ultrak Belgium
Holdings Limited
3
75
Multi Concept Systemes, S.A. Switzerland None MCS
100% owned by Ultrak Ultrak Switzerland
Holdings Limited
MACH Security, Sp.z o.o. Poland None MACH
100% owned by Ultrak Mach Security
Holdings Limited Ultrak Poland
------------------------------ ------------------- -------------------- ----------------------------------
Multi Concept Systemes, S.A. Y Ch.du Closalet 4 None
100% owned by Ultrak Y CH-1023 Crissier
Holdings Limited Switzerland
MACH Security, Sp.z o.o. Y Al. Wojska Poskiego 70 None
100% owned by Ultrak X 00-000 Xxxxxxxx
Xxxxxxxx Xxxxxxx X Xxxxxx
============================== =============== ============================= =================================
4
76
SCHEDULE 7.3 (CONT'D)
ORGANIZATIONAL CHART
Attached Hereto
77
SCHEDULE 7.8
LITIGATION
None
