EIGHTH AMENDMENT AND WAIVER
ULTRAK OPERATING, L.P.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT (this "Amendment") is executed on and effective
as of February 6, 2002 ("Execution Date of Eighth Amendment"), among ULTRAK
OPERATING, L.P., a Texas limited partnership ("Borrower"), Ultrak, Inc., a
Delaware corporation ("Parent"), AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO (as a "Lender"), XXXXXX TRUST AND SAVINGS BANK (as a "Lender"), and
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO (as "Administrative Agent"
for present and future Lenders).
RECITALS
Borrower, Parent, Administrative Agent and Lenders are parties to
that certain First Amended and Restated Credit Agreement dated as of May 17,
2000 (as previously, hereby or hereafter renewed, extended, modified,
supplemented, amended and/or restated, the "Credit Agreement"), providing for,
among other things, a secured revolving credit facility. The parties to this
Amendment have agreed to amend the Credit Agreement as set forth herein.
AGREEMENTS
NOW THEREFORE, in consideration of the premises, and for other good,
fair and valuable consideration, the receipt, adequacy and reasonable
equivalency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms; References. Unless otherwise stated in this Amendment, terms
defined in the Credit Agreement have the same meanings when used in this
Amendment. All references in the Credit Documents to the "Credit Agreement"
refer to the Credit Agreement as heretofore amended and as amended by this
Amendment. This Amendment is a "Credit Document" referred to in the Credit
Agreement, and the provisions relating to Credit Documents in the Credit
Agreement are incorporated by reference, the same as if set forth verbatim in
this Amendment.
2. Amendments. The Credit Agreement is hereby amended as follows:
(a) The phrases "the Eurocurrency Lending Installation", "or by the
Eurocurrency Lending Installation", "and LIBOR Rate Borrowings", "or to
the Eurocurrency Lending Installation and to Administrative Agent in the
case of Eurocurrency Borrowings", "or the Eurocurrency Lending
Installation and Administrative Agent in the case of Eurocurrency
Borrowings", "or, alternatively, at the Eurocurrency Lending Installation
in the case of Eurocurrency Borrowings", "or by the Eurocurrency Lending
Installation, as the case may be, by 2:00 p.m. London time", "or the
Eurocurrency Lending Installation, as the case may be", "or, in the case
of Eurocurrency Borrowings, the Eurocurrency Lending Installation",
Page 1 of 23
"or, alternatively, in the case of Eurocurrency Borrowings, the
Eurocurrency Lending Installation's cost of funds for that amount and for
the period stated above", "including the Dollar Equivalent of any
Eurocurrency Borrowings" and any substantially similar phrases are hereby
deleted wherever such phrases appear in the Credit Agreement.
(b) The definition of "ACH Obligations" is deleted from the Credit
Agreement and the following definitions are substituted instead:
"Deposit Account" means any deposit account (as defined in
Article 9 of the UCC) maintained by any Company with any
Lender or any Affiliates of any Lender, including any demand
deposit account, controlled disbursement account, lock box
account or other deposit account of any nature.
"Deposit Account Obligations" means any and all obligations of
any Company owing to any Lender or any Affiliates of any
Lender under any treasury management or commercial account
services agreement, any service terms or other service
agreements, including without limitation wire, electronic
payments, automated clearing house, controlled disbursement,
and/or zero balance service terms, and all overdrafts on any
Deposit Account.
(c) Wherever in the Credit Agreement the term "ACH Obligations" is used,
such term is changed to read "Deposit Account Obligations".
(d) The proviso in clause (b) of the definition of "Acquisition" (which
reads "(provided that, formation or organization of any entity shall not
constitute an "Acquisition" to the extent that the amount of the loan,
advance, investment or capital contribution in such entity constitutes a
permitted investment under Section 9.7))" is deleted.
(e) The definition of "Applicable Margin" (including subparagraphs
(a)-(e), inclusive, thereof) is amended and restated in its entirety to
read as follows:
"Applicable Margin" means three and one-fourth percent (3.25%).
(f) The definitions of "Bank One London", "Base Eurocurrency Rate",
"Conversion Notice", "Current Equipment Appraisal", "Current Real
Property Appraisal", "Dollar Equivalent", "Domestic Borrowing", "EBITDA
Rate Adjustment Effective Date", "EBITDA Rate Determination Date",
"Equipment Sublimit", "Eurocurrency", "Eurocurrency Borrowing",
"Eurocurrency Lending Installation", "Eurocurrency Rate", "Eurocurrency
Sublimit", "Forced Liquidation Value", "LC Subfacility", "LIBOR Rate",
"LIBOR Rate Borrowing", "Permitted Intercompany Guaranty", "Real Property
Sublimit", "Reserve Requirement", "TARGET Settlement Date", "Type" are
deleted.
Page 2 of 23
(g) A new definition is added to the Credit Agreement:
"Bank Deed of Trust" means that certain Leasehold Deed Of
Trust, Security Agreement and Assignment of Rents and Leases
and Fixture Filing dated February 6, 2002, from Borrower to
Xxxxxxx X. Xxxxxxxxx, as Trustee, for the benefit of
Administrative Agent, acting on behalf of Lenders, securing
payment of the Obligation, covering all of Grantor's rights,
titles, interests, estates and options in and to real estate
situated Xxxxxx County, Texas, including all rights, titles,
interests, estates and options in and under the Briarwood
Lease.
(h) The definition of "Base Rate Borrowing" is amended to change
"Domestic Borrowing" to "Borrowing".
(i) The definition of "Borrowing Base" is amended by adding the following
at the end thereof::
"Borrowing Base" means, at any time after December 31, 2001,
the sum, without duplication, of (a) up to eighty five percent
(85%) of the face amount (less maximum discounts, credits and
allowances which may be taken by or granted to Account Debtors
in connection therewith) then outstanding under existing
Eligible Accounts, less such reserves as Administrative Agent
in its sole discretion, exercised in a commercially reasonable
manner, elects to establish, plus (b) the lesser of the
Eligible Inventory Sublimit and an amount equal to up to fifty
percent (50%) of existing Eligible Inventory, valued at
average cost, less such reserves as Administrative Agent in
its sole discretion, exercised in a commercially reasonable
manner, elects to establish.
(j) The definition of "Borrowing Base Deficiency" is amended and restated
in its entirety to read as follows:
"Borrowing Base Deficiency" means the amount, if any, by which
the sum at any time of (i) the outstanding Principal Debt
evidencing Base Rate Borrowings, plus (ii) the LC Exposure
exceeds the lesser of (A) the total Commitments of all Lenders
and (B) the Borrowing Base.
(k) The following new definitions are added to the Credit Agreement:
"Briarwood" means Briarwood Waters Ridge LP, a Texas limited
partnership.
Page 3 of 23
"Briarwood First Lien" means a first lien deed of trust for
the benefit of the Entity providing financing to Briarwood for
acquisition of the Lewisville Facility, securing indebtedness
in the original principal amount not exceeding Six Million Six
Hundred Thousand Dollars ($6,600,000).
"Briarwood Lease" means a Lease Agreement between Briarwood,
as lessor, and Borrower, as lessee, covering the Lewisville
Facility in form and substance reasonably acceptable to
Administrative Agent, with the material terms outlined on
Addendum "A" to the Eighth Amendment of this Agreement, or a
Lease Agreement with another lessor substantially similar
thereto.
"Briarwood Sale" means the sale of the Lewisville Facility to
Briarwood on December 17, 2001 for cash consideration of not
less than Six Million Six Hundred Thousand Dollars
($6,600,000).
(l) The definition of "Business Day" is amended and restated in its
entirety to read as follows:
"Business Day" means any day other than Saturday, Sunday and
any other day that commercial banks are authorized by
applicable Laws to be closed in Texas or Illinois.
(m) The definition of "Commitment" is amended and restated in its
entirety to read as follows:
"Commitment" means, (a) for all Lenders, the amount of Twenty
Million Dollars ($20,000,000), and, (b) for each Lender, the
amount stated beside that Lender's name on the most recently
amended Schedule 2 (which amount is subject to reduction and
cancellation as provided in this Amendment).
(n) The definition of "Default Rate" is amended and restated in its
entirety to read as follows:
"Default Rate" means, for any day, an annual interest rate
equal from day to day to the lesser of (a) the Base Rate plus
the Applicable Margin plus four percent (4.0%) and (b) the
Maximum Rate.
(o) The definition of "Eligible Inventory Sublimit" is amended and
restated in its entirety to read as follows:
Page 4 of 23
"Eligible Inventory Sublimit" means Ten Million Dollars ($10,000,000).
(p) A new definition is added to the Credit Agreement:
"Execution Date of Eighth Amendment" means February 6, 2002.
(q) The definition styled "First TROL Default Waiver", "Second TROL
Default Waiver" and "Third TROL Default Waiver" is amended and restated
in its entirety to read as follows:
"First TROL Default Waiver", "Second TROL Default Waiver"
"Third TROL Default Waiver", "Fourth TROL Default Waiver" and
"Fifth TROL Default Waiver" means waivers by the same names
granted pursuant to various amendments, including this
Amendment, to this Agreement.
(r) The definition of "Funding Loss" is amended and restated in its
entirety to read as follows:
"Funding Loss" means any loss, expense or reduction in yield
(but not any Applicable Margin) that any Lender reasonably
incurs because Borrower fails or refuses (for any reason
whatsoever other than a default by Administrative Agent or the
Lender claiming that loss, expense or reduction in yield) to
take any Borrowing that it has requested under this Amendment.
(s) The definition of "LC" is amended and restated in its entirety to
read as follows: --
"LC" means a standby letter of credit issued by Administrative
Agent under this Amendment pursuant to an LC Agreement. For
the avoidance of doubt, no new LCs will be issued pursuant to
this Amendment after November 1, 2001, and the existing LC
outstanding in favor of Xxxxx Heavy Limited - India in the
amount of $9,393 will not be renewed unless cash collateral in
the form of a deposit with Bank One is pledged to
Administrative Agent.
(t) The second half (", and Lenders shall be deemed to be nominees for
the Eurocurrency Lending Installation with respect to any Eurocurrency
Borrowings for any period during which the Eurocurrency Lending
Installation has not received fundings of a Lender's Commitment
Percentage of a Eurocurrency Borrowing from such Lender") of the
definition of "Lenders" is deleted.
(u) A new definition is added to the Credit Agreement:
Page 5 of 23
"Lewisville Facility" means all of the real estate
(approximately 14 acres) and improvements thereon at 0000
Xxxxxx Xxxxx Xx., Xxxxxxxxxx, Xxxxx 00000.
(v) The definition of "Net Proceeds" is amended to change "other than a
Permitted Asset Sale" to "other than a sale of Inventory in the ordinary
course of business".
(w) The definition of "Permitted Asset Sale" is amended and restated in
its entirety to read as follows:
"Permitted Asset Sale" means (a) any sale and disposition of
Inventory in the ordinary course of business for fair and
adequate consideration (other than sales of Inventory on
credit to Foreign Subsidiaries in excess of the amount
permitted by clause (e) of this definition), (b) any sale of
assets which are obsolete or are no longer in use and which
are not significant to the continuation of the business of the
Companies, (c) upon prior written notice to, and completion of
all actions necessary to confirm, reaffirm or re-establish
Lender Liens to the satisfaction of Administrative Agent, any
sale and disposition from any Domestic Company to any other
Domestic Company provided, in all respects, such sale and
disposition is otherwise subject to and complies with Section
9.5, (d) any transfer of assets in connection with mergers and
consolidations permitted under this Agreement, (e) sales of
Inventory by a Domestic Company to Foreign Subsidiaries at
manufacturer's cost and consistent with past practice, not to
exceed the amount outstanding as of December 31, 2001
($_________), (f) any other sales and dispositions approved in
advance by Administrative Agent and (g) the Briarwood Sale,
provided that, on or before February 28, 2002, Briarwood and
the holder of the Briarwood First Lien must execute and
deliver a Landlord Waiver and Lienholder Joinder in form and
substance substantially the same as that provided to Borrower
by counsel to Administrative Agent on January 21, 2002,
providing for (A) notice to Administrative Agent of a default
under the Briarwood Lease or the Briarwood First Lien and a
reasonable opportunity to cure the same and reinstate the
Briarwood Lease or Briarwood First Lien, as the case may be,
(B) the right of Administrative Agent or Lenders to enter the
Lewisville Facility after any default under the Briarwood
Lease or the Briarwood First Lien or after any Event of
Default hereunder and to occupy the same for a period of one
hundred twenty (120) days rent-free for the purpose of
securing and selling and/or removing equipment, inventory and
other goods in which Administrative Agent has been granted a
security interest, (C) the subordination of the landlord's
liens of Briarwood to the security interests of
Page 6 of 23
Administrative Agent to secure the Obligation and (D) other
customary provisions.
(x) The definition of "Permitted Intercompany Advances" is amended and
restated in its entirety to read as follows:
"Permitted Intercompany Advances" means (a) loans, advances or
extensions of credit ("advances") by any Domestic Company to
any other Domestic Company so long as each such advance to a
Domestic Company is carried by the Domestic Company making the
advances as a written promissory note or account receivable
subject to Lender Liens and no other Liens, (b) loans,
advances and extensions of credit to third parties outstanding
on December 31, 2001, described on Addendum "A" hereto and (c)
sales of Inventory by a Domestic Company to Foreign
Subsidiaries at manufacturer's cost and consistent with past
practice, the sum of which, when combined with loans, advances
and extensions of credit by Domestic Companies to Foreign
Subsidiaries outstanding on December 31, 2001, described on
Addendum "A" to the Eighth Amendment to this Agreement do not
exceed Ten Million Dollars ($10,000,000) at any time
outstanding. For the avoidance of doubt, except as permitted
by clause (c) preceding, no loans, advances or extensions of
credit may be made by Parent, Borrower or any other Company to
any Foreign Subsidiary other than loans, advances and
extensions of credit by Domestic Companies to Foreign
Subsidiaries outstanding on December 31, 2001, described on
Addendum "A" to the Eighth Amendment to this Agreement.
(y) The definition of "Principal Debt" is amended by deleting the
parenthetical expression ("(including the Dollar Equivalent of
Eurocurrency Borrowings)").
(z) The definition of "Revolving Facility Termination Date" is amended
and restated in its entirety to read as follows:
"Revolving Facility Termination Date" means the earlier of (i)
February 28, 2002 and (ii) the date on which all Principal
Debt and interest thereon has been paid in full and all LC
exposure has been terminated or fully cash collateralized".
(aa) The definition of "UCC" is amended and restated in its entirety to
read as follows:
"UCC" means the Uniform Commercial Code, as adopted and
amended from time to time and in force in the State of Texas
and any other applicable jurisdiction at the time in question.
Page 7 of 23
(bb) Sections 2.1(b), 2.1(f), 2.1(h), 2.4(b)(ii), 3.2(c)(iv), 3.13, 3.14,
3.19, 3.20(a), 3.21(a), 3.21(b), 4.6, 9.2(a)(iv), 9.2(a)(ix), 9.2(a)(x),
9.8(e), and 9.8(f) are deleted in their entirety.
(cc) Section 2.1(c) is amended and restated in its entirety to read as
follows:
(c) Maximum Borrowings from All Lenders. The sum at any time
of (i) the outstanding Principal Debt plus (ii) the LC
Exposure may never exceed the lesser of (A) the total
Commitments of all Lenders and (B) the Borrowing Base.
(dd) Sections 2.1(d) is amended and restated in its entirety to read as
follows:
(d) Maximum Borrowings from Each Lender. The sum at any time
of (i) the outstanding Principal Debt owed to any Lender, plus
(ii) the LC Exposure of such Lender may never exceed such
Lender's Commitment.
(ee) Lenders have exercised their right pursuant to Section 2.1(g) to
terminate their obligations and commitments to make Eurocurrency
Borrowings available to Borrower, to permit future renewals of Borrowings
as Eurocurrency Borrowings and to permit future conversions of Domestic
Borrowings to Eurocurrency Borrowings, and Section 2.1(g) is deleted in
its entirety.
(ff) Section 2.2 is deleted, and Administrative Agent and Lenders have no
further obligation or commitment to make Borrowings pursuant thereto.
(gg) The parenthetical expression ("(compliance with the procedures set
forth in Section 2.4 and elsewhere herein being required for LIBOR Rate
Borrowings and Eurocurrency Borrowings)") in Section 2.3(a)(ii) is
deleted.
(hh) Section 2.4(a) is amended and restated in its entirety to read as
follows:
Borrowing Request. Borrower may request a Borrowing only by
making or delivering a Borrowing Request to Administrative
Agent, which is irrevocable and binding on Borrower, stating
the amount for each Borrowing and which must be received by
Administrative Agent no later than (i) 12:00 noon on the
Business Day on which funds are requested (the "Borrowing
Date"). Administrative Agent shall promptly notify each Lender
of any Borrowing Request.
(ii) The last two sentences of Section 2.4(b) ("Notwithstanding the
foregoing, Xxxxxx will not be required to fund its Commitment Percentage
of Eurocurrency Borrowings which are outstanding on the date of this
Amendment, but Xxxxxx will have a contingent risk participation
obligation therein pursuant to Section 2.4(b)(ii). If, at the end of the
Interest
Page 8 of 23
Period for each such outstanding Eurocurrency Borrowing, Borrower
continues all or part thereof as a Eurocurrency Borrowing, Xxxxxx shall
be obligated to fund its Commitment Percentage of each such continuation
pursuant to the first sentence of this Section 2.4(b).") are deleted.
(jj) The parenthetical expression, "(or, alternatively, in the case of
Eurocurrency Borrowings, the Eurocurrency Lending Installation's cost of
funds for that amount and for the period stated above)", appearing in
Section 2.4(b)(i) is deleted.
(kk) Section 2.5(a) is amended and restated in its entirety to read as
follows:
(a) Conditions. Subject to the terms and conditions of this
Credit Agreement prior to the Eighth Amendment hereto and
applicable Laws, Administrative Agent (itself or through one
of its Affiliates, and references in this Section 2.5 to
"Administrative Agent" include those Affiliates) has issued
LCs upon the request of Borrower, and two of those LCs are
outstanding as of November 1, 2001. No new LCs will be issued
pursuant to this Amendment after November 1, 2001, and the
existing LC outstanding in favor of Xxxxx Heavy Limited -
India in the amount of $9,393 will not be renewed, and must be
released and terminated on the Revolving Facility Termination
Date, unless cash collateral in the form of a deposit in the
amount of Ten Thousand Dollars ($10,000) with Bank One is
pledged to Administrative Agent.
(ll) The fourth sentence ("Any partial terminations shall reduce
availability under the Eurocurrency Sublimit on a pro rata basis in the
same proportion which the Eurocurrency Sublimit at the time bears to the
total Commitments") of Section 2.7 is deleted.
(mm) A new Section 2.8 is added to the Credit Agreement which shall read
as follows:
2.8 Deposit Account Transfers and Obligations; Commitment from
Qualified Lender; Treasury Management Services; Additional Fees.
(a) From and after November 1, 2001, Bank
One and its Affiliates will not accept and shall have
no exposure with respect to transfers related to
Deposit Accounts, ACH transfers or Deposit Account
Obligations of any kind. In the event Borrower or any
other Company initiates any transfer or transaction
which anticipates transferring funds from or clearing
items through a Deposit Account, all of such
transfers, transactions and items must be fully
pre-funded by one of the Companies, so that Bank One
and its Affiliates have no
Page 9 of 23
overdraft, ACH or other exposure when any items are
presented to Bank One or one of its Affiliates.
(b) Borrower agrees (i) to deliver to
Administrative Agent on or before December 31, 2001,
a commitment letter executed by a substantial and
financially capable lending institution ("Qualified
Lender") and accepted by Borrower and Parent,
providing for a closing and funding on or before
February 28, 2002, pursuant to which the Qualified
Lender commits to make a loan in an amount sufficient
to pay in full all of the Obligation (including a
release or cash-collateralization of all LC
Exposure), containing no conditions which Borrower
cannot reasonably be expected to satisfy (a
"Qualified Commitment") and (ii) to cause the
Qualified Commitment to continue in full force and
effect and to be funded and the Obligation to be paid
in full on or before February 28, 2002 (including a
release or cash-collateralization of all LC
Exposure).
(c) Bank One may be asked to continue to
maintain treasury management services and controlled
disbursement accounts for Borrower and other
Companies after the Obligation has been paid in full,
and Bank One is willing to do so for a limited period
of time, but only if Bank One receives a letter of
credit, indemnification or other credit support
satisfactory to Bank One to protect and indemnify
Bank One to its satisfaction against any possible
exposure which may result if Bank One pays or honors
a transfer of funds or item initiated by one of the
Companies from any Deposit Account.
(d) A waiver fee of Fifty Thousand Dollars
($50,000) shall be paid by Borrower to Administrative
Agent for the account of Lenders on the Eighth
Amendment Execution Date. An additional fee of Fifty
Thousand Dollars ($50,000) shall be paid by Borrower
to Administrative Agent for the account of Lenders on
February 28, 2002 if the Obligation is not paid in
full on or before February 28, 2002; provided that,
all of such $50,000 additional fee will be promptly
refunded by Lenders if the Obligation is paid in full
on or before March 15, 2002, and half of such $50,000
additional fee will be promptly refunded by Lenders
if the Obligation is paid in full after March 15,
2002 and on or before March 31, 2002. At any time
after any payment is due under this Section or any
other provision of the Credit Documents,
Administrative Agent and each of its Affiliates shall
be entitled to debit one or more Deposit Accounts for
each such payment and distribute the same to Lenders.
(nn) Section 3.1(b) is amended and restated in its entirety to read as follows:
Page 10 of 23
(b) Payment. Except for payment made on Base Rate Borrowings
by appropriate debits to Borrower's Loan Account pursuant to
Section 2.3 and Section 3.4, Borrower must make each payment
and prepayment on the Obligation to Administrative Agent's
principal office in Chicago, Illinois in immediately available
funds by 1:00 p.m.(local time) on the day due; otherwise, but
subject to Section 3.8, those funds continue to accrue
interest as if they were received on the next Business Day.
Administrative Agent shall promptly pay to each Lender the
part of any payment or prepayment to which that Lender is
entitled under this Amendment on the same day Administrative
Agent receives the funds from Borrower.
(oo) Section 3.2(a) is amended and restated in its entirety to read as follows:
(a) Interest. Accrued interest on each Borrowing is due and
payable on the first day of each month, commencing on the
first day of the month following the Initial Closing Date.
Accrued interest is also due and payable on the Revolving
Facility Termination Date.
(pp) Section 3.2(b) is amended and restated in its entirety to read as follows:
(b) Revolving Facility Principal. The Principal Debt is due
and payable on the Revolving Facility Termination Date.
Before that date, Borrower may at any time prepay, without
penalty (except as provided in the Eighth Amendment to this
Agreement) and in whole or in part, the Principal Debt.
(qq) Section 3.3 is amended and restated in its entirety to read as follows:
3.3 Interest Rate on Borrowings. Except as otherwise
provided in this Agreement, Borrowings bear interest at an
annual rate equal to the lesser of (a) the Base Rate plus
the Applicable Margin and (b) the Maximum Rate. Each change
in the Base Rate or Maximum Rate is effective, without
notice to Borrower or any other Person, upon the effective
date of change.
(rr) Section 3.6 is amended and restated in its entirety to read as follows:
3.6 Instruments and Chattel Paper. On the Eighth Amendment
Execution Date (with respect to existing chattel paper and
instruments) and immediately upon receipt of any chattel
paper and instruments in the future by Borrower or any other
Company, Borrower or such other Company shall deliver or
cause to be delivered to Gardere Xxxxx Xxxxxx LLP (attn:
Xxxxxx X. Xxxx) in
Page 11 of 23
trust for Administrative Agent, with appropriate endorsement
and assignment to vest title (for collateral purposes) and
possession in Administrative Agent, with full recourse to
Borrower, all chattel paper and instruments which Borrower
and each other Company now owns or may at any time or times
hereafter acquire in order to permit Administrative Agent to
perfect its security interest in such property. Prior to the
close of business on February 28, 2002 (or earlier upon
demand by Administrative Agent after the occurrence of an
Event of Default or Potential Default after the Eighth
Amendment Execution Date), the trustee shall deliver such
chattel paper and instruments to Administrative Agent unless
the Obligation has been paid in full.
(ss) Section 3.9 is amended and restated in its entirety to read as follows:
3.9 Default Rate. All Principal Debt and, unless prohibited
by applicable Government Requirements, all past-due interest
accruing on the Principal Debt shall, at Administrative
Agent's option, bear interest on the amount thereof from
time to time outstanding from the earlier of the date due
(stated or by acceleration) and the date of occurrence of an
Event of Default or Potential Default at the Default Rate
until paid (or, in the case of an occurrence of an Event of
Default or Potential Default, until cured or until the
actual date a waiver is granted), regardless whether payment
is made before or after entry of a judgment.
(tt) Section 3.11 is amended and restated in its entirety to read as
follows:
3.11 Interest Calculations. Interest on all Borrowings will
be calculated on the basis of actual number of days
(including the first day but excluding the last day) elapsed
but computed as if each calendar year consisted of 360 days
(unless such calculation would result in the interest on the
Borrowings exceeding the Maximum Rate in which event such
interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be). All interest rate
determinations and calculations by Administrative Agent are
conclusive and binding absent manifest error.
(uu) The last sentence ("Unless otherwise notified to the contrary, all
Eurocurrency Borrowings shall be made by the Lending Installations of
each Lender designated on Schedule 2") of Section 3.18 is deleted.
(vv) The lead paragraph of Section 8.1(b) is amended and restated
in its entirety to read as follows:
12 of 23
(b) Collateral and Borrowing Base Reports. In addition, by the
close of business each Tuesday, Borrower shall provide
Administrative Agent with a written Collateral Report (herein
so called), on a weekly basis after January 21, 2002,
including a Borrowing Base Report as of the immediately
preceding Friday, reflecting activity for the week ended on
such Friday, unless reasonably requested more often by
Administrative Agent, in form and substance, and with such
specificity, as is satisfactory to Administrative Agent:
(ww) Section 8.5 is amended to add the following as the next-to-last sentence
thereof:
Without limiting the foregoing, on or at any time after the
earlier of (i) February 28, 2002, and (ii) the date on which
the Frost Capital Group Commitment Letter dated December 21,
2001 is terminated or rescinded with no immediate replacement
therefore acceptable to Administrative Agent being delivered
by Borrower, Administrative Agent shall be entitled to
commence a field inspection and audit of the Inventory,
Accounts and other assets of the Companies, at the cost and
expense of Borrower.
(xx) Section 9.2(a)(vii) is amended and restated in its entirety to read as
follows:
(vii) Up to Nine Hundred Eight Thousand Dollars ($908,000) of
overdraft facilities for French, Italian, South African and
Belgian Subsidiaries, if (A) no Domestic Company has any
liability or obligation for or with respect to such overdraft
facilities and related overdrafts, and (B) such overdraft
facilities and related overdrafts do not exceed at any time
the amount owing on December 31, 2001 as set forth on Addendum
"A" to the Eighth Amendment to this Agreement;
(yy) Section 9.3(b) is amended and restated in its entirety to read as
follows:
(b) Limited Future Liens. Liens not otherwise permitted by
this Section 9.3, so long as
(i) such Liens or leases existed on
November 1, 2001 and are described on Addendum "A"
to the Eighth Amendment to this Agreement,
(ii) such Liens or leases are granted on
equipment or machinery on which no Lender Lien
exists, to secure an
Page 13 of 23
aggregate amount of Debt not exceeding at any time
the amount reflected on such Addendum "A", and
(iii) the Debt securing such additional
Liens is subordinated to the Obligation on terms
acceptable to Required Lenders;
(zz) Section 9.5 is amended and restated in its entirety to read as follows:
9.5 Transactions with Affiliates. No Company may enter into
any transaction with any of its Affiliates except (i)
transactions permitted under Sections 9.7(h), (i) and (j) and
Section 9.9, (ii) transactions between Domestic Companies
(other than Investments) in the ordinary course of business
and upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in
an arm's-length transaction with a Person that was not its
Affiliate and (iii) sales of Inventory by a Domestic Company
to Foreign Subsidiaries at manufacturer's cost and consistent
with past practice, the sum of which, when combined with
loans, advances and extensions of credit by Domestic Companies
to Foreign Subsidiaries outstanding on the Execution Date of
Eighth Amendment do not exceed the amount outstanding on
December 31, 2001, as described on Addendum "A" to the Eighth
Amendment to this Agreement.
(aaa) Section 9.7(h) is amended to change "Company" to "Domestic Company" in
each place it appears, except the first time it appears.
(bbb) Section 9.10(a) is amended and restated in its entirety to read as
follows:
(a) if no Event of Default, Potential Default or Material
Adverse Event exists or will exist as a result of it, any
merger or consolidation between Domestic Companies so long as,
if Borrower is involved, it is the survivor;
(ccc) A new Section 9.17 is added to the Credit Agreement, which shall read as
follows:
9.17 F/X Contracts; Hedging Agreements; Rate Management
Transactions. From and after the Eighth Amendment Execution
Date, neither Borrower nor any other Company shall enter into
any F/X Contract, Hedging Agreement or other Rate Management
Transaction. Any foreign exchange transactions or services
needed by Borrower or any other Company may be accommodated by
Bank One, but any credit exposure must be pre-funded in cash
by Borrower in an amount acceptable to Bank One.
Page 14 of 23
(ddd) Section 10.4 is amended and restated in its entirety to read as
follows:
10.4 Capital Expenditures. From and after January 1,
2002, the Companies will not make Capital Expenditures in excess of
an aggregate of Two Hundred Fifty Thousand Dollars ($250,000).
(eee) Section 10.5 is amended and restated in its entirety to read
as follows:
10.5 Minimum Excess Availability. Borrower will at all
times maintain Excess Availability of at least Two Million Dollars
($2,000,000).
(fff) A new Section 11.14 is added to the Credit Agreement, which shall read as
follows:
11.14 Borrower does not deliver to Administrative Agent on or
before December 31, 2001, a Qualified Commitment executed by a
Qualified Lender and accepted by Borrower and Parent which is
in full force and effect when delivered, providing for a
closing and funding on or before February 28, 2002, pursuant
to which the Qualified Lender commits to make a loan in an
amount sufficient to pay in full all of the Obligation
(including a release or cash-collateralization of all LC
Exposure), containing no conditions which Borrower cannot
reasonably be expected to satisfy.
(ggg) In Section 14.13 of the Credit Agreement and in any similar provision in
any of the other Credit Documents, "Chicago, Xxxx County, Illinois" is changed
to "Dallas, Dallas County, Texas".
(hhh) Section 14.14 of the Credit Agreement and any provisions in any of the
other Credit Documents providing for arbitration of disputes are deleted.
3. Other Matters.
(a) Schedule 2 to the Credit Agreement is hereby amended and replaced
in its entirety by Schedule 2 to this Amendment.
(b) If and to the extent not previously complied with, Borrower will,
and will cause each other Company to, comply with the requirements of
Section 3.6, as herein amended.
(c) Bank One will refund to Borrower all NSF fees charged in December
2001 and January 2002
Page 15 of 23
4. Waivers.
(a) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default arising
under Section 8.1(a) of the Credit Agreement with respect to the fact
that Borrower failed to deliver, on or before the dates required by
the Credit Agreement, the Monthly Report and compliance certificate
for the months of September, October, November and December 2001.
(b) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default arising
under Section 8.14(c) of the Credit Agreement with respect to the
fact that Borrower and Parent did not execute and deliver a deed of
trust within thirty (30) days after the date requested therefor by
Administrative Agent.
(c) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default arising
under Section 9.9 of the Credit Agreement with respect to Borrower
making the Briarwood Sale without the consent of Administrative
Agent.
(d) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default arising
under Section 10.2 of the Credit Agreement with respect to the fact
that the ratio of the consolidated Cash Flow Available for Debt
Service to Debt Service Requirements for the three quarters ended
September 30, 2001 was less than 1.25 to 1.00.
(e) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default arising
under Section 10.3 of the Credit Agreement with respect to the fact
that the Tangible Net Worth on October 31, 2001 and November 30, 2001
was less than the required amount.
(f) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver of any Event of Default or Potential Default
existing under Section 11.8 of the Credit Agreement with respect to
(i) the fact that the sale in October 2001 by Parent of 2,337,700
shares of common stock to Xxxxxx, when combined with the contract in
October 2001 by Xxxxxx to sell his preferred stock in Parent to
Xxxxxx, exceeded the 25% limit in Section 11.8((ii) and (ii) the fact
that, on January 17, 2002, Xxxxxx sold his shares of preferred stock
to Xxxxxx.
(g) Administrative Agent and Lenders each hereby reserve the absolute
and unconditional right to revoke the waivers granted by one or more
of paragraphs 4(a), 4(b), 4(c), 4(d), 4(e) and 4(f) preceding at any
time, in the sole discretion of Administrative Agent or either
Lender, with or without cause, by giving verbal or written notice of
such revocation to Borrower, effective immediately at the time such
notice is given (with any verbal notice to be followed by written
notice, but effective as of the time of the verbal notice). Such
Page 16 of 23
waivers shall automatically expire and terminate on the date on which
Administrative Agent or either Lender exercises its unconditional
revocation right pursuant to the immediately preceding sentence.
(h) Administrative Agent and Lenders hereby grant a temporary,
revocable waiver (the "Fifth TROL Default Waiver") with respect to
the Event of Default existing on the date hereof under Section 11.10
of the Credit Agreement as a result of the fact that a TROL Default
has occurred because of the failure of the Companies to maintain as
of June 30 and September 30, 2001 (i) the leverage ratio required by
Section 6.01 of the Amended and Restated Guaranty dated as of March
22, 2000 given by Parent under the TROL Financing for the benefit of
the TROL Lenders (the "TROL Guaranty"), (ii) the debt service
coverage ratio required by Section 6.02 of the TROL Guaranty and
(iii) the minimum net worth required by Section 6.03 of the TROL
Guaranty. The Fifth TROL Default Waiver will automatically expire and
terminate on the earlier of (1) the date on which Administrative
Agent or either Lender exercises its unconditional revocation right
pursuant to the next sentence hereof, (2) the date on which the TROL
Lenders accelerate the maturity of the Lease Obligations (as defined
in the TROL Guaranty) and (3) the date on which the TROL Lenders
commence the exercise of any remedies under the TROL Financing
Documents. Administrative Agent and each Lender hereby reserve the
absolute and unconditional right to revoke the Fifth TROL Default
Waiver at any time, in the sole discretion of Administrative Agent or
either Lender, with or without cause, by giving verbal or written
notice of such revocation to Borrower, effective immediately at the
time such notice is given (with any verbal notice to be followed by
written notice, but effective as of the time of the verbal notice).
5. Conditions Precedent. Unless one or more of the following conditions
precedent is waived by Lenders, this Amendment is effective only if the
following conditions are satisfied on the Execution Date of the Eighth
Amendment:
(a) Administrative Agent must receive counterparts of this Amendment
executed by Parent, Borrower, Administrative Agent, each Lender and
each Subsidiary whose name appears on the Subsidiary Joinder at the
end of this Amendment (each, a "Ratifying Subsidiary");
(b) Borrower must pay in full all fees and expenses due and owing to
Administrative Agent and to each Lender, including unpaid fees and
expenses of counsel to Administrative Agent and counsel to each
Lender, excluding only the disputed amount of $9,001.83 from the
October, November and December 2001 billing statements of Fulbright &
Xxxxxxxx L.L.P.
(c) Borrower must deliver to Administrative Agent a letter from
Gardere Xxxxx Xxxxxx LLP to Administrative Agent acknowledging its
responsibilities under Section 3.6, as amended and restated in this
Amendment.
Page 17 of 23
(d) Borrower must deliver to Administrative Agent the executed and
acknowledged Bank Deed of Trust, which Administrative Agent will not
record prior to February 28, 2002 unless an Event of Default or
Potential Default other than those waived in this Amendment occurs.
(e) Borrower must deliver to Administrative Agent a certificate of
the Secretary of Borrower, the Secretary of Parent and the Secretary
of each Ratifying Subsidiary certifying as to resolutions of the
board of directors or executive committee of Borrower, Parent and
each Ratifying Subsidiary authorizing and approving the execution of
this Amendment.
6. Ratifications. Except as expressly modified and superseded by this Amendment,
the Credit Documents are ratified and confirmed and continue in full force and
effect. The Credit Documents, as amended by this Amendment, continue to be
legal, valid, binding and enforceable in accordance with their respective terms.
Without limiting the generality of the foregoing, Borrower and Parent, and each
Ratifying Subsidiary, hereby ratify and confirm that all Liens heretofore
granted to Administrative Agent for the benefit of Lenders were intended to, do
and continue to secure the full payment and performance of the Obligation.
Borrower and Parent agree to perform such acts and duly authorize, execute,
acknowledge, deliver, file and record such additional assignments, security
agreements, modifications or amendments to any of the foregoing, and such other
agreements, documents and instruments as Administrative Agent may reasonably
request in order to perfect and protect those Liens and preserve and protect the
Rights of Administrative Agent and Lenders in respect of all present and future
Collateral.
7. Representations, Warranties and Confirmations. Borrower and Parent hereby,
jointly and severally, represent and warrant to Administrative Agent and Lenders
that (a) this Amendment and any other Credit Documents to be delivered under
this Amendment have been duly executed and delivered by or on behalf of Borrower
and each other Company party to them, are valid and binding upon Borrower and
the other Companies and are enforceable against Borrower and the other Companies
in accordance with their respective terms, except as limited by any applicable
Debtor Relief Laws, (b) no action of, or filing with, any Governmental Authority
is required to authorize, or is otherwise required in connection with, the
execution, delivery and performance by Borrower or any other Company of this
Amendment or any other Credit Document to be delivered under this Amendment, (c)
the execution, delivery and performance by Borrower and the other Companies of
this Amendment and any other Credit Documents to be delivered under this
Amendment do not require the consent of any other Person and do not and will not
constitute a violation of any Laws, agreements or understandings to which
Borrower or any other Company is a party or by which Borrower or any other
Company is bound, (d) the representations and warranties contained in the Credit
Agreement, as amended by this Amendment, and any other Credit Documents are true
and correct in all material respects as of the date of this Amendment, (e) no
Event of Default or Potential Default exists, other than the Events of Default
and Potential Defaults to which the First, Second, Third, Fourth and Fifth TROL
Default Waiver relate and the Events of Default referred to in paragraphs 4(a),
4(b), 4(c), 4(d), 4(e) and 4(f) of this Amendment, and (f) each Company has
performed all of its obligations under the Credit Agreement and other Credit
Documents. Borrower and Parent, jointly and severally, confirm and acknowledge
that (i) all advances which have been
Page 18 of 23
heretofore made by Administrative Agent and Lenders, even though Potential
Defaults and Events of Default may have existed, were made in good faith by
Administrative Agent and Lenders, and (ii) because Potential Defaults and
Events of Default exist, Lenders have no obligation to make future advances,
and any future advances by Lenders are totally discretionary.
8. Release of All Claims. Borrower, Parent and each Ratifying Subsidiary hereby,
jointly and severally, unconditionally release and forever discharge
Administrative Agent and each Lender and their respective successors, assigns,
agents, directors, officers, employees, affiliates, accountants, consultants,
contractors, advisors and attorneys (collectively, the "Benefited Parties") from
all Claims (as defined below) and jointly and severally agree to indemnify the
Benefited Parties, and hold them harmless from any and all claims, losses,
causes of action, costs and expenses of every kind or character in connection
with the Claims. As used in this Amendment, the term "Claims" means any and all
possible claims, demands, actions, causes of actions, costs, expenses and
liabilities whatsoever, known or unknown, at law or in equity, originating in
whole or in part, which Borrower, Parent or any Ratifying Subsidiary, or any of
their agents, employees or affiliates may now or hereafter have or claim against
any of the Benefited Parties and irrespective of whether any such Claims arise
out of contract, tort, violation of Law or otherwise in connection with any of
the Credit Documents or the TROL Financing, including any contracting for,
charging, taking, reserving, collecting or receiving interest in excess of the
maximum rate on interest chargeable under applicable Law and any loss, cost or
damage, of any kind or character, arising out of or in any way connected with or
in any way resulting from the actions or omissions of the Benefited Parties,
including any breach of fiduciary duty, breach of any duty of good faith or fair
dealing, breach of confidence, breach of funding commitment other than the
express funding commitments contained in the Credit Agreement, undue influence,
duress, economic coercion, conflict of interest, negligence, bad faith,
malpractice, violations of the Racketeer Influenced and Corrupt Organizations
Act, intentional or negligent infliction of mental distress, tortious
interference with contractual relations, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive
trade practices, libel, slander, conspiracy or any claim for wrongfully
accelerating any obligations or wrongfully attempting to foreclose on any
collateral. Borrower, Parent and each Ratifying Subsidiary, jointly and
severally, agree that none of the Benefited Parties have fiduciary or similar
obligations to Borrower, Parent or any agents, employees or affiliates of
Borrower or Parent and that their relationships are strictly that of creditor
and debtor. This release is accepted by Administrative Agent and each Lender
pursuant to this Amendment and shall not be construed as an admission of
liability by Administrative Agent, any Lender or any other Benefited Party.
9. Reaffirmation of Liability Limitations by Xxxxxx Bank. Xxxxxx Bank hereby
reaffirms and confirms to Administrative Agent all of Administrative Agent's
Rights and all of Xxxxxx Bank's obligations under and pursuant to Section 13.5
of the Credit Agreement.
10. Counterparts. This Amendment may be executed in any number of counterparts
with the same effect as if all signatories had signed the same document.
Page 19 of 23
11. Parties Bound. This Amendment binds and inures to the benefit of Borrower,
Lenders and Administrative Agent and, subject to Section 14.12 of the Credit
Agreement, their respective successors and assigns.
12. ENTIRETY. THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT,
AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
FOR THE TRANSACTIONS HEREIN AND THEREIN, AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Executed as of and effective as of Execution Date of Eighth Amendment.
ULTRAK, INC., as Parent
By:_______________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
ULTRAK OPERATING, L.P. as Borrower
By: Ultrak GP, Inc. its General Partner
By:_______________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
as Administrative Agent and a Lender
By:________________________________________
Xxxxxx Xxxxxx Xxxxx, First Vice President
XXXXXX TRUST AND SAVINGS BANK, as a Lender
By:________________________________________
Xxxxxxx Xxxxx, Vice President
Page 20 of 23
SUBSIDIARY JOINDER
To induce Administrative Agent and Lenders to enter into this
Amendment, each Subsidiary named below (a) consents and agrees to this
Amendment's execution and delivery, (b) ratifies and confirms that all
guaranties, assurances and Liens granted, conveyed or assigned to Administrative
Agent for the benefit of Lenders under the Credit Documents are not released,
diminished, impaired, reduced or otherwise adversely affected by this or any
prior amendment, and continue to guarantee, assure and secure the full payment
and performance of the Obligation, (c) agrees to perform such acts and duly
authorize, execute, acknowledge, deliver, file and record such additional
guaranties, assignments, security agreements, deeds of trust, mortgages and
other agreements, documents, instruments and certificates as Administrative
Agent may reasonably deem necessary or appropriate in order to create, perfect,
preserve and protect those guaranties, assurances and Liens, and (d) waives
notice of acceptance of this consent and agreement, which consent and agreement
binds each of the undersigned and their respective successors and permitted
assigns and inures to the benefit of Administrative Agent and Lenders and their
respective successors and permitted assigns.
ULTRAK GP, INC.
By:________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
ULTRAK, LP, INC.
By:________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
DIAMOND ELECTRONICS, INC.
By:________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
MONITOR DYNAMICS, INC.
By:________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
ABM DATA SYSTEMS, INC.
By:________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
SECURITY WARRANTY, INC.
By:_________________________________________
Xxxxx X. Xxxxxx, Senior Vice President and Chief
Financial Officer
SECURITY WARRANTY (BVI) LTD.
By:_________________________________________
Xxxxx X. Xxxxxx, Director
Page 21 of 23
SCHEDULE 2
LENDERS AND COMMITMENTS
==================================================== ====================================== ===========================
Name and Address of Lender Commitment Commitment Percentage
==================================================== ====================================== ===========================
American National Bank and Trust Company of Chicago Eleven Million One Hundred Eleven 0.55555556 (55.555556%)
c/o Bank One, N.A. Thousand One Hundred Eleven and
Managed Assets Department 11/100 Dollars
0000 Xxxx, 0xx Xxxxx ($11,111,111.11)
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx Xxxxx,
First Vice President
Telephone: 214/000-0000
Facsimile: 214/290-2740
==================================================== ====================================== ===========================
Xxxxxx Trust and Savings Bank Eight Million Eight Hundred Eighty 0.44444444 (44.444444%)
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0X Xxxxx Xxxxxxxx Eight Hundred Eighty
Xxxxxxx, Xxxxxxxx 00000 Eight and 89/100 Dollars
Attn: Xxxxxxx Xxxxx, Vice President ($8,888,888.89)
Telephone: 312/000-0000
Facsimile: 312/765-1641
==================================================== ====================================== ===========================
TOTAL Twenty Million Dollars
($20,000,000)
==================================================== ====================================== ===========================
Page 22 of 23
ADDENDUM "A"
TO
EIGHTH AMENDMENT TO
ULTRAK FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Description of Briarwood Lease Terms
Description of Existing Liens Permitted by Section 9.3(b)
Description of Existing Loans, Advances and Extensions of Credit to
Third Parties Outstanding on Execution Date of Eighth Amendment
Description of Existing Loans, Advances and Extensions of Credit by
Domestic Companies to Foreign Subsidiaries Outstanding on Execution
Date of Eighth Amendment
Page 23 of 23
