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EXHIBIT 10.3
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") made and
entered into as of this 4th day of October, 1993, by and among ULTRAK, INC., a
Colorado corporation ("Ultrak"), CCTV SOURCE INTERNATIONAL, INC., a Texas
corporation ("CCTV"), and LOSS PREVENTION ELECTRONICS CORPORATION, a Colorado
corporation ("Loss prevention"), each with principal offices and mailing
address at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000
(hereinafter Ultrak, CCTV, and Loss Prevention are collectively called
"Borrowers"), and PETRUS FUND, L.P., a Texas limited partnership, with offices
at 0000 Xxxxxxxx Xxxxxx, 00000 Xxxxx Xxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
(hereinafter called the "Lender");
R E C I T A L S
1. Borrowers and Lender have made and entered into that
certain Loan Agreement dated July 20, 1992 (the "Loan Agreement"),
pursuant to which Lender agreed to make available to Borrowers a
$3,000,000 line of credit in accordance with the terms and conditions
of the Loan Agreement and pursuant to the provisions set forth
therein.
2. Borrowers have requested that Lender agree to an
amendment to the Loan Agreement to, among other things: (1) increase
the line of credit from $3,000,000 to $6,000,000, (2) modify the rate
of interest accruing on funds outstanding under the line of credit,
(3) modify certain provisions pertaining to the Warehouseman's
Agreement (including substitution of representatives of Borrower for
the bonded warehouseman), and (4) extend the Drawdown Termination Date
from January 20, 1995 to April 4, 1996.
3. Lender has agreed to Borrowers' requests, subject to
the terms and conditions set forth in this Amendment.
W I T N E S S E T H
For and in consideration of the mutual covenants and agreements herein
contained and of the loans and commitment hereinafter referred to, the
Borrowers and the Lender agree as follows:
FIRST AMENDMENT TO LOAN AGREEMENT-- Page 1
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ARTICLE I
Definitions
As used in this Amendment, capitalized terms not otherwise defined in
this Amendment shall have the meanings given them in the Loan Agreement.
ARTICLE II
Amendments
2.01. Amendments to Definitions. Section 1.02 of the Loan Agreement
is amended by restating certain of the defined terms set forth in Section 1.02
to read in full as follows:
"Borrowing Base" shall mean at any time an amount not to
exceed the lesser of: (a) Six Million and No/100 Dollars
($6,000,000.00) or (b) the Inventory Advance Amount determined as of
the date the Borrowing Base is calculated.
"Drawdown Termination Date" shall mean the earlier of (a)
April 4, 1996 or (b) ninety (90) days following the date Lender gives
Borrowers' Agent notice of Lender's exercise of its right to terminate
its Commitment pursuant to Section 2.10(b) hereof.
"Fenced Area of the Carrollton Warehouse" shall mean any one
or more fenced areas at Ultrak's warehouse at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx 00000, which are denoted as a secure area for
Eligible Inventory and which are protected and maintained pursuant to
the Warehouseman's Agreement.
"Inventory Advance Amount" shall mean at any time an amount
equal to the lesser of:
(a) Six Million and No/100 Dollars ($6,000,000.00), or
(b) the product of all Eligible Inventory of the
Borrowers (excluding Eligible Inventory that is subject to a
Letter of Credit Arrangement) times the Inventory Percentage.
"Revolving Credit Note" shall mean the promissory note of the
Borrowers described in Subsection 2.01 hereof and being in the form of
note attached as Exhibit A-1 hereto, and all renewals, extensions,
modifications and rearrangements thereof.
"Revolving Loan Maturity Date" shall mean the earlier of
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(a) April 4, 1996 or (b) one hundred eighty (180) days following the
date Lender gives Borrowers' Agent notice of Lender's exercise of its
right to terminate its Commitment pursuant toSection 2.10(b) hereof.
"Warehouseman's Agreement" shall mean the agreement between
Borrowers and Lender pertaining to the storage and security of
Borrower's Eligible Inventory that is located in the Fenced Area of
the Carrollton Warehouse, the terms of which are set forth inExhibit
F-1 attached hereto.
2.02 Additional Definitions. Section 1.02 of the Loan Agreement is
further amended by adding the defined terms set forth in Section 1.02 to read
in full as follows:
"First Amendment" shall mean that certain First Amendment to
Loan Agreement, dated October 4, 1993, executed by and among Borrowers
and Lender.
"Nations Bank" shall mean NationsBank of Texas, N.A., a
national banking association.
"Prime Rate" shall mean the per annum rate of interest
publicly announced by NATIONSBANK from time to time as its "Prime
Rate", "Base Rate", or other similar general reference rate of
interest (which rate may or may not be the lowest rate of interest
charged by NationsBank on loans similar to the loan evidenced hereby).
2.03. Interest Rate. Section 2.02(a) of the Loan Agreement is
amended and restated to read in full as follows:
"(a) The Revolving Credit Note shall bear interest from the
date thereof until the Revolving Loan Maturity Date at a rate per
annum which is equal to the greater of:
(1) eight and one-half percent (8-1/2%) per annum;
(2) the lesser of (i) the Maximum Non-usurious Rate, and
(ii) the Prime Rate in effect from day to day, plus
two percent (2.0%) (the "Floating Rate").
Each change in the Floating Rate shall become effective, without
notice to Borrowers, on the effective date of each change in the Prime
Rate."
2.04. Request for Loan. Section 2.03(a)(ii) of the Loan Agreement
is amended and restated to read in full as follows:
"(ii) the requested date of such advance (the
"Borrowing Date") (such date not to be less than ten (10)
Business Days after Lender receives the Notice of
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Borrowing and all other information and documentation Lender
may request);".
2.05. Commitment Fee. Section 2.11 of the Loan Agreement is amended
and restated to read in full as follows:
"Section 2.11 Commitment Fee. Borrowers shall pay to Lender
at execution and delivery of the First Amendment an initial fee of
Fifteen Thousand and No/100 Dollars ($15,000.00), plus an amount equal
to $30,000.00 per annum, prorated over the period of time beginning
July 20, 1993 through the date of the First Amendment. Thereafter, on
each anniversary date of the First Amendment (i.e., October 4 of each
year, beginning October 4, 1994) Borrowers shall pay to Lender a
commitment fee (the "Commitment Fee"), calculated on the basis of
Forty-Five Thousand and No/100 Dollars ($45,000.00) per annum, and
pro-rated over the then remaining term of the Commitment, if less than
a full year. These fees shall be consideration paid to Lender in
exchange for Lender's agreement to make the total amount of the
Commitment available to Borrowers, subject to the terms of this
Agreement. The Commitment Fee will be non-refundable. Nevertheless,
if Lender exercises its right under Section 2.10(b) to terminate its
Commitment, then Borrowers shall be entitled to a refund of the
Commitment Fee, pro-rated on the basis of the remaining portion, as of
the effective date of termination, of the annual period for which the
Commitment Fee was paid (i.e., beginning October 4 of one year and
ending October 3 of the following year). In the event that any
Indebtedness remains owing to Lender as of the effective date of
Lender's termination of the Commitment underSection 2.10(b), Lender,
at Lender's option, may credit the Indebtedness in the amount of the
portion of the Commitment Fee to which Borrowers are entitled as a
refund."
2.06 Subsidiaries. Section 3.16 of the Loan Agreement is amended
and restated to read in full as follows:
"Section 3.16 Subsidiaries. CCTV, Loss Prevention and Exxis
are wholly-owned subsidiaries of Ultrak. Ultrak has no other
subsidiaries, other than Dental Vision Direct, Inc., a Texas
corporation. CCTV, Loss Prevention and Exxis have no subsidiaries."
2.07. Insurance. The second sentence of Section 4.07 of the Loan
Agreement is amended and restated to read in full as follows:
"NationsBank may be names as loss co-payee, to the extent that its
interest may appear."
2.08. Warehouseman's Agreement. Section 4.14 of the Loan
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Agreement is amended and restated to read in full as follows:
"Section 4.14 Warehouseman's Agreement. Borrowers shall
observe, enforce, follow and maintain the procedures set forth in the
Warehouseman's Agreement attached asExhibit F-1 hereto during the term
of this Agreement. Borrowers shall take any and all action necessary
for the performance of the duties and obligations under the
Warehouseman's Agreement. Borrowers shall provide immediate notice to
Lender of any circumstance that would hinder, interfere with, or
impede any person in the performance of the duties and obligations
under the Warehouseman's Agreement. All expenses involved in the
Warehouseman's Agreement shall be borne by Borrowers, except as
provided otherwise in Exhibit F-1."
2.09. Limitation on Leases. Section 5.07(b) of the Loan Agreement
is amended and restated to read in full as follows:
"(b) leases and lease agreements for real property at 0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx, not to exceed in the aggregate
$500,000.00 in any fiscal year of the Borrowers."
2.10. Current Ratio. Section 6.01 of the Loan Agreement is amended
and restated to read in full as follows:
"Section 6.01 Current Ratio. During the term of this
Agreement, Borrowers will not permit or suffer at any date the ratio
of (a) their consolidated Current Assets, to (b) their consolidated
Current Liabilities, to be less than 1.35 to 1.0."
2.11. Leverage Ratio. Section 6.02 of the Loan Agreement is amended
and restated to read in full as follows:
"Section 6.02 Leverage Ratio. During the term of this
Agreement, Borrowers shall not permit or suffer at any date the ratio
of (a) the consolidated total liabilities of Borrowers, determined
according to generally accepted accounting principles, to (b)
Borrowers' consolidated Tangible Net Worth, to be greater than the
ratios set forth below during the corresponding periods of time set
forth below:
Period of Time Ratio
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From the date hereof
through and including
December 31, 1993: 2.30 to 1
From January 1, 1994
through and including
June 30, 1994: 2.20 to 1
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From July 1, 1994
through and including
December 31, 1994: 2.00 to 1
From January 1, 1995
and thereafter: 1.80 to 1."
2.12. Schedules. Schedules I, II, III, V and VI of the Loan
Agreement are hereby replaced in their entirety by Schedules I-A, II-A, III-A,
V-A and VI-A, respectively, attached to this Amendment; and all references in
the Loan Agreement to Schedules I, II, III, V and VI shall be deemed references
to Schedules I-A, II-A, III-A, V-A and VI-A, respectively.
ARTICLE III
Miscellaneous
3.01. Effectiveness. Except as specified herein, all terms and
conditions of the Loan Agreement shall remain unmodified and in full force and
effect. Further, each Borrower hereby ratifies and reaffirms such Borrower's
obligations and agreements under the Security Instruments, agrees that the
Security Instruments shall remain in full force and effect, notwithstanding
execution of this Amendment, and agrees that the Security Instruments shall
continue to be the legal, valid and binding obligations of each Borrower, as
applicable, enforceable in accordance with the terms therein.
3.02. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
3.03. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.
3.04. NO ORAL AGREEMENTS. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS CONSTITUTE A WRITTEN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES 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 RELATING TO THE LOANS.
IN WITNESS WHEREOF, the parties hereto have cause this instrument
to be duly executed as of the date first above written.
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BORROWER:
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ULTRAK, INC.
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
Chief Financial Officer
CCTV SOURCE INTERNATIONAL, INC.
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
Chief Financial Officer
LOSS PREVENTION ELECTRONICS
CORPORATION
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
Chief Financial Officer
PETRUS FUND, L.P.
By: XXXXX INVESTMENTS, INC.
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
President
Exhibits:
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A-1 - Revolving Credit Note
F-1 - Warehouseman's Agreement
Schedules:
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I-A - Authorized Persons
II-A - Stock, Warrants, Etc.
III-A - Liabilities
V-A - Liens
VI-A - Investments, Loans & Advances
FIRST AMENDMENT TO LOAN AGREEMENT-- Page 7
