EXHIBIT 4.9
AMENDMENT NO. 5
This AMENDMENT NO. 5 (this "Amendment") is dated as of March 15, 1995 and
entered into by and among Borg-Warner Security Corporation, a Delaware
corporation (the "Company"), the financial institutions listed on the signature
pages hereof (the "Banks") and THE LONG-TERM CREDIT BANK OF JAPAN, LTD., as
Agent for the Banks (the "Agent") and, for purposes of Section 7 hereof, the
Credit Support Parties (as defined in Section 7 hereof) listed on the signature
pages hereof, and is made with reference to that certain Credit Agreement dated
as of January 27, 1993, as amended as of November 2, 1993, January 24, 1994,
June 30, 1994 and December 14, 1994 (as so amended, the "Credit Agreement"), by
and among the Company, the Banks and the Agent. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS, the Company and the Banks wish to make certain amendments with
respect to the provisions regarding the extension of the Scheduled Commitment
Termination Date, the financial covenants, certain other covenants, Letters of
Credit containing provisions for the automatic increase of their Stated Amounts,
and certain fees, subject to the terms and conditions set forth herein; and
WHEREAS, the Company has requested that the Banks consent to an amendment
of the Company Pledge Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. NEXT EXTENSION DATE
With regard to any extension of the Scheduled Commitment Termination Date
from January 27, 1997, the next applicable Extension Date under Section 2.1.C of
the Credit Agreement shall be September 30, 1995, and the Company may give an
Extension Notice for such Extension Date by August 31, 1995.
SECTION 2. AMENDMENTS
Effective as of the Amendment Effective Date (as defined in Section 4
hereof), the Credit Agreement is hereby amended as follows:
(a) Section 2.1.B (Participation Commitments) of the Credit Agreement is
amended by replacing the phrase "its Percentage of the Stated Amount thereof"
with the phrase "its Percentage of the Stated Amount thereof (and of any
automatic increases in such Stated Amount provided for in such Letter of
Credit)".
(b) Section 2.1.C (Extension of Facility) of the Credit Agreement is
amended by
(1) replacing the phrase "not more than 90 days, but not less
than 60 days," in the first sentence of paragraph (a) with the phrase
"not less than 30 days", and
(2) replacing the term "Stated Amount" in paragraph (f) with the
phrase "Stated Amount (including any automatic increases thereof
provided for in such Letter of Credit)".
(c) Section 2.3.A (Issuance Request) of the Credit Agreement is amended so
that the clause (a) thereof reads in its entirety as follows:
"(a) be issued in a Stated Amount which, after giving effect to
any automatic increases provided for in such Letter of Credit and when
added to the then aggregate amount of LC Outstandings, does not exceed
the then Total Commitment Amount; and"
(d) Section 2.3.B (Issuance of Letters of Credit) of the Credit Agreement
is amended by replacing the term "Stated Amount" in the last sentence thereof
with the phrase "Stated Amount (and the amounts and timing of any automatic
increases thereof provided for in such Letter of Credit)" and by adding the
following sentence at the end thereof:
"No Automatically Increasing Letter of Credit shall provide for any
automatic increases in its Stated Amount after the first anniversary of its
Issuance Date."
(e) Section 2.3.F (Deemed Disbursements) of the Credit Agreement is
amended by replacing the phrase in clause (a) thereof "that portion of the LC
Outstandings attributable to the then aggregate amount which is undrawn and
available under all then outstanding Letters of Credit" with the phrase "that
portion
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of the LC Outstandings attributable to the then aggregate amount which is
undrawn and available (or will be available upon the occurrence of an automatic
increase in Stated Amount) under all then outstanding Letters of Credit".
(f) Section 2.4.D [commitment fee] of the Credit Agreement is amended by
deleting the phrase "of 0.375% per annum" and substituting therefor the phrase
"determined as specified in Section 2.5 hereof".
(g) Section 2.4 (Fees) of the Credit Agreement is further amended by
replacing the period at the end of Section 2.4.E with a semicolon and adding the
following Sections 2.4.F [extension fees], 2.4.G [Automatically Increasing
Letter of Credit commitment fee] and 2.4.H [Refinancing Fees]:
"F. for the account of each Bank that in its sole discretion consents
to the extension of the Scheduled Commitment Termination Date to January
27, 1998, an extension fee in the amount of 0.20% of such Bank's
Participation Commitment, such extension fee to be payable on September 30,
1995 (it being understood and agreed that in the event the Banks in their
sole discretion consent to any further extensions of the Scheduled
Commitment Termination Date, an extension fee mutually agreed to by the
Banks and the Company shall be payable by the Company to the Agent for the
account of the Banks in consideration of each such further extension); and
"G. with respect to each Automatically Increasing Letter of Credit,
for the account of each Bank an Automatically Increasing Letter of Credit
commitment fee (in addition to the commitment fee referred to in Section
2.4.D) of 0.625% per annum on the aggregate amount of prospective automatic
increases in the Stated Amount of such Automatically Increasing Letter of
Credit provided for in such Automatically Increasing Letter of Credit; and
"H. in the event that the 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 the Required Banks, then for the
account of each Bank a fee equal to .50% of such Bank's Commitment."
(h) Section 2.5 of the Credit Agreement is amended to read in its entirety
as follows:
"SECTION 2.5 Letter of Credit Fee Rates; Commitment Fee Rates.
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The letter of credit fee rate and the commitment fee rate for any
fiscal quarter shall be equal to the rate per annum set forth opposite the
Company's Adjusted Interest Coverage Ratio for the twelve-month period
immediately preceding the fiscal quarter for which the determination is
being made.
Adjusted Interest Letter of Commitment
Coverage Ratio Credit Fee Rate Fee Rate
----------------- --------------- ----------
Less than 2.25:1.00 2.25% 0.50%
Less than 2.75:1.00 2.00% 0.50%
but greater than or
equal to 2.25:1.00
Less than 4.00:1.00 1.75% 0.375%
but greater than or
equal to 2.75:1.00
Equal to or greater than 1.50% 0.375%
4.00:1.00 but less than
4.50:1.00
Equal to or greater than 1.25% 0.375%
4.50:1.00
Upon delivery of the Compliance Certificate pursuant to Section
5.1(iv) of the Credit Agreement, the letter of credit fee rate and the
commitment fee rate shall automatically be adjusted in accordance with the
Adjusted Interest Coverage Ratio for the 12-month period immediately
preceding the fiscal quarter for which the determination is being made as
set forth in such Compliance Certificate and the table set forth above,
such adjustment to be retroactive to the first day of the fiscal quarter
during which such Compliance Certificate is delivered; provided that any
payment made with respect to a Letter of Credit on other than a Quarterly
Payment Date shall not be adjusted. For purposes of the Quarterly Payment
Date that is the last Business Day of February, at least 15 days prior to
such Quarterly Payment Date, the Company shall deliver to the Agent a good
faith estimate of the Adjusted Interest Coverage Ratio for the 12-month
period ending on the last day of the Company's fourth fiscal quarter, which
estimate shall be used to determine the letter of credit fee rate and the
commitment fee rate. Upon delivery of the Compliance Certificate for such
period, appropriate adjustment of the letter of credit fee rate, the
commitment fee rate and amounts paid shall be made. If the Company fails
to deliver a Compliance Certificate which sets forth the information
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necessary to determine the Adjusted Interest Coverage Ratio during any
fiscal quarter, the letter of credit fee rate during the fiscal quarter for
which such Compliance Certificate was not delivered shall automatically be
adjusted to 2.25% per annum and the commitment fee rate during such fiscal
quarter shall automatically be adjusted to 0.50% per annum. In the event
that the 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 are, satisfactory to the Required
Banks, then each of the percentages set forth above for the Letter of
Credit Fee Rate shall increase by an additional 0.25%. 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 of the
percentages set forth above for the Letter of Credit Fee Rate, as such
percentages may have been adjusted by operation of the preceding sentence,
shall increase by an additional 0.25%. 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 sentences shall be
terminated and of no further force or effect."
(i) Section 5.10.A (BW-Other Corporation) of the Credit Agreement is
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 Amendment No. 5 dated as of March 15, 1995 to this Agreement, the
Company may pay such amounts as have been disclosed in writing to the Agent as
of such effective date and thereafter the Company may pay the Centaur Settlement
Amount."
(j) Section 6.1 (Indebtedness) of the Credit Agreement is amended by:
(1) deleting subclause (y) from clause (iii) thereof in its
entirety and by substituting the following therefor: "(y)
notwithstanding the foregoing, in connection with any refinancing of
the Senior Notes, the 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,";
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(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) adding a new clause (x) at the end of such Section 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 Required Banks."
(k) Section 6.2 (Liens) of the Credit Agreement is 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 Section 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) after
clause (vii) thereof 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
Section 6.1(x)."
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(l) Section 6.3 (Investments) of the Credit Agreement is amended by adding
the following at the end of clause (iii) thereof: "and Wells Fargo Alarm
Services, Inc. and BW-Canada Alarm (Wells Fargo) Corporation may make and own
Investments approved by the Required Banks 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 Section 6.1(x)".
(m) Section 6.6.A (Interest Coverage Ratio) of the Credit Agreement is
amended by deleting such Section in its entirety and by substituting the
following therefor:
"A. Interest Coverage Ratio. The 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 Section 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:
Minimum Interest
"Period 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 the Company and for the immediately succeeding three
fiscal quarters, in calculating Consolidated Interest Expense for each such
fiscal quarter, the Company may exclude the Centaur Interest Amount for
such Centaur Settlement Amount for each such fiscal quarter."
(n) Section 6.6.B (Leverage Ratio) of the Credit Agreement is amended by
deleting the table set forth therein for the fiscal years ending 1994 through
1999 and substituting the following therefor:
Maximum
"Period 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
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
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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 the Company and for the immediately succeeding three
fiscal quarters, in calculating the amount of Funded Debt for each such
fiscal quarter, the Company may exclude such Centaur Settlement Amount for
each such fiscal quarter."
(o) Section 6.6.C (Consolidated Net Worth) of the Credit Agreement is
amended by deleting the table set forth therein for the fiscal years ending 1994
through 1999 and substituting the following therefor:
Minimum Consolidated
"Period Net Worth
------ --------------------
Fiscal year ending 1994
-----------------------
Fourth fiscal quarter $ 55,000,000
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
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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, the Company
shall exclude the effect of any gain related to taking into Consolidated
Net Income any reserves previously established to pay Centaur Settlement
Amounts."
(p) Section 6.6.D (Consolidated EBITDA) of the Credit Agreement is amended
by deleting the table set forth therein for the fiscal years ending 1994 through
1999 and substituting the following therefor:
Minimum Consolidated
"Period 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
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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"
(q) Section 6.6.E (Consolidated Capital Expenditures) of the Credit
Agreement is amended by:
(1) deleting the text thereof up to but not including the proviso set
forth therein and substituting the following therefor:
"E. Consolidated Capital Expenditures. The Company and its
Subsidiaries shall not permit the sum of (i) Consolidated Capital
Expenditures plus (ii) an 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
Section 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 Section 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
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; 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 2.90:1.00 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 Section 6.6.E of the
Credit Agreement: "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."
(r) Section 6.7 (Restriction on Fundamental Changes) of the Credit
Agreement is amended by deleting clause (iv) thereof in its entirety and
substituting the following therefor:
"(iv) the Company and its Consolidated Subsidiaries may acquire all or
substantially all the business, property, 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 Amendment No. 5 dated as of March
15, 1995 hereto (A) does not exceed $25,000,000 in the aggregate for all
such Acquisitions or (B) in the event that (x) no Default or Unmatured
Default has occurred and is continuing, (y) the ratio of the Company's
Funded Debt to Consolidated 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 the
Company no longer meets the conditions set forth in
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clauses (y) and (z), the Company shall again be required to comply with the
foregoing clause (A) of this Section 6.7(iv); provided that no Default or
Unmatured 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 the Company pays all or a 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 the Company or its Consolidated Subsidiaries
for such Acquisition for purposes of determining compliance with this
Section 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 Section 5.11; and"
(s) Section 6.9 (Sale or Discount of Receivables) of the Credit Agreement
is amended to read in its entirety as follows:
"SECTION 6.9. Sale or Discount of Receivables. The 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 Sections 6.1(vii) and 6.1(x)."
(t) Article VII (Defaults) of the Credit Agreement is further amended so
that clause (i)(b) of the first paragraph following Section 7.14 of the Credit
Agreement is replaced with the following: "(b) an amount equal to the maximum
amount that may at any time be drawn under all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall
have presented or be entitled to present, the drafts and other documents
required to draw under such Letter of Credit and including the amount of any
automatic increases in Stated Amounts of Automatically Increasing Letters of
Credit which have not yet occurred)".
(u) Annex I (Defined Terms) to the Credit Agreement is amended so that the
following definitions of "Alarm Installation Costs", "Automatically Increasing
Letter of Credit", "Centaur Interest Amount", "Centaur Settlement Amount", and
"New Receivables Facility" are inserted in the appropriate alphabetical
positions, and the definitions of "BW-Other
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Corporation", "Contingent Liability", "Extension Date" and "LC Outstandings" are
restated to read in their entirety as follows:
""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."
""Automatically Increasing Letter of Credit" means a Letter of Credit
which provides for automatic increase or increases in the Stated Amount of
such Letter of Credit."
""BW-Other Corporation" means the direct and indirect subsidiaries of
BW-Other Corporation, a Delaware corporation, prior to its liquidation into
the 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."
""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" (as defined in the BT Credit Agreement) then in effect for
loans under the BT Credit Agreement (without reference to the "Prime Rate
Margin" as defined therein)."
""Centaur Settlement Amount" means all amounts paid or contributed by
the Company to Centaur Insurance Company ("Centaur") or directly or
indirectly paid by the Company on behalf of Centaur, in each case on or
after the effective date of Amendment No. 5 dated as of March 15, 1995 to
this Agreement for the purpose of settling litigation pending against
Centaur or against the 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 the Company to the Agent and approved by the Agent as of the
effective date of Amendment No. 5 dated as of March 15, 1995 to this
Agreement."
""Contingent Liability" means the undrawn outstanding portion of the
Stated Amount of a Letter of Credit and, in the case of an Automatically
Increasing Letter of Credit,
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any automatic increases in such Stated Amount provided for in such Letter
of Credit which have not yet occurred."
""Extension Date" means September 30, 1995 and March 15 of each
subsequent year, beginning with March 15, 1996."
""LC Outstandings" means, on any date, the sum of (i) the maximum
aggregate liability of the Issuers under outstanding Letters of Credit
(determined as if all automatic increases provided for in Automatically
Increasing Letters of Credit have occurred whether or not they have), and
(ii) the aggregate amount of drawings under Letters of Credit for which the
Issuers and the Banks have not been reimbursed by the Company on that
date."
""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 the Required Banks, which
facility shall be provided by a financial institution satisfactory to the
Required Banks, to replace the Company's existing off-balance sheet
receivables financing facility with Enterprise Funding Corporation."
(v) The definition of "Asset Sale" contained in Annex I (Defined Terms) to
the Credit Agreement is amended by deleting clause (B) therefrom in its entirety
and replacing it with the following: "(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
Section 6.1(vii) and (x) and, in the case of the off-balance sheet facility
permitted by Section 6.1(x), the sale of related equipment."
(w) Exhibit E (Form of Compliance Certificate) to the Credit Agreement is
amended to read in its entirety in the form of Annex A hereto.
SECTION 3. CONSENTS.
(a) Each Bank 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 Bank hereby
authorizes the Collateral Agent, upon request of the Company and on such Bank's
behalf, to execute and deliver such First Amendment to Pledge Agreement.
(b) Each Bank executing this Amendment hereby consents to the amendment of
the Intercreditor Agreement by a First Amendment to Intercreditor Agreement
substantially in the form annexed
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hereto as Annex C and each such Bank hereby authorizes the Collateral Agent,
upon request of the Company and on such Bank's behalf, to execute and deliver
such First Amendment to Intercreditor Agreement.
SECTION 4. CONDITIONS TO EFFECTIVENESS
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 "Amendment Effective Date") prior to March 24, 1995:
(a) On or before the Amendment Effective Date, the Company shall deliver to
the Banks (or to the Agent with sufficient originally executed copies, where
appropriate, for each Bank and its counsel) the following, each, unless
otherwise noted, dated the Amendment Effective Date:
(1) Resolutions of its board of directors authorizing and approving
the execution, delivery and performance of this Amendment and of the Credit
Agreement as amended by this Amendment, certified as of the 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;
(4) An opinion of counsel to the Company as to the Amendment in form
and substance satisfactory to the Agent and the Banks; and
(5) 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 the Agent.
(b) On or before the Amendment Effective Date, each of the Borg-Warner
Guarantor Subsidiaries shall deliver to the Banks (or to the Agent with
sufficient originally executed copies, where appropriate, for each Bank and its
counsel) the following, each, unless otherwise noted, dated the Amendment
Effective Date:
(i) Signature and incumbency certificates of its officers executing
this Amendment; and
(ii) Executed copies of this Amendment.
(c) On or before the Amendment Effective Date, each Bank executing this
Amendment shall have received an amendment fee in
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the amount equal to such Bank's Commitment multiplied by 0.30% and the Agent
shall have received an Agent's amendment fee in an amount previously agreed to
by the Company and the Agent.
(d) On or before the Amendment Effective Date, the Required Banks shall
have delivered to the Agent originally executed copies of this Amendment.
(e) On or before the Amendment Effective Date, corresponding consents and
amendments shall have been made to the BT Credit Agreement and such BT Credit
Agreement, as so amended, shall have become effective.
(f) On or before the 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 the Agent, acting on behalf of the Banks, and its counsel shall be
satisfactory in form and substance to the Agent and such counsel, and the Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as the Agent may reasonably request.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Company
represents and warrants to the Agent and each Bank that the following statements
are true, correct and complete:
(a) Corporate Power and Authority. The 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").
(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 the Company.
(c) No Conflict. The execution and delivery by the Company of this
Amendment and the performance by the 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 the Company or any of its Subsidiaries, the Certificate
or Articles of Incorporation or Bylaws of the Company or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on the Company or any of its Subsidiaries, (ii) conflict with, result in
a breach of or
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constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of the 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 the Company or any of its Subsidiaries (other than any Liens
created under any of the Credit Documents in favor of Collateral Agent on behalf
of the Banks), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of the Company or any of
its Subsidiaries.
(d) Governmental Consents. The execution and delivery by the Company of
this Amendment and the performance by the 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 the Company and are the legally valid and binding
obligations of the Company, enforceable against the 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 Article IV of the Credit
Agreement are and will be true, correct and complete in all material respects on
and as of the Fifth Amendment Effective Date to the same extent as through 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 a Default.
SECTION 6. MISCELLANEOUS
(a) Reference to and Effect on the Credit Agreement and the other Credit
--------------------------------------------------------------------
Documents.
---------
(1) On and after the 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 Credit Documents to the "Credit Agreement",
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"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 Credit 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 the
Agent or any Bank under, the Credit Agreement or any of the other Credit
Documents.
(b) Fees and Expenses. The Company acknowledges that all costs, fees and
expenses as described in Section 9.9 of the Credit Agreement incurred by the
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the 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) 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.
(e) Governing 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.
SECTION 7. ACKNOWLEDGEMENT AND CONSENT
Each of the Borg-Warner Guarantor Subsidiaries is a party to the Borg-
Warner Subsidiary Guaranty, as amended, pursuant to which each such Borg-Warner
Guarantor Subsidiary has guarantied the Obligations. The Borg-Warner Guarantor
Subsidiaries are collectively referred to herein as the "Credit Support Parties"
and the Borg-Warner Subsidiary Guaranty is referred to herein as the "Credit
Support Documents".
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Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of this Amendment and consents to the terms hereof. 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 the Company now or hereafter existing under or in respect of the
Credit Agreement.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is 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 Credit
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
date hereof 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 acknowledges and agrees that (i) such Credit
Support Party is not required by the terms of the Credit Agreement or any other
Credit Document to consent to the amendments of the Credit Agreement effected
pursuant to this Amendment and (ii) nothing in the Credit Agreement, this
Amendment or any other Credit 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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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 7 only)
as a Credit Support Party
By:_____________________________
Title:__________________________
WELLS FARGO ARMORED SERVICE
CORPORATION
(for purposes of Section 7 only)
as a Credit Support Party
By:_____________________________
Title:__________________________
BW-CANADIAN GUARD CORPORATION
(for purposes of Section 7 only)
as a Credit Support Party
By:_____________________________
Title:__________________________
BORG-WARNER PROTECTIVE SERVICES
CORPORATION
(for purposes of Section 7 only)
as a Credit Support Party
By:_____________________________
Title:__________________________
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PONY EXPRESS COURIER CORP.
(for purposes of Section 7 only)
as a Credit Support Party
By:_____________________________
Title:__________________________
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., individually as
a Bank and as Agent
By:_____________________________
Title:__________________________
CAISSE NATIONALE DE CREDIT AGRICOLE
By:_____________________________
Title:__________________________
THE SUMITOMO BANK LIMITED, CHICAGO BRANCH
By:_____________________________
Title:__________________________
U.S. NATIONAL BANK OF OREGON
By:_____________________________
Title:__________________________
BANK OF HAWAII
By:_____________________________
Title:__________________________
THE FUJI BANK, LIMITED
By:_____________________________
Title:__________________________
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BANK OF NEW YORK
By:_____________________________
Title:__________________________
THE TORONTO-DOMINION BANK
By:_____________________________
Title:__________________________
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