Exhibit 10.3
SECOND AMENDMENT OF CREDIT AGREEMENT
THIS SECOND AMENDMENT OF CREDIT AGREEMENT (this "AMENDMENT") is
entered into to be effective as of February 29, 2000, between PROTECTION ONE
ALARM MONITORING, INC., a Delaware corporation ("BORROWER"), each of the Persons
which is a signatory to this Amendment (collectively, "LENDERS), and WESTAR
CAPITAL, INC., as Administrative Agent for the Lenders (in such capacity,
together with its successors in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
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A. Borrower, Lenders and Administrative Agent, entered into the
Credit Agreement dated as of December 21, 1998 (as renewed, extended, modified,
and amended from time to time, the "CREDIT AGREEMENT"; capitalized terms used
herein shall, unless otherwise indicated, have the respective meanings set forth
in the Credit Agreement), providing for a revolving credit facility in the
original maximum principal amount of $500,000,000.
B. Pursuant to a letter agreement dated as of September 30, 1999,
Borrower reduced the Total Commitment to $250,000,000.
C. The Lenders and the Administrative Agent entered into that certain
Assignment and Acceptance dated December 17, 1999 wherein the Administrative
Agent and the Lenders assigned all of their rights and obligations under the
Credit Agreement to Westar Capital, Inc.
D. Pursuant to that certain Agreement of even date herewith among
Borrower, POI and Westar Capital, Inc., Borrower is selling certain assets to
Westar Capital, Inc. and will utilize the cash proceeds thereof to prepay the
Principal Debt (the "AGREEMENT") as set forth herein.
E. Borrower, Lender, and Administrative Agent desire to further
modify certain provisions contained in the Credit Agreement, subject to the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower, Lender, and
Administrative Agent agree as follows:
1. AMENDMENTS TO THE CREDIT AGREEMENT.
(A) SECTION 1.1 is hereby amended to delete the definitions of
"APPLICABLE MARGIN," "EBITDA," "INTEREST COVERAGE RATIO," "PERMITTED
ACQUISITIONS," and "TERMINATION DATE" in their entirety and replace such
definitions with the following:
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APPLICABLE MARGIN means, as of any date of
determination, the interest margin over Base Rate or the
Eurodollar Rate, as the case may be, that corresponds to
the Leverage Ratio set forth below on such date of
determination:
=============== ===================================== ============================== ==================== ========================
APPLICABLE APPLICABLE
MARGIN MARGIN FOR APPLICABLE
LEVEL LEVERAGE RATIO FOR BASE RATE EURODOLLAR MARGIN FOR COMMITMENT
BORROWINGS BORROWINGS FEES
=============== ===================================== ============================== ==================== ========================
1 Less than or equal to 5.00:1 1.00% 2.25% 0.375%
- --------------- ------------------------------------- ------------------------------ -------------------- ------------------------
2 Greater than 5.00:1 but less than 1.25% 2.50% 0.50%
or equal to 5.25:1
- --------------- ------------------------------------- ------------------------------ -------------------- ------------------------
3 Greater than 5.25:1 but less than 1.65% 3.00% 0.50%
or equal to 5.50:1
- --------------- ------------------------------------- ------------------------------ -------------------- ------------------------
4 Greater than 5.50:1 2.15% 3.50% 0.50%
=============== ===================================== ============================== ==================== ========================
The Applicable Margin payable by the Borrower on
the Borrowings outstanding hereunder shall be adjusted on
the date of receipt by the Administrative Agent of the
Financial Statements and Compliance Certificates required
to be delivered pursuant to SECTIONS 9.3(A) AND (B) as
tested using the Leverage Ratio for the most recent fiscal
quarter. If the Financial Statements and Compliance
Certificates required pursuant to SECTION 9.3(A) OR (B) are
not received by the Administrative Agent by the date
required, the Applicable Margin shall be determined as if
the Leverage Ratio is greater than 5.50:1. From the date
hereof until the Borrower's Financial Statements for the
fiscal quarter ended March 31, 2000 and corresponding
Compliance Certificate are delivered pursuant to SECTION
9.3(B), the Applicable Margin shall be determined based on
Level 1.
EBITDA means, with respect to any Person for any
fiscal period, an amount equal to (a) consolidated net
income of such Person for such period, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gains
from extraordinary items for such period, and (iv) any
aggregate net gain during such period arising from the
sale, exchange, or other disposition of capital assets by
such Person (including any fixed assets, whether tangible
or intangible, and all inventory sold in conjunction with
the disposition of fixed assets, but excluding asset sales
in the ordinary course of business permitted pursuant to
SECTION 10.11), in each case to the extent included in the
calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without
duplication, minus (c) any cash payments made in respect of
any item of extraordinary loss accrued during a prior
period and added back to EBITDA in such prior period
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pursuant to CLAUSE (G)(V) below, plus (d) to the extent
deducted from the calculation of consolidated net income in
CLAUSE (A) above, (i) non-recurring expenses incurred in
connection with the restructuring (including the payment,
prepayment, renegotiation, buyout, or other compromise,
collection, or other restructuring transaction and all
expenses related thereto including attorneys' fees and
expenses) of dealer contracts and receivables and (ii)
expenses related to the writeoff of dealer receivables
(provided that the aggregate amount of such expenses that
may be added pursuant to this CLAUSE (D) may not exceed
$10,000,000 in the aggregate during the term of this
Agreement), plus (e) expenses related to the purchase of
accounts from Paradigm Direct, LLC recognized during such
period that, in accordance with GAAP, are required to be
expensed (as opposed to capitalized), plus (f) expenses
related to the internal generation of accounts recognized
during such period that, in accordance with GAAP, are
required to be expensed (as opposed to capitalized), plus
(g) the sum of (i) any provision for income taxes, (ii)
Interest Expense, (iii) the amount of depreciation and
amortization for such period, (iv) the amount of any
deduction to consolidated net income as the result of any
Stock option expense, (v) the amount of any item of
extraordinary loss not paid in cash in such period, and
(vi) the absolute value of any aggregate net loss during
such period arising from the sale, exchange, or other
disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible, and all
inventory sold in conjunction with the disposition of fixed
assets, but excluding asset sales in the ordinary course of
business permitted pursuant to SECTION 10.11), in each case
to the extent included in the calculation of consolidated
net income of such Person for such period in accordance
with GAAP, but without duplication. In the case of any
Permitted Acquisition or internally generated account
during any period of calculation, EBITDA shall, for the
purposes of the foregoing calculations, be adjusted to give
effect to such Permitted Acquisition or internally
generated account, as if such Permitted Acquisition or
internally generated account occurred on the first (1st)
day of such period, by, with respect to any Permitted
Acquisition, increasing, if positive, or decreasing, if
negative, EBITDA by the EBITDA of such newly-acquired
business during such period of calculation occurring prior
to the date of such Permitted Acquisition.
INTEREST COVERAGE RATIO means, as of any date of
determination thereof, the ratio of (a) the product of (i)
Consolidated EBITDA for the most-recent fiscal quarter
ending on or prior to the date of determination, and (ii)
four (4), to (b) Consolidated Interest Expense for the
most-recent four (4) fiscal quarters ending on or prior to
the date of determination; provided, however, for purposes
of calculating the Interest Coverage Ratio, (i)
Consolidated Interest Expense shall be adjusted to give pro
forma effect to the reduction in Interest Expense as a
result of the reduction of Indebtedness from the
application of the proceeds from such asset disposition
(whether such proceeds are in cash or bonds) as if such
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asset disposition and corresponding reduction of
Indebtedness occurred on the first day of such
determination period and (ii) Consolidated EBITDA shall be
adjusted to give pro forma effect to such asset disposition
as if such asset disposition had occurred on the first day
of such determination period.
PERMITTED ACQUISITIONS means:
(A) any Dealer Acquisition, including, without
limitation, any Paradigm Acquisition;
(B) any Immaterial Acquisition, provided that
the aggregate consideration with respect to such Immaterial
Acquisition, when combined with the aggregate consideration of
all other Immaterial Acquisitions during the twelve (12) month
period prior to such Immaterial Acquisition, does not exceed $
10,000,000;
(C) any Acquisition by any Company with respect
to which each of the following requirements shall have been
satisfied:
(I) as of the closing of any
Acquisition, the Acquisition has been approved and recommended by
the board of directors (or other equivalent governing body, if
any) of the Person to be acquired or from which such assets or
business are to be acquired;
(II) as of the closing of any
Acquisition, after giving effect to such Acquisition, the
acquiring party must be Solvent and the Companies, on a
consolidated basis, must be Solvent;
(III) as of the closing of any
Acquisition, no Potential Default or Default shall exist or occur
as a result of, and after giving effect to, such Acquisition;
(IV) as of the closing of any
Acquisition, if such Acquisition is structured as a merger,
Borrower, (or if such merger is with any Subsidiary of Borrower,
then such Subsidiary) must be the surviving entity after giving
effect to such merger;
(V) the making and performance of
the related acquisition agreements with respect to such
Acquisition, and all other agreements, documents, and actions
required thereunder, will not violate any provision of any Law,
except where such violation could not be a Material Adverse
Event, and will not violate any provisions of the Constituent
Documents of any Company, or constitute a default under any
agreement by which any Company or its respective property may be
bound, except where such default could not be a Material Adverse
Event; and
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(VI) if such Acquisition is a
Material Acquisition, contemporaneously with the closing of such
Material Acquisition, Borrower shall have delivered to Agent (A)
a Permitted Acquisition Compliance Certificate, demonstrating pro
forma compliance with the terms and conditions of the Loan
Documents, after giving effect to the Acquisition, and (B) any
proposed adjustments to the Budget most-recently delivered
pursuant to the terms of this Agreement as a result of such
Acquisition; or
(D) any other Acquisition for which the prior
written consent of Required Lenders has been obtained (and
Lenders agree to respond to a request for consent to any such
Acquisition within ten (10) Business Days following Borrower's
request for such consent; provided that the failure to provide a
response to such request for consent shall be deemed to be a
refusal to grant such consent).
TERMINATION DATE means the earlier of (a)
January 2, 2001, and (b) the effective date of any other
termination or cancellation of Lenders' commitments to lend
under, and in accordance with, this Agreement.
(B) SECTION 1.1 is hereby amended to add the following
definitions:
"ASSET SALE" means the sale, transfer, or other
disposition by any Company of any of its assets other than
any sale, transfer or disposition of any assets (a)
permitted by SUBSECTIONS 10.11(A) THROUGH (G), or (b)
which, when the Net Proceeds thereof are added to the Net
Proceeds of any other sale, transfer or other disposition
pursuant to this clause (b), does not yield Net Proceeds in
excess of $2,000,000 in the aggregate.
"INCREASE EFFECTIVE DATE" has the meaning set
forth in SECTION 2.5(A).
"INCREASE REQUEST" has the meaning set forth in
SECTION 2.5(A).
"NET PROCEEDS" means, with respect to any Asset
Sale by any Company, the amount of cash received by such
Company in connection with such transaction after deducting
therefrom the aggregate, without duplication, of the
following amounts to the extent properly attributable to
such transaction: (a) reasonable brokerage commissions,
attorneys' fees, finder's fees, accounting fees, and other
similar commissions and fees, in each case, to the extent
paid or payable by such Company; and (b) taxes paid or
payable by such Company to any Governmental Authority as a
result of such transaction.
"PARADIGM ACQUISITION" means the acquisition of
contracts or accounts from Paradigm Direct, LLC.
"REQUESTED AMOUNT" has the meaning set forth in
SECTION 2.5(A).
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"SECOND AMENDMENT" means the Second Amendment to
Credit Agreement dated effective as of February 29, 2000
among the Borrower, the Lenders and the Administrative
Agent.
"SPECIAL ASSET SALE" means the sale of the
outstanding shares of Protection One UK plc, Protection One
International, Inc. and Protection One Investments, Inc.
pursuant to the Agreement.
(C) SECTION 1.1 is hereby amended to delete the definition
of "NATIONSBANK" in its entirety:
(D) SECTION 2.3 is hereby deleted in its entirety and
replaced with the following:
2.3 TERMINATION OF COMMITMENTS.
(A) VOLUNTARY. Without premium or penalty, and upon giving
not less than three (3) Business Days prior telephonic notice
(followed by written notice) to Administrative Agent, Borrower may
terminate in whole or in part the unused portion of the Total
Commitment provided that (i) each partial termination shall be in an
amount of not less than $10,000,000 or a greater integral multiple
of $1,000,000; (ii) the amount of the Commitment Usage may not
exceed the Total Commitment (unless Borrowings are simultaneously
paid in an amount equal to such excess); and (iii) each reduction
shall be allocated Pro Rata among Lenders in accordance with their
respective Pro Rata Parts. Promptly after receipt of such notice of
termination or reduction, Administrative Agent shall notify each
Lender of the proposed cancellation or reduction. Such termination
or partial reduction of the Total Commitment shall be effective on
the Business Day specified in Borrower's notice (which date must be
at least three (3) Business Days after Borrower's delivery of such
notice). In the event that the Total Commitment is reduced to zero
at a time when there shall be no Principal Debt, this Agreement
shall be terminated to the extent specified in SECTION 14.14, and
all commitment fees and other fees then earned and unpaid hereunder
and all other amounts of the Obligation then due and owing shall be
immediately due and payable, without notice or demand by
Administrative Agent or any Lender.
(B) MANDATORY. The Total Commitment shall automatically
terminate in an amount equal to each mandatory prepayment pursuant to
SECTION 3.2(B)(III). The Total Commitment shall be automatically
reduced to $115,000,000 on the date of the mandatory prepayment
pursuant to SECTION 3.2(B)(IV). Each termination in the Total
Commitment pursuant to this SECTION 2.3(B) shall be allocated Pro
Rata among Lenders in accordance with their respective Pro Rata
Parts.
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(E) A new SECTION 2.5 is hereby added as follows:
SECTION 2.5 INCREASE OF COMMITMENTS.
(a) The Borrower shall have the right from time to time to
increase the Total Commitment by an amount of up to $40,000,000 for
the purpose of consummating acquisitions approved by the
Administrative Agent in its sole and absolute discretion, upon a
specific date (the "INCREASE EFFECTIVE DATE") set forth in such
request (the "INCREASE Request") upon the same terms and conditions
as set forth herein. Any such increase shall be in incremental
aggregate amounts of not less than $5,000,000 (the "REQUESTED
AMOUNT") and shall increase the amount of the Total Commitments then
in effect and the Committed Sum of each Lender shall be increased by
its Pro Rata Part of the Requested Amount (subject to the Borrower's
right to terminate or reduce the amount of the Commitments pursuant
to Section 2.3).
(b) On the Increase Effective Date specified in any
Increase Request (i) each Lender's Committed Sum shall be
automatically increased by a Pro Rata Part of the aggregate amount of
the Requested Amount on the Increase Effective Date therefor, and
correspondingly, the Total Commitments, shall be increased
accordingly, in each case without the necessity of further amendment
to this Agreement and (ii) Borrower shall pay to the Administrative
Agent, for the account of the Credit Parties as Administrative Agent
shall determine, an amendment fee in an amount equal to 3/8% of the
Requested Amount on the Increase Effective Date.
(c) Upon the request to the Administrative Agent by any
Lender, the Borrower shall deliver to each such Lender, in exchange
for the Note held by such Lender, a new Note, in the principal amount
of such Lender's Committed Sum after giving effect to the adjustments
made pursuant to this Section 2.5.
(F) Section 3.2(B) is hereby deleted in its entirety and replaced
with the following:
(B) MANDATORY PAYMENTS.
(i) The Total Principal Debt is due and payable
on the Termination Date.
(ii) On any date of determination, if the
Commitment Usage exceeds the Total Commitment, then
Borrower shall make a mandatory prepayment of the
Principal Debt in the amount of such excess, together with
(i) all accrued and unpaid interest on the principal
amount so prepaid, and (ii) any Consequential Loss arising
as a result thereof.
(iii) Subject in all respects to Section 10.11,
concurrently with the receipt thereof, Borrower shall make
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a mandatory prepayment of the Principal Debt in an amount
equal to fifty percent (50%) of the Net Proceeds of each
Asset Sale (other than the Special Asset Sale).
(iv) On the effective date of the Second
Amendment, Borrower shall make a mandatory prepayment of
the Principal Debt in an amount equal to one hundred
percent (100%) of the cash proceeds of the Special Asset
Sale.
(v) All mandatory prepayments hereunder shall
be applied Pro Rata.
(G) Section 9.3(A)(II) is hereby deleted in its entirety and replaced
with the following:
(ii) a Compliance Certificate (other than with respect to
the fiscal year ended December 31, 1999).
(H) The following language shall be added at the end of SECTION
9.3(B) before the period ".":
(other than with respect to the fiscal quarter ended
September 30, 1999)
(I) SECTION 10.9 is hereby deleted in its entirety and replaced with
the following:
10.9 DISTRIBUTIONS AND SUBORDINATED DEBT PAYMENTS.
(A) DISTRIBUTIONS. Borrower shall not, and shall not permit
any other Company to, directly or indirectly declare, make, or pay any
Distributions, other than (i) Distributions declared, made, or paid by
any Company wholly in the form of its capital Stock, and (ii)
Distributions by any Company to Borrower, (iii) Distributions in the
form of Common Stock of POI issued in connection with the conversion of
the Convertible Notes, and (iv) Distributions from any Subsidiary of
POI to POI the proceeds of which:
(A) shall be applied by POI directly to pay
out-of-pocket expenses, for administrative, legal, and
accounting services provided by third parties that are
reasonable and customary and incurred in the ordinary
course of business for such professional services, or to
pay franchise fees and similar costs;
(B) will be used to repurchase the Stock of POI
in order to fulfill the obligations of any Company under an
employee Stock purchase plan or similar plan covering
employees of any Company as from time to time in effect;
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(C) will be used to pay taxes of the Companies as
part of a consolidated, combined, or unitary tax filing
group or of the separate operations of POI; or
(D) will be used to make investments in, or loans
to, any Subsidiary of POI otherwise permitted pursuant to
this Agreement.
(B) SUBORDINATED DEBT. Borrower shall not, and shall not
permit any other Company to pay, prepay, redeem, defease, or repurchase
any Subordinated Debt when it violates the subordination provisions
thereof, provided that so long as no Default exists Borrower may
refinance Subordinated Debt with the proceeds of other Subordinated
Debt, provided, further that notwithstanding the foregoing Borrower
shall be permitted to repurchase Subordinated Debt, in an aggregate
amount not to exceed $50,000,000.
(J) SECTION 10.11 is hereby deleted in its entirety and replaced with
the following:
10.11 SALE OF ASSETS. Borrower shall not, and shall not
permit any other Company to, sell, assign, transfer, or otherwise
dispose of any of its assets, other than (a) sales of inventory and
equipment leases (including, without limitation, equipment leases
originated or acquired by C.E.T., S.A. or its Subsidiaries) in the
ordinary course of business, (b) the sale, discount, or transfer of
delinquent accounts receivable in the ordinary course of business for
purposes of collection, (c) sales of immaterial assets for
consideration not less than the fair market value thereof, (d)
dispositions of obsolete assets and assets no longer useful in the
respective businesses of the Companies, (e) transfers resulting from
any casualty or condemnation of property or assets, (f) licenses or
sublicenses of intellectual property and general intangibles and
licenses, leases, or subleases of other property in each case in the
ordinary course of business and that do not materially interfere with
the business of any Company, (g) dispositions permitted by SECTION
10.12, (h) other asset sales during any fiscal year of the Companies in
an aggregate amount not exceeding ten percent (10%) of the consolidated
total assets of the Companies determined in accordance with GAAP for
the most recent fiscal year (without regard to any write down or write
up thereof), and (i) the Special Asset Sale.
(K) SECTION 10.13 is hereby deleted in its entirety and replaced with
the following:
10.13 FINANCIAL COVENANTS. As calculated on a consolidated
basis for the Companies:
(A) LEVERAGE RATIO. The Administrative Agent and the
Lenders hereby waive compliance with the Leverage Ratio for the fiscal
quarters ended September 30, 1999 and December 31, 1999. Borrower shall
not permit the Leverage Ratio, as of the last day of any fiscal quarter
of the Companies during the following periods, to be greater than the
ratio set forth opposite such period below:
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------------------------------------------- ----------------------
PERIOD RATIO
------------------------------------------- ----------------------
January 1, 2000 through December 31, 2000 5.75 to 1.0
------------------------------------------- ----------------------
January 1, 2001 and thereafter 5.50 to 1.0
------------------------------------------- ----------------------
(B) INTEREST COVERAGE. The Administrative Agent and the
Lenders hereby waive compliance with the Interest Coverage Ratio for
the fiscal quarters ended September 30, 1999 and December 31, 1999.
Borrower shall not permit the Interest Coverage Ratio, as of the last
day of any fiscal quarter of the Companies during the following
periods, to be less than the ratio set forth opposite such period
below:
-------------------------------------------- ----------------------
PERIOD RATIO
-------------------------------------------- ----------------------
January 1, 2000 through December 31, 2000 2.10 to 1.0
-------------------------------------------- ----------------------
January 1, 2001 and thereafter 2.25 to 1.0
-------------------------------------------- ----------------------
(L) SECTION 11.6 is hereby deleted in its entirety and replaced with
the following:
11.6 CHANGE OF CONTROL. POI shall cease to own, directly or
indirectly, one hundred percent (100%) of the voting control
(directly or indirectly) of Borrower.
(M) EXHIBIT A-1 is hereby deleted in its entirety and replaced with
EXHIBIT A-1 attached hereto.
(N) ScHEDULE 2.1 is hereby deleted in its entirety and replaced with
SCHEDULE 2.1 attached hereto.
2. AMENDMENT OF CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS. All
references in the Loan Documents to the Credit Agreement shall henceforth
include references to the Credit Agreement as modified and amended by this
Amendment, and as may, from time to time, be further modified, amended,
restated, extended, renewed, and/or increased.
3. RATIFICATIONS. Borrower (a) ratifies and confirms all provisions
of the Loan Documents as amended by this Amendment, (b) ratifies and confirms
that all guaranties, assurances, and Liens, if any, granted, conveyed, or
assigned to the Credit Parties under the Loan Documents are not released,
reduced, or otherwise adversely affected by this Amendment and continue to
guarantee, assure, and secure full payment and performance of the present and
future Obligation, and (c) agrees to perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record such additional documents, and
certificates as the Credit Parties may reasonably request in order to create,
perfect, preserve, and protect those guaranties, assurances, and Liens.
4. REPRESENTATIONS. Borrower represents and warrants to the Credit
Parties that as of the date of this Amendment: (a) this Amendment has been duly
authorized, executed,
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and delivered by Borrower and each of the other Obligors that are parties to
this Amendment; (b) no action of, or filing with, any Governmental Authority is
required to authorize, or is otherwise required in connection with, the
execution, delivery, and performance by Borrower or any other Obligor of this
Amendment; (c) the Loan Documents, as amended by this Amendment, are valid and
binding upon Borrower and the other Obligors and are enforceable against
Borrower and the other Obligors in accordance with their respective terms,
except as limited by Debtor Relief Laws and general principles of equity; (d)
the execution, delivery, and performance by Borrower and the other Obligors of
this Amendment do not require the consent of any other Person and do not and
will not constitute a violation of any Governmental Requirement, order of any
Governmental Authority, or material agreements to which Borrower or any other
Obligor is a party thereto or by which Borrower or any other Obligor is bound;
(e) all representations and warranties in the Loan Documents are true and
correct in all material respects on and as of the date of this Amendment, except
to the extent that (i) any of them speak to a different specific date, or (ii)
the facts on which any of them were based have been changed by transactions
contemplated or permitted by the Credit Agreement; and (f) both before and after
giving effect to this Amendment, no Potential Default or Default exists.
5. CONDITIONS. This Amendment shall not be effective unless and
until:
(A) this Amendment has been executed by Borrower, the other
Obligors, Administrative Agent, and the Required Lenders;
(B) If requested by any Lender, Borrower shall have executed and
delivered to Administrative Agent Amended and Restated Notes dated of even date
herewith, and payable to the order of Lenders in the aggregate principal amount
of the Total Commitment;
(C) Borrower shall have delivered to Administrative Agent such
documents satisfactory to Administrative Agent evidencing the authorization and
execution of this Agreement, and the other documents executed and delivered in
connection herewith (including opinions of counsel) (collectively, the
"AMENDMENT DOCUMENTS"); and
(D) Borrower shall have paid to Administrative Agent, for the
account of the Credit Parties as Administrative Agent shall determine, (i) an
amendment fee in an amount equal to 3/8% of the Total Commitment on the
effective date of this Amendment after giving effect to the reductions on the
date hereof ($431,250.00) and (ii) the reasonable fees and expenses of
Administrative Agent's counsel (including the allocated costs of internal
counsel) not to exceed $50,000.00.
6. CONTINUED EFFECT. Except to the extent amended hereby or by any
documents executed in connection herewith, all terms, provisions, and conditions
of the Credit Agreement and the other Loan Documents, and all documents executed
in connection therewith, shall continue in full force and effect and shall
remain enforceable and binding in accordance with their respective terms.
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7. MISCELLANEOUS. Unless stated otherwise (a) the singular number
includes the plural and vice versa and words of any gender include each other
gender, in each case, as appropriate, (b) headings and captions may not be
construed in interpreting provisions, (c) this Amendment shall be construed --
and its performance enforced -- under Texas law, (d) if any part of this
Amendment is for any reason found to be unenforceable, all other portions of it
nevertheless remain enforceable, and (e) this Amendment may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to
constitute the same document.
8. PARTIES. This Amendment binds and inures to Borrower and the
Credit Parties and their respective successors and permitted assigns.
9. ENTIRETIES. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
AMENDED BY THIS AMENDMENT AND THE OTHER AMENDMENT DOCUMENTS, REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE TO SECOND AMENDMENT OF
CREDIT AGREEMENT AMONG
PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,
WESTAR CAPITAL, INC., AS ADMINISTRATIVE AGENT
AND
THE LENDERS NAMED HEREIN
EXECUTED as of the day and year first above written.
PROTECTION ONE ALARM MONITORING, INC.,
a Delaware corporation, as Borrower
By: /s/ John E. Mack III
-------------------------------
Name: John E. Mack III
Title: Chief Executive Officer
SIGNATURE PAGE TO SECOND AMENDMENT OF
CREDIT AGREEMENT AMONG
PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,
WESTAR CAPITAL, INC., AS ADMINISTRATIVE AGENT,
AND
THE LENDERS NAMED HEREIN
WESTAR CAPITAL, INC., as Administrative Agent and a Lender
By: /s/ Cynthia S. Couch
---------------------
Name: Cynthia S. Couch
Title: Treasurer
To induce the Credit Parties to enter into this Amendment, each of
the undersigned (a) consents and agrees to the Amendment Documents' execution
and delivery, (b) ratifies and confirms that all guaranties, assurances, and
Liens, if any, granted, conveyed, or assigned to the Credit Parties under the
Loan Documents are not released, diminished, impaired, reduced, or otherwise
adversely affected by the Amendment Documents and continue to guarantee, assure,
and secure the full payment and performance of all present and future
Obligations (except to the extent specifically limited by the terms of such
guaranties, assurances, or Liens), (c) agrees to perform such acts and duly
authorize, execute, acknowledge, deliver, file, and record such additional
guaranties, assignments, security agreements, deeds of trust, mortgages, and
other agreements, documents, instruments, and certificates as the Credit Parties
may reasonably deem necessary or appropriate in order to create, perfect,
preserve, and protect those guaranties, assurances, and Liens, and (d) waives
notice of acceptance of this consent and agreement, which consent and agreement
binds the undersigned and its successors and permitted assigns and inures to the
Credit Parties and their respective successors and permitted assigns.
PROTECTION ONE, INC.,
a Delaware corporation
By: /s/ John E. Mack III
--------------------
Name: John E. Mack III
Title: Chief Executive Officer
NETWORK MULTI-FAMILY SECURITY CORPORATION,
a Delaware corporation
By: /s/ John E. Mack III
--------------------
Name: John E. Mack III
Title: Chief Executive Officer