Exhibit 10.16
FOURTH AMENDMENT OF CREDIT AGREEMENT
THIS FOURTH AMENDMENT OF CREDIT AGREEMENT (this "AMENDMENT") is entered
into on February 28, 2001, effective as of March 2, 2001, 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
INDUSTRIES, 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
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 Industries, Inc. (f/k/a Westar Capital, Inc.).
D. Borrower, Lender and Administrative Agent entered into a Second
Amendment of Credit Agreement effective as of February 29, 2000 and a Third
Amendment of Credit Agreement effective as of January 2, 2001 (the "Third
Amendment"), pursuant to which certain provisions of the Credit Agreement were
amended.
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
"IMMATERIAL ACQUISITION" and "TERMINATION DATE" in their entirety and replace
such definitions with the following:
IMMATERIAL ACQUISITION means any single Acquisition involving
an aggregate consideration (including, without limitation, cash paid,
Stock issued, or Debt issued or assumed) in an amount that does not
exceed $1,000,000.
TERMINATION DATE means the earlier of (a) January 2, 2002, 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 by deleting subsection (c) in the
definition of "Permitted Acquisition."
(c) SECTION 1.1 is hereby amended to add the following definition:
CAPITAL EXPENDITURES means for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed assets or capital assets (including expenditures for
the purchase of installed security systems) or additions to equipment
(including replacements, capitalized repairs and improvements during
such period) that should be capitalized under GAAP on a consolidated
balance sheet of such Person and its Subsidiaries, other than any such
expenditures made (w) with the proceeds of any condemnation award or
insurance or which will be reimbursed by insurance, (x) in connection
with normal replacement and maintenance programs properly expensed in
accordance with GAAP, or (y) with the proceeds of any asset sale made
pursuant to Section 10.11 other than Net Proceeds Borrower is required
to use to make mandatory prepayments of Principal Debt pursuant to
Section 3.2(b); provided that costs required to be capitalized with or
pursuant to Securities and Exchange Commission Staff Accounting
Bulletin No. 101 shall be excluded from Capital Expenditures.
(d) SECTION 2.5(a) is hereby deleted in its entirety and replaced with
the following:
(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 or making other expenditures
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).
(e) SECTION 2.5(b) is hereby amended to change the amount of the
amendment fee set forth in clause (ii) to 1% of the Requested Amount on the
Increase Effective Date.
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(f) SECTION 10 is hereby amended by adding the following new Section
10.13(c):
(c) CAPITAL EXPENDITURES. Borrower shall not, and shall not
permit any other Company to, directly or indirectly, make or commit to
make any Capital Expenditures in an aggregate amount exceeding
$85,000,000 for the fiscal year of the Borrower ending December 31,
2001.
(g) SCHEDULE 2.1 is hereby deleted and replaced with Schedule 2.1
attached hereto.
2. NO DEFAULT. Lender acknowledges that no Default has occurred as a
result of the restatement of POI's consolidated financial statements included in
POI's and Borrower's Form 10-K/A-2 for the fiscal year ended December 31, 1999
and amended Forms 10-Q for the first three quarterly periods in 2000, or the
delivery of the PowerCall, Inc. Permitted Acquisition Compliance Certificate
following the effective date of such acquisition.
3. 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.
4. 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.
5. 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, 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
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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.
6. 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) 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 (collectively, the "AMENDMENT DOCUMENTS"); and
(c) 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 1% of the Total Commitment on the effective date of
this Amendment ($1,150,000), provided that the amendment fee paid in connection
with the Third Amendment shall be credited against such fee, and (ii) the
reasonable fees and expenses of Administrative Agent's counsel (including the
allocated costs of internal counsel).
7. 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.
8. 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.
9. PARTIES. This Amendment binds and inures to Borrower and the Credit
Parties and their respective successors and permitted assigns.
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10. 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 THIRD AMENDMENT OF
CREDIT AGREEMENT AMONG
PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,
WESTAR INDUSTRIES, INC., AS ADMINISTRATIVE AGENT
AND
THE LENDERS NAMED HEREIN
EXECUTED on and effective as of the dates first above written.
PROTECTION ONE ALARM MONITORING, INC., a
Delaware corporation, as Borrower
By: /s/ Anthony D. Somma
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Name: Anthony D. Somma
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Title: Chief Financial Officer
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SIGNATURE PAGE TO THIRD AMENDMENT OF
CREDIT AGREEMENT AMONG
PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,
WESTAR INDUSTRIES, INC., AS ADMINISTRATIVE AGENT
AND
THE LENDERS NAMED HEREIN
EXECUTED on and effective as of the dates first above written.
WESTAR INDUSTRIES, INC., as Administrative Agent
and a Lender
By: /s/ Paul R. Geist
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Name: Paul R. Geist
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Title: President
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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.
EXECUTED on and effective as of the dates first above written.
PROTECTION ONE, INC., a Delaware corporation
By: /s/ Anthony D. Somma
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Name: Anthony D. Somma
-------------------------------------------
Title: Chief Financial Officer
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NETWORK MULTI-FAMILY SECURITY CORPORATION, a
Delaware corporation
By: /s/ Anthony D. Somma
------------------------------------------------
Name: Anthony D. Somma
-------------------------------------------
Title: Chief Financial Officer
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SCHEDULE 2.1
PARTIES, ADDRESSES, COMMITMENTS, AND WIRING INFORMATION
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BORROWER
================================================================ ==============================================
Protection One Alarm Monitoring, Inc.
818 South Kansas Avenue
Topeka, KS 66612
Attention: Tony Somma
Telecopy No. (785) 575-6511
With a Copy to:
Weil, Gotshal & Manges, LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75252
Attention: Angela L. Fontana, Esq.
================================================================ ==============================================
ADMINISTRATIVE AGENT
================================================================ ==============================================
Westar Industries, Inc.
818 South Kansas Avenue
Topeka, KS 66612
Attention: Paul R. Geist
Telecopy No. (785) 575-1774
Wiring Instructions:
Bank of America, Dallas, Texas
ABA # 111000012
Account Number: 3750912584
Reference: Protection One Alarm Monitoring, Inc.
Attention: Lynn Cook
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PRO RATA PART OF THE
LENDERS COMMITTED SUM COMMITMENTS
=================================================================== ====================== ===========================
Westar Industries, Inc. $115,000,000 (1) 100%
818 South Kansas Avenue
Topeka, KS 66612
Attn: Paul R. Geist
Telecopy No. (785) 575-1774
Wiring Instructions:
Bank of America, Dallas, Texas
ABA # 111000012
Account No.: 3750912584
Reference: Protection One Alarm Monitoring, Inc.
Attention: Lynn Cook
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(1) Subject to increase pursuant to Section 2.5.