EXHIBIT 4.8
BORG-WARNER SECURITY CORPORATION
SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT
This SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this
"AMENDMENT") is dated as of March 15, 1995 and entered into by and among BORG-
WARNER SECURITY CORPORATION, a Delaware corporation ("COMPANY"), the financial
institutions listed on the signature pages hereof ("LENDERS"), BANK OF AMERICA
ILLINOIS, THE BANK OF NEW YORK and THE BANK OF NOVA SCOTIA, as Lead Managers,
BANKERS TRUST COMPANY, CIBC INC. and NATIONSBANK, N.A. ("CAROLINAS"), as Co-
Agents, and BANKERS TRUST COMPANY, as Administrative Agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), and, for purposes of Section 5 hereof, the
Credit Support Parties (as defined in Section 5 hereof) listed on the signature
pages hereof, and is made with reference to that certain Credit Agreement dated
as of January 27, 1993 by and among Company, Lenders, Lead Managers, Co-Agents
and Administrative Agent, as amended by that certain First Amendment to the
Credit Agreement dated as of June 30, 1994 (such agreement, as so amended, being
referred to herein as the "CREDIT AGREEMENT"). Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit Agreement by
(i) revising the pricing provisions thereof, (ii) amending certain provisions
related to the refinancing of the Senior Notes, (iii) making provision for a
proposed off-balance sheet facility for the alarm services businesses, (iv)
amending certain of the financial covenants contained therein and (v) making
certain other amendments as set forth below; and
WHEREAS, subject to the terms and conditions of this Amendment, Lenders
are willing to agree to such amendments;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS.
A. ASSET SALE. The definition of "Asset Sale" contained in
subsection 1.1 of the Credit Agreement is hereby amended by deleting clause (B)
therefrom in its entirety and by substituting the following therefor:
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"(B) the sale or discount of notes, accounts receivable, contracts,
leases or other receivables to the extent sold or discounted in
connection with the off-balance sheet facilities permitted by
subsections 6.1(vii) and (x) and, in the case of the off-balance sheet
facility permitted by subsection 6.1(x), the sale of related
equipment."
B. BW - OTHER CORPORATION. The definition of "BW-Other Corporation"
contained in subsection 1.1 of the Credit Agreement is hereby amended by
deleting it in its entirety and by substituting the following therefor:
"'BW-Other Corporation' means the direct and indirect subsidiaries
of BW-Other Corporation, a Delaware corporation, prior to its
liquidation into Company, including without limitation Borg-Warner
Equities Corporation, Borg-Warner Equities Corporation of California,
Borg-Warner Equities Corporation of Monterey, Inc., NAL II, Ltd., Borg-
Warner Insurance Holding Corporation and Centaur Insurance Company."
C. NEW DEFINITIONS. Section 1.1 of the Credit Agreement is hereby
further amended by adding thereto the following definitions, which definitions
shall be inserted in proper alphabetical order:
"'Alarm Installation Costs' means the costs allocated to a
subscriber installation in connection with the original installation of
an alarm system, including without limitation all charges for materials
and for the labor associated with such installation.
'Centaur Interest Amount' means, for each period for which the
determination is being made and for each Centaur Settlement Amount for
which such calculation is being made, an amount equal to the interest
expense attributable to such Centaur Settlement Amount for such period,
commencing from the date of payment of such Centaur Settlement Amount
for the first such period, which amount shall be calculated by
utilizing the Prime Rate then in effect for Loans outstanding under
this Agreement (without reference to the Prime Rate Margin).
'Centaur Settlement Amount' means all amounts paid or contributed
by Company to Centaur Insurance Company ("Centaur") or directly or
indirectly paid by Company on behalf of Centaur, in each case on or
after the effective date of the Second Amendment for the purpose of
settling litigation pending against Centaur or against Company but
relating to Centaur or of paying the costs and expenses associated with
such litigation provided that the aggregate amount of all such payments
does not exceed the amount disclosed in writing by Company to Co-Agents
and approved by Co-Agents as of the effective date of the Second
Amendment.
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'New Receivables Facility' means an off-balance sheet receivables
financing facility in the amount of not less than $100,000,000, the
terms and conditions of which are satisfactory to Requisite Lenders,
which facility shall be provided by a financial institution
satisfactory to Requisite Lenders, to replace Company's existing off-
balance sheet receivables financing facility with Enterprise Funding
Corporation.
'Second Amendment' means the Second Amendment to Credit Agreement
and Consent dated as of March 15, 1995, by and among Company, Lenders,
Lead Managers, Co-Agents and Administrative Agent."
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS; NOTES; LETTERS OF CREDIT.
A. RATE OF INTEREST. Subsection 2.2A of the Credit Agreement is
hereby amended by deleting the table contained in the second paragraph thereof
in its entirety and substituting the following therefor:
"Adjusted Interest Prime Rate Eurodollar
Coverage Ratio Margin Rate Margin
-------------- ---------- -----------
Less than 2.25:1.00 1.50% 2.50%
Equal to or greater than 2.25:1.00 1.25% 2.25%
but less than 2.75:1.00
Equal to or greater than 2.75:1.00 1.00% 2.00%
but less than 3.55:1.00
Equal to or greater than 3.55:1:00 0.75% 1.75%
but less than 4.00:1.00
Equal to or greater than 4.00:1.00
but less than 4.50:1.00 0.50% 1.50%
Equal to or greater than 4.50:1.00 0.25% 1.25%
provided, however, in the event that Company has not obtained a
commitment letter for the New Receivables Facility by August 15, 1995,
from a financial institution which is, and the terms and conditions of
which commitment letter are, satisfactory to Requisite Lenders, each of
the percentages set forth above for the Prime Rate Margin and the
Eurodollar Rate Margin shall increase by an additional .25%; provided
further in the event that the New Receivables Facility has not been
executed and delivered by the Company and the other parties thereto by
September 15, 1995, each
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of the percentages set forth above for the Prime Rate Margin and the
Eurodollar Rate Margin, as such percentages may have been adjusted by
operation of the foregoing proviso, shall increase by an additional
.25%; provided further in the event that the Company has refinanced its
existing receivables facility with Enterprise Funding Corporation with
the proceeds of the New Receivables Facility on or prior to September
30, 1995, commencing as of the date of such refinancing, the rate
increases provided for in the foregoing two provisos shall be
terminated and shall be of no further force or effect."
B. FEES. Subsection 2.3 of the Credit Agreement is hereby amended by
adding the following at the end thereof:
"C. Refinancing Fees. In the event that Company has not obtained a
commitment letter for the New Receivables Facility by July 1, 1995, the
terms and conditions of which are satisfactory to Requisite Lenders,
Company shall pay to Administrative Agent for distribution to each
Lender in proportion to that Lender's Pro Rata Share of the
Commitments, an aggregate fee equal to .50% of the then outstanding
Commitments."
1.3 AMENDMENTS TO SECTION 5: COMPANY'S AFFIRMATIVE COVENANTS.
Subsection 5.10A of the Credit Agreement is hereby amended by deleting
the two provisos contained in the first sentence thereof and by substituting the
following therefor:
"; provided that prior to the effective date of the Second Amendment,
Company may pay such amounts as have been disclosed in writing to the
Co-Agents as of such effective date and thereafter Company may pay the
Centaur Settlement Amount."
1.4 AMENDMENTS TO SECTION 6: COMPANY'S NEGATIVE COVENANTS
A. INDEBTEDNESS. Subsection 6.1 of the Credit Agreement is hereby
amended by:
(1) deleting subclause (y) from clause (iii) thereof in its entirety
and by substituting the following therefor:
"(y) concurrently with any such refinancing, renewal or extension of
the Existing Indebtedness of Company to The Long-Term Credit Bank of
Japan, Ltd. listed in Item 1 of Schedule C annexed hereto prior to its
final scheduled maturity, the Commitments shall be permanently reduced
in an amount equal to the amount of such Existing Indebtedness so
refinanced, renewed or extended; and (z) notwithstanding the foregoing,
in connection
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with any refinancing of the Senior Notes, Company may issue up to
$140,000,000 principal amount of such refinancing Indebtedness;";
(2) adding immediately after the phrase "of which" in the fourth line
of clause (vii) thereof the following ", and any modifications, amendments
or supplements thereto,";
(3) deleting the phrase "clauses (i)-(vii)" from clause (viii) thereof
and by substituting "clauses (i)-(vii) and clause (x)" therefor;
(4) deleting the phrase "clauses (i)-(viii)" from clause (ix) thereof
and by substituting "clauses (i)-(viii) and clause (x)" therefor and by
deleting the period at the end of such clause (ix) and by substituting ";
and" therefor; and
(5) by adding a new clause (x) at the end of such subsection 6.1 as
follows:
"(x) Wells Fargo Alarm Services, Inc., BW-Canada Alarm (Wells Fargo)
Corporation, and their respective wholly owned subsidiaries may become
and remain liable with respect to an off-balance sheet facility
providing for the purchase of receivables, contracts, leases and
related equipment from such entities, the terms and conditions of which
facility, and any modifications, amendments or supplements thereto,
shall be satisfactory in form and substance to the Requisite Lenders.".
B. LIENS. Subsection 6.2 of the Credit Agreement is hereby amended
by:
(1) deleting the phrase "Additional Senior Indebtedness" from clause
(ii) thereof and by substituting the following therefor:
"Additional Senior Indebtedness, including the holders of Indebtedness
refinancing the Senior Notes in accordance with subsection 6.1(iii),"
and
(2) deleting the period at the end of clause (vii) thereof and by
substituting "; and" therefor and by adding a new clause (viii) at the end
of such subsection 6.2 as follows:
"(viii) Liens in favor of the purchaser of receivables, contracts,
leases and related equipment from Wells Fargo Alarm Services, Inc., BW-
Canada Alarm (Wells Fargo) Corporation, and their respective
subsidiaries, which Liens are filed with respect to such receivables,
contracts, leases and related equipment in connection with the off-
balance sheet facility permitted under subsection 6.1(x)".
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C. INVESTMENTS. Subsection 6.3 of the Credit Agreement is hereby
amended by adding the following at the end of clause 6.3(iii) thereof:
"and Wells Fargo Alarm Services, Inc. and BW-Canada Alarm (Wells Fargo)
Corporation may make and own Investments approved by Requisite Lenders
in financing subsidiaries established for the purpose of purchasing and
selling receivables, contracts, leases and related equipment in
connection with the off-balance sheet facility permitted pursuant to
subsection 6.1(x)".
D. INTEREST COVERAGE RATIO. Subsection 6.6A of the Credit Agreement
is hereby amended by deleting the subsection in its entirety and by substituting
the following therefor:
"A. INTEREST COVERAGE RATIO. Company will not permit the ratio (the
"Interest Coverage Ratio") of (i) Consolidated EBITDA minus the sum of
(x) Consolidated Capital Expenditures plus (y) an amount equal to Alarm
Installation Costs originated during the period for which the
determination is being made which are treated as sales-type leases and
which have not been sold in connection with the off-balance sheet
facility permitted pursuant to subsection 6.1(x) hereof, to (ii)
Consolidated Interest Expense as of the last day of each of the fiscal
quarters shown below for the four consecutive preceding fiscal quarters
ended on such date, to be less than the correlative ratio indicated
below:
PERIOD MINIMUM INTEREST COVERAGE RATIO
------ -------------------------------
Fiscal year ending 1994
-----------------------
Fourth fiscal quarter 1.60:1.00
Fiscal year ending 1995
-----------------------
First fiscal quarter 1.30:1.00
Second fiscal quarter 1.30:1.00
Third fiscal quarter 1.35:1.00
Fourth fiscal quarter 1.50:1.00
Fiscal year ending 1996
-----------------------
First fiscal quarter 1.50:1.00
Second fiscal quarter 1.55:1.00
Third fiscal quarter 1.60:1.00
Fourth fiscal quarter 1.75:1.00
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Fiscal year ending 1997
-----------------------
First fiscal quarter 1.75:1.00
Second fiscal quarter 1.80:1.00
Third fiscal quarter 1.85:1.00
Fourth fiscal quarter 2.00:1.00
Fiscal year ending 1998
-----------------------
First fiscal quarter 2.00:1.00
Second fiscal quarter 2.05:1.00
Third fiscal quarter 2.10:1.00
Fourth fiscal quarter 2.25:1.00
Fiscal year ending 1999
-----------------------
First fiscal quarter 2.35:1.00
Second fiscal quarter 2.50:1.00
provided however that for each fiscal quarter in which a Centaur
Settlement Amount is paid by Company and for the immediately succeeding
three fiscal quarters, in calculating Consolidated Interest Expense for
each such fiscal quarter, Company may exclude the Centaur Interest
Amount for such Centaur Settlement Amount for each such fiscal
quarter."
E. LEVERAGE RATIO. Subsection 6.6B of the Credit Agreement is hereby
amended by deleting the table set forth therein for each fiscal quarter,
commencing with the 1994 fourth fiscal quarter, and by substituting the
following therefor:
"PERIOD MAXIMUM LEVERAGE RATIO
------ ----------------------
Fiscal year ending 1994
-----------------------
Fourth fiscal quarter 3.35:1.00
Fiscal year ending 1995
-----------------------
First fiscal quarter 3.65:1.00
Second fiscal quarter 3.65:1.00
Third fiscal quarter 3.60:1.00
Fourth fiscal quarter 3.35:1.00
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Fiscal year ending 1996
-----------------------
First fiscal quarter 3.35:1.00
Second fiscal quarter 3.20:1.00
Third fiscal quarter 3.00:1.00
Fourth fiscal quarter 2.90:1.00
Fiscal year ending 1997
-----------------------
First fiscal quarter 2.90:1.00
Second fiscal quarter 2.80:1.00
Third fiscal quarter 2.65:1.00
Fourth fiscal quarter 2.50:1.00
Fiscal year ending 1998
-----------------------
First fiscal quarter 2.45:1.00
Second fiscal quarter 2.35:1.00
Third fiscal quarter 2.25:1.00
Fourth fiscal quarter 2.15:1.00
Fiscal year ending 1999
-----------------------
First fiscal quarter 2.00:1.00
Second fiscal quarter 1.80:1.00
provided however that for each fiscal quarter in which a Centaur
Settlement Amount is paid by Company and for the immediately succeeding
three fiscal quarters, in calculating the amount of Funded Debt for
each such fiscal quarter, Company may exclude such Centaur Settlement
Amount for each such fiscal quarter."
F. CONSOLIDATED NET WORTH. Subsection 6.6C of the Credit Agreement is
hereby amended by deleting the table set forth therein for each fiscal quarter,
commencing with the 1994 fourth fiscal quarter, and by substituting the
following therefor:
"PERIOD MINIMUM CONSOLIDATED NET WORTH
------ ------------------------------
Fiscal year ending 1994
-----------------------
Fourth fiscal quarter $55,000,000
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Fiscal year ending 1995
-----------------------
First fiscal quarter 50,000,000
Second fiscal quarter 50,000,000
Third fiscal quarter 55,000,000
Fourth fiscal quarter 60,000,000
Fiscal year ending 1996
-----------------------
First fiscal quarter 60,000,000
Second fiscal quarter 65,000,000
Third fiscal quarter 70,000,000
Fourth fiscal quarter 85,000,000
Fiscal year ending 1997
-----------------------
First fiscal quarter 87,500,000
Second fiscal quarter 90,000,000
Third fiscal quarter 95,000,000
Fourth fiscal quarter 105,000,000
Fiscal year ending 1998
-----------------------
First fiscal quarter 110,000,000
Second fiscal quarter 120,000,000
Third fiscal quarter 125,000,000
Fourth fiscal quarter 130,000,000
Fiscal year ending 1999
-----------------------
First fiscal quarter 145,000,000
Second fiscal quarter 160,000,000
provided however that in calculating Consolidated Net Worth, Company shall
exclude the effect of any gain related to taking into Consolidated Net Income
any reserves previously established to pay Centaur Settlement Amounts."
G. CONSOLIDATED EBITDA. Subsection 6.6D of the Credit Agreement is
hereby amended by deleting the table set forth therein for each fiscal quarter,
commencing with the 1994 fourth fiscal quarter, and by substituting the
following therefor:
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"PERIOD MINIMUM CONSOLIDATED EBITDA
------- ---------------------------
Fiscal year ending 1994
-----------------------
Fourth fiscal quarter $145,000,000
Fiscal year ending 1995
-----------------------
First fiscal quarter 130,000,000
Second fiscal quarter 130,000,000
Third fiscal quarter 132,500,000
Fourth fiscal quarter 140,000,000
Fiscal year ending 1996
-----------------------
First fiscal quarter 140,000,000
Second fiscal quarter 150,000,000
Third fiscal quarter 160,000,000
Fourth fiscal quarter 160,000,000
Fiscal year ending 1997
-----------------------
First fiscal quarter 162,500,000
Second fiscal quarter 165,000,000
Third fiscal quarter 167,500,000
Fourth fiscal quarter 170,000,000
Fiscal year ending 1998
-----------------------
First fiscal quarter 172,500,000
Second fiscal quarter 175,000,000
Third fiscal quarter 177,500,000
Fourth fiscal quarter 180,000,000
Fiscal year ending 1999
-----------------------
First fiscal quarter 185,000,000
Second fiscal quarter 190,000,000"
H. CONSOLIDATED CAPITAL EXPENDITURES. Subsection 6.6E of the Credit
Agreement is hereby amended by deleting the text of subsection 6.6E up to but
not including the proviso set forth therein and substituting the following
therefor:
"E. Consolidated Capital Expenditures. Company and its Subsidiaries
shall not permit the sum of (i) Consolidated Capital Expenditures plus (ii)
an
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amount equal to 75% of the Alarm Installation Costs originated in such
fiscal year which are sold in connection with the off-balance sheet facility
permitted pursuant to subsection 6.1(x) plus (iii) an amount equal to 100%
of the Alarm Installation Costs originated in such fiscal year which are
treated as sales-type leases which are not sold in connection with the off-
balance sheet facility permitted pursuant to subsection 6.1(x) to exceed in
any fiscal year the amount set forth below for such fiscal year (the
"Capital Expenditure Amount"):
PERIOD CAPITAL EXPENDITURE AMOUNT
------ --------------------------
Fiscal year ending 1993 $70,000,000
Fiscal year ending 1994 $75,000,000
Fiscal year ending 1995 $55,000,000
Fiscal year ending 1996 $60,000,000
Fiscal year ending 1997 $60,000,000
Fiscal year ending 1998 $60,000,000
Fiscal year ending 1999 $60,000,000
; provided that for fiscal years commencing on and after January 1,
1996, if the Company's Adjusted Interest Coverage Ratio for such fiscal
year is greater than 2.90 to 1.00 as of December 31, 1995, or as of the
last day of any fiscal year thereafter, the Capital Expenditure Amount
for the immediately succeeding fiscal year, and for each fiscal year
thereafter, shall be increased to $75,000,000;" and
(2) adding the following sentence at the end of subsection 6.6E:
"Notwithstanding the foregoing, in no event shall the Capital
Expenditure Amount for the fiscal year ending December 31, 1995, be
increased by any Unutilized Amount from the fiscal year ending December
31, 1994."
I. ACQUISITIONS. Subsection 6.7(iv) of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting the following
therefor:
"(iv) Company and its Consolidated Subsidiaries may acquire all or
substantially all the business, property or fixed assets of, or stock
or other evidence of beneficial ownership of, any Person engaged in
businesses substantially similar to those conducted by the Company and
its Consolidated Subsidiaries (such asset or stock acquisitions being
herein collectively referred to as "Acquisitions"); provided that the
purchase price (including all assumed liabilities) paid with respect to
Acquisitions made on or after the effective date of the Second
Amendment (A) does not exceed $25,000,000 in the aggregate for all such
Acquisitions or (B) in the event that (x) no Event of Default or
Potential Event of Default has occurred and is continuing, (y) the
ratio of Company's Funded Debt to Consolidated
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EBITDA for the immediately preceding four consecutive fiscal quarters
is not greater than 2.50 to 1.00 and (z) the Company's Adjusted
Interest Coverage Ratio for the immediately preceding four consecutive
fiscal quarters is not less than 3.00 to 1.00 (in determining
compliance with clauses (y) and (z) hereof, such calculations shall be
made on a pro forma basis for the period of calculation after giving
effect to the occurrence of the Acquisition on the first day of the
relevant calculation period and after giving effect to all
Indebtedness, including any assumed liabilities, incurred in connection
therewith and calculating interest on any such Indebtedness at a fixed
rate equal to the rate (whether fixed or floating) which such
Indebtedness would bear on the date of determination), does not exceed
$50,000,000 in the aggregate for all such Acquisitions; provided
however in the event that thereafter Company no longer meets the
conditions set forth in clauses (y) and (z), Company shall again be
required to comply with the foregoing clause (A) of this subsection
6.7(iv); provided that no Potential Event of Default or Event of
Default shall occur under this Agreement if the aggregate Acquisitions
then exceed $25,000,000 if such Acquisitions, at the time made, were
permitted under this Agreement; provided further that to the extent
that Company pays all or any portion of the purchase price for an
Acquisition through the issuance of shares of Common Stock, the value
of the shares of such Common Stock shall be deducted from the
calculation of the purchase price payable by Company or its
Consolidated Subsidiaries for such Acquisitions for purposes of
determining compliance with the provisions of this subsection 6.7(iv);
and provided further that any such Person so acquired that constitutes
a Material Subsidiary shall execute counterparts of the Borg-Warner
Subsidiary Guaranty and the Borg-Warner Subsidiary Pledge Agreement as
provided in subsection 5.11; and"
J. SALE OR DISCOUNT OF RECEIVABLES. Subsection 6.9 of the Credit
Agreement is hereby amended by deleting the subsection in its entirety and
substituting the following therefor:
"Company will not, and will not permit any of its Consolidated
Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, notes,
accounts receivable, contracts, leases or other receivables, other than
pursuant to the off-balance sheet facilities permitted under
subsections 6.1(vii) and 6.1(x)."
1.5 AMENDMENT OF EXHIBITS. Exhibit IV to the Credit Agreement is
hereby amended by deleting it in its entirety and by substituting therefor the
form of Compliance Certificate annexed hereto as Annex A.
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SECTION 2. CONSENT
A. COMPANY PLEDGE AGREEMENT. Each Lender executing this Amendment
hereby consents to the amendment of the Company Pledge Agreement by a First
Amendment to Pledge Agreement substantially in the form annexed hereto as Annex
B and each such Lender hereby authorizes the Collateral Agent, upon request of
the Company and on such Lender's behalf, to execute and deliver such First
Amendment to Pledge Agreement.
B. INTERCREDITOR AGREEMENT. Each Lender executing this Amendment
hereby consents to the amendment of the Intercreditor Agreement by a First
Amendment to
Intercreditor Agreement substantially in the form annexed hereto as
Annex C and each such Lender hereby authorized the Collateral Agent, upon
request of the Company and on such Lender's behalf, to execute and deliver such
First Amendment to Intercreditor Agreement.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 and Section 2 of this Amendment shall become effective as of
the date hereof only upon the satisfaction of all of the following conditions
precedent (upon such satisfaction, the "SECOND AMENDMENT EFFECTIVE DATE"):
A. On or before the Second Amendment Effective Date, Company shall
deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender) the following,
each, unless otherwise noted, dated the Second Amendment Effective Date:
1. Resolutions of its Board of Directors authorizing and approving the
execution, delivery and performance of this Amendment and of the Agreement
as amended by this Amendment, certified as of the Second Amendment Effective
Date by its secretary or assistant secretary as being in full force and
effect without modification or amendment.
2. Signature and incumbency certificates of its officers executing this
Amendment;
3. Executed copies of this Amendment; and
4. A letter from a responsible officer of the Company with respect to
past and anticipated Centaur Settlement Amounts, which letter shall have
been approved by Co-Agents.
B. On or before the Second Amendment Effective Date, each of the
Borg-Warner Guarantor Subsidiaries shall deliver to Lenders (or to
Administrative Agent
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for Lenders with sufficient originally executed copies, where appropriate, for
each Lender) the following, each, unless otherwise noted, dated the Second
Amendment Effective Date:
1. Signature and incumbency certificates of its officers executing
this Amendment; and
2. Executed copies of this Amendment.
C. On or before the Second Amendment Effective Date, each Lender
executing this Amendment shall have received an amendment fee in an amount equal
to such Lender's Pro Rata Share of the Commitments multiplied by 0.25% and each
Co-Agent shall have received a structuring fee in an amount previously agreed
upon by Company and Co-Agents.
D. On or before the Second Amendment Effective Date, Requisite
Lenders shall have delivered to Administrative Agent originally executed copies
of this Amendment.
E. On or before the Second Amendment Effective Date, corresponding
consents and amendments shall have been obtained or made with respect to the
Credit Agreement dated as of January 27, 1993, as amended, among Company, the
financial institutions named therein, and The Long Term Credit Bank of Japan,
Chicago Agency.
F. On or before the Second Amendment Effective Date, all corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
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B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created under
any of the Loan Documents in favor of Collateral Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company of
this Amendment and the performance by Company of the Amended Agreement do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by Company and are the legally valid and
binding obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
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SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Pledge Agreement, as amended through
the Second Amendment Effective Date, pursuant to which Company has pledged
certain Collateral to Collateral Agent to secure the Obligations. Each of the
Borg-Warner Guarantor Subsidiaries is a party to the Borg-Warner Subsidiary
Guaranty, as amended through the Second Amendment Effective Date, pursuant to
which each such Borg-Warner Guarantor Subsidiary has guarantied the Obligations.
Company and Borg-Warner Guarantor Subsidiaries are collectively referred to
herein as the "CREDIT SUPPORT PARTIES," and the Company Pledge Agreement and
Borg-Warner Subsidiary Guaranty are collectively referred to herein as the
"CREDIT SUPPORT DOCUMENTS."
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Second Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges and agrees
that (i) notwithstanding the conditions to effectiveness set forth in this
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Loan Document shall be deemed to require
the consent of such Credit Support Party to any future amendments to the Credit
Agreement.
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SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(1) On and after the Second Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(2) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect
and are hereby ratified and confirmed.
(3) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under, the Credit Agreement or any of the
other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 9.3 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
17
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORG-WARNER SECURITY CORPORATION
By:____________________________________
Title:_________________________________
WELLS FARGO ALARM SERVICES, INC. (for
purposes of Section 5 only) as a Credit
Support Party
By:____________________________________
Title:_________________________________
WELLS FARGO ARMORED SERVICE CORPORATION
(for purposes of Section 5 only) as a
Credit Support Party
By:___________________________________
Title:________________________________
BW-CANADIAN GUARD CORPORATION (for
purposes of Section 5 only) as a Credit
Support Party
By:___________________________________
Title:________________________________
S-1
BORG-WARNER PROTECTIVE SERVICES
CORPORATION (for purposes of Section 5
only) as a Credit Support Party
By:___________________________________
Title:________________________________
PONY EXPRESS COURIER CORP. (for purposes
of Section 5 only) as a Credit Support
Party
By:___________________________________
Title:________________________________
BANKERS TRUST COMPANY, INDIVIDUALLY AND
AS CO-AGENT AND AS ADMINISTRATIVE AGENT
By:___________________________________
Title:________________________________
CIBC INC., INDIVIDUALLY AND AS CO-AGENT
By:___________________________________
Title:________________________________
NATIONSBANK, N.A. ("CAROLINAS"),
INDIVIDUALLY AND AS CO-AGENT
By:___________________________________
Title:________________________________
S-2
BANK OF AMERICA ILLINOIS, INDIVIDUALLY
AND AS LEAD MANAGER
By:___________________________________
Title:________________________________
THE BANK OF NEW YORK, INDIVIDUALLY AND
AS LEAD MANAGER
By:___________________________________
Title:________________________________
THE BANK OF NOVA SCOTIA, INDIVIDUALLY
AND AS LEAD MANAGER
By:___________________________________
Title:________________________________
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE
By:___________________________________
Title:________________________________
By:___________________________________
Title:________________________________
S-3
DRESDNER BANK AG (CHICAGO AND GRAND
CAYMAN BRANCHES)
By:________________________________
Title:_____________________________
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:________________________________
Title:_____________________________
THE NIPPON CREDIT BANK, LTD.
By:________________________________
Title:_____________________________
THE NORTHERN TRUST COMPANY
By:________________________________
Title:_____________________________
UNION BANK OF FINLAND LTD. - GRAND
CAYMAN BRANCH
By:________________________________
Title:_____________________________
By:________________________________
Title:_____________________________
S-4