Exhibit 10(c)
2000 AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
THIS AGREEMENT is made as of the 28th day of July,
2000, by and between DETECTION SYSTEMS, INC., a corporation
formed under the laws of the State of New York with offices at
130 Perinton Parkway, Fairport, New York 14450 ("Detection"), on
behalf of itself and as successor by merger to Radionics, Inc.
and FLEET NATIONAL BANK, a national banking association with
offices at One East Avenue, Rochester, New York 14638 (as
successor to Fleet Bank, "Bank").
This Agreement amends, clarifies and supersedes in its
entirety the 1998 Amended and Restated Credit Facility Agreement
among the parties to this Agreement dated as of September 30,
1998 (the "Prior Agreement").
The parties hereby agree as follows:
I. ARTICLE - DEFINITIONS
1.1 The following terms shall have the following
meanings unless otherwise expressly stated herein:
"Affiliate" shall mean any entity which directly or
indirectly, or through one or more intermediaries, Controls
or is Controlled By or is Under Common Control with the
Borrower.
"Agency" shall mean the County of Monroe Industrial
Development Agency, a public benefit corporation formed
under the laws of the State of New York.
"Applicable Base Rate Margin" shall mean the following
amounts for the following respective ratios of Funded Debt
to EBITDA, calculated for the Borrower and Subsidiaries on a
consolidated basis and without duplication in accordance
with GAAP:
Ratio Margin (Basis Points)
Greater than 2.25 to 1 25.0
2.25 to 1 and less 0.0
The Applicable Base Rate Margin shall be adjusted at the
beginning of each three month period commencing either March
1, July 1, September 1, and December 1 respectively, and
shall be established for that period based upon the average
rolling ratios shown by the Borrower's financial statements
for the four fiscal quarters ending on the most recent
December 31, March 31, June 30, or September 30 respectively.
"Applicable LIBOR Margin" shall mean the following
amounts for the following respective ratios of Funded Debt
to EBITDA, calculated for the Borrower and Subsidiaries on a
consolidated basis and without duplication in accordance
with GAAP:
Ratio Margin (Basis Points)
Greater than 2.25 to 1 150
Greater than 1.75 to 1 but less than
or equal to 2.25 to 1 120
Greater than 1.60 to 1 but less than
or equal to 1.75 to 1 110
Greater than 1.25 to 1 but less than
or equal to 1.60 to 1 100
Greater than 1.00 to 1 but less than
or equal to 1.25 to 1 80
Less than or equal to 1.00 to 1 70
The Applicable LIBOR Margin shall be adjusted at the
beginning of each three month period commencing either March
1, July 1, September 1, and December 1 respectively, and
shall be established for that period based upon the average
rolling ratios shown by the Borrower's financial statements
for the four fiscal quarters ending on the most recent
December 31, March 31, June 30, or September 30 respectively.
"Bank" shall mean Fleet National Bank (as successor to
Fleet Bank) and its successors, legal representatives, and
assigns.
"Base Rate" shall mean the higher of the Federal Funds
Rate plus 100 basis points, or the Prime Rate.
"Borrower" shall mean Detection and its successors,
legal representatives, and assigns.
"Break Costs" shall mean an amount equal to the amount
(if any) required to compensate the Bank for any additional
losses (including without limitation any loss, cost, or
expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by the Bank to
fund or maintain the Obligations prepaid), costs, and
expenses (including without limitation penalties) the Bank
incurs as a result of or in connection with such
prepayment. If by reason of an Event of Default the Bank
elects to declare the Obligations to be immediately due and
payable, then any Break Costs with respect to the
Obligations shall become due and payable in the same manner
as though Borrower had exercised a right of prepayment.
"Business Day" shall mean, in respect of any date that
is specified in this Agreement to be subject to adjustment
in accordance with the Modified Following Business Day
Convention, a day on which commercial banks settle payments
in New York or, if the payment obligation is calculated by
reference to any LIBOR Rate, London, England.
"Controls" (including the terms "Controlled By" or
"Under Common Control") shall mean but not be limited to the
ownership of twenty-five percent (25%) or more of the
outstanding shares of capital stock of any corporation
having voting power for the election of directors, whether
or not at the same time stock of any other class or classes
has or might have voting power by reason of the happening of
any contingency, or ownership of twenty-five percent (25%)
or more of any interest in any partnership, or any other
interest by reason of which a controlling influence over the
affairs of the entity may be exercised.
"Current Assets" shall mean all assets treated as
current assets in accordance with GAAP.
"Current Liabilities" shall mean treated as current
liabilities in accordance with GAAP, including without
limitation all obligations payable on demand or within one
year after the applicable measurement date as well as
installment, reimbursement, or sinking fund payments payable
within one year after the applicable measurement date, but
excluding any such liabilities which are renewable or
extendable at the option of the obligor to a date more than
one year after the applicable measurement date.
"Current Ratio" shall mean Current Assets compared to
Current Liabilities.
"Debt" for any person or entity shall mean (i)
indebtedness of such person or entity for borrowed money,
(ii) obligations of such person or entity for the deferred
purchase price of property or services (except trade
payables incurred in the ordinary course of business), (iii)
capitalized or capitalizable obligations of such person or
entity with respect to leases, (iv) the amount available for
drawing under outstanding standby letters of credit issued
for the account of such person or entity and the amount of
other off-balance sheet obligations or liabilities, each to
the extent not otherwise treated separately as Debt, (v) all
obligations endorsed (other than for collection in the
ordinary course of business) or guaranteed by such person or
entity directly or indirectly in any manner including
without limitation contingent obligations to purchase, pay
or supply funds to any person or entity to assure a creditor
against loss, (vi) obligations of such person or entity
arising under acceptance facilities, or bills, notes, or
similar instruments, and (vii) obligations secured by a
lien, security interest, or other arrangement for the
purpose of security on property owned by such person or
entity whether or not the underlying obligations have been
assumed by such person or entity.
"Distributions" shall mean (i) dividends, payments, or
distributions of any kind in respect of the capital stock,
securities or other equity interests or rights to acquire
such equity interests of the applicable entity (except
distributions in the form of such stock, equity securities,
equity interests, or rights to acquire equity interests or
assets of a business being acquired), and (ii) repurchases,
redemptions, or acquisitions of capital stock, securities,
or other equity interests or rights to acquire such equity
interests of the Borrower or any Affiliate.
"Domestic Subsidiaries" shall mean consolidated
subsidiaries organized under the laws of the United States
of America or any state, territory or instrumentality
thereof that are wholly owned by Detection. All Domestic
Subsidiaries are required to (a) be Guarantors, (b) provide
the Bank with security interests in all of their assets
unless otherwise agreed by the Bank, and (c) except for
intercompany transactions with the Borrower and other
Subsidiaries, themselves comply in all respects with the
requirements set forth in Section 8.13, and 9.10, and with
the same requirements as are imposed upon the Borrower in
Article 11 of this Agreement.
"EBITDA" shall mean, for any period and determined in
accordance with GAAP, net operating income (calculated
before Interest Expense, taxes, extraordinary and unusual
items, and income or loss attributable to equity in
Affiliates) plus depreciation and amortization of
intangibles less Distributions.
"Environment" means any water including but not limited
to surface water and ground water or water vapor; any land
including land surface or subsurface; stream sediments; air;
fish; wildlife; plants; and all other natural resources or
environmental media.
"Environmental Laws" means all federal, state and local
environmental, land use, zoning, health, chemical use,
safety and sanitation laws, statutes, ordinances,
regulations, codes and rules relating to the protection of
the Environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling,
production or disposal of Hazardous Substances and the
regulations, rules, ordinances, bylaws, policies,
guidelines, procedures, interpretations, decisions, orders
and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Environmental Permits" means all licenses, permits,
approvals, authorizations, consents or registrations
required by any applicable Environmental Laws and all
applicable judicial and administrative orders in connection
with ownership, lease, purchase, transfer, closure, use
and/or operation of the Improvements and/or as may be
required for the storage, treatment, generation,
transportation, processing, handling, production or disposal
of Hazardous Substances.
"Environmental Report" means written reports, if any,
prepared for the Bank by an environmental consulting or
environmental engineering firm.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Event of Default" shall mean the occurrence of any
event described in Article 12 hereof.
"Federal Funds Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Bank from three Federal funds brokers of recognized
standing selected by it.
"Fee Rate" shall mean the rate used in computing the
unused fee and computed as described in Section 2.7 of this
Agreement.
"First Tier Foreign Subsidiary" shall mean a Foreign
Subsidiary the stock of which is owned directly by the
Borrower or a Domestic Subsidiary.
"Fixed Charges" shall mean for the applicable period,
(i) Interest Expense, (ii) provision for taxes, (iii)
capital expenditures not funded by Funded Debt or out of
additional paid in capital, and (iv) principal or other
payments due with respect to Debt which are Current
Liabilities.
"Foreign Subsidiary" shall mean any Subsidiary formed
under the laws of a jurisdiction other than the United
States of America or any state, territory or instrumentality
thereof.
"Funded Debt" shall mean all Debt that is not a Current
Liability.
"GAAP" shall mean generally accepted accounting
principles as in effect from time to time in the United
States of America.
"Guarantors" shall mean all persons or entities that
have jointly and severally guaranteed all of the Obligations
in form satisfactory to the Bank, including without
limitation, all Domestic Subsidiaries. Unless the Bank and
the Borrower otherwise agree in writing, no Foreign
Subsidiary shall be a Guarantor.
"Hazardous Substances" means, without limitation, any
explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances
and any other material defined as a hazardous substance in
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601,
et. seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801, et. seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C.
Sections 6901, et. seq.; Articles 15 and 27 of the New York
State Environmental Conservation Law or any other federal,
state, or local law, regulation, rule, ordinance, bylaw,
policy, guideline, procedure, interpretation, decision,
order, or directive, whether existing as of the date hereof,
previously enforced or subsequently enacted.
"Improvements" shall mean any real property owned or
used by the Borrower.
"Increased Cost" shall mean any additional amounts
sufficient to compensate the Bank and any assignee or
participant of the Bank for any increased costs of funding
or maintaining the Obligations as a result of any law (other
than changes in tax laws imposed on the overall net income
or similar measure of profitability of the Bank) or
guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations
and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards",
or the adoption after the date of this Agreement of any law
or guideline regarding capital adequacy, or any change in
any of the foregoing or in the interpretation or
administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by the Bank or the Bank's holding company (or any assignee
or participant of the Bank or any of their holding
companies), with any request or directive regarding capital
adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, which has
or would have the effect of reducing the rate of return on
the Bank's capital or on the capital of the Bank's holding
company (or the capital of any assignee or participant of
the Bank or any of their holding companies) as a direct
consequence of the transactions contemplated by this
Agreement and all related documents and agreements, the
existence of the Bank's commitments hereunder, or the
Obligations to a level below that which the Bank or the
Bank's holding company (or any assignee or participant of
the Bank or any of their holding companies) would have
achieved but for such adoption, change or compliance (taking
into consideration the Bank's, assignee's or participant's
policies on capital adequacy).
"Interest Expense" shall mean, for the applicable
period, for the Borrower and Subsidiaries determined on a
consolidated basis without duplication, all interest paid,
capitalized, or accrued, and amortization of debt discount
with respect to all Debt less all related interest income
during such period and determined after giving effect to the
net cost associated with financial arrangements of any kind
made to protect against fluctuations in interest rates such
as interest rate swap contracts, interest rate cap
agreements, and the like.
"LIBOR" shall mean the rate per annum (rounded upward,
if necessary, to the nearest 1/32 of one percent) as
determined on the basis of the offered rates for deposits in
United States Dollars, for a period of time comparable to
the applicable LIBOR Interest Period which appears on the
Telerate Page 3750 as of 11:00 a.m., London time on the day
that is two London Banking Days preceding the first day of
the applicable LIBOR Interest Period (the "Interest Setting
Date"); provided, however, if the rate described above does
not appear on the Telerate System on any applicable Interest
Setting Date, the LIBOR rate shall be the rate (rounded
upwards as described above, if necessary) for deposits in
United States Dollars for a the applicable Interest Period
on the Reuters Page "LIBO" (or such other page as may
replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time) on
the day that is two (2) London Banking Days prior to the
beginning of such LIBOR Interest Period. If both the
Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered
rates for deposits in United States Dollars for a period of
time comparable to the applicable LIBOR Interest Period
which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. (London Time),
on the day that is two (2) London Banking Days preceding the
first day of such LIBOR Interest Period. The principal
London office of each of the four major London banks will be
requested to provide a quotation of its United States Dollar
deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in
United States Dollars to leading European banks for a period
of time comparable to the applicable LIBOR Interest Period
offered by major banks in New York City at approximately
11:00 a.m. New York City time on the day that is two (2)
London Banking Days preceding the first day of such LIBOR
Interest Period. In the event that the Bank is unable to
obtain any such quotation as provided above, it will be
deemed that LIBOR for the LIBOR Interest Period cannot be
determined.
In the event that LIBOR cannot be determined, or there
is any change in any law or application thereof that makes
it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for the Bank to hold
obligations if the rate is determined with reference to the
LIBOR (collectively, a "LIBOR End Date"), then borrowings
with interest based upon the LIBOR Rate shall not be
available after the LIBOR End Date.
"LIBOR Interest Period" shall mean any particular
one-month, three-month, or six-month period during which an
applicable LIBOR Rate shall be in effect.
"LIBOR Rate" shall mean, with respect to any interest
rate period, the rate per anum equal to LIBOR, further
adjusted to reflect any Increased Cost.
"Loan Documents" shall mean all notes, instruments,
security agreements, assignments, pledges, mortgages,
guarantees, and other documents and agreements of any kind
or nature related to this Agreement or the Obligations.
"Modified Following Business Day Convention" shall mean
the convention for adjusting any relevant date if it would
otherwise fall on a day that is not a Business Day. Terms,
when used in conjunction with the term, "Modified Following
Business Day Convention", and a date, shall mean that an
adjustment will be made if that date would otherwise fall on
a day that is not a Business Day so that the date will be
the first following day that is a Business Day.
"Mortgage" shall mean the mortgage described in Section
5.5 of this Agreement.
"Mortgage Loan" shall mean the mortgage loan made by
the Bank in favor of Detection in the original principal
amount of Three Million Four Hundred Thousand Dollars
($3,400,000.00).
"Mortgage Loan Note" shall mean the note evidencing the
Obligations related to the Mortgage Loan in the form of
Exhibit B attached hereto and made a part hereof.
"Mortgaged Property" shall mean the property and
improvements covered by and more specifically described in
the Mortgage.
"Obligations" shall include all of the Borrower's
obligations owing to the Bank or any participant or assignee
of the Bank, including all obligations related to this
Agreement of any kind or nature, arising now or in the
future, including without limitation obligations under the
Revolving Line Note and the Mortgage Loan Note.
"Prime Rate" shall mean the variable per annum rate of
interest so designated from time to time by the Bank as its
prime rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged
to any customer.
"Rate Change Date" shall mean the first day of each
one-month, three-month, or six-month period for which any
LIBOR Rate applies.
"Release" has the same meaning as given to that term in
Section 101(22) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601(22), and the regulations promulgated
thereunder.
"Revolving Line" shall mean the revolving line of
credit established pursuant to Section of this Agreement.
"Revolving Line Note" shall mean the note evidencing
Obligations related to the Revolving Line as described in
Section of this Agreement.
"Revolving Line Conversion Date" shall mean July ___,
2003.
"Revolving Line Termination Date" shall mean the date
on which the Revolving Line terminates as described in
Section of this Agreement.
"Subsidiary" shall mean for any person or entity any
corporation or other business organization of which at least
a majority of the securities, equity, or other ownership
interests having absolute or contingent voting power are
directly or indirectly owned by such person or entity.
"Tangible Assets" shall mean total assets, after
deduction of depreciation, depletion, and reserves, but
excluding accounts from and other obligations payable by
officers and Affiliates and further excluding all assets
required to be classified as intangible assets in accordance
with GAAP (including without limitation organizational
expense, good will, unamortized debt discount, research and
development costs, patents, trademarks, copyrights, other
intellectual property rights, franchises, and deferred
assets).
"Tangible Net Worth" shall mean Tangible Assets less
Total Liabilities as determined by GAAP.
"Total Liabilities" shall mean the sum of all
liabilities shown on the balance sheet as of the applicable
date of determination, determined in accordance with GAAP.
1 ARTICLE - REVOLVING LINE
1.1 Revolving Line. Subject to the terms and
conditions of this Agreement, the Bank hereby establishes for the
benefit of the Borrower a revolving line of credit in the maximum
principal amount of Thirty-Five Million Dollars ($35,000,000)
outstanding at any one time. The proceeds of the Revolving Line
shall be used for Borrower's working capital purposes. Subject
to the terms of this Agreement, the Borrower (or either of them)
may borrow, repay, and reborrow under the Revolving Line, between
the date of this Agreement up to but not including the Revolving
Line Conversion date, and so long as the aggregate principal
amount outstanding at any time to the Borrower does not exceed
$35,000,000. Each borrowing request must be of at least
$250,000. No additional advances shall be made under the
Revolving Line from and after the Revolving Line Conversion Date.
1.1 Revolving Line Note. The Borrower shall
execute, together with this Agreement, a note evidencing
Obligations related to the Revolving Line in the form of Exhibit
A attached hereto and made a part hereof.
1.1 Interest Rate and Payments. All outstanding
amounts under the Revolving Line, except as specifically provided
herein, shall bear interest until paid in full (including without
limitation after acceleration, maturity and judgment) at the Base
Rate plus the Applicable Base Rate Margin. Changes in the rate
of interest applicable to the Revolving Line Note shall become
effective automatically and without notice at the time of changes
in the Base Rate.
The Borrower, however, at least three Business Days
prior to each Rate Change Date may notify the Bank of its
election to have a portion of the outstanding principal amount
under the Revolving Line (which must be at least $1,000,000 and
must be an increment of $100,000) bear interest for a one-month,
three-month, or six month period commencing on such Rate Change
Date at the LIBOR Rate plus the Applicable LIBOR Margin.
All computations of interest shall be made on the basis
of a three hundred sixty (360) day year and the actual number of
days elapsed.
1.1 Payments. Payments of all accrued interest
under the Revolving Line Note shall be due and payable on the
first day of each month. Commencing on the first day of the
month following the Revolving Line Conversion Date, equal
principal payments under the Revolving Line Note shall be due in
an amount each equal to a fraction, the numerator of which is one
(1) and the denominator of which is forty-eight (48), of the
outstanding principal amount under the Revolving Line Note on the
Revolving Line Conversion Date, due on the first day of each
month. All remaining outstanding principal and accrued interest
under the Revolving Line Note shall be due and payable in full on
the earlier of (i) July 28, 2007, and (ii) the date of an Event
of Default.
1.1 Revolving Line Termination. Unless extended in
writing by the Bank on terms and conditions then acceptable to
the Bank, the Revolving Line will terminate on, the earlier of
(i) July 28, 2007, and (ii) the date of an Event of Default.
Notwithstanding the foregoing, no additional advances shall be
made under the Revolving Line from and after the Revolving Line
Conversion Date.
1.1 Break Costs. Any payment of any principal
outstanding under the Revolving Line Note which principal amount
is then bearing interest at a rate based upon the LIBOR Rate
shall be accompanied by a payment of all Break Costs unless such
payment is on the Rate Change Date applicable to that particular
principal amount outstanding.
1.1 Unused Fee. The Borrower shall pay to the Bank
an unused fee computed at the following applicable Fee Rate for
the respective applicable ratio of Funded Debt to EBITDA,
calculated for the Borrower and Subsidiaries on a consolidated
basis and without duplication in accordance with GAAP:
Ratio Fee Rate (Basis Points)
Greater than 2.25 to 1 25
Greater than 1.25 to 1 but
less than or equal to 2.25 to 1 15
Greater than 1.00 to 1 but
less than or equal to1.25 to 1 12.5
Less than or equal to 1.00 to 1 10
Each Fee Rate shall be adjusted at the beginning of each
three month period commencing either March 1, July 1, September
1, and December 1 respectively, and shall be established for that
period based upon the average rolling ratios shown by the
Borrower's financial statements for the four fiscal quarters
ending on the most recent December 31, March 31, June 30, or
September 30 respectively.
The unused fee shall be computed as follows: $35,000,000,
minus the average daily outstanding principal balance of the
Revolving Line, times the Fee Rate per annum. At the end of each
fiscal quarter, the Bank will bill the Borrower for the unused
fee.
1.1 Letters of Credit. Subject to the terms and
conditions of this Agreement, the Bank will make letters of
credit available for the account of the Borrower. The aggregate
amount available for drawing under all letters of credit
outstanding shall reduce, dollar for dollar, the amount then
available for advances under the Revolving Line. The letters of
credit shall be in form satisfactory to the Bank and the
expiration dates thereof shall not be later than the Revolving
Line Termination Date.
The Borrower will pay the Bank's customary letter of
credit commissions in connection with each letter of credit.
The Borrower, if requested by the Bank, will execute
reimbursement agreements in form satisfactory to the Bank,
documenting its Obligations with respect to the Letter of
Credit. All drawings under any letter of credit shall be treated
as immediate advances under the Revolving Line.
1.1 Facility Fee. The Borrower shall pay to the
Bank a fee on the date hereof in connection with the increase in
the total availability to the Borrower under this Agreement over
that available under the Prior Agreement.
1 ARTICLE - MORTGAGE LOAN
1.1 Prior Mortgage Loan. The Bank previously has
made the Mortgage Loan to Detection evidenced by the Mortgage
Loan Note.
1.1 Agreement Covers Prior Mortgage Loan Note. The
Mortgage Loan, the Mortgage Loan Note, and all related
documentation, shall remain in full force and effect, enforceable
in accordance with their original terms, as modified extended or
replaced from time to time. All of the terms of this Agreement,
however, also shall be applicable to the Mortgage Loan. Solely
with respect to the Mortgage Loan, to the extent of any express
inconsistency between the terms of this Agreement and the terms
of the Mortgage Loan, the terms of the Mortgage Loan shall
prevail and the inconsistent terms thereof are expressly
incorporated herein. Additional but not inconsistent terms
contained in the Mortgage Loan are not superseded by this
Agreement.
1 ARTICLE - EXPENSES/DEFAULT RATE INCREASES
1.1 Administrative Expenses. The Borrower shall
pay any fees, expenses and disbursements, including reasonable
legal fees, of the Bank related to this Agreement, the
Obligations, the perfection of any collateral security required
hereunder, and the transactions contemplated by this Agreement.
Such payments shall be due from time to time upon the Bank giving
the Borrower notice of the amount of such expenses.
1.1 Collection Costs. At the request of the Bank,
the Borrower shall promptly pay any expenses, reasonable
attorney's fees, costs, or disbursements in connection with
administration of the Obligations or collection of any of the
Obligations or enforcement of any of the Bank's rights hereunder
or under any note, security agreement, reimbursement agreement,
guarantee, or other agreement related hereto. This obligation
shall survive the payment of any notes executed hereunder. The
Bank may apply any payments of any nature received by it first to
the payment of Obligations under this Section 4.2,
notwithstanding any conflicting provision contained in this
Agreement or any other agreement with the Borrower.
1.1 Default Interest Rate. Upon the failure of the
Borrower to comply with any covenant contained in Section 8.1 or
Article 10 of this Agreement, the rate of interest on each of the
Obligations shall be increased to a rate at all times equal to
four percentage points (4%) above the rate of interest which
would be in effect absent such failure of compliance, such
increased rate to remain in effect through and including the end
of the fiscal quarter in which such failure of compliance is
remedied. Upon the occurrence of an Event of Default, the
provisions of this paragraph shall be superseded by the
provisions of the second paragraph of this Section 4.3 which
relates to increases in the rate of interest in case of the
occurrence of an Event of Default.
Upon the occurrence of an Event of Default, the rate of
interest on each of the Obligations shall be increased to a rate
at all times equal to four percentage points (4%) above the rate
of interest which would be in effect absent such failure of
compliance, such increased rate to remain in effect through and
including payment in full of all of the Obligations and
cancellation of further commitments to lend under this Agreement,
or written waiver of such Event of Default by the Bank.
1.1 Late Payment Fees. If the entire amount of
principal and/or interest is not paid in full under any of the
Loan Documents within ten (10) days after the same is due,
Borrower shall pay to the Bank a late fee equal to five percent
(5%) of the required payment.
1.1 Prepayments Upon Default. If by reason of an
Event of Default the Bank elects to declare the Obligations to be
immediately due and payable, then any Break Cost or prepayment
charge with respect to the Obligations shall become due and
payable in the same manner as though the Borrower had exercised a
right of prepayment.
1 ARTICLE - COLLATERAL AND GUARANTEES
1.1 Security Interests. As collateral for all
Obligations, the Borrower shall provide to the Bank, and shall
cause each Guarantor to provide to the Bank, a security interest
and lien in all their respective assets, including without
limitation machinery, equipment, furniture, fixtures, vehicles,
accounts, inventory, chattel paper, interests in leases and
property under lease, intellectual property and proprietary
interests, documents, instruments, and general intangibles,
provided, however, that Borrower shall not provide the Bank with
a security interest or lien in any Margin Stock as defined in
Regulation U of the Federal Reserve Board purchased by the
Borrower in accordance with Section 9.2 hereof. Such security
interests shall be first liens on such assets, which shall not be
otherwise encumbered except as specified on Schedule 5.1 attached
hereto and made a part hereof.
1.1 Guarantees. The Borrower shall cause all
Subsidiaries other than Foreign Subsidiaries to become
Guarantors. The Guarantor guarantees shall contain an agreement
that, except for intercompany transactions with the Borrower or
other Subsidiaries, such Guarantor shall comply in all respects
with the requirements set forth in Section 8.13, and 9.10, and
with the same requirements as are imposed upon the Borrower in
Article 11 of this Agreement.
1.1 Stock Pledge. The Borrower shall pledge to the
Bank (a) all of Borrower's shares of capital stock of Domestic
Subsidiaries, and (b) in the case of each First-Tier Foreign
Subsidiary, 65% of the total combined voting power of all classes
of stock of such First-Tier Foreign Subsidiary entitled to vote.
No stock of any Foreign Subsidiary other than a First Tier
Foreign Subsidiary shall be pledged to the Bank.
1 ARTICLE - REPRESENTATIONS OF BORROWER
The Borrower represents and warrants to the Bank as
follows:
1.1 Organization and Power. Detection is duly
organized, validly existing and in good standing under the laws
of the State of New York, and is duly qualified to transact
business and in good standing in all states in which it is
required to qualify or in which failure to qualify could have a
material adverse impact on its business. Detection has full
power and authority to own its properties, to carry on its
business as now being conducted, to execute, deliver and perform
this Agreement and all related documents and instruments, and to
consummate the transactions contemplated hereby. Detection has
no Subsidiaries or Affiliates except those listed on Schedule 6.1.
Each Subsidiary is duly organized, validly existing and
in good standing under the laws of the state or country of its
organization, and is duly qualified to transact business and in
good standing in all states and countries in which it is required
to qualify or in which failure to qualify could have a material
adverse impact on its business. Each Subsidiary has full power
and authority to own its properties, to carry on its business as
now being conducted, to execute, deliver and perform its
obligations under this Agreement and all documents and
instruments related to this Agreement, and to consummate the
transactions contemplated hereby.
1.1 Proceedings of Borrower. All necessary action
on the part of the Borrower, including shareholder approval to
the extent required, relating to authorization of the execution
and delivery of this Agreement and all related documents and
instruments, and the performance of the Obligations of the
Borrower hereunder and thereunder has been taken. This Agreement
and all related documents and instruments constitute legal, valid
and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency or similar
law affecting the rights of creditors generally, and equitable
principles. The Borrower has no defenses, offsets, claims, or
counterclaims with respect to its obligations arising under this
Agreement and all related documents and instruments. The
execution and delivery by the Borrower of this Agreement and all
related documents and agreements, and the performance by the
Borrower of its obligations under this Agreement and all related
documents and agreements will not violate any provision of law or
either of the Borrower's respective Certificates of Incorporation
or By-laws or organizational or other documents or agreements.
The execution, delivery and performance of this Agreement and all
related documents and agreements, and the consummation of the
transactions contemplated hereby will not violate, be in conflict
with, result in a breach of, or constitute a default under any
agreement to which the Borrower is a party or by which any of its
properties is bound, or any order, writ, injunction, or decree of
any court or governmental instrumentality, and will not result in
the creation or imposition of any lien, charge or encumbrance
upon any of its properties except in favor of the Bank.
All necessary action on the part of each Subsidiary,
including shareholder approval to the extent required, relating
to authorization of the execution and delivery of this Agreement
and all related documents and instruments, and the performance of
the Obligations of each Subsidiary hereunder and thereunder has
been taken. All documents and instruments related to this
Agreement executed by each Subsidiary respectively constitute
legal, valid and binding obligations of such Subsidiary,
enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency or similar law affecting the rights of creditors
generally, and equitable principles. No Subsidiary has defenses,
offsets, claims, or counterclaims with respect to its obligations
arising under all documents and instruments related to this
Agreement. The execution and delivery by each Subsidiary or all
documents and agreements related to this Agreement, and the
performance by each Subsidiary of its obligations under this
Agreement and all related documents and agreements will not
violate any provision of law or any Subsidiary's Certificate of
Incorporation or By-laws or organizational or other documents or
agreements. The execution, delivery and performance of all
documents and agreements related to this Agreement, and the
consummation of the transactions contemplated hereby will not
violate, be in conflict with, result in a breach of, or
constitute a default under any agreement to which any Subsidiary
is a party or by which any of its properties is bound, or any
order, writ, injunction, or decree of any court or governmental
instrumentality, and will not result in the creation or
imposition of any lien, charge or encumbrance upon any of its
properties except in favor of the Bank.
1.1 Capitalization. All of the outstanding shares
and other equity interests of both of the Borrowers are duly
authorized, validly issued, and fully paid. There is no existing
contract, debenture, security, right, option, warrant, call or
similar commitment of any character calling for or relating to
the issuance, retirement, redemption, purchase, or repurchase of
shares or other equity interests of the Borrower.
All of the outstanding shares and other equity
interests of each Subsidiary are duly authorized, validly issued,
and fully paid. There is no existing contract, debenture,
security, right, option, warrant, call or similar commitment of
any character calling for or relating to the issuance,
retirement, redemption, purchase, or repurchase of shares or
other equity interests of any Subsidiary except with respect to
Emergency Communications, Inc. pursuant to the Shareholders
Agreement dated January 26, 1993, a complete copy of which has
been provided to the Bank prior to the date hereof.
1.1 Litigation. Except as shown on Schedule 6.4,
there is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency
pending or, to the knowledge of the Borrower, threatened against
or affecting the Borrower (i) that brings into question the
legality, validity or enforceability of this Agreement or the
transactions contemplated hereby or (ii) that, if adversely
determined, would have a material adverse effect on the financial
condition or the business of the Borrower.
There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other
agency pending or, to the knowledge of the Borrower, threatened
against or affecting any Subsidiary (i) that brings into question
the legality, validity or enforceability of this Agreement or the
transactions contemplated hereby or (ii) that, if adversely
determined, would have a material adverse effect on the financial
condition or the business of the Subsidiary.
1.1 Financial Statements. All financial statements
furnished by the Borrower to the Bank are complete and correct,
have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
indicated, and fairly present the financial condition of the
Borrower and its Subsidiaries, as of the respective dates thereof
and the results of their respective operations for the respective
periods covered thereby.
1.1 Adverse Changes. Since the most recent
financial statements described in Section 6.5 hereof there has
been no material adverse change in the condition, financial or
otherwise, of the Borrower or its Subsidiaries, taken as a whole.
1.1 Taxes. The Borrower has filed or caused to be
filed when due all federal tax returns and all state and local
tax returns that are required to be filed, and has paid or caused
to be paid all taxes as shown on said returns or any assessment
received. Detection's tax returns have been audited and tax
years closed through and including fiscal 1995. Each Subsidiary
has filed or caused to be filed when due all federal tax returns
and all state and local tax returns that are required to be
filed, and has paid or caused to be paid all taxes as shown on
said returns or any assessment received. The Borrower's tax
returns are not being audited on the date of this Agreement and
the Borrower has not been notified of any intention by any taxing
authority to conduct such an audit.
1.1 Properties. The Borrower and each of its
Subsidiaries have good and marketable title to all of their
properties and assets, including without limitation, the
properties and assets reflected in the most recent financial
statements referred to in Section 6.5 hereof. The Borrower and
each of its Subsidiaries have undisturbed peaceable possession
under all leases under which they are operating, none of which
contain unusual or burdensome provisions that may materially
affect the operations of the Borrower and its Subsidiaries, and
all such leases are in full force and effect.
1.1 Indebtedness. Except as disclosed in the most
recent financial statements referred to in Section 6.5 hereof,
the Borrower and its Subsidiaries have no outstanding Debt.
1.1 ERISA. No action, event, or transaction has
occurred that could give rise to a lien or encumbrance on the
assets of the Borrower or its Subsidiaries as a result of the
application of relevant provisions of ERISA, and the Borrower and
its Subsidiaries are in material compliance with all requirements
of ERISA.
1.1 Margin Securities. Except as may be permitted
by Section 9.2 hereof, no proceeds of the Obligations have been
or will be used for the purpose of purchasing or carrying Margin
Securities as defined in Regulation U of the Federal Reserve
Board.
1.1 Compliance With Law. The Borrower and its
Subsidiaries are not in violation of any laws, ordinances,
governmental rules, requirements, or regulations to which they
are subject which violation might materially adversely affect the
condition (financial or otherwise) of the Borrower and its
Subsidiaries. The Borrower and its Subsidiaries have obtained
and are in compliance with all licenses, permits, franchises, and
governmental authorizations necessary for the ownership of their
properties and the conduct of their business, for which failure
to comply could materially adversely affect the condition
(financial or otherwise) of Borrower and its Subsidiaries.
1.1 Patents, Trademarks, and Authorizations. The
Borrower and its Subsidiaries own or possess all patents,
trademarks, service marks, trade names, copyrights, licenses,
authorizations, other intellectual property rights, and all
rights with respect to the foregoing, necessary to the conduct of
their business as now conducted without any material conflict
with the rights of others.
1.1 Contracts and Agreements. The Borrower and its
Subsidiaries are not parties to any contract or agreement that
materially adversely affects their business, property, assets, or
condition, financial or otherwise, and the Borrower and its
Subsidiaries are in compliance in all material respects with all
contracts and agreements to which they are a party.
2 ARTICLE - CONDITIONS OF LENDING
The following conditions must be satisfied before the
Bank shall have any obligation to make any advance under this
Agreement:
1.1 Representations and Warranties. The
representations and warranties of the Borrower contained herein
shall be true and correct as of the date of making of each such
advance, with the same effect as if made on and as of such date.
1.1 No Defaults. There shall exist no condition or
event that constitutes (or that, with the giving of notice or the
passage of time or both, would constitute) an Event of Default
under Article 12 hereof at the time each advance is made.
1.1 Performance. The Borrower shall have performed
and complied with all agreements and conditions required to be
performed or complied with by it prior to or at the time the
advance is made.
1.1 Opinion of Counsel. The Borrower shall have
delivered an opinion of its counsel, dated the date of this
Agreement, and upon request supplemental opinions dated the date
of the advance, in form and substance reasonably satisfactory to
the Bank.
1.1 Documents to be Delivered. The Borrower shall
have delivered to the Bank all security agreements, reimbursement
agreements, assignments, guarantees, and any related documents
necessary or desirable in connection with the requirements of
Article 5 hereof. All notes evidencing the Obligations shall
have been delivered to the Bank at the time of the making of the
respective loans.
1.1 Certified Resolutions. Each of the Borrowers
and the Guarantors shall have delivered a certificate of its
corporate secretary certifying, as of the date of the first
advance, resolutions duly adopted by its respective Board of
Directors authorizing the execution, delivery and performance of
this Agreement, or in the case of Guarantors, its respective
guarantee, and all related documents and agreements and the
consummation of the transactions contemplated hereby, which
resolutions shall remain in full force and effect so long as any
of the Obligations are outstanding or any commitment to lend
exists under this Agreement.
1.1 Fees and Taxes. The Borrower shall have paid
all filing fees, taxes, and assessments related to the borrowings
and the perfection of any interests in collateral security
required hereunder.
1.1 Insurance. The Borrower shall have delivered
evidence satisfactory to the Bank of the existence of insurance
required hereby.
1.1 Organizational Documents. The Borrower shall
have delivered to the Bank copies of its then-effective
Certificate of Incorporation, By-laws, d/b/a certificates, and
other organizational documents and instruments, and upon request
of the Bank, a written certificate that such documents and
instruments have not been changed or amended since the last
advance to Borrower pursuant to the terms of this Agreement.
1.1 Other Documents and Agreements. On or before
the date of this Agreement, the Borrower shall have delivered
such other documents, instruments, and agreements as the Bank and
its legal counsel may require in connection with the transactions
contemplated hereby.
1.1 Certificates of Good Standing. On or before the
date of this Agreement the Borrower shall have delivered to the
Bank certificates of good standing from appropriate state
officials to the effect that the each of the Borrowers and each
Domestic Subsidiary that owns a Foreign Subsidiary is in good
standing in the state of its formation as well as in all other
states in which qualification is necessary for each of the
Borrowers and such Domestic Subsidiaries to carry on its business
in such states.
1 ARTICLE - AFFIRMATIVE COVENANTS OF BORROWER
So long as any Obligations to the Bank shall be
outstanding or this Agreement remains in effect, unless the Bank
otherwise consents in writing, the Borrower shall:
1.1 Financial Statements. Furnish to the Bank as
soon as available, but in no event later than one hundred twenty
(120) days after the end of each of its fiscal years, copies of
its annual report containing its annual financial statements
audited by and with an unqualified opinion from an independent
certified public accountant satisfactory to the Bank. Said
financial statements shall be accompanied by (i) copies of its
Form 10K for the respective year, (ii) a schedule showing
computation of financial covenants, (iii) a copy of any
management letter prepared by the Borrower's accountants, and
(iv) a certificate of the Chief Financial Officer or the Chief
Accounting Officer of the Borrower to the effect that no Event of
Default has occurred and no condition exists which with the
passage of time or the giving of notice would constitute an Event
of Default.
The Borrower also shall furnish to the Bank copies of
its consolidating quarterly financial statements and Form 10Q not
more than fifty (50) days after the close of each quarter of its
fiscal year. Said statements shall be accompanied by (i) a
schedule showing computation of financial covenants, and (ii) a
certificate of the Chief Financial Officer or the Chief
Accounting Officer of the Borrower to the effect that no Event of
Default has occurred and no condition exists which with the
passage of time or the giving of notice would constitute an Event
of Default.
The Borrower shall provide to the Bank interim
financial statements, if any, prepared by the Borrower's
independent accountants.
1.1 Other Reports and Inspections. Furnish to the
Bank an annual budget within 30 days of the commencement of any
fiscal year, and such additional information, reports, or
financial statements as the Bank may, from time to time,
reasonably request.
The Borrower shall permit any person designated by the
Bank to inspect the property, assets, and books of the Borrower
at reasonable times and, prior to an Event of Default, upon
reasonable notice, and shall discuss its affairs, finances, and
accounts at reasonable times with the Bank from time to time as
often as may be reasonably requested.
1.1 Taxes. Pay and discharge all taxes,
assessments, levies, and governmental charges upon the Borrower,
its income and property, prior to the date on which penalties are
attached thereto; provided, however, that the Borrower may in
good faith contest any such taxes, assessments, levies, or
charges so long as such contest is diligently pursued and no lien
or execution exists or is levied against any of Borrower's assets
related to the contested items and so long as Borrower maintains
all reserves required by GAAP.
1.1 Insurance. Maintain or cause to be maintained
insurance, of kinds and in amounts satisfactory to the Bank, with
responsible insurance companies on all of its real and personal
properties in such amounts and against such risks as are prudent,
including but not limited to, full-risk extended coverage hazard
insurance to the full insurable value of real property
(co-insurance not being permitted without the prior written
consent of the Bank), all-risk coverage for personal property,
business interruption or loss of rents coverage, worker's
compensation insurance, and comprehensive general liability and
products liability insurance. The Borrower also shall maintain
flood insurance covering any of its real properties located in
flood zones. The Borrower shall provide to the Bank, no less
often than annually and upon its request, a detailed list and
evidence satisfactory to the Bank of its insurance carriers and
coverage and shall obtain such additional insurance as the Bank
may reasonably request. Hazard insurance policies for real
property shall name the Bank as mortgagee, and for personalty,
additional insured and loss payee, as its interests may appear.
All policies shall provide for at least thirty (30) days' prior
notice of cancellation to the Bank.
1.1 Existence. Cause to be done all things
necessary to preserve and to keep in full force and effect its
existence, rights, and franchises and to comply in all material
respects with all valid laws and regulations now in effect or
hereafter promulgated by any properly constituted governmental
authority having jurisdiction.
1.1 Maintenance of Properties. At all times
maintain, preserve, protect, and keep its property used or useful
in conducting its business, in good repair, working order, and
condition and, from time to time, make all needful and proper
repairs, renewals, replacements, betterments, and improvements
thereto, so that the business carried on may be properly and
advantageously conducted at all times.
1.1 Material Changes, Judgments. Notify the Bank
immediately of any material adverse change in the financial
condition of the Borrower and of the filing of any suits,
judgments, or liens which, if adversely determined, could have a
material adverse effect on the business or financial condition of
the Borrower. The Borrower also shall notify the Bank
immediately of any change in the name, identity, or
organizational structure of the Borrower, the Guarantors, or any
Foreign Subsidiary.
1.1 ERISA Compliance. Comply in all material
respects with the provisions of ERISA and regulations and
interpretations related thereto.
1.1 Franchises/Permits/Laws. Preserve and keep in
full force and effect all franchises, permits, licenses, and
other authority as are necessary to enable it to conduct its
business as being conducted on the date of this Agreement and
comply in all material respects with all laws, regulations, and
requirements now in effect or hereafter promulgated by any
properly constituted governmental authority having jurisdiction
over it.
1.1 Payments. Make all payments as and when
required by this Agreement and the notes and other agreements
related hereto or to the Obligations.
1.1 Deposits/Bank Services. Detection shall
maintain all of its main depository accounts at the Bank and
shall obtain its cash management services from the Bank.
1.1 Amendments. Give the Bank written notice of an
amendment or modification to the Certificate of Incorporation or
other governing documents or agreements of either Borrower.
1.1 Subsidiaries. Cause each Subsidiary to
comply in all respects with the same requirements as are imposed
upon the Borrower in Sections 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, and
8.9 of this Agreement.
1 ARTICLE - NEGATIVE COVENANTS OF BORROWER
So long as any Obligations shall be outstanding, or
this Agreement shall remain in effect, unless the Bank otherwise
consents in writing, the Borrower shall not, directly or
indirectly:
1.1 Debt/Liens. Create, incur, assume, or allow to
exist, voluntarily or involuntarily, any Debt, or any security
interest, assignment, pledge, lien or other encumbrance for the
purpose of collateral of any kind (including the charge upon
property purchased under conditional sales or other title
retention agreements) upon any of its property or assets, whether
now owned or hereafter acquired, or become the general partner in
any partnership, excluding only (i) Obligations to and interests
held by the Bank, (ii) Debt described in Schedule 9.1 attached
hereto and made a part hereof, (iii) encumbrances described in
Schedule 5.1, and (iv) obligations and interests to which the
Bank consents in writing.
1.2 Loans and Investments. Make any loan or advance
to, or any investment of any kind in, any person, firm, joint
venture, corporation or other entity whatsoever, except (i)
short-term investments in certificates of deposit of financial
institutions and similar investments made in the ordinary course
of business, (ii) to the extent permitted by this Agreement, to
or in any Subsidiary, provided however, that aggregate
investments and/or capital contributions by the Borrower and its
Domestic Subsidiaries in or to the Foreign Subsidiaries (taken as
a whole) shall in no event exceed $1,000,000 per year, and (iii)
provided that Borrower remains at all times in compliance with
each of the financial covenants set forth in Article 10 hereof,
payment of up to $10,000,000 in the aggregate for repurchases of
common stock of Detection Systems, Inc. between April 1, 1999 and
March 31, 2000.
1.1 Mergers, Sales and Acquisitions/Change in
Ownership Interests. Enter into any merger or consolidation, or
acquire all or substantially all the stock or other ownership
interests or assets of any person, firm, joint venture,
corporation, or other entity except for acquisition transactions
involving the expenditure by the Borrower and its Affiliates of
not more than $1,000,000 in total consideration in any one year
or in any single transaction; or sell, lease, transfer, or
otherwise dispose of any material portion of its assets except in
the ordinary course of business.
The Borrower will not allow any change in the
ownership, legal or equitable, of the shareholder or other
equity interests in the Subsidiaries except between or among the
Borrower and the Domestic Subsidiaries.
1.1 Amendments. Allow the amendment or
modification of either of their Certificates of Incorporation,
By-laws, or other governing documents and agreements in any
material respect without the prior written consent of the Bank.
1.1 Compensation. Compensate any person or entity,
including without limitation salaries, bonuses, consulting fees,
or otherwise, in excess of amounts reasonably related to services
rendered to the Borrower.
1.1 Judgments. Allow to exist any judgments
against Borrower in excess of $100,000 which are not fully
covered by insurance or for which an appeal or other proceeding
for the review thereof shall not have been taken and for which a
stay of execution pending such appeal shall not have been
obtained.
1.1 Margin Securities. Except as may be permitted
by Section 9.2 hereof, allow any proceeds of the Obligations to
be used for the purpose of purchasing or carrying any Margin
Securities as defined in Regulation U of the Board of Governors
of the Federal Reserve.
1.1 Tennessee Assets. Allow any of either of their
respective assets to be located in the State of Tennessee with a
value in excess of the dollar amount limitation of coverage by
the respective Borrower's Security Agreements related to
Tennessee assets.
1.1 Negative Pledge. Assign, transfer, pledge or
otherwise encumber to or in favor of anyone other than the Bank
any property, real, personal or intangible, which the Borrower
now or hereafter owns. Borrower will not at any time enter into
any agreement with anyone other than the Bank in which the
Borrower agrees not to assign, transfer, pledge or otherwise
encumber any property, real, personal or intangible, which the
Borrower now or hereafter owns.
9.10 Subsidiaries. Cause each Subsidiary to comply in
all respects with the same requirements as are imposed upon the
Borrower in Sections 9.1, 9.2, 9.3, 9.5, 9.6, 9.8 and 9.9 of this
Agreement.
1 ARTICLE - FINANCIAL COVENANTS
The financial covenants set forth in Section 10.1,
10.2, 10.3 and 10.4 shall be determined by calculating such
covenant for the Borrower and its Subsidiaries on a consolidated
basis and without duplication in accordance with GAAP.
So long as any Obligations to the Bank shall be
outstanding or this Agreement remains in effect, unless the Bank
otherwise consents in writing, the Borrower, shall:
1.1 Minimum Current Ratio. Maintain a minimum
Current Ratio of at least 2.0 to 1.0, as shown on each quarterly
financial statement provided to the Bank.
1.1 Minimum Fixed Charge Coverage. Maintain a ratio
of (a) EBITDA minus Distributions to (b) Fixed Charges,
calculated for the quarter ending on the measurement date plus
the fewer of either (i) the last three preceding quarters, or
(ii) the number of quarters except the measurement date quarter
that have ended after March 31, 1998, as shown on the quarterly
financial statements provided to the Bank, of at least 1.5 to 1.0
for the quarter ending June 30, 1998 and thereafter.
1.1 Maximum Funded Debt Ratio. Maintain a ratio of
Funded Debt to EBITDA, calculated for the quarter ending on the
measurement date plus the three preceding quarters, not exceeding:
(a) 2.5 to 1.0 measured on March 31, 2000,
June 30, 2000, September 30, 2000, and December
31, 2000,
(b) 2.25 to 1.0 measured on March 31, 2001,
June 30, 2001, September 30, 2001, and December
31, 2001, and
(c) 2.0 measured on March 31, 2002 and at the end of
each quarter thereafter.
1.1 Minimum Tangible Net Worth. Maintain a minimum
Tangible Net Worth equal to at least one hundred percent (100%)
of Tangible Net Worth of the Borrower as of March 31, 2000 plus,
in each succeeding fiscal quarter, an amount equal to
seventy-five percent (75%) of net operating income for all
periods following March 31, 2000 plus one hundred percent (100%)
of the net proceeds from any sale of stock or other equity
interests in the Borrower for all periods following March 31,
2000 as shown on each quarterly financial statement provided to
the Bank.
10.5 Limitation on Foreign Intercompany Indebtedness.
Ensure at all times that aggregate indebtedness of all Foreign
Subsidiaries owing to the Borrower and all Domestic Subsidiaries
at no time exceeds by more than $29,900,000 the aggregate
indebtedness of the Borrower and all Domestic Subsidiaries owing
to all Foreign Subsidiaries.
10.6 Profitability. Maintain positive net operating
income (calculated before Interest Expense, taxes, extraordinary
and unusual items, and income or loss attributable to equity in
Affiliates) on a quarterly basis at all times during each fiscal
quarter of the Borrower commencing with the fiscal quarter ending
March 31, 1999, as shown on each quarterly income statement for
the Borrower provided to the Bank.
1 ARTICLE - ENVIRONMENTAL MATTERS; INDEMNIFICATION
1.1 Environmental Representations. The Borrower
represents and warrants that, to the best of Borrowers's
knowledge and except as shown on Schedule 11.1:
(a) Neither the Improvements nor any property adjacent to
the Improvements is being or has been used for the
storage, treatment, generation, transportation,
processing, handling, production or disposal of any
Hazardous Substance or as a landfill or other waste
disposal site or for the storage of petroleum or
petroleum based products except in compliance with all
Environmental Laws.
(b) Underground storage tanks are not and have not been
located on the Improvements except in compliance with
all Environmental Laws.
(c) The soil, subsoil, bedrock, surface water and
groundwater of the Improvements are free of any
Hazardous Substances.
(d) There has been no Release, nor is there the threat of a
Release of any Hazardous Substance on, at or from the
Improvements or any property adjacent to or within the
immediate vicinity of the Improvements which through
soil, subsoil, bedrock, surface water or groundwater
migration could come to be located on the Improvements,
and Borrower has not received any form of notice or
inquiry from any federal, state or local governmental
agency or authority, any operator, tenant, subtenant,
licensee or occupant of the Improvements or any
property adjacent to or within the immediate vicinity
of the Improvements or any other person with regard to
a Release or the threat of a Release of any Hazardous
Substance on, at or from the Improvements or any
property adjacent to the Improvements.
(e) All Environmental Permits relating to the Borrower and
the Improvements have been obtained and are in full
force and effect.
(f) No event has occurred with respect to the Improvements
which, with the passage of time or the giving of
notice, or both, would constitute a violation of any
applicable Environmental Law or non-compliance with any
Environmental Permit.
(g) There are no agreements, consent orders, decrees,
judgments, license or permit conditions or other orders
or directives of any federal, state or local court,
governmental agency or authority relating to the past,
present or future ownership, use, operation, sale,
transfer or conveyance of the Improvements which
require any change in the present condition of the
Improvements or any work, repairs, construction,
containment, clean up, investigations, studies, removal
or other remedial action or capital expenditures with
respect to the Improvements.
(h) There are no actions, suits, claims or proceedings,
pending or threatened, which could cause the incurrence
of expenses or costs of any name or description or
which seek money damages, injunctive relief, remedial
action or any other remedy that arise out of, relate to
or result from (i) a violation or alleged violation of
any applicable Environmental Law or non-compliance or
alleged non-compliance with any Environmental Permit,
(ii) the presence of any Hazardous Substance or a
Release or the threat of a Release of any Hazardous
Substance on, at or from the Improvements or any
property adjacent to or within the immediate vicinity
of the Improvements or (iii) human exposure to any
Hazardous Substance, noises, vibrations or nuisances of
whatever kind to the extent the same arise from the
condition of the Improvements or the ownership, use,
operation, sale, transfer or conveyance thereof.
1.1 Environmental Covenants. The Borrower
covenants and agrees with the Bank that, so long as this
Agreement remains in effect, the Borrower shall:
(a) Comply with, and shall cause all operators, tenants,
subtenants, licensees and occupants of the Improvements
to comply with all applicable Environmental Laws and
shall obtain and comply with, and shall cause all
operators, tenants, subtenants, licensees and occupants
of the Improvements to obtain and comply with, all
Environmental Permits.
(b) Not cause or permit any change to be made in the
present or intended use of the Improvements which would
(i) violate any applicable Environmental Law, (ii)
constitute non-compliance with any Environmental Permit
or (iii) materially increase the risk of a Release of
any Hazardous Substance.
(c) Promptly provide Bank with a copy of all notifications
which it gives or receives with respect to any past or
present Release or the threat of a Release of any
Hazardous Substance on, at or from the Improvements or
any property adjacent to the Improvements.
(d) Undertake and complete all investigations, studies,
sampling and testing and all removal and other remedial
actions required by law to contain, remove and clean up
all Hazardous Substances that are determined to be
present at the Improvements in accordance with all
applicable Environmental Laws and all Environmental
Permits.
(e) At all times allow the Bank and its officers,
employees, agents, representatives, contractors and
subcontractors reasonable access after reasonable prior
notice to the Improvements for the purposes of
ascertaining site conditions, including, but not
limited to, subsurface conditions.
(f) Deliver promptly to the Bank: (i) copies of any
documents received from the United States Environmental
Protection Agency, or any state, county or municipal
environmental or health agency concerning the
Borrower's operations or the Improvements; and (ii)
copies of any documents submitted by the Borrower to
the United States Environmental Protection Agency or
any state, county or municipal environmental or health
agency concerning its operations or the Improvements.
(g) If at any time the Bank obtains any reasonable evidence
or information which suggests that a material potential
environmental problem may exist at the Improvements,
the Bank may require that a full or supplemental
environmental inspection and audit report with respect
to the Improvements of a scope and level of detail
satisfactory to Bank be prepared by an environmental
engineer or other qualified person acceptable to the
Bank at Borrower's expense. Such audit may include a
physical inspection of the Improvements, a visual
inspection of any property adjacent to or within the
immediate vicinity of the Improvements, personnel
interviews and a review of all Environmental Permits.
If the Bank requires, such inspection shall also
include a records search and/or subsurface testing for
the presence of Hazardous Substances in the soil,
subsoil, bedrock, surface water and/or groundwater. If
such audit report indicates the presence of any
Hazardous Substance or a Release or the threat of a
Release of any Hazardous Substance on, at or from the
Improvements, Borrower shall promptly undertake and
diligently pursue to completion all necessary,
appropriate and legally authorized investigative,
containment, removal, clean up and other remedial
actions, using methods recommended by the engineer or
other person who prepared said audit report and
acceptable to the appropriate federal, state and local
agencies or authorities.
1.1 Indemnity. The Borrower agrees to indemnify,
defend, and hold harmless the Bank from and against any and all
liabilities, claims, damages, penalties, expenditures, losses, or
charges, including, but not limited to, all costs of
investigation, monitoring, legal representation, remedial
response, removal, restoration or permit acquisition of any kind
whatsoever, which may now or in the future be undertaken,
suffered, paid, awarded, assessed, or otherwise incurred by the
Bank (or any other person or entity affiliated with the Bank or
representing or acting for the Bank or at the Bank's behest, or
with a claim on the Bank or to whom the Bank has liability or
responsibility of any sort related to this Section 11.3) relating
to, resulting from or arising out of (a) the use of the
Improvements for the storage, treatment, generation,
transportation, processing, handling, production or disposal of
any Hazardous Substance or as a landfill or other waste disposal
site, (b) the presence of any Hazardous Substance or a Release or
the threat of a Release of any Hazardous Substance on, at or from
the Improvements, (c) the failure to promptly undertake and
diligently pursue to completion all necessary, appropriate and
legally authorized investigative, containment, removal, clean up
and other remedial actions with respect to a Release or the
threat of a Release of any Hazardous Substance on, at or from the
Improvements, (d) human exposure to any Hazardous Substance,
noises, vibrations or nuisances of whatever kind to the extent
the same arise from the condition of the Improvements or the
ownership, use, operation, sale, transfer or conveyance thereof,
(e) a violation of any applicable Environmental Law, (f)
non-compliance with any Environmental Permit or (g) a material
misrepresentation or inaccuracy in any representation or warranty
or a material breach of or failure to perform any covenant made
by Borrower in this Agreement. Such costs or other liabilities
incurred by the Bank or other entity described in this Section
11.3 shall be deemed to include, without limitation, any sums
which the Bank deems it necessary or desirable to expend to
protect its security interests and liens.
1.1 No Limitation. The liability of Borrower under
this Article 11 shall in no way be limited, abridged, impaired or
otherwise affected by (a) any amendment or modification of this
Agreement or any other document relating to the Obligations by or
for the benefit of Borrower or any subsequent owner of the
Improvements except for an amendment or modification which
expressly refers to this Article 11, (b) any extensions of time
for payment or performance required by this Agreement or any
other document relating to the Obligations, (c) the release of
Borrower, any guarantor or any other person from the performance
or observance of any of the agreements, covenants, terms or
conditions contained in this Agreement or any other document
relating to the Obligations by operation of law, Bank's voluntary
act or otherwise, (d) the invalidity or unenforceability of any
of the terms of provisions of this Agreement or any other
document relating to the Obligations, (e) any exculpatory
provision contained in this Agreement or any other document
relating to the Obligations limiting Bank's recourse to property
encumbered by any mortgage or to any other security or limiting
Bank's rights to a deficiency judgment against Borrower, (f) any
applicable statute of limitations, (g) any investigation or
inquiry conducted by or on the behalf of Bank or any information
which Bank may have or obtain with respect to the environmental
or ecological condition of the Improvements, (h) the sale,
assignment or foreclosure of any interest in collateral for the
Obligations, (i) the sale, transfer or conveyance of all or part
of the Improvements, (j) the dissolution and liquidation of
Borrower, (k) the death or legal incapacity of any individual,
(l) the release or discharge, in whole or in part, of Borrower in
any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding, or
(m) any other circumstances which might otherwise constitute a
legal or equitable release or discharge of Borrower, in whole or
in part.
1.1 Survival. Notwithstanding anything to the
contrary contained herein, the Borrower's liability and
obligations under Section 11.4 shall survive the discharge,
satisfaction or assignment of this Agreement by the Bank and the
payment in full of all of the Obligations.
1.1 Investigations. If the Borrower defaults on
any of its Obligations pursuant to this Agreement or any other
Loan Document, the Bank or its designee shall have the right,
upon reasonable notice to the Borrower, to enter upon the
Improvements and conduct such tests, investigation and sampling,
including but not limited to installation of monitoring wells, as
shall be reasonably necessary for the Bank to determine whether
any disposal of Hazardous Substances has occurred on, at or near
the Improvements. The costs of all such tests, investigations
and samplings shall be considered as additional indebtedness
secured by all collateral for the Obligations and shall become
immediately due and payable without notice and with interest
thereon at highest rate then borne by any of the Obligations.
1.1 No Warranty Regarding Information. The
Borrower agrees that the Bank shall not be liable in any way for
the completeness or accuracy of any Environmental Report or the
information contained therein. The Borrower further agrees that
the Bank has no duty to warn the Borrower or any other person or
entity about any actual or potential environmental contamination
or other problem that may have become apparent or will become
apparent to the Bank.
1 ARTICLE - DEFAULTS
1.1 Defaults. The following events (hereinafter
called "Events of Default") shall constitute defaults under this
Agreement. Such Events of Default shall be without prejudice to
the Bank's rights to demand payment in full of Obligations
payable on demand, as specified in this Agreement or the notes
relating to such Obligations, at any time.
a. Nonpayment. Failure of the Borrower to make any
payment of any type under the terms of the Loan Documents
within ten (10) days after the same becomes due and payable.
b. Performance. Failure of the Borrower or any
Subsidiary to observe or perform any other condition,
covenant or term of the Loan Documents; provided, however,
except with respect to Sections 8.1 and 8.4 and Article 10
of this Agreement, if such failure is susceptible to cure an
Event of Default shall not occur unless such failure is not
cured within thirty (30) days after the Bank gives the
Borrower or the Subsidiary respectively notice of same.
c. Other Obligations. Failure of the Borrower or
any Subsidiary to observe or perform any other condition,
covenant, or term of any other agreement with the Bank after
any applicable cure or grace period related thereto, or
default by the Borrower or any Subsidiary under any
agreement involving Debt or any other material agreement
with any third person or entity.
d. Representations. (i) failure of any
representation or warranty made by the Borrower or any
Guarantor in connection with the execution of the Loan
Documents, or any certificate of officers pursuant thereto,
to be truthful, accurate or correct in all material
respects, or (ii) after fifteen (15) days notice and failure
to cure, failure of any representation or warranty made by
the Borrower or any Guarantor in connection with the
performance of the Loan Documents after the closing date, or
any certificate of officers pursuant thereto to be truthful,
accurate or correct in all material respects.
e. Financial Difficulties. Financial difficulties
of the Borrower or any Guarantor as evidenced by:
(i) any admission in writing of inability to pay
debts as they become due; or
(ii) the filing of a voluntary or involuntary
petition in bankruptcy, or under any chapters of the
Bankruptcy Code, or under any federal or state statute
providing for the relief of debtors; or
(iii) making an assignment for the benefit of
creditors; or
(iv) consenting to the appointment of a trustee
or receiver for all or a major part of any of its
property; or
(v) the entry of a court order appointing a
receiver or a trustee for all or a major part of its
property; or
(vi) the occurrence of any event, action, or
transaction that could give rise to a lien or
encumbrance on the assets of the Borrower as a result
of application of relevant provisions of ERISA.
f. Material Change. After ten (10) days notice to
the Borrower, any condition by reason of which the Bank
reasonably believes the Borrower's ability to timely repay
any Obligations to the Bank is impaired, including without
limitation by reason of material or reasonably projected
material change in Borrower's business or operations, or in
any factor affecting Borrower's business or operations, or
regarding any other obligation or agreement of Borrower, or
in the financial condition of Borrower or its Subsidiaries
taken as a whole, or in the collateral for the Borrower's
Obligations.
1.1 Remedies. If any one or more Events of Default
listed in Section 12.1 (e)(i)-(v) occur, (a) any further
commitments or obligations of the Bank shall be deemed to be
automatically and without need for further action terminated, and
(b) all Obligations of the Borrower to the Bank, automatically
and without need for further action, shall become forthwith due
and payable without presentment, demand, protest, or other notice
of any kind, all of which are hereby expressly waived. If any
one or more Events of Default other than those listed in Section
12.1 (e)(i)-(v) occur, the Bank may, at its option, take either
or both of the following actions at the same or different times:
(a) terminate any further commitments or obligations of the Bank,
and (b) declare all Obligations of the Borrower to the Bank,
automatically and without need for further action, to be
forthwith due and payable without presentment, demand, protest,
or other notice of any kind, all of which are hereby expressly
waived.
In case any such Events of Default shall occur, the
Bank shall be entitled to recover judgment against the Borrower
for all Obligations of the Borrower to the Bank either before, or
after, or during the pendency of any proceedings for the
enforcement, of any security interests, mortgages, pledges, or
guarantees and, in the event of realization of any funds from any
security or guarantee and application thereof to the payment of
the Obligations due, the Bank shall be entitled to enforce
payment of and recover judgment for all amounts remaining due and
unpaid on such Obligations. The Bank shall be entitled to
exercise any other legal or equitable right which it may have,
and may proceed to protect and enforce its rights by any other
appropriate proceedings, including action for the specific
performance of any covenant or agreement contained in this
Agreement and other agreements held by the Bank.
After any Event of Default, the Bank may require the
Borrower to deliver cash collateral to the Bank, together with
agreements related thereto satisfactory to the Bank in its sole
discretion, in an amount equal to the aggregate undrawn
outstanding amount of all letters of credit issued pursuant to
Section 2.8 of this Agreement.
1 ARTICLE - MISCELLANEOUS
1.1 Waiver. No delay or failure of the Bank to
exercise any right, remedy, power or privilege hereunder shall
impair the same or be construed to be a waiver of the same or of
any Event of Default or an acquiescence therein. No single or
partial exercise of any right, remedy, power or privilege shall
preclude other or further exercise thereof by the Bank. All
rights, remedies, powers, and privileges herein conferred upon
the Bank shall be deemed cumulative and not exclusive of any
others available.
1.1 Survival of Representations. All
representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the execution and
delivery of other agreements hereunder.
1.1 Additional Security/Setoff. The Borrower and
Guarantors hereby grant to the Bank a lien, security interest,
and right of set off as security for the Obligations upon and
against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of
Bank or any entity under the control of Fleet Financial Group,
Inc., or in transit to any of them. At any time without demand
or notice, the Bank may set off the same or any part thereof and
apply the same to any liability or obligation of Borrower or
Guarantors even though unmatured and regardless of the adequacy
of any other collateral securing the Obligations. Any and all
rights to require Bank to exercise its rights or remedies with
respect to any other collateral which secures the Obligations,
prior to exercising its right of set off with respect to such
deposits, credits, or other property of the Borrower or
Guarantors are hereby knowingly, voluntarily, and irrevocably
waived.
1.1 Notices. Any notice or demand upon any party
hereto shall be deemed to have been sufficiently given or served
for all purposes hereof when delivered in person or by nationally
recognized overnight courier with receipt requested, or two
Business Days after it is mailed certified mail postage prepaid,
return receipt requested, addressed as follows:
If to Bank: Fleet National Bank
One East Avenue
Rochester, New York 14638
Attention: Corporate Banking Department
Martin K. Birmingham
If to Borrower: etection Systems, Inc.
130 Perinton Parkway
Fairport, New York 14450
Attention: President
Any party may change, by notice in writing to the other parties,
the address to which notices to it shall be sent.
1.1 Entire Agreement. This Agreement and the
documents referred to herein embody the entire agreement and
understanding among the parties and supersede all prior
agreements and understandings relating to the subject matter
hereof. This Agreement shall not be changed or amended without
the written agreement of all parties hereto. This Agreement
embodies all commitments to lend between the Bank and the
Borrower and supersedes any prior commitments.
1.1 Parties in Interest. All the terms and
provisions of this Agreement shall inure to the benefit of and be
binding upon and be enforceable by the parties and their
respective successors and assigns and shall inure to the benefit
of and be enforceable by any holder of notes executed hereunder.
Upon any transfer of any Obligation or any interest therein the
Bank may deliver or otherwise transfer or assign to the holder
any collateral or guarantees for the Obligation, which holder
shall thereupon have all the rights of the Bank.
1.1
Business Days. All Loan Documents shall be governed
by the Modified Following Business Day Convention, but any
extension of time shall, in each such case, be included in the
computation of any interest or fees.
1.1 Oral and Telecopy Requests. As a convenience
to the Borrower, Borrower hereby authorizes the Bank to rely upon
requests made by the Borrower or its employees in writing or by
telecopy, and to treat such requests as if they were made in a
writing delivered to the Bank. Any advance of funds made by the
Bank pursuant to any such request shall be deemed to be
authorized by the Borrower unless immediately repaid in full.
1.1 Severability. In the event that any one or
more of the provisions contained in this Agreement or any other
agreement, document, or guarantee related hereto shall, for any
reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or such other agreement,
document, or guarantee.
1.1 Governing Law. This Agreement and the notes
and agreements hereunder, together with all of the rights and
obligations of the parties hereto, shall be construed, governed
and enforced in accordance with the laws of the State of New York
without regard to conflicts of laws principles.
1.1 Participations; Assignments. All the terms and
provisions of this Agreement shall inure to the benefit of and be
binding upon and be enforceable by the parties and their
respective successors and assigns and shall inure to the benefit
of and be enforceable by any holder of notes executed hereunder.
Bank may at any time pledge all or any portion of its
rights under the Loan Documents, including any portion of any
note evidencing the Obligations, to any of the twelve (12)
Federal Reserve Banks.
The Bank shall have the unrestricted right at any time
or from time to time, and without Borrower's or any Guarantor's
consent, to assign all or any portion of its rights and
obligations hereunder to one or more banks or other financial
institutions (each an "Assignee"), and Borrower agrees that it
shall execute, or cause to be executed, and shall cause each
Guarantor to execute, such documents, including without
limitation, amendments to this Agreement and to any other Loan
Documents, as the Bank shall deem necessary to effect the
foregoing. In addition, at the request of the Bank and any such
Assignee, Borrower shall issue one or more new promissory notes,
as applicable, to any such Assignee and, if Bank has retained any
of its rights and obligations hereunder following such
assignment, to Bank, which new promissory notes shall be issued
in replacement of, but not in discharge of, the liability
evidenced by the promissory note held by Bank prior to such
assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and Bank after giving
effect to such assignment. Upon the execution and delivery of
appropriate assignment documentation, amendments, and any other
documentation required by Bank in connection with such
assignment, and the payment by Assignee of the purchase price
agreed to by Bank and such Assignee, such Assignee shall be a
party to this Agreement and shall have all of the rights and
obligations of the Bank hereunder (and under any and all other
Loan Documents) to the extent that such rights and obligations
have been assigned by the Bank pursuant to the assignment
documentation between the Bank and such Assignee, and Bank shall
be released from its obligations hereunder and thereunder to a
corresponding extent.
The Bank shall have the unrestricted right at any time
and from time to time, and without the consent of or notice to
Borrower or Guarantor, to grant to one or more banks or other
financial institutions (each a "Participant") participating
interests in Bank's obligation to lend hereunder and/or any or
all of the Obligations. In the event of any such grant by Bank
of a participating interest to Participant, whether or not upon
notice to Borrower, Bank shall remain responsible for the
performance of its obligations hereunder and Borrower shall
continue to deal solely and directly with Bank in connection with
Bank's rights and obligations hereunder.
The Bank may furnish any information concerning
Borrower in its possession from time to time to prospective
Assignees and Participants, provided that the Bank shall require
any such prospective Assignee or Participant to agree in writing
to maintain the confidentiality of such information.
1.1 Clarification of Prior Agreements. This
Agreement clarifies and supersedes the 1998 Amended and Restated
Credit Agreement dated as of September 30, 1998, as amended by
the First Amendment to the Credit Agreement dated as of April
___, 1999, between the Bank and the Borrower, and the credit
facilities related thereto.
1.1 Jurisdiction/TRIAL BY JURY. Grantor consents to
jurisdiction and service of process in the courts of the State of
New York and in the courts of the United States having
jurisdiction hereof. BORROWER AND BANK MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO ACCEPT
THIS AGREEMENT AND MAKE THE LOANS CONTEMPLATED HEREUNDER.
1.1 Loss or Mutilation. Upon receipt of an affidavit
of an officer of Bank as to the loss, theft, destruction, or
mutilation of any note evidencing any Obligation or any other
Loan Document which is not of public record, and, provided that
such affidavit includes or is accompanied by an indemnity by Bank
reasonably satisfactory to Borrower, Borrower will issue, in lieu
thereof, a replacement note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.
1.1 Usury. All agreements between Borrower,any
Guarantor and Bank are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of
acceleration or maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Bank for
the use or the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as
of the date hereof, provided, however that in the event there is
a change in the law which results in a higher permissible rate of
interest, then the Loan Documents shall be governed by such new
law as of its effective date. In this regard, it is expressly
agreed that it is the intent of Borrower and Bank in the
execution, delivery and acceptance of this Agreement to contract
in strict compliance with the laws of the State of New York from
time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time performance of such provision shall be
due, shall involve transcending the limit of such validity
prescribed by applicable law, then the obligation to be fulfilled
shall automatically be reduced to the limits of such validity,
and if under or from any circumstances whatsoever Bank should
ever receive as interest an amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall
be applied to the reduction of the principal balance evidenced
hereby and not to the payment of interest. This provision shall
control every other provision of all agreements between Borrower
and Bank.
1.1 Time of Payments. In the event that any
payment is due from the Borrower under this Agreement or any
note, instrument, agreement, or document related hereto, such
payment shall be made in immediately available funds to the Bank
at or before 2:00 p.m. on the Business Day on which such payment
is due. Payments made after such time shall continue to bear
interest until the next succeeding Business Day at the rates
otherwise provided in this Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first above written.
FLEET NATIONAL BANK
By: ______________________________
Martin K. Birmingham, Vice
President
DETECTION SYSTEMS, INC.
By: ______________________________
Title:
______________________________
INDEX TO SCHEDULES
SCHEDULE 5.1 - Liens and Encumbrances
SCHEDULE 6.1 - Affiliates and Subsidiaries
SCHEDULE 6.4 - Litigation
SCHEDULE 9.1 - Obligations
SCHEDULE 11.1 - Environmental Matters
INDEX TO EXHIBITS
EXHIBIT A - Revolving Line Note
EXHIBIT B - Mortgage Loan Note
<PAGE>
EXHIBIT A
AMENDED AND RESTATED REVOLVING LINE NOTE
$35,000,000.00 July 28, 2000
Unless otherwise expressly provided herein, all
capitalized terms in this Amended and Restated Revolving Line
Note ("Revolving Line Note") shall have the meanings given to
them in the 2000 Amended and Restated Credit Facility Agreement
dated as of July 28, 2000, between the undersigned ("Borrower")
and Fleet National Bank, as the same may be amended, extended,
replaced, or modified from time to time (the "Credit Agreement").
This Revolving Line Note evidences the same obligations
as evidenced by and amends, replaces, and restates in its
entirety (i) the Revolving Line Note dated as of May 31, 1996, as
amended and restated by the Amended and Restated Revolving Line
Note dated February 18, 1997, as amended and restated by the
Amended and Restated Revolving Line Note dated June 24, 1997, as
amended and restated by the Amended and Restated Revolving Line
Note dated September 30, 1998, given by the Borrower in favor of
the Bank, and (ii) the Term Loan Note dated May 31, 1996 in the
original principal amount of $14,350,000, as amended and restated
by the Amended and Restated Term Loan Note dated June 24, 1997,
as amended by the Amended and Restated Term Loan Note dated
September 30, 1998, given by the Borrower in favor of the Bank.
FOR VALUE RECEIVED, the Borrower hereby promises to pay
to the order of the Bank, at any of its banking offices, or at
such other places as Bank may specify in writing to Borrower, the
principal sum of Thirty-Five Million Dollars ($35,000,000), or if
less, the aggregate unpaid principal amount of all advances made
by Bank to Borrower. Bank shall maintain a record of amounts of
principal and interest payable by Borrower from time to time, and
the records of Bank maintained in the ordinary course of business
shall be prima facie evidence of the existence and amounts of the
Borrower's obligations recorded therein. In addition, Bank may
mail or deliver periodic statements to Borrower indicating the
date and amount of each advance hereunder (but any failure to do
so shall not relieve Borrower of the obligation to repay any
advance). Unless Borrower questions the accuracy of an entry on
any periodic statement within fifteen business days after such
mailing or delivery by Bank, Borrower shall be deemed to have
accepted and be obligated by the terms of each such periodic
statement as accurately representing the advances hereunder. In
the event of transfer of this Revolving Line Note, or if the Bank
shall otherwise deem it appropriate, Borrower hereby authorizes
Bank to endorse on this Revolving Line Note the amount of
advances and payments to reflect the principal balance
outstanding from time to time. Bank is hereby authorized to
honor borrowing and other requests received from purported
representatives of Borrower orally, by telecopy, in writing, or
otherwise. Oral requests shall be conclusively presumed to have
been made by an authorized person and Bank's crediting of
Borrower's account with the amount requested shall conclusively
establish Borrower's obligation to repay the amount advanced.
Interest. All outstanding amounts under this Revolving
Line Note shall bear interest until paid in full at the Base Rate
plus the Applicable Base Rate Margin. Changes in the rate of
interest applicable to this Revolving Line Note shall become
effective automatically and without notice at the time of changes
in the Base Rate.
The Borrower, however, at least three business days
prior to each Rate Change Date may notify the Bank of its
election to have a portion of the outstanding principal amount
under this Revolving Line Note (which must be at least $1,000,000
and must be an increment of $100,000) bear interest for a
one-month, three-month, or six-month period commencing on such
Rate Change Date at the LIBOR Rate plus the Applicable LIBOR
Margin.
Interest shall be calculated based on actual days
elapsed divided by a year of 360 days. Interest shall continue
to accrue after maturity, including after acceleration and
judgment, at the rate required by this Revolving Line Note until
this Revolving Line Note is paid in full. The rate of interest
on this Revolving Line Note may be increased under the
circumstances provided in the Credit Agreement. The right of Bank
to receive such increased rate of interest shall not constitute a
waiver of any other right or remedy of Bank.
Payments. Payments of all accrued interest under this
Revolving Line Note shall be due and payable on the first day of
each month. Commencing on the first day of the month following
the Revolving Line Conversion Date, equal principal payments
under this Revolving Line Note shall be due in an amount each
equal to a fraction, the numerator of which is one (1) and the
denominator of which is forty-eight, of the outstanding principal
amount under the Revolving Line Note on the Revolving Line
Conversation Date, due on the first day of each month. All
remaining outstanding principal and accrued interest under this
Revolving Line Note shall be due and payable in full on the
earlier of (i) July 28, 2007, and (ii) the date of an Event of
Default.
Unless extended by the Bank on terms and conditions then
acceptable to the Bank, the Revolving Line will terminate, on the
earlier of (i) July 28, 2007, and (ii) the date of an Event of
Default.
Notwithstanding the foregoing, no additional advances shall be
made hereunder from and after the Revolving Line Conversion
Date.
All payments shall be in lawful money of the United
States in immediately available funds. Unless canceled in
writing by Borrower, Borrower authorizes Bank to debit its
accounts at Bank to make payments due hereunder, but such
authority shall not relieve Borrower of the obligation to assure
that payments are made when due.
Late Charge. This Revolving Line Note is subject to
the late charges provided in the Credit Agreement.
Maximum Rate. All agreements between Borrower and Bank
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount paid
or agreed to be paid to Bank for the use or the forbearance of
the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in
effect as of the date hereof provided, however that in the event
there is a change in the law which results in a higher
permissible rate of interest, then this Note shall be governed by
such new law as of its effective date. In this regard, it is
expressly agreed that it the intent of Borrower and Bank in the
execution, delivery and acceptance of this Note to contract in
strict compliance with the laws of the State of New York from
time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any other
documents between the Borrower and the Bank at the time of
performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be
reduced to the limits of such validity, and if under or from
circumstances whatsoever Bank should ever receive as interest and
amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every
other provision of all agreements between Borrower and Bank.
Prepayment. This Revolving Line Note is freely
prepayable in whole or in part at any time, subject to payment of
Break Costs, if any, as provided in the Credit Agreement.
Holidays. If this Revolving Line Note or any payment
hereunder becomes due on a day not a Business Day, the due date
of this Revolving Line Note or payment shall be extended to the
next succeeding Business Day, but any interest or fees shall be
calculated based upon the actual time of payment.
Events of Default. At Bank's option, this Revolving
Line Note shall become immediately due and payable in full,
without further presentment, protest, notice, or demand, upon the
happening of any Event of Default.
Modification of Terms. The terms of this Revolving
Line Note cannot be changed, nor may this Revolving Line Note be
discharged in whole or in part, except by a writing executed by
Bank. In the event that Bank demands or accepts partial payments
of this Revolving Line Note, such demand or acceptance shall not
be deemed to constitute a waiver of the right to demand the
entire unpaid balance of this Revolving Line Note at any time in
accordance with the terms hereof. Any delay or omission by Bank
in exercising any rights hereunder shall not operate as a waiver
of such rights.
Collection Costs. Borrower on demand shall pay all
expenses of Bank, including without limitation reasonable
attorneys' fees, in connection with enforcement and collection of
this Revolving Line Note.
Miscellaneous. To the fullest extent permissible by
law, Borrower waives presentment, demand for payment, protest,
notice of nonpayment, and all other demands or notices otherwise
required by law in connection with the delivery, acceptance,
performance, default, or enforcement of this Revolving Line
Note. Borrower consents to extensions, postponements,
indulgences, amendments to notes and agreements, substitutions or
releases of collateral, and substitutions or releases of other
parties primarily or secondarily liable herefor, and agrees that
none of the same shall affect Borrower's obligations under this
Revolving Line Note which shall be unconditional.
Laws. Borrower agrees that this Revolving Line Note
shall be governed by the laws of the State of New York.
DETECTION SYSTEMS, INC.
By: ____________________________
Title: __________________________
<PAGE>
EXHIBIT B
AMENDED AND RESTATED MORTGAGE LOAN NOTE
$[3,400,000 - to be updated with current balance]
September ___, 1998
Unless otherwise expressly provided herein, all
capitalized terms in this Mortgage Loan Note shall have the
meanings given to them in the Amended and Restated Credit
Facility Agreement dated as of September __, 1998 between the
undersigned ("Detection"), Radionics, Inc. and Fleet National
Bank (as successor to Fleet Bank, "Bank"), as the same may be
amended, extended, replaced, or modified from time to time (the
"Credit Agreement").
This Amended and Restated Mortgage Loan Note evidences
the same obligations as evidenced by, and amends and restates in
its entirety, the Mortgage Loan Note dated May 31, 1996 in the
original principal amount of $3,400,000 given by the Borrower to
the Bank, as amended and restated by the Amended and Restated
Mortgage Loan Note dated June 24, 1997 in the original principal
amount of $3,400,000, given by the Borrower to the Bank.
FOR VALUE RECEIVED, Detection hereby promises to pay to
the order of the Bank, at any of its banking offices, or at such
other places as Bank may specify in writing to Borrower, the
principal sum of [Three Million Four Hundred Thousand Dollars
($3,400,000)].
Interest. Outstanding principal amounts under this
Mortgage Loan Note shall bear interest until paid in full at the
Base Rate plus the Applicable Base Rate Margin. Changes in the
rate of interest applicable to this Mortgage Loan Note shall
become effective automatically and without notice at the time of
changes in the Base Rate.
Detection, however, at least two business days prior to
each Rate Change Date may notify the Bank of its election to have
a portion of the outstanding principal amount under this Mortgage
Loan Note (which must be at least $1,000,000 and must be an
increment of $100,000) bear interest for a one-month,
three-month, or six month period commencing on such Rate Change
Date at the LIBOR Rate plus the Applicable LIBOR Margin.
Interest shall be calculated based on actual days
elapsed divided by a year of 360 days.
Interest shall continue to accrue after maturity at the
rate required by this Mortgage Loan Note until this Mortgage Loan
Note is paid in full. The rate of interest on this Mortgage Loan
Note may be increased under the circumstances provided in the
Credit Agreement. The right of Bank to receive such increased
rate of interest shall not constitute a waiver of any other right
or remedy of Bank.
Mortgage Loan Note shall be due and payable on the first day of
each month. In addition, commencing on October 1, 1998,
principal payments of $20,987.65 each shall be due and payable on
the first day of each month.
All Obligations under and related to this Mortgage Loan
Note shall be due and payable in full on May 31, 2006.
All payments shall be in lawful money of the United
States in immediately available funds. Unless canceled in
writing by Detection, Detection authorizes Bank to debit its
accounts at Bank to make payments due hereunder, but such
authority shall not relieve Detection of the obligation to assure
that payments are made when due.
Late Charge. This Mortgage Loan Note is subject to the
late charges provided in the Credit Agreement.
Maximum Rate. All agreements between Borrower and Bank
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount paid
or agreed to be paid to Bank for the use or the forbearance of
the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York from time to time in effect. If, under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any other documents between the Borrower and the Bank at
the time of performance of such provision shall be due, shall
involve transcending the limit of such validity prescribed by
applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity, and if
under or from circumstances whatsoever Bank should ever receive
as interest and amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced
hereby and not to the payment of interest. This provision shall
control every other provision of all agreements between Borrower
and Bank.
Prepayment. This Mortgage Loan Note is freely
prepayable in whole or in part at any time, subject to payment of
Break Costs, if any, as provided in the Credit Agreement.
Holidays. If this Mortgage Loan Note or any payment
hereunder becomes due on a Saturday, Sunday or other holiday on
which the Bank is authorized to close, the due date of this
Mortgage Loan Note or payment shall be extended to the next
succeeding business day, but any interest or fees shall be
calculated based upon the actual time of payment.
Events of Default. At Bank's option, this Mortgage
Loan Note shall become immediately due and payable in full upon
the happening of any Event of Default.
Modification of Terms. The terms of this Mortgage Loan
Note cannot be changed, nor may this Mortgage Loan Note be
discharged in whole or in part, except by a writing executed by
Bank. In the event that Bank demands or accepts partial payments
of this Mortgage Loan Note, such demand or acceptance shall not
be deemed to constitute a waiver of the right to demand the
entire unpaid balance of this Mortgage Loan Note at any time in
accordance with the terms hereof. Any delay or omission by Bank
in exercising any rights hereunder shall not operate as a waiver
of such rights.
Collection Costs. Detection on demand shall pay all
expenses of Bank, including without limitation reasonable
attorneys' fees, in connection with enforcement and collection of
this Mortgage Loan Note.
Miscellaneous. To the fullest extent permissible by
law, Detection waives presentment, demand for payment, protest,
notice of non-payment, and all other demands or notices otherwise
required by law in connection with the delivery, acceptance,
performance, default, or enforcement of this Mortgage Loan Note.
Detection consents to extensions, postponements, indulgences,
amendments to notes and agreements, substitutions or releases of
collateral, and substitutions or releases of other parties
primarily or secondarily liable herefor, and agrees that none of
the same shall affect Detection's obligations under this Mortgage
Loan Note which shall be unconditional.
Laws. Detection agrees that this Mortgage Loan Note
shall be governed by the laws of the State of New York.
DETECTION SYSTEMS, INC.
By: ____________________________
Title: __________________________
