EXHIBIT 3
$15,000,000
AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of December 3, 1996
between
INTEK DIVERSIFIED CORPORATION
as Borrower
and
SECURICOR COMMUNICATIONS LIMITED
as Lender
TABLE OF CONTENTS
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SECTION Page
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1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
2. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . . . . . 10
2.1. Advances . . . . . . . . . . . . . . . . . . . . . . . 10
2.2. Letters of Credit . . . . . . . . . . . . . . . . . . 11
2.3. Use of Proceeds . . . . . . . . . . . . . . . . . . . 12
2.4. Interest on Loan . . . . . . . . . . . . . . . . . . . 12
2.5. Prepayments . . . . . . . . . . . . . . . . . . . . . 13
2.6. Receipt of Payments . . . . . . . . . . . . . . . . . 14
2.7. Application of Payments . . . . . . . . . . . . . . . 14
2.8. Accounting . . . . . . . . . . . . . . . . . . . . . . 14
2.9. Indemnity . . . . . . . . . . . . . . . . . . . . . . 15
2.10. Access . . . . . . . . . . . . . . . . . . . . . . . . 15
2.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 15
3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 16
3.1. Conditions to the Effectiveness . . . . . . . . . . . 16
3.2. Further Conditions to Each Advance and Letter of
Credit . . . . . . . . . . . . . . . . . . . . . . . . 18
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 19
4.1. Corporate Existence; Compliance with Law . . . . . . . 19
4.2. Executive Offices . . . . . . . . . . . . . . . . . . 19
4.3. Subsidiaries . . . . . . . . . . . . . . . . . . . . . 19
4.4. Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . . . . 20
4.5. Solvency . . . . . . . . . . . . . . . . . . . . . . . 20
4.6. Labor Matters . . . . . . . . . . . . . . . . . . . . 20
4.7. Investment Company Act . . . . . . . . . . . . . . . . 21
4.8. Margin Regulations . . . . . . . . . . . . . . . . . . 21
4.9. No Litigation . . . . . . . . . . . . . . . . . . . . 21
4.10. Stock Agreement . . . . . . . . . . . . . . . . . . . 21
4.11. Hitachi Supply Agreement . . . . . . . . . . . . . . . 22
4.12. Patents, Trademarks, Copyrights and Licenses . . . . . 22
4.13. No Material Adverse Effect . . . . . . . . . . . . . . 22
5. FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . . . . . 22
5.1. Reports and Notices . . . . . . . . . . . . . . . . . 22
5.2. Communication with Accountants . . . . . . . . . . . . 23
6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 23
6.1. Maintenance of Existence and Conduct of Business . . . 24
6.2. Payment of Obligations . . . . . . . . . . . . . . . . 24
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6.3. Books and Records. . . . . . . . . . . . . . . . . . . 25
6.4. Litigation . . . . . . . . . . . . . . . . . . . . . . 25
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . . 25
6.6. Compliance with Law . . . . . . . . . . . . . . . . . 25
6.7. Supplemental Disclosure . . . . . . . . . . . . . . . 25
6.8. Net Worth . . . . . . . . . . . . . . . . . . . . . . 25
7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 26
7.1. Maintenance of Business . . . . . . . . . . . . . . . 26
7.2. Transactions with Affiliates. . . . . . . . . . . . . 26
7.3. Events of Default . . . . . . . . . . . . . . . . . . 26
8. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.1. Termination . . . . . . . . . . . . . . . . . . . . . 26
8.2. Survival of Obligations Upon Termination of Financing
Arrangement. . . . . . . . . . . . . . . . . . . . . . 27
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES . . . . . . . . . . . 27
9.1. Events of Default . . . . . . . . . . . . . . . . . . 27
9.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . 29
9.3. Waivers by Borrower . . . . . . . . . . . . . . . . . 30
9.4. Right of Set-Off . . . . . . . . . . . . . . . . . . . 30
10. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . 30
10.1. Loan Subordinated to Senior Indebtedness . . . . . . 30
10.2. Priority and Payment Over of Proceeds in Certain
Events. . . . . . . . . . . . . . . . . . . . . . . . 31
10.3. Rights of Holders of Senior Indebtedness Not To Be
Impaired. . . . . . . . . . . . . . . . . . . . . . . 33
10.4. Subrogation . . . . . . . . . . . . . . . . . . . . . 34
10.5. Obligations of Borrower Unconditional . . . . . . . . 34
10.6. Notice to Lender . . . . . . . . . . . . . . . . . . 35
10.7. Right of Lender as Holder of Senior Indebtedness . . 35
10.8. Reinstatement . . . . . . . . . . . . . . . . . . . . 35
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 36
11.1. Complete Agreement; Modification of Agreement;
Sale of Interest. . . . . . . . . . . . . . . . . . . 36
11.2. Fees and Expenses . . . . . . . . . . . . . . . . . . 36
11.3. No Waiver by Lender . . . . . . . . . . . . . . . . . 37
11.4. Remedies . . . . . . . . . . . . . . . . . . . . . . 37
11.5. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . 37
11.6. Severability . . . . . . . . . . . . . . . . . . . . 37
11.7. Parties . . . . . . . . . . . . . . . . . . . . . . . 38
11.8. Conflict of Terms . . . . . . . . . . . . . . . . . . 38
11.9. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 38
11.10. Notices . . . . . . . . . . . . . . . . . . . . . . . 38
11.11. Survival . . . . . . . . . . . . . . . . . . . . . . 40
SECTION Page
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11.12. Section Titles. . . . . . . . . . . . . . . . . . . . 40
11.13. Counterparts . . . . . . . . . . . . . . . . . . . . 40
SCHEDULES
Schedule 4.1 Corporate Matters
Schedule 4.2 Executive Office
Schedule 4.3 Subsidiaries
Schedule 4.12 Patents, Trademarks, Copyrights and Licenses
Schedule 7.3 Certain Transactions
EXHIBITS
Exhibit A-Form of Notice of Advance
Exhibit B-Form of Note
AMENDED AND RESTATED LOAN AGREEMENT, dated as of December 3,
1996, between INTEK DIVERSIFIED CORPORATION, a Delaware corporation
having an office at 000 Xxxx 000xx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000
(the "Borrower"), and SECURICOR COMMUNICATIONS LIMITED, a company
incorporated under the laws of England and Wales having an office at
00 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxx, XX0 0XX, Xxxxxxx ("Lender").
W I T N E S S E T H :
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WHEREAS, Midland International Corporation, a Delaware
corporation ("Midland"), Borrower and Xxxxxxxx Capital Limited, an
Ontario corporation ("Xxxxxxxx"), entered into an Amended and Restated
Sale of Assets and Trademark License Agreement, dated as of September
19, 1996 (the "Asset and Trademark Agreement"), pursuant to which
Midland sold to Borrower the Trademark (as defined herein) and certain
other assets, as described therein (collectively, the "Acquired
Assets"), in consideration for up to 2,500,000 shares of common stock,
par value $0.01 per share of Intek, an assumption of certain
liabilities of Midland (the "Assumed Liabilities") and a cash payment,
all as set forth in the Asset and Trademark Agreement (the "Midland
Transaction"); and
WHEREAS, Borrower assigned and transferred all of its right,
title and interest in and to the Acquired Assets and the Asset and
Trademark Agreement (and certain other agreements) to its wholly-owned
Subsidiary, Midland USA, Inc. ("MUSA"), and MUSA has conducted the
U.S. LMR Distribution Business since the consummation of the Midland
Transaction;
WHEREAS, Borrower and Lender entered into a Stock Purchase
Agreement, dated as of June 18, 1996, as amended by agreement of the
parties dated as of September 19, 1996 (the "Stock Agreement"),
pursuant to which Lender agreed to sell to Borrower all of the
outstanding securities (other than certain preferred shares) of
Lender's wholly-owned subsidiary, Securicor Radiocoms Limited
("Radiocoms"), in consideration for 25,000,000 shares of Common Stock
(the "Securicor Transaction"); and
WHEREAS, pursuant to the Stock Agreement, Lender has agreed,
among other things, to advance up to $15 million to Borrower following
the consummation of the Securicor Transaction to finance the combined
business of Borrower, the U.S. LMR Distribution Business and
Radiocoms;
WHEREAS, it is currently contemplated that the Securicor
Transaction will be consummated on or about December 3, 1996; and
WHEREAS, in connection with the consummation of the Midland
Transaction on September 20, 1996, Lender and Midland USA, Inc.
("MUSA"), a wholly owned subsidiary of Borrower, entered into that
certain Loan Agreement, dated as of September 19, 1996 (the "MUSA Loan
Agreement"), wherein Lender agreed, among other things, to loan up to
$15 million to MUSA to fund Borrower's operations until the closing of
the Securicor Transaction; and
WHEREAS, Lender, Borrower and MUSA have agreed that upon the
consummation of the Securicor Transaction, the "Obligations" (as
defined in the MUSA Loan Agreement) of MUSA outstanding under the MUSA
Loan Agreement on the date of such consummation will be assumed by
Borrower and become obligations under this Amended and Restated Loan
Agreement (subject to the terms hereof), as set forth in that certain
letter agreement between the parties, dated September 19, 1996 (the
"Intek Loan Assumption Agreement"); and
WHEREAS, the aggregate amount outstanding under the MUSA
Loan Agreement, including accrued interest thereon, as of the date
hereof, is $5,912,047.22 and
WHEREAS, the parties wish to amend and restate the MUSA Loan
Agreement as set forth herein to, among other things, confirm the
substitution of Borrower as the obligor with respect to all
Obligations (rather than MUSA) and provide for certain other changes;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto agree as
follows:
1. DEFINITIONS
In addition to the defined terms appearing above,
capitalized terms used in this Agreement shall have (unless otherwise
provided elsewhere in this Agreement) the following respective
meanings when used herein:
"Acquired Assets" shall have the meaning ascribed to it in
the recitals hereof.
"Advance" shall have the meaning ascribed to it in Section
2.1(a) hereof.
"Affiliate" shall mean, with respect to any Person, any
other Person that controls such Person or is controlled by or under
common control with such Person.
"Agreement" shall mean this Loan Agreement, including all
amendments, modifications and supplements hereto and any appendices,
exhibits or schedules to any of the foregoing, and shall refer to the
Agreement as the same may be in effect at the time such reference
becomes operative.
"Ancillary Agreements" shall mean any and all supplemental
agreements, undertakings, instruments, documents or other writings
executed by Borrower.
"Asset and Trademark Agreement" shall have the meaning
ascribed to it in the recitals hereof.
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed
in the State of New York.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
of America or any agency thereof maturing within one year from the
date of acquisition thereof; (ii) commercial paper maturing no more
than one year from the date of creation thereof and at the time of
their acquisition having the highest rating obtainable from either
Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc.; and
(iii) certificates of deposit, maturing no more than one year from the
date of creation thereof, issued by commercial banks incorporated
under the laws of the United States of America, each having combined
capital, surplus and undivided profits of not less than $200,000,000
and having a rating of "A" or better by a nationally recognized rating
agency.
"Change of Control" shall mean any acquisition, directly or
indirectly, in one transaction or a series of transactions, by any
Person, other than Lender or any Affiliate thereof, of greater than
(i) 50% or more of the issued and outstanding Common Stock, or (ii)
50% or more of the assets of Borrower and its Subsidiaries, taken as a
whole (including without limitation the sale by Borrower of the stock
of a Subsidiary or Subsidiaries whose combined assets represent 50% or
more of the assets of Borrower and its Subsidiaries, taken as a
whole).
"Charges" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes at the time due
and payable, levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) Borrower's or any of its Subsidiaries' ownership or
use of any of its assets, or (iv) any other aspect of Borrower's or
any of the Subsidiaries' business.
"Closing Date" shall mean the date on which all of the
conditions precedent to the effectiveness of this Agreement have been
satisfied.
"Code" shall mean the Uniform Commercial Code of the
jurisdiction with respect to which such term is used, as in effect
from time to time.
"Commitment Termination Date" shall mean December 31, 1997.
"Common Stock" shall mean common stock, par value $0.01, of
Borrower.
"Composite Prime Rate" shall mean the average of the rate of
interest per annum publicly announced from time to time by each of The
Chase Manhattan Bank, The Bank of New York, N.A. and Citibank, N.A. as
its prime rate in effect at its principal office in New York City
(each change in any such prime rate to be effective on the date such
change is publicly announced).
"Default" shall mean any event which, with the passage of
time or notice or both would, unless cured or waived, become an Event
of Default.
"Event of Default" shall have the meaning ascribed to it in
Section 9.1 hereof.
"Federal Reserve Board" shall have the meaning ascribed to
it in Section 4.8 hereof.
"Fiscal Year" shall mean the calendar year. Subsequent
changes of the fiscal year of Borrower shall not change the term
"Fiscal Year," unless Lender shall consent in writing to such changes.
"GAAP" shall mean generally accepted accounting principles
in the United States of America as in effect from time to time.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease,
dividend, or other obligation ("primary obligations") of any other
Person (the "primary obligor") in any manner including, without
limitation, any obligation or arrangement of such Person (a) to
purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet condition of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect
thereof.
"Hitachi Supply Agreement" shall mean the agreement between
Midland and Hitachi Denshi Ltd., a Japanese corporation ("Hitachi"),
dated as of May 12, 1994 and pursuant to which Hitachi agreed, among
other things, to manufacture and sell to Midland certain mobile
radios.
"Indebtedness" of any Person shall mean (i) all indebtedness
of such Person for borrowed money or for the deferred purchase price
of property or services (including, without limitation, reimbursement
and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured, but not
including obligations to trade creditors incurred in the ordinary
course of business), (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, (iii) all indebtedness created or
arising under any conditional sale or other title retention agreements
with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such prop-
erty), (iv) all Guaranteed Indebtedness, (v) all Indebtedness referred
to in clause (i), (ii), (iii) or (iv) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including,
without limitation, accounts and contract rights) owned by such
Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness, and (vi) the Obligations.
"Intek Loan Assumption Agreement" shall have the meaning
ascribed to it in the recitals hereof.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Lender at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance or guarantee, by Lender or another, of
letters of credit, bank acceptances in respect of letters of credit,
or the like. The amount of such Letter of Credit Obligations shall
equal the maximum amount which may be payable by Lender thereupon or
pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters
of credit issued at the request and for the account of Borrower, and
bankers' acceptances issued by Borrower, for which Lender has incurred
Letter of Credit Obligations pursuant thereto.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any lease or title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).
"Loan" shall mean the aggregate amount of Advances
outstanding at any time plus the amount of any interest capitalized
with respect thereto.
"Loan Documents" shall mean this Agreement, the Note, and
any other Ancillary Agreements as to which Lender is a party or a
beneficiary and all other agreements, instruments, documents and
certificates, including, without limitation, pledges, powers of
attorney, consents, assignments, contracts, notices, and all other
written matter whether heretofore, now or hereafter executed by or on
behalf of Borrower or any of its Affiliates, or any employee of
Borrower or any of its Affiliates, and delivered to Lender in
connection with this Agreement or the transactions contemplated
hereby.
"Material Adverse Effect" or "Material Adverse Change" shall
mean an event or circumstance which materially adversely affects the
business, properties, financial condition or operations of Borrower
and its Subsidiaries (taken as a whole).
"Maximum Lawful Rate" shall have the meaning ascribed to it,
in Section 2.4(c) hereof.
"Midland" shall have the meaning ascribed to it in the
recitals hereof.
"MUSA" shall have the meaning ascribed to it in the recitals
hereof.
"MUSA Loan Agreement" shall have the meaning ascribed to it
in the recitals hereof.
"Net Worth" shall mean the total assets less the total
liabilities of Borrower and its consolidated Subsidiaries as
determined in accordance with GAAP; provided, however, that in no
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event shall the par value of the Radiocoms Preferred Stock be counted
as a liability in making such calculation.
"Note" shall have the meaning ascribed to it in Section
2.1(b).
"Obligations" shall mean all loans, advances, debts,
liabilities, and obligations, for monetary amounts (whether or not
such amounts are liquidated or determinable) owing by Borrower to
Lender (including all Letter of Credit Obligations), and all covenants
and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other
instrument, arising under any of the Loan Documents. This term in-
cludes, without limitation, all interest (whether capitalized or
otherwise), charges, expenses, attorneys' fees and any other sum
chargeable to Borrower under any of the Loan Documents.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, county, city, municipal
or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Radiocoms" shall have the meaning ascribed to it in the
recitals hereof.
"Radiocoms Preferred Stock" shall mean the 20,000 shares of
Preference Stock of Radiocoms, par value $1,000 per share, which are
issued and outstanding as of the date hereof.
"Repayment Date" means June 30, 2001.
"Securicor Transaction" shall have the meaning ascribed to
it in the recitals hereof.
"Senior Debt" shall mean all Indebtedness of Borrower
(including without limitation all principal of and premium, if any,
and interest on, and all other amounts of any nature whatsoever owing
in respect of such Indebtedness, as the same may be amended, modified
or supplemented and any refinancing thereof from time to time) other
than Indebtedness which, in accordance with its terms, ranks pari
passu or junior to the Loan.
"Senior Indebtedness" shall have the meaning ascribed to it
in Section 10.1 hereof.
"Xxxxxxxx" shall have the meaning ascribed to it in the
recitals hereof.
"Solvent" shall mean, when used with respect to any Person,
that:
(a) the present fair saleable value of such Person's
assets (including, without limitation, the fair saleable value of
the goodwill arising in connection with the Midland Transaction
and other intangible assets) is in excess of the total amount of
such Person's liabilities;
(b) such Person is able to pay its debts as they
become due; and
(c) such Person does not have unreasonably small
capital to carry on such Person's business as theretofore
operated and all businesses in which such Person is about to
engage.
"Stock" shall mean all shares, options, warrants, general or
limited partnership interests, participations or other equivalents
(regardless of how designated) of or in a corporation, partnership or
equivalent entity whether voting or nonvoting, including, without
limitation, common stock, preferred stock, or any other "equity
security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by
the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended).
"Subordinated Indebtedness" shall have the meaning ascribed
to it in Section 10.1 hereof.
"Subsidiary" shall mean any Person 50% or more of whose
issued and outstanding voting securities is owned or controlled,
directly or indirectly, by the specified Person.
"Taxes" shall have the meaning ascribed thereto in Section
2.11 hereof.
"Trademarks" shall mean the Trademarks described on Schedule
4.12(b) hereto and the trade name "Midland" and similar variations
thereof, and all registrations, applications and renewals thereof and
all logos, whether or not registered, used in connection therewith.
"US LMR Distribution Business" shall mean the business
consisting of the sale and distribution of land mobile radio products
bearing the Trademarks within the US LMR Distribution Territory as
conducted by MUSA.
"US LMR Distribution Territory" shall mean the United States
of America and the territories and possessions thereof.
Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily
given such term in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise
specifically provided herein, in accordance with GAAP consistently
applied. That certain terms or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed
to limit the foregoing. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the
meanings provided for by the Code as in effect in the State of New
York to the extent the same are used or defined therein. The words
"herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole, including the Exhibits and
Schedules hereto, as the same may from time to time be amended, modi-
fied or supplemented, and not to any particular section, subsection or
clause contained in this Agreement.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the feminine
and the neuter.
2. AMOUNT AND TERMS OF CREDIT
--------------------------
2.1. Advances. (a) Upon and subject to the terms and
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conditions hereof, Lender shall make available, from time to time,
until the Commitment Termination Date, for Borrower's use and upon the
request of Borrower therefor, advances (each, an "Advance") in an
aggregate amount (which amount shall include all outstanding Letter of
Credit Obligations, whether or not then due and payable) which shall
not exceed $15,000,000 (less the amounts outstanding as of the Closing
Date, as set forth in Section 2.1(b)). Each Advance shall be made on
notice, given no later than 1:00 P.M. (New York City time) on the
second Business Day prior to the proposed Advance, by Borrower to
Lender and no Advance shall be requested unless the amount thereof is
equal to the lesser of (i) $500,000 and (ii) a whole number multiple
of $500,000 in excess thereof unless the availability under this
Agreement is less than $500,000 in which case such Advance shall equal
such amount; provided, however, that there shall be no minimum Advance
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with respect to any Letter of Credit Obligations to be incurred
pursuant to Section 2.2. Each such notice (a "Notice of Advance")
shall be in writing in substantially the form of Exhibit A hereto,
executed by any duly authorized officer of Borrower, specifying there-
in the requested date and amount of such Advance. Lender shall,
before 5:00 P.M. (New York City time) on the date of the proposed
Advance, upon fulfillment of the applicable conditions set forth in
Section 3, wire to a bank in the United States or the United Kingdom
designated by Borrower and reasonably acceptable to Lender the amount
of such Advance.
(b) The Loan made by Lender shall be evidenced by a
promissory note to be executed and delivered by Borrower at or prior
to the Closing Date, the form of which is attached hereto and made a
part hereof as Exhibit B (the "Note"). The Note shall be payable to
the order of Lender and shall represent the obligation of Borrower to
pay the amount of the Loan, with interest thereon as prescribed in
Section 2.4. The date and amount of each Advance and each payment of
principal and interest or any capitalization of interest with respect
thereto shall be recorded on the books and records of Lender, which
books and records shall constitute prima facie evidence of the
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accuracy of the information therein recorded. Borrower acknowledges
that, (i) as of the date hereof, the amount outstanding under the MUSA
Loan Agreement is $5,912,047.22, (ii) that such amount constitutes the
amount outstanding under this Agreement as of the date hereof, and
(iii) that the amount of the Loan shall be
increased by the amount of any payments on or pursuant to any Letter
of Credit Obligations that Lender incurred pursuant to the MUSA Loan
Agreement, regardless of the date of such payments. The entire unpaid
balance of the Loan and all other Obligations shall be due and payable
on the Repayment Date.
2.2. Letters of Credit. (a) Lender shall, subject to the
-----------------
terms and conditions hereinafter set forth, (i) incur Letter of Credit
Obligations in respect of the issuance, on the Closing Date, of such
Letters of Credit supporting obligations of Borrower or its
Subsidiaries, as Borrower shall request by written notice to Lender
executed by any duly authorized officer of Borrower, which is received
by Lender not less than 2 Business Days prior to the Closing Date, and
(ii) incur from time to time on written request of Borrower or its
Subsidiaries, additional Letter of Credit Obligations in respect of
Letters of Credit supporting obligations of Borrower or its
Subsidiaries; provided, however, that no such Letter of Credit shall
-------- -------
have an expiry date which is after March 31, 1998. It is understood
that the determination of the bank or other legally authorized Person
(including Lender) which shall issue or accept, as the case may be,
any letter of credit or bankers acceptance contemplated by this
Section 2.2(a) shall be made by Lender, in its sole discretion.
(b) In the event that Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, such payment shall then
be deemed to constitute an Advance under Section 2.1(a) hereof
(whether or not Borrower is then permitted to request Advances at such
time).
(c) In the event that Lender shall incur any Letter of
Credit Obligations pursuant hereto at the request or on behalf of
Borrower hereunder, Borrower shall pay to Lender, as compensation to
Lender for such Letter of Credit Obligation, all fees and charges paid
by Lender on account of such Letter of Credit Obligation to the issuer
or like party. Fees payable in respect of Letter of Credit Obliga-
tions shall be paid to Lender, in arrears, on the first day of each
month for the preceding month.
2.3. Use of Proceeds. Borrower shall apply the proceeds of
---------------
the Advances for the general corporate purposes of Borrower and its
Subsidiaries.
2.4. Interest on Loan. (a)(i) From the Closing Date
----------------
through and including the Commitment Termination Date, interest
accrues on the amount outstanding from time to time under the Loan at
the Composite Prime Rate plus one percent (1%) per annum,
calculated on the basis of a 360 day year for the number of days
elapsed. Interest will be capitalized on the Commitment Termination
Date and shall be added to the principal amount outstanding at such
time under the Loan.
(ii) Following the Commitment Termination Date, interest
accrues on the amount outstanding from time to time under the Loan at
the rate of 11% per annum, calculated on the basis of a 360 day year
for the number of days elapsed. Interest will be capitalized on a
monthly basis and shall be added to the principal amount outstanding
from time to time under the Loan. Interest accrued and uncapitalized
on the Repayment Date shall be payable on such date.
(b) So long as any Event of Default shall be continuing,
the interest rate applicable to the Loan shall be increased by 3% per
annum above the rate otherwise applicable.
(c) Notwithstanding anything to the contrary set forth in
this Section 2.4, if at any time until payment in full of all of the
Obligations, the applicable rate of interest under this Agreement
exceeds the highest rate of interest permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable hereto (the "Maximum Lawful Rate"), then in such event and
so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter the applicable rate
-------- -------
of interest under this Agreement is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Lender
from the making of advances hereunder is equal to the total interest
which Lender would have received had the applicable rate of interest
under this Agreement been (but for the operation of this paragraph)
the interest rate payable since the Closing Date. Thereafter, the
interest rate payable hereunder shall be the applicable rate of
interest under this Agreement, unless and until such rate shall again
exceed the Maximum Lawful Rate, in which event this paragraph shall
again apply.
2.5. Prepayments. (a) Upon the occurrence of a Change of
-----------
Control of Borrower, the commitment of Lender to make Advances under
this Agreement shall immediately terminate, and Borrower shall
immediately pay to Lender the full amount of the Loan then
outstanding, together with any accrued but uncapitalized interest
thereon.
(b) Borrower shall have the right, at any time, to prepay
the Loan, in whole or in part, without premium or penalty, upon at
least three Business Days irrevocable notice to Lender specifying (i)
the amount to be repaid and (ii) the date of such repayment. If any
such notice is given, Borrower shall make the prepayment specified
therein, and such prepayment shall be due and payable as specified
therein. Amounts prepaid may not be reborrowed. Each partial
prepayment of the Loan pursuant to this Section 2.5(b) shall be in an
amount equal to the lesser of $500,000 or a whole number multiple of
$500,000 in excess thereof or such lesser amount outstanding.
2.6. Receipt of Payments. Borrower shall make each payment
-------------------
under this Agreement not later than 11:00 A.M. (New York City time) on
the day when due in lawful money of the United States of America in
immediately available funds to Lender's depositary bank as designated
by Lender from time to time for deposit in Lender's depositary
account. For purposes only of computing interest hereunder, all
payments shall be applied by Lender on the day payment has been
credited by Lender's depository bank to Lender's account in
immediately available funds. For purposes of determining the amount
of funds available for borrowing by Borrower pursuant to Section
2.1(a) hereof, such payments shall be applied by Lender against the
outstanding amount of the Loan at the time they are credited to its
account.
2.7. Application of Payments. Borrower irrevocably waives
-----------------------
the right to direct the application of any and all payments at any
time or times hereafter received by Lender from or on behalf of
Borrower, and Borrower irrevocably agrees that Lender shall have the
continuing exclusive right to apply any and all such payments against
the then due and payable Obligations of Borrower and in repayment of
the Loan as Lender may deem advisable. Lender is authorized to, and
at its option may, make advances on behalf of Borrower for payment of
all fees, expenses, charges, costs, principal and interest incurred by
Borrower hereunder when and as Borrower fails to promptly pay any such
amounts. At Lender's option and to the extent permitted by law, any
advances so made may be deemed Advances constituting part of the Loan
hereunder.
2.8. Accounting. Lender will, upon Borrower's request,
----------
provide a monthly accounting of transactions under the Loan to
Borrower within 10 days of the end of the month. Each and every such
accounting shall (absent manifest error) be deemed final, binding and
conclusive upon Borrower in all respects as to all matters reflected
therein, unless Borrower, within 20 days after the date any such
accounting is rendered, shall notify
Lender in writing of any objection which Borrower may have to any such
accounting, describing the basis for such objection with specificity.
In that event, only those items expressly objected to in such notice
shall be deemed to be disputed by Borrower. Lender's determination,
based upon the facts available, of any item objected to by Borrower in
such notice shall (absent manifest error) be final, binding and
conclusive on Borrower, unless Borrower shall commence a judicial
proceeding to resolve such objection within 45 days following Lender's
notifying Borrower of such determination.
2.9. Indemnity. Borrower shall indemnify and hold Lender
---------
and its officers, directors, employees, agents, Affiliates and
shareholders (collectively, the "Indemnified Persons") harmless from
and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including, without limitation,
reasonable attorneys' fees and disbursements, including those incurred
upon any appeal) which may be instituted or asserted against or
incurred by any Indemnified Person as the result of the execution of
the Loan Documents or extension of credit hereunder; provided,
--------
however, that Borrower shall not be liable for such indemnification to
-------
such Indemnified Person to the extent that any such suit, action,
proceeding, claim, damage, loss, liability or expense results from
such Indemnified Person's negligence or willful misconduct.
2.10. Access. Lender and any of its officers, employees
------
and/or agents shall have the right, exercisable as frequently as
Lender determines to be appropriate, during normal business hours (or
at such other times as may reasonably be requested by Lender), to
inspect the properties and facilities of Borrower and to inspect,
audit and make extracts from all of Borrower's records, files and
books of account. Borrower shall deliver any document or instrument
reasonably necessary for Lender, to obtain records from any service
bureau maintaining records for Borrower, and shall maintain duplicate
records or supporting documentation on media, including, without
limitation, computer tapes and discs owned by Borrower. Borrower
shall instruct its banking and other financial institutions to make
available to Lender such information and records as Lender may
reasonably request.
2.11. Taxes. (a) Any and all payments by Borrower
-----
hereunder or under the Note shall be made, in accordance with this
Section 2.11, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding
taxes imposed on or measured by the net income
of Lender by the jurisdiction under the laws of which Lender is
organized or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If Borrower
shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Note to Lender, (i) the sum payable
shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional
sums payable under this Section 2.11) Lender receives an amount equal
to the sum it would have received had no such deductions been made,
(ii) Borrower shall make such deductions, and (iii) Borrower shall pay
the full amount deducted to the relevant taxing or other authority in
accordance with applicable law.
(b) In addition, Borrower shall pay any present or future
stamp or documentary taxes or any other sales, transfer, excise,
mortgage recording or property taxes, charges or similar levies that
arise from any payment made hereunder or under the Note or from the
execution, sale, transfer, delivery or registration of, or otherwise
with respect to the Loan Documents and any other agreements and
instruments contemplated thereby (hereinafter referred to as "Other
Taxes").
(c) Borrower shall indemnify Lender for the full amount of
Taxes or Other Taxes (including without limitation, any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this
Section 2.11) paid by Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the
date such Lender makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at its address referred to in
Section 11.10, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations of
Borrower contained in this Section 2.11 shall survive both (i) the
payment in full of principal and interest hereunder and under the Note
and (ii) the termination of this Agreement.
3. CONDITIONS PRECEDENT
--------------------
3.1. Conditions to the Effectiveness. Notwithstanding any
-------------------------------
other provision of this Agreement and without affecting in any manner
the rights of Lender under the MUSA Loan Agreement, this Agreement
shall not be effective, and Borrower shall have no rights under this
Agreement, and Lender shall not be obligated to make available any
Advance or Letter of Credit hereunder, unless and until Borrower shall
have delivered to Lender, in form and substance satisfactory to Lender
and (unless otherwise indicated) each dated not later than the Closing
Date:
(a) The Note to the order of Lender duly executed by
Borrower.
(b) Resolutions of the board of directors of Borrower
certified by the Secretary or Assistant Secretary of Borrower, as of
the Closing Date, to be duly adopted and in full force and effect on
such date, authorizing (i) the consummation of each of the
transactions contemplated by the Loan Documents and (ii) specific
officers to execute and deliver this Agreement and the other Loan
Documents.
(c) A copy of the organizational charter and all amendments
thereto of Borrower and each of its Subsidiaries, certified as of a
recent date by the Secretary of State of the jurisdiction of its
organization, and copies of Borrower's by-laws, certified by the
Secretary or Assistant Secretary of Borrower as true and correct as of
the Closing Date.
(d) Governmental certificates, dated the most recent
practicable date prior to the Closing Date, with telegram updates
where available, showing that the Borrower and each of its
Subsidiaries is organized and in good standing in the jurisdiction of
its organization and is qualified as a foreign corporation and in good
standing in all other jurisdictions in which it is qualified to
transact business.
(e) (i) Copies of all closing documents and certificates
delivered in connection therewith; and
(ii) a certificate from the chief executive officer of
Borrower certifying that the transactions contemplated by
the Stock Agreement have been completed.
(f) A certificate of the chief executive officer of
Borrower stating that all of the representations and warranties of the
Borrower contained herein or in any of the Loan Documents are correct
on and as of the Closing Date as though made on and
as of such date, and no event has occurred and is continuing, or would
result from any Advance, if made on the Closing Date, which con-
stitutes or would constitute a Default or an Event of Default.
(g) Certificates of the Secretary or an Assistant Secretary
of Borrower, dated the Closing Date, as to the incumbency and
signatures of the officers of, respectively, Borrower executing any of
the Loan Documents and any other certificate or other document to be
delivered pursuant hereto or thereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
(h) Such additional information and materials as Lender may
reasonably request, including, without limitation, copies of any debt
agreements, security agreements and other material contracts.
3.2. Further Conditions to Each Advance and Letter of
------------------------------------------------
Credit. It shall be a further condition to the funding of each
------
subsequent Advance and incurrence of Letter of Credit Obligations that
the following statements shall be true on the date of each such
Advance or incurrence:
(a) All of the representations and warranties of Borrower
contained herein or in any of the Loan Documents shall be correct on
and as of the Closing Date and the date of each such Advance as though
made on and as of such date, except to the extent that any such
representation or warranty expressly relates to an earlier date and
for changes therein permitted or contemplated by this Agreement.
(b) No event shall have occurred and be continuing, or
would result from the funding of any Advance, which constitutes or
would constitute a Default or an Event of Default.
(c) The aggregate principal amount of the Advances made to
Borrower hereunder after giving effect to such Advance, plus the
aggregate amount of all outstanding Letter of Credit Obligations
(whether or not then due or payable), shall not exceed $15,000,000.
The acceptance by Borrower of the proceeds of any Advance or
the incurrence by Lender of Letter of Credit Obligations shall be
deemed to constitute, as of the date of such acceptance, a
representation and warranty by Borrower that the conditions in this
Section 3.2 have been satisfied.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
To induce Lender to make the Loan, as herein provided for,
Borrower makes the following representations and warranties to Lender,
each and all of which shall be true and correct as of the date of
execution and delivery of this Agreement:
4.1. Corporate Existence; Compliance with Law. Borrower
----------------------------------------
and each Subsidiary of Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation; (ii) except as indicated on Schedule 4.1(ii) hereto, is
duly qualified to do business and is in good standing under the laws
of each jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification (except for
jurisdictions in which such failure to so qualify or to be in good
standing would not have a Material Adverse Effect); (iii) has the
requisite corporate power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease, and to conduct its
business as now, heretofore and proposed to be conducted; (iv) except
as indicated on Schedule 4.1(iv) hereto, has all material licenses,
permits, consents or approvals from or by, and has made all material
filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (v) is in compliance with its
certificate of incorporation and by-laws; and (vi) is in compliance
with all applicable provisions of law where the failure to comply
would have a Material Adverse Effect.
4.2. Executive Offices. The location of Borrower's
-----------------
executive offices and principal place of business is set forth in
Schedule 4.2 hereto, and, after the Closing Date, as set forth in a
written amendment thereto delivered by Borrower to Lender.
4.3. Subsidiaries. There exist, and upon consummation of
------------
the Securicor Transaction there shall exist, no Subsidiaries of
Borrower other than (a) as set forth on Schedule 4.3 hereto, which
sets forth such Subsidiaries, together with their respective
jurisdictions of organization, and the authorized and outstanding
capital Stock of each such Subsidiary, by class and number and
percentage of each class legally owned by Borrower or a Subsidiary of
Borrower or any other Person, or to be owned by the Closing Date or
(b) after the Closing Date, as set forth in a written amendment to
Schedule 4.3 delivered by Borrower to Lender. There are no options,
warrants, rights to purchase or similar rights covering capital Stock
for any such Subsidiary.
4.4. Corporate Power; Authorization; Enforceable
-------------------------------------------
Obligations. The execution, delivery and performance by Borrower of
-----------
the Loan Documents, Ancillary Agreements and all instruments and
documents to be delivered by Borrower, to the extent it is a party
thereto, hereunder and thereunder: (i) are within Borrower's corporate
power; (ii) have been duly authorized by all necessary or proper
corporate action; (iii) are not in contravention of any provision of
Borrower's certificates or articles of incorporation or by-laws;
(iv) will not violate any law or regulation, or any order or decree of
any court or governmental instrumentality in any material respect;
(v) will not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required by,
any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Borrower or any of its Subsidiaries is a party or
by which Borrower or any of its Subsidiaries or any of their
respective properties is bound; (vi) will not result in the creation
or imposition of any Lien upon any of the property of Borrower or any
of its Subsidiaries; and (vii) do not require the consent or approval
of any Governmental Authority or any other Person. Each of the Loan
Documents has been duly executed and delivered for the benefit of or
on behalf of Borrower and each constitutes a legal, valid and binding
obligation of Borrower, to the extent it is a party thereto,
enforceable against it in accordance with its terms.
4.5. Solvency. After giving effect to the assumption by
--------
Borrower of MUSA's obligation under the MUSA Loan Agreement and the
initial Advance, if made on the Closing Date, and the payment of all
estimated legal, investment banking, accounting and other fees related
hereto or to the Stock Agreement, Borrower will be Solvent as of and
on the Closing Date (it being understood that in making such
representation Borrower has relied on the projections previously
provided to Lender, which are based on assumptions that Borrower
believes are reasonable).
4.6. Labor Matters. There are no strikes or other labor
-------------
disputes against Borrower pending or, to Borrower's knowledge,
threatened which would have a Material Adverse Effect.
4.7. Investment Company Act. Neither Borrower nor any of
----------------------
its Subsidiaries is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended. The making of the Advances by Lender, the
application of the proceeds and repayment thereof by Borrower and the
consummation of the transactions contemplated by this Agreement and
the other Loan Documents will not violate any
provision of such Act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.
4.8. Margin Regulations. Neither Borrower nor any of its
------------------
Subsidiaries owns any "margin security," as that term is defined in
Regulations G and U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), and the proceeds of the Advances
will be used only for the purposes contemplated hereunder. The
Advances will not be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which
might cause any of the loans under this Agreement to be considered a
"purpose credit" within the meaning of Regulations G, T, U or X of the
Federal Reserve Board. Borrower will not take or permit any
Subsidiary or agent acting on its behalf to take any action which
might cause this Agreement or any document or instrument delivered
pursuant hereto to violate any regulation of the Federal Reserve
Board.
4.9. No Litigation. No action, claim or proceeding is now
-------------
pending or, to the knowledge of Borrower, threatened against Borrower
or any of its Subsidiaries at law, in equity or otherwise, before any
court, board, commission, agency or instrumentality of any federal,
state, or local government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators, which, if determined
adversely, could have a Material Adverse Effect, nor to the knowledge
of Borrower does a state of facts exist which is reasonably likely to
give rise to such proceedings.
4.10. Stock Agreement. The closing of the Securicor
---------------
Transaction and the consummation of the transactions contemplated
thereby will occur immediately prior to the Closing Date.
4.11. Hitachi Supply Agreement. MUSA is a "Midland
------------------------
Affiliate" under the Hitachi Supply Agreement and entitled to make
purchases thereunder.
4.12. Patents, Trademarks, Copyrights and Licenses.
--------------------------------------------
Borrower and each of its Subsidiaries owns all material patents,
patent applications, copyrights, trademarks, trademark applications,
and know-how (collectively, "Intangible Property") necessary to
continue to conduct its business as heretofore conducted by it, now
conducted by it and proposed to be conducted by it, each of which is
listed, together with Patent and Trademark Office application or
registration numbers, where applicable, on Schedule 4.12(a) hereto.
Further, (i) Borrower
and each of its Subsidiaries has good and lawful title to the
Intangible Property owned by it (subject to the licenses set forth on
Schedule 4.12(d) hereto); (ii) to Borrower's knowledge, the Intangible
Property is valid and subsisting and is enforceable; (iii) to
Borrower's knowledge, there are no actual or threatened claims by
third parties regarding the Intangible Property; (iv) to Borrower's
knowledge, the Intangible Property does not infringe or otherwise
violate any rights of any third party, except where any violation or
infringement would not have a Material Adverse Effect.
4.13. No Material Adverse Effect. No event has occurred
--------------------------
and is continuing which has had or could have a Material Adverse
Effect.
5. FINANCIAL STATEMENTS AND INFORMATION
------------------------------------
5.1. Reports and Notices. Borrower covenants and agrees
-------------------
that from and after the Closing Date and until the Commitment
Termination Date, it shall deliver to Lender:
(a) Within 45 days after the end of each fiscal quarter,
(i) a copy of the unaudited consolidated balance sheets of Borrower as
of the end of such month and the related statements of income and cash
flows for that portion of the Fiscal Year ending as of the end of such
month, and (ii) a copy of the unaudited consolidated statements of
income of Borrower for such month, all prepared in accordance with
GAAP (subject to normal year-end adjustments), accompanied by the
certification of the chief executive officer or chief financial
officer of Borrower that all such financial statements are complete
and correct and present fairly in accordance with GAAP (subject to
normal year-end adjustments), the financial position, the results of
operations and the statements of cash flows of Borrower as at the end
of such month and for the period then ended, and that there was no
Default or Event of Default in existence as of such time.
(b) As soon as practicable, but in any event within two (2)
Business Days after Borrower becomes aware of the existence of any
Default or Event of Default, or any development or other information
which would have a Material Adverse Effect, telephonic or telegraphic
notice specifying the nature of such Default or Event of Default or
development or information, including the anticipated effect thereof,
which notice shall be promptly confirmed in writing within five (5)
days.
(c) If requested by Lender, copies of all federal, state,
local and foreign tax returns and reports in respect of income,
franchise or other taxes on or measured by income (excluding sales,
use or like taxes) filed by Borrower or any of its Subsidiaries.
(d) Such other information respecting Borrower's or its
Subsidiaries' business (including with respect to orders received and
inventory purchased), financial condition or prospects as Lender may,
from time to time, reasonably request.
5.2. Communication with Accountants. Borrower authorizes
------------------------------
Lender to communicate directly with its (or any of its Subsidiaries')
independent certified public accountants and tax advisors and author-
izes those accountants to disclose to Lender any and all financial
statements and other supporting financial documents and schedules
including copies of any management letter with respect to the
business, financial condition and other affairs of Borrower or any of
its Subsidiaries. At Lender's request, Borrower shall deliver a
letter addressed to such accountants and tax advisors instructing them
to comply with the provisions of this Section 5.2.
6. AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that, unless Lender shall
otherwise consent in writing, from and after the date hereof and until
the Repayment Date:
6.1. Maintenance of Existence and Conduct of Business.
------------------------------------------------
Borrower shall: (a) do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence,
and the rights and franchises of Borrower and each of its
Subsidiaries; (b) transact business on behalf of itself or any
Subsidiary only in such names as Borrower shall specify to Lender in
writing not less than thirty days prior to the first date such name is
used by Borrower and (c) at all times maintain, preserve and protect
all of its Trademarks and any tradenames.
6.2. Payment of Obligations. (a) Borrower shall: (i) pay
----------------------
and discharge or cause to be paid and discharged all its and its
Subsidiaries' Indebtedness, including, without limitation, all the
Obligations as and when due and payable, and (ii) pay and discharge or
cause to be paid and discharged promptly all (A) Charges imposed upon
it, its income and profits, or any of its property (real, personal or
mixed), and (B) lawful claims for labor, materials, supplies and
services or otherwise before any thereof shall become in default.
(b) Borrower, on behalf of itself or any Subsidiary, may in
good faith contest, by proper legal actions or proceedings diligently
pursued, the validity or amount of any Charges or claims arising under
Section 6.2(a)(ii), provided that at the time of commencement of any
such action or proceeding, and during the pendency thereof
(i) adequate reserves with respect thereto are maintained on the books
of Borrower, in accordance with GAAP; (ii) such contest operates to
suspend collection of the contested Charges or claims and is
maintained and prosecuted continuously with diligence; (iii) no Lien
shall exist for such Charges or claims during such action or
proceeding; (iv) Borrower shall promptly pay or discharge such
contested Charges and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Lender evidence acceptable to
Lender of such compliance, payment or discharge, if such contest is
terminated or discontinued adversely to Borrower; and (v) Lender has
not advised Borrower in writing that Lender reasonably believes that
nonpayment or nondischarge thereof would have a Material Adverse
Effect.
(c) Notwithstanding anything to the contrary contained in
Section 6.2(b) above, Borrower shall have the right to pay the charges
or claims arising under Section 6.2(a)(ii) and in good faith contest,
by proper legal actions or proceedings, the validity or amount of such
Charges or claims.
6.3. Books and Records. Borrower shall keep, and shall
-----------------
cause its Subsidiaries to keep, all books, accounts and records in the
ordinary course of business.
6.4. Litigation. Borrower shall notify Lender in writing,
----------
promptly upon learning thereof, of any litigation commenced against
Borrower or any of its Subsidiaries, and of the institution against
any of them of any suit or administrative proceeding that may have a
Material Adverse Effect.
6.5. Insurance. Borrower shall maintain insurance
---------
covering, without limitation, fire, theft, burglary, public liability,
property damage, product liability and insurance on all property and
assets of Borrower and its Subsidiaries, all in amounts customary for
its business and in any event with a lender's loss payable clause for
the benefit of Lender.
6.6. Compliance with Law. Borrower shall, and shall cause
-------------------
its Subsidiaries to, comply in all material respects with all federal,
state and local laws and regulations applicable to it.
6.7. Supplemental Disclosure. From time to time as may be
-----------------------
necessary (in the event that such information is not otherwise
delivered by Borrower to Lender pursuant to this Agreement), so long
as there are Obligations outstanding hereunder, Borrower will
supplement each Schedule (if any) or representation herein with
respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to
be set forth or described in such Schedule or as an exception to such
representation or which is necessary to correct any information in
such Schedule or representation which has been rendered inaccurate
thereby; provided, however, that such supplement to such Schedule or
-------- -------
representation shall not be deemed an amendment thereof unless
otherwise consented to by the Lender.
6.8. Net Worth. Borrower shall maintain at all times, on a
---------
consolidated basis with its Subsidiaries, a Net Worth of not less than
$20 million.
7. NEGATIVE COVENANTS
------------------
Borrower covenants and agrees that, without Lender's prior
written consent, from and after the date hereof and until the
Repayment Date:
7.1. Maintenance of Business. Borrower shall not and shall
-----------------------
not permit any of its subsidiaries to engage in any business other
than the business currently engaged in by Borrower or such Subsidiary.
7.2. Transactions with Affiliates. (a) Except as set
-----------------------------
forth on Schedule 7.2(b), Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into or be a party to any transaction
with any Affiliate of Borrower, other than with Securicor, and then
only in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair
and reasonable terms that are fully disclosed to Lender and are no
less favorable to Borrower or such Subsidiary than would be obtained
in a comparable arm's-length transaction with a Person not an
Affiliate of Borrower.
(b) Except as set forth on Schedule 7.2(b) hereto, Borrower
shall not enter into any agreement or transaction to pay to any Person
any management or similar fee based on or related to Borrower's
operating performance or income or any percentage thereof, nor pay any
management or similar fee to an Affiliate.
7.3. Events of Default. Borrower shall not, and shall not
-----------------
permit any of its Subsidiaries to, take or omit to take any action,
which act or omission would constitute (i) a default or an event of
default pursuant to, or noncompliance with any of, the terms of any of
the Loan Documents or (ii) a material default or an event of default
pursuant to, or noncompliance with any other contract, lease,
mortgage, deed of trust or instrument to which it is a party or by
which it or any of its property is bound, or any document creating a
Lien, unless such default, event of default or non-compliance would
not have a Material Adverse Effect.
8. TERM
----
8.1. Termination. Subject to the provisions of Section 2
-----------
hereof, the financing arrangement contemplated hereby in respect of
the Loan shall be in effect until the Commitment Termination Date.
8.2. Survival of Obligations Upon Termination of Financing
-----------------------------------------------------
Arrangement. Except as otherwise expressly provided for in the Loan
-----------
Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in
any way affect or impair the powers, obligations, duties, rights and
liabilities of Borrower or the rights of Lender relating to any
transaction or event occurring prior to such termination. Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations
contained in the Loan Documents shall survive such termination or
cancellation and shall continue in full force and effect until such
time as all of the Obligations have been paid in full in accordance
with the terms of the agreements creating such Obligations, at which
time the same shall terminate.
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
--------------------------------------
9.1. Events of Default. The occurrence of any one or more
-----------------
of the following events (regardless of the reason therefor) shall
constitute an "Event of Default" hereunder:
(a) Borrower shall fail to make any payment of principal
of, or interest on or any other amount owing in respect of, the Loan
or any of the other Obligations when due and such failure continues
for a period of five (5) days.
(b) Borrower shall fail or neglect to perform, keep or
observe any of the provisions of Section 6.8 or Section 7 hereof.
(c) Borrower shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other
Loan Documents and the same shall remain unremedied for a period
ending on the first to occur of twenty (20) days after Borrower shall
receive written notice of any such failure from any Lender or forty
five (45) days after Borrower shall become aware thereof.
(d) A default shall occur under any other agreement,
document or instrument to which Borrower or any of its Subsidiaries is
a party or by which Borrower's or any of its Subsidiaries' property is
bound, and such default causes (or permits any holder of such
Indebtedness or a trustee to cause) such Indebtedness or a portion
thereof in an aggregate amount exceeding $50,000, to become due prior
to its stated maturity or prior to its regularly scheduled dates of
payment.
(e) Any representation or warranty herein or in any Loan
Document or in any written statement pursuant thereto or hereto,
report, financial statement or certificate made or delivered to Lender
by Borrower shall be untrue or incorrect in any material respect, as
of the date when made or deemed made (including those made or deemed
made pursuant to Section 3.2).
(f) Any of the assets of Borrower or any of its
Subsidiaries shall be attached, seized, levied upon or subjected to a
writ or distress warrant, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors
of Borrower or any Subsidiary of Borrower and shall remain unstayed or
undismissed for thirty (30) consecutive days; or any Person other than
Borrower shall apply for the appointment of a receiver, trustee or
custodian for any of the assets of Borrower or any Subsidiary of
Borrower and shall remain unstayed or undismissed for thirty (30)
consecutive days; or Borrower or any Subsidiary of Borrower shall have
concealed, removed or permitted to be concealed or removed, any part
of its property, with intent to hinder, delay or defraud its creditors
or any of them or made or suffered a transfer of any of its property
or the incurring of an obligation which may be fraudulent under any
bankruptcy, fraudulent conveyance or other similar law.
(g) A case or proceeding shall have been commenced against
Borrower or any Subsidiary of Borrower in a court having competent
jurisdiction seeking a decree or order in respect of Borrower or any
Subsidiary of Borrower (i) under title 11 of the
United States Code, as now constituted or hereafter amended, or any
other applicable federal, state or foreign bankruptcy or other similar
law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) of Borrower or any
Subsidiary of Borrower or of any substantial part of its or their
properties, or (iii) ordering the winding-up or liquidation of the
affairs of Borrower or any Subsidiary of Borrower and such case or
proceeding shall remain undismissed or unstayed for thirty (30)
consecutive days or such court shall enter a decree or order granting
the relief sought in such case or proceeding.
(h) Borrower or any Subsidiary of Borrower shall (i) file a
petition seeking relief under title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy or other similar law, (ii) consent to the
institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of Borrower or any Subsidiary of Borrower or of any
substantial part of its or their properties, (iii) fail generally to
pay its debts as such debts become due, or (iv) take any corporate
action in furtherance of any such action.
9.2. Remedies. If any Event of Default specified in
--------
Section 9.1 shall have occurred and be continuing, Lender may, by
written notice to Borrower and the lender with respect to any Senior
Debt (the "Senior Lender") declare all Obligations to be forthwith due
and payable, whereupon all such Obligations, without presentment,
demand, protest or further notice of any kind, all of which are
expressly waived by Borrower, shall become due and payable (x) if none
of the Senior Debt is outstanding, immediately and (y) if any Senior
Debt is outstanding, upon the first to occur of (1) acceleration of
any Senior Debt or (2) the fifth Business Day after receipt by
Borrower and the Senior Lender of such written notice given hereunder,
unless on or prior to the date such amounts become due and payable
Borrower shall have cured the default, event or condition resulting in
such Event of Default and no other Event of Default is then continuing
and Borrower shall have given notice of such cure to Agent and
Lenders; provided, however, that upon the occurrence of an Event of
-------- -------
Default specified in Section 9.1(f), (g) or (h) hereof, such
Obligations shall become due and payable without declaration, notice
or demand by Lender. Notwithstanding the above, at any time after
such declaration of acceleration has been made and before payment in
full of the Obligations, Lender, by written notice to Borrower, may
rescind and annul such declaration and
its consequences if all Events of Default, other than the non-payment
of principal of the Loan which has become due solely by such
declaration of acceleration, have been cured or waived.
9.3. Waivers by Borrower. Except as otherwise provided for
-------------------
in this Agreement and applicable law, Borrower waives (i) presentment,
demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held
by Lender on which Borrower may in any way be liable and hereby
ratifies and confirms whatever Lender may do in this regard, (ii) all
rights to notice and a hearing prior to Lender's taking possession or
control of, or to Lender's replevy, attachment or levy upon, any bond
or security which might be required by any court prior to allowing
Lender to exercise any of its remedies, and (iii) the benefit of all
valuation, appraisal and exemption laws. Borrower acknowledges that
it has been advised by counsel of its choice with respect to this
Agreement, the other Loan Documents and the transactions evidenced by
this Agreement and the other Loan Documents.
9.4. Right of Set-Off. Upon the occurrence and during the
----------------
continuance of any Event of Default, Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Lender to or for the credit or the
account of Borrower against any and all of the obligations of Borrower
now or hereafter existing under this Agreement, and the Note held by
Lender irrespective of whether or not Lender shall have made any
demand under this Agreement or such Note and although such obligations
may be unmatured. Lender agrees promptly to notify Borrower after any
such set-off and application made by Lender; provided, however, that
-------- -------
the failure to give such notice shall not affect the validity of such
set-off and application. The rights of Lender under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which Lender may have.
10. SUBORDINATION
-------------
10.1. Loan Subordinated to Senior Indebtedness. Borrower
----------------------------------------
covenants and agrees, and Lender likewise covenants and agrees, that
all payments of the principal of (and premium, if
any), and interest on, the Loan and all other Obligations by Borrower
pursuant to this Agreement (collectively the "Subordinated
Indebtedness") shall be subordinated in accordance with the provisions
of this Section 10 to the prior payment in full of all Senior
Indebtedness of Borrower. For purposes of this Section 10, the term
"Senior Indebtedness" shall mean the Senior Debt of Borrower and shall
include principal of and premium, if any, and interest (including
interest accruing at the rate provided for in the documents evidencing
such Senior Indebtedness after the commencement of any proceeding of
the type referred to in Section 10.2(a) hereof, whether or not an
allowed claim in such proceeding) on all loans and other extensions of
credit under, and all expenses, fees, reimbursements, indemnities and
other amounts owing pursuant to, all such Senior Debt of the Borrower.
10.2. Priority and Payment Over of Proceeds in Certain
------------------------------------------------
Events.
------
(a) Upon payment or distribution of assets or securities of
Borrower of any kind or character, whether in cash, property or
securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of Borrower, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other
proceedings or upon an assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of Borrower, all
Senior Indebtedness shall first be paid in full in cash, or payment
provided for in cash or cash equivalents in a manner satisfactory to
the holders of Senior Indebtedness, before any direct or indirect
payments or distributions, including, without limitation, by exercise
of set-off, of any cash, property or securities on account of
principal of (or premium, if any) or interest on the Subordinated
Notes and to that end the holders of Senior Indebtedness shall be
entitled to receive (pro rata on the basis of the respective amounts
of Senior Indebtedness held by them) directly, for application to the
payment thereof (to the extent necessary to pay all Senior
Indebtedness in full after giving effect to any substantially
concurrent payment or distribution to or provision for payment to the
holders of such Senior Indebtedness), any payment or distribution of
any kind or character, whether in cash, property or securities, in
respect of the Subordinated Indebtedness. The holders of Senior
Indebtedness are hereby authorized to file an appropriate claim for
and on behalf of Lender if they or any of them do not file, and there
is not otherwise filed on behalf of the Holders, a proper claim or
proof of claim in the form required in any such proceeding prior to 30
days before the expiration of the time to file such claim or claims.
(b) No direct or indirect payment by or on behalf of
Borrower of principal of (premium, if any), or interest on, the Loan,
whether pursuant to the terms of this Agreement, upon acceleration or
otherwise, shall be made if at the time of such payment there exists
(i) a default in the payment of all or any portion of principal of
(premium, if any), interest on, fees or other amounts owing in
connection with any Senior Indebtedness, or (ii) any other default or
event of default under any document or instrument evidencing the
Senior Indebtedness as the same may be amended, modified or otherwise
refinanced (and Lender has received notice thereof from the agent for
or representative of the holders of a majority of the outstanding
principal amount of the Senior Indebtedness (the "Representative") as
provided below), and in either case such default or event of default
shall not have been cured or waived in writing; provided, however,
-------- -------
that if within the period specified in the next sentence with respect
to a default or event of default referred to in clause (ii) above, the
holders of Senior Indebtedness have not declared the Senior
Indebtedness to be immediately due and payable (or have declared such
Senior Indebtedness to be immediately due and payable and within such
period have rescinded such acceleration), then and in that event,
payment of principal of, and interest on, the Loan shall be resumed.
With respect to any default or event of default under clause (ii)
above the period referred to in the preceding sentence shall commence
upon receipt by Lender of a written notice or notices (which shall
specify all defaults and events of default existing under such
documents or instruments on the date of such notice and of which the
Representative, whichever is giving such notice, had actual knowledge
at such time) of the commencement of such period from the
Representative, and shall end at the completion of the 180th day after
the beginning of such period. Only one such 180 day period may
commence within any 360 consecutive days. Upon termination of any
such period, Borrower shall resume payments on account of the
principal of (premium, if any), and interest on, the Loan, and on
account of all other Subordinated Indebtedness, subject to the
provisions of Sections 10.1 and 10.2 hereof.
(c) (i) In the event that, notwithstanding the foregoing
provision prohibiting such payment or distribution, Lenders
shall have received any payment on account of the
Subordinated Indebtedness at a time when such payment is
prohibited by such provision before the Senior Indebtedness
is paid in full, then and in such event, such payment or
distribution shall be received and held in trust by Lender
apart from its other assets and paid over or delivered to
the holders of the Senior Indebtedness remaining unpaid to
the
extent necessary to pay in full in cash the principal of
(premium, if any), and interest on, such Senior Indebtedness
in accordance with its terms and after giving effect to any
concurrent payment or distribution to the holders of such
Senior Indebtedness.
(ii) Nothing contained in this Section 10 will limit
the right of the Lender to take any action to accelerate the
maturity of the Subordinated Indebtedness pursuant to
Section 9.2 hereof.
(iii) Upon any payment or distribution of assets or
securities referred to in this Section 10, Lender shall be
entitled to rely upon any order or decree of a court of
competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending,
and upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person
making any such payment or distribution, delivered to Lender
for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of Borrower, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or
to this Section 10.
10.3. Rights of Holders of Senior Indebtedness Not To Be
--------------------------------------------------
Impaired. No right of any present or future holder of any Senior
--------
Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act
by any such holder, or by any noncompliance by Borrower with the terms
and provisions and covenants herein regardless of any knowledge
thereof such holder may have or otherwise be charged with.
The provisions of this Section 10 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of the
Senior Indebtedness. Borrower and Lender acknowledges that the
holders of the Senior Indebtedness are or will be relying upon the
provisions of this Section 10 in extending such Senior Indebtedness.
10.4. Subrogation. Upon the payment in full of all Senior
-----------
Indebtedness, Lender shall be subrogated to the extent of the payments
or distributions made to the holders of, or otherwise applied to
payment of, the Senior Indebtedness pursuant to the provisions of this
Section 10 and to the rights of the
holders of Senior Indebtedness to receive payments or distributions of
assets of Borrower made on the Senior Indebtedness until Loan shall be
paid in full; and for the purposes of such subrogation, no payments or
distributions to holders of Senior Indebtedness of any cash, property
or securities to which Lender would be entitled except for the
provisions of this Section 10, and no payment over pursuant to the
provisions of this Section 10 to holders of Senior Indebtedness by
Lender, shall, as between Borrower, their creditors other than holders
of Senior Indebtedness and Lender, be deemed to be payment by Borrower
to or on account of Senior Indebtedness, it being understood that the
provisions of this Section 10 are solely for the purpose of defining
the relative rights of the holders of Senior Indebtedness, on the one
hand, and Lender, on the other hand.
If any payment or distribution to which Lender would
otherwise have been entitled but for the provisions of this Section 10
shall have been applied, pursuant to the provisions of this Section
10, to the payment of Senior Indebtedness, then and in such case,
Lender shall be entitled to receive from the holders of Senior
Indebtedness at the time outstanding any payments or distributions
received by such holders of Senior Indebtedness in excess of the
amount sufficient to pay all Senior Indebtedness in full.
10.5. Obligations of Borrower Unconditional. Nothing
-------------------------------------
contained in this Section 10 or elsewhere in this Agreement or in the
Note is intended to or shall impair, as between Borrower and Lender,
the obligations of Borrower, which are absolute and unconditional, to
pay to Lender the principal of (premium, if any), and interest on, the
Loan as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative
rights of Lender and creditors of Borrower other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent
any Holder from exercising all remedies otherwise permitted by
applicable law upon the occurrence of a default or event of default
under this Agreement, subject to the rights, if any, under this
Section 10 of the holders of Senior Indebtedness in respect of cash,
property or securities of Borrower received upon the exercise of any
such remedy.
The failure to make a payment on account of principal of, or
interest on, the Loan by reason of any provision of this Section 10
shall not be construed as preventing the occurrence of a Default or an
Event of Default hereunder.
10.6. Notice to Lender. Borrower shall give prompt written
----------------
notice to Lender of any fact known to Borrower which would prohibit
the making of any payment on or in respect of the Loan, but failure to
give such notice shall not affect the subordination of the
Subordinated Indebtedness to the Senior Indebtedness provided in this
Section 10. Notwithstanding the provisions of this Section 10 or any
other provision of this Agreement or the Loan, Lender shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or in respect of the Loan,
unless and until Lender shall have received written notice thereof
from Borrower, the Representative or other holder of Senior
Indebtedness, and, prior to the receipt of any such written notice,
subject to the provisions of this Section 10, Lender shall be entitled
in all respects to assume no such facts exist. Nothing contained in
this Section 10.6 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by Sections 10.1 and
10.2.
10.7. Right of Lender as Holder of Senior Indebtedness.
------------------------------------------------
Lender in its individual capacity shall be entitled to all the rights
set forth in this Section 10 with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Agreement shall
deprive Lender of any of its rights as such holder.
10.8. Reinstatement. The provisions of this Section 10
-------------
shall continue to be effective or be reinstated, and the Senior
Indebtedness shall not be deemed to be paid in full, as the case may
be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by the holder thereof upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made.
11. MISCELLANEOUS
-------------
11.1. Complete Agreement; Modification of Agreement; Sale
---------------------------------------------------
of Interest. (a) The Loan Documents constitute the complete
-----------
agreement between the parties with respect to the subject matter
hereof and may not be modified, altered or amended except by an
agreement in writing signed by Borrower and Lender. Borrower may not
sell, assign or transfer any of the Loan Documents or any portion
thereof including, without limitation, Borrower's rights, title,
interests, remedies, powers and duties hereunder or thereunder.
Borrower hereby consents to Lender's sale of participations,
assignment, transfer or other
disposition, at any time or times, of any of the Loan Documents or of
any portion thereof or interest therein, including, without limita-
tion, Lender's rights, title, interests, remedies, powers or duties
thereunder, whether evidenced by a writing or not. Borrower agrees
that it will use its best efforts to assist and cooperate with Lender
in any manner reasonably requested by Lender to effect the sale of
participations in or assignments of any of the Loan Documents or of
any portion thereof or interest therein.
(b) In the event Lender assigns or otherwise transfers all
or any part of the Note Borrower shall, upon the request of Lender,
issue a new Note to effectuate such assignment or transfer.
11.2. Fees and Expenses. If, at any time or times,
-----------------
regardless of the existence of an Event of Default, Lender shall
employ counsel or other advisors for advice or other representation or
shall incur reasonable legal or other costs and expenses in connection
with any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender, Borrower or any other Person) in any
way relating to any of the Loan Documents or any other agreements to
be executed or delivered in connection herewith, then, and in any such
event, the attorneys' and other parties' fees reasonably arising from
such services, including those of any appellate proceedings, and all
expenses, costs, charges and other fees reasonably incurred by such
counsel and others in any way or respect arising in connection with or
relating to any of the events or actions described in this Section
shall be payable, on demand, by Borrower to Lender and shall be
additional Obligations secured under this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: paralegal fees, costs
and expenses; accountants' and investment bankers' fees, costs and
expenses; court costs and expenses; photocopying and duplicating
expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram charges; secretarial
overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal services.
11.3. No Waiver by Lender. Lender's failure, at any time
-------------------
or times, to require strict performance by Borrower of any provision
of this Agreement any of the other Loan Documents shall not waive,
affect or diminish any right of Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by
Lender of an Event of Default by Borrower
under the Loan Documents shall not suspend, waive or affect any other
Event of Default by Borrower under this Agreement and any of the other
Loan Documents whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Borrower
contained in this Agreement or any of the other Loan Documents and no
Event of Default by Borrower under this Agreement and no defaults by
Borrower under any of the other Loan Documents shall be deemed to have
been suspended or waived by Lender, unless such suspension or waiver
is by an instrument in writing signed by an officer of Lender and
directed to Borrower specifying such suspension or waiver.
11.4. Remedies. Lender's rights and remedies under this
--------
Agreement shall be cumulative and nonexclusive of any other rights and
remedies which Lender may have under any other agreement, including
without limitation, the Loan Documents, by operation of law or
otherwise.
11.5. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL
--------------------
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THE LOAN DOCUMENTS.
11.6. Severability. Wherever possible, each provision of
------------
this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
11.7. Parties. This Agreement and the other Loan Documents
-------
shall be binding upon, and inure to the benefit of, the successors of
Borrower and Lender and the assigns, transferees and endorsees of
Lender.
11.8. Conflict of Terms. Except as otherwise provided in
-----------------
this Agreement or any of the other Loan Documents by specific
reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY
-------------
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. LENDER AND
BORROWER AGREE TO SUBMIT TO PERSONAL JURISDICTION AND TO WAIVE ANY
OBJECTION AS TO VENUE IN THE COUNTY OF NEW YORK, STATE OF NEW YORK.
SERVICE OF PROCESS ON BORROWER OR LENDER IN ANY ACTION ARISING OUT OF
OR RELATING TO ANY OF THE LOAN DOCUMENTS SHALL BE EFFECTIVE IF MAILED
TO SUCH PARTY AT THE ADDRESS LISTED IN SECTION 11.10 HEREOF. NOTHING
HEREIN SHALL PRECLUDE LENDER OR BORROWER FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.
11.10. Notices. Except as otherwise provided herein,
-------
whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any
of the parties desires to give or serve upon another any communication
with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in
writing and either shall be delivered in person with receipt
acknowledged or by registered or certified mail, return receipt
requested, postage prepaid, or telecopied and confirmed by telecopy
answerback addressed as follows:
(a) If to Lender at:
00 Xxxxxxxxxx Xxxx
Xxxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Attention: Xxxxxx Xxxxx
Telecopy No. (0000) 000 0000
With copies to:
Weil, Gotshal & Xxxxxx LLP
00 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Attention: Xxxxx Xxxxxxxxx, Esq.
Telecopy No. 0171 426 0990
(b) If to Borrower, at:
Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx
Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy No. 310 366 7712
With copies to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx
Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy No. 000 000 0000
or at such other address as may be substituted by notice given as
herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every
notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or
served on the date on which personally delivered, with receipt acknow-
ledged, telecopied and confirmed by telecopy answerback or seven (7)
Business Days after the same shall have been deposited (i) in the
United States mail (in the case of notice being given by Borrower or
any other Person in the United States) or (ii) in the United Kingdom
mail (in the case of notice being given by Lender or any other Person
located in the United Kingdom). Failure or delay in delivering copies
of any notice, demand, request, consent, approval, declaration or
other communication to the persons designated above to receive copies
shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other
communication.
11.11. Survival. The representations and warranties of
--------
Borrower in this Agreement shall survive the execution, delivery and
acceptance hereof by the parties hereto and the closing of the
transactions described herein or related hereto.
11.12. Section Titles. The Section titles and Table of
--------------
Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.
11.13. Counterparts. This Agreement may be executed in any
------------
number of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
INTEK DIVERSIFIED CORPORATION
By:_______________________________
Name:
Title:
SECURICOR COMMUNICATIONS LIMITED
By:_______________________________
Name:
Title:
The undersigned hereby guarantees to Borrower the performance by
Lender of all of its obligations under this Agreement.
SECURITY SERVICES PLC
By:_______________________________
Name:
Title:
Date: December 3, 1996
EXHIBIT A
---------
NOTICE OF ADVANCE
------------------
_____________, 199_
Securicor Communications Limited
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx
XX0 4LDAttention:Xxxxxxx Xxxxxxxxx
Gentlemen:
The undersigned, INTEK DIVERSIFIED CORPORATION, refers to
the Amended and Restated Loan Agreement, dated as of December 3, 1996
(the "Loan Agreement", the terms defined therein being used herein as
therein defined), between the undersigned and SECURICOR COMMUNICATIONS
LIMITED, and hereby gives you notice, irrevocably, pursuant to Section
2.1 of the Loan Agreement, that the undersigned hereby requests an
Advance under the Loan Agreement, and in that connection sets forth
below the information relating to such Advance as required by Section
2.1(a) of the Loan Agreement:
(i) The date of the requested Advance shall be
_______________, 199_.
(ii) The aggregate amount of the requested Advance is
$___________ (minimum: $500,000).
(iii) The Advance shall be used solely as permitted by
Section 2.3 of the Loan Agreement.
The undersigned hereby certifies that the statements
contained in Section 3.2 of the Loan Agreement are true on the date
hereof, and will be true on the date of the requested Advance, before
and after giving effect thereto and to the application of the proceeds
therefrom.
Very truly yours,
INTEK DIVERSIFIED CORPORATION
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
NYFS09...:\73\73273\0003\1224\AGRN216U.07D
