EXHIBIT 4.3
AMENDMENT NO. 6
This AMENDMENT NO. 6 (this "Amendment") is dated as of October 16, 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 6 hereof, the
Credit Support Parties (as defined in Section 6 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, December 14, 1994 and March 15, 1995 (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 amend the Credit Agreement with
respect to (i) the provisions relating to the Scheduled Commitment Termination
Date, (ii) the financial covenants, (iii) certain other covenants thereof,
including without limitation to permit the Company to enter in a $200,000,000
senior term loan facility to be equally and ratably secured with the
Obligations, (iv) certain Banks' Commitments, (v) the Total Commitment Amount,
and (vi) certain fees; and
WHEREAS, subject to the terms and conditions of this Amendment, the Banks
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:
1. AMENDMENTS
(a) The Scheduled Commitment Termination Date is hereby extended from
January 27, 1997 to December 31, 1998, and the date "December 31, 1998" is
substituted for the date "January 27, 1997" in the definition of "Scheduled
Commitment Termination Date" in Annex I to the Credit Agreement.
(b) The Total Commitment Amount is hereby reduced from $180,000,000 to
$155,000,000 and the number "155,000,000" is substituted for the number
"180,000,000" in the definition of "Total Commitment Amount" in Annex I to the
Credit Agreement.
(c) Section 2.4 of the Credit Agreement is amended by deleting Section
2.4.H in its entirety.
(d) Section 2.5 of the Credit Agreement relating to the letter of credit
fee rate and the commitment fee rate is hereby amended by deleting it in its
entirety and by substituting therefor the following:
"SECTION 2.5 Letter of Credit Fee Rates; Commitment Fee Rate.
The commitment fee rate shall be 0.50% per annum. From September 30,
1995 through and including September 30, 1996, the letter of credit fee
rate shall be 2.50% per annum. Thereafter the letter of credit fee rate for
any fiscal quarter shall be equal to the rate per annum set forth opposite
the Company's Interest Coverage Ratio for the twelve-month period
immediately preceding the fiscal quarter for which the determination is
being made.
Interest Letter of
Coverage Ratio Credit Fee Rate
------------------- ---------------
Less than 2.25:1.00 2.50%
Less than 2.75:1.00 2.25%
but greater than or
equal to 2.25:1.00
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Less than 4.00:1.00 2.00%
but greater than or
equal to 2.75:1.00
Equal to or greater than 1.75%
4.00:1.00 but less than
4.50:1.00
Equal to or greater than 1.50%
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 shall
automatically be adjusted in accordance with the 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 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. Upon delivery of the Compliance Certificate
for such period, appropriate adjustment of the letter of credit fee rate
and amounts paid shall be made. If the Company fails to deliver a
Compliance Certificate which sets forth the information necessary to
determine the 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 2.50% per
annum."
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(e) Section 4.1.D of the Credit Agreement is hereby amended by deleting the
third sentence thereof in its entirety and substituting "As of June 30, 1995,
the Material Subsidiaries own not less than 83% of the value of all tangible
assets of Credit Parties taken as a whole." therefor.
(f) Section 4.4 of the Credit Agreement is hereby amended by deleting the
reference to "December 31, 1991" contained in the first sentence thereof and
substituting therefor "December 31, 1994".
(g) (i) Section 5.1 of the Credit Agreement is hereby amended by
inserting the phrase "cash flows," immediately after the phrase "operating
profit," contained in clause (xii) thereof;
(ii) Section 5.1 of the Credit Agreement is hereby further amended by
renumbering clause (xiv) thereof as clause (xv) and by adding a new clause
(xiv) thereto as follows:
"(xiv) together with each delivery of financial statements of the
Company and its Subsidiaries pursuant to subsection (iii) above, a
written notice setting forth with respect to each Person that became a
Subsidiary of the Company (a) the date on which such Person became a
Subsidiary of the Company and (b) all of the data required to be set
forth in Schedule A annexed hereto with respect to all Subsidiaries of
the Company (it being understood that such written notice shall be
deemed to supplement Schedule A annexed hereto for all purposes of
this Agreement); and"
(h) Section 5.6.B of the Credit Agreement is hereby amended by deleting it
in its entirety and by substituting therefor the following:
"B. Except with respect to specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an
executed agreement with respect to an Asset Sale, or as may be
restricted by
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the 9-1/8% Subordinated Note Indenture, the Receivables Facilities,
the Term Loan Facility or the BT Credit Agreement, neither the Company
nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired."
(i) (i) Section 5.10.A of the Credit Agreement is hereby amended by adding
the following proviso to the end of the first sentence thereof:
"; and, provided further that the Company may pay routine costs
and expenses related to BW-Other Corporation in the ordinary course of
business consistent with past practices"
(ii) Concurrently with the repayment in full of the Senior Notes,
Section 5.10.A of the Credit Agreement shall be amended by deleting it in
its entirety and by substituting the following therefor:
"A. From and after the effective date of Amendment No. 6 hereto,
the Company and its Subsidiaries may not make direct or indirect
Investments in or become or be liable with respect to any Contingent
Obligation with respect to BW-Other Corporation except for existing
investments listed on Schedule E; provided, however, that prior to the
effective date of Amendment No. 6 hereto, 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; and, provided, further that the Company may pay
routine costs and expenses related to BW-Other Corporation in the
ordinary course of business consistent with past practices. The
Company will not and will not permit any of its Subsidiaries to
directly or indirectly enter into or permit to exist any transaction
between the Company and its Subsidiaries and BW-Other Corporation on
terms that are less favorable to the Company and its
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Subsidiaries than those that might be obtained from third parties."
(j) Section 6.1 of the Credit Agreement is hereby amended by:
(1) deleting clause (iii) thereof in its entirety and substituting
therefor the following:
"(iii) The Company and its Consolidated Subsidiaries may remain
liable with respect to each of the items of Existing Indebtedness
described in Schedule C annexed hereto and any Indebtedness incurred
to refinance such Existing Indebtedness; provided that after giving
effect to such refinancing Indebtedness and the repayment of the
corresponding Existing Indebtedness with the proceeds thereof, (a) the
aggregate principal amount of the refinancing Indebtedness and the
corresponding Existing Indebtedness so refinanced shall not be greater
than the outstanding principal amount of such Existing Indebtedness
immediately prior to such refinancing, (b) the weighted average life
to maturity of such refinancing Indebtedness shall be no shorter than
the Existing Indebtedness being refinanced and (c) such refinancing
Indebtedness shall not be secured by any additional property than that
which secures the Existing Indebtedness being refinanced;"
(2) deleting clause (vi) thereof in its entirety and substituting
therefor the following:
"(vi) The Company may remain liable with respect to $150,000,000
aggregate principal amount of the 9-1/8% Subordinated Notes;"
(3) deleting clause (vii) thereof in its entirety and substituting
therefor the following:
"(vii) BPS Financial Services, Inc. may become and remain liable
with respect to the Existing
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Receivables Facility, the Receivables Bridge Facility and the New
Receivables Facility and with respect to intercompany promissory notes
in favor of the Company and its other Consolidated Subsidiaries,
evidencing BPS Financial Services, Inc.'s obligations with respect to
the purchase price of receivables purchased by BPS Financial Services,
Inc. under the Existing Receivables Facility, the Receivables Bridge
Facility or the New Receivables Facility provided that all
intercompany promissory notes issued to the Company or Material
Subsidiaries shall be pledged by the Company or such Material
Subsidiaries to the Collateral Agent for the benefit of the Banks;"
(4) deleting the phrase "clauses (i)-(vii) and clause (x)" from clause
(viii) thereof and by substituting "clauses (i)-(vii) and clauses (x)-(xi)"
therefor;
(5) deleting the phrase "clauses (i)-(viii) and clause (x)" from
clause (ix) thereof and by substituting therefor "clauses (i)-(viii) and
clauses (x)-(xi)" and by deleting the word "and" at the end thereof;
(6) deleting clause (x) thereof in its entirety and substituting
therefor the following:
"(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 the Alarm Services Contract
Securitization Facility; the financing subsidiary established for the
purpose of the Alarm Services Contract Securitization Facility may
become and remain liable with respect to intercompany promissory notes
in favor of Wells Fargo Alarm Services, Inc., BW-Canada Alarm (Wells
Fargo) Corporation and their respective wholly owned subsidiaries and
in favor of the Company evidencing such subsidiary's obligations with
respect to the purchase price of receivables, contracts and/or leases
under the Alarm Services Contract Securitization Facility; provided
that all intercompany promissory
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notes issued to the Company or Material Subsidiaries shall be pledged
by the Company or such Material Subsidiaries to the Collateral Agent
for the benefit of the Banks;"
(7) by adding a new clauses (xi) and (xii) at the end of such Section
6.1 as follows:
"(xi) The Company may become and remain liable with respect to
the Term Loan Facility; and
(xii) In addition to the Indebtedness permitted by clauses
(i)-(xi), the Company and its Consolidated Subsidiaries may become and
remain liable with respect to Indebtedness not exceeding $20,000,000
in the aggregate outstanding at any time; provided however that any
Indebtedness incurred by the Company or any Consolidated Subsidiary
which constitutes a Foreign Entity pursuant to this Section 6.1(xii)
shall reduce the amount available to the Company and such Consolidated
Subsidiaries pursuant to Section 6.1(viii) by that same amount."
(8) Concurrently with the repayment in full of the Senior Notes,
clause (iv) of Section 6.1 of the Credit Agreement shall be amended by
deleting it in its entirety and substituting the following therefor:
"(iv) The Company and its Consolidated Subsidiaries may become
and remain liable with respect to Indebtedness in respect of Capital
Leases; provided that the aggregate outstanding amount of such Capital
Leases does not exceed $30,000,000 at any time;"
(9) Concurrently with the repayment in full of the Senior Notes,
clause (viii) of Section 6.1 of the Credit Agreement shall be amended by
deleting it in its entirety and substituting the following therefor:
"(viii) In addition to the Indebtedness permitted by clauses
(i)-(vii) and clauses (x)-(xi), the
-8-
Company's Consolidated Subsidiaries which constitute Foreign Entities
may incur and remain liable with respect to Indebtedness not exceeding
at any one time $5,000,000 in aggregate outstanding principal amount;"
(10) Concurrently with the repayment in full of the Senior Notes,
clause (ix) of Section 6.1 of the Credit Agreement shall be amended by
deleting it in its entirety and substituting therefor:
"(ix) [intentionally omitted];"
(11) Concurrently with the repayment in full of the Senior Notes,
clause (xii) of section 6.1 of the Credit Agreement shall be amended by
deleting the proviso contained therein in its entirety.
(k) Section 6.2 of the Credit Agreement is hereby amended by:
(1) deleting the phrase "the holders of the Additional Senior
Indebtedness, including the holders of Indebtedness refinancing the Senior
Notes in accordance with Section 6.1(iii)," from clause (ii) thereof and by
substituting therefor the phrase "the holders of the Senior Notes, the
lenders under the Term Loan Facility upon the agent thereunder".
(2) deleting the clause (viii) thereof in its entirety and
substituting therefor the following:
"(viii) Liens in favor of the purchaser of receivables, contracts
and/or leases 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 and/or
leases in connection with the Alarm Services Contract Securitization
Facility permitted under Section 6.1(x)."
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(3) Concurrently with the repayment in full of the Senior Notes,
clause (ii) of Section 6.2 shall be amended by deleting it in its entirety
and substituting the following therefor:
"(ii) Liens granted pursuant to the Collateral Documents in favor
of the Collateral Agent for the benefit of the Banks, the holders of
the Senior Notes, the lenders under the Term Loan Facility upon the
agent thereunder signing an acknowledgment to the Intercreditor
Agreement, the lenders under the BT Credit Agreement, the
beneficiaries of the guaranties permitted pursuant to Section 6.4(iii)
and, as may be otherwise approved from time to time by the Required
Banks and as shall sign an acknowledgement to the Intercreditor
Agreement;"
(l) Section 6.3 of the Credit Agreement is hereby amended by:
(1) deleting clause (iii) in its entirety and substituting therefor
the following:
"(iii) The Company and its Consolidated Subsidiaries may make
intercompany loans to the extent permitted under Section 6.1(ii); the
Company and its Consolidated Subsidiaries may own the Investments
existing on the Closing Date in the Company's Subsidiaries; the
Company and its Consolidated Subsidiaries may make and own additional
Investments after the Closing Date in Consolidated Subsidiaries which
constitute Material Subsidiaries or in Consolidated Subsidiaries which
are both Borg-Warner Guarantor Subsidiaries and Borg-Warner Pledged
Subsidiaries; 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 and/or leases in
connection with the Alarm Services Contract
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Securitization Facility permitted pursuant to Section 6.1(x);"
(2) deleting the word "and" from the end of clause (v).
(3) deleting clause (vi) thereof in its entirety and substituting
therefor the following:
"(vi) The Company and its Consolidated Subsidiaries may make
intercompany investments in BPS Financial Services, Inc. to the extent
permitted pursuant to Section 6.1(vii);"
(3) adding new clauses (vii) and (viii) at the end of such Section 6.3
as follows:
"(vii) The Company and its Consolidated Subsidiaries may create
or acquire new Consolidated Subsidiaries and make Investments in such
Consolidated Subsidiaries to the extent not otherwise prohibited under
this Agreement provided that the aggregate amount of all such
Investments, (x) to the extent such creation or acquisition
constitutes a Consolidated Capital Expenditure, does not exceed the
Consolidated Capital Expenditure amount permitted pursuant to Section
6.6.E and (y) together with all amounts expended pursuant to Section
6.7(iii) and (iv), does not exceed the amount permitted by Sections
6.7(iii) and (iv); and
(viii) The Company and its Consolidated Subsidiaries may create
or acquire Joint Ventures to the extent not otherwise prohibited
pursuant to this Agreement provided that the aggregate amount expended
for all such Investments does not exceed $5,000,000."
(m) Section 6.4 of the Credit Agreement is hereby amended by:
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(1) adding at the end of clause (ii) thereof the following "and
Contingent Obligations under substantially similar Loan Guaranties in favor
of the Collateral Agent under the Intercreditor Agreement for the benefit
of the lenders under the Term Loan Facility and the lenders under the BT
Credit Agreement;"
(2) deleting the phrase "or the lenders under the BT Credit Agreement"
from clause (iii) thereof each place it occurs therein and by substituting
therefor ", the lenders under the BT Credit Agreement or lenders under the
Term Loan Facility"; and
(3) deleting the phrase "permitted by clauses (i)-(x)" from clause
(xi) thereof and by substituting therefor "permitted by clauses (i)-(x) and
clause (xii)"; and
(4) deleting the period at the end of clause (xi) thereof, by
substituting "; and" therefor and by adding at the end thereof the
following:
"(xii) Contingent Obligations in respect of the obligations of
its Consolidated Subsidiaries permitted pursuant to Sections 6.1(x)
and (xii)."; and
(5) Concurrently with the repayment in full of the Senior Notes,
clause (vi) shall be amended by deleting clause (z) therefrom and the
reference to clause (z) in the second proviso therein.
(n) (1) The third full paragraph of Section 6.5 of the Credit
Agreement is hereby amended by adding the phrase "or as may be provided in
the BT Credit Agreement, the 9-1/8% Subordinated Note Indenture or the
Receivables Facilities (with respect to BPS Financial Services, Inc. or
such other financing subsidiary as may have been established for purposes
of the Alarm Services Contract Securitization Facility)" immediately after
the phrase "In addition, except as provided herein" contained therein.
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(2) Concurrently with the repayment in full of the Senior Notes,
Section 6.5 of the Credit Agreement shall be amended by deleting it in its
entirety and substituting the following therefor:
"The Company shall not, and shall not permit any of its
Consolidated Subsidiaries to, directly or indirectly, declare, order,
pay, make or set apart any sum for any Restricted Junior Payment;
except:
(i) The Company may make Restricted Junior Payments to
cancel or repurchase stock or stock options granted or to be
granted to employees of the Company or any of its Consolidated
Subsidiaries under the Borg-Warner Security Corporation
Management Stock Option Plan, the 1993 Stock Option Plan or
pursuant to any stock subscription agreements with respect to
shares of Common Stock in an aggregate amount which does not
exceed $5,000,000; and
(ii) The Company may make Restricted Junior Payments in
respect of the Company's obligations to pay interest on its
Subordinated Indebtedness in accordance with the terms of, and
only to the extent required by, the terms of such Subordinated
Indebtedness, as such terms are in effect on the Closing Date;
provided that immediately prior to and immediately after giving effect
to any Restricted Junior Payment permitted by this Section 6.5, no
Default or Unmatured Default exists or will exist.
The Company will not, and will not permit any of its Subsidiaries
to, deposit any funds for the purpose of making any Restricted Junior
Payment with a trustee, paying agent or registrar or other payment
intermediary more than three (3) Business Days prior to the date such
payment is due, unless required to do so
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by the terms, as of the Closing Date, of the applicable indenture.
In addition, except as provided herein or as may be provided in
the BT Credit Agreement, the 9-1/8% Subordinated Note Indenture or the
Receivables Facilities (with respect to BPS Financial Services, Inc.
or such other financing subsidiary as may have been established for
the purposes of the Alarm Services Contract Securitization Facility),
the Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of
any Subsidiary to (a) pay dividends or make any other distribution on
any of such Subsidiary's capital stock owned by the Company or any
Subsidiary of the Company, (b) subject to subordination provisions,
pay any indebtedness owed to the Company or any other Subsidiary, (c)
make loans or advances to the Company or any other Subsidiary or (d)
transfer any of its property or assets to the Company or any other
Subsidiary, except any restrictions existing under any agreements in
effect on the Closing Date or any renewals or extensions thereof;
provided that the terms and conditions of any such renewals or
extensions are no less favorable to the Banks than the agreements
being renewed or extended."
(o) Section 6.6.A of the Credit Agreement is hereby amended by deleting the
section in its entirety and by substituting the following therefor:
"A. Interest Coverage Ratio. The Company will not permit its
Interest Coverage Ratio 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:
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Minimum
Fiscal Quarter Ended Interest Coverage Ratio
-------------------- -----------------------
September 30, 1995 2.25:1.00
December 31, 1995 2.20:1.00
March 31, 1996 2.20:1.00
June 30, 1996 2.20:1.00
September 30, 1996 2.20:1.00
December 31, 1996 2.20:1.00
March 31, 1997 2.25:1.00
June 30, 1997 2.30:1.00
September 30, 1997 2.35:1.00
December 31, 1997 2.40:1.00
March 31, 1998 2.45:1.00
June 30, 1998 2.55:1.00
September 30, 1998 2.60:1.00
December 31, 1998 2.70:1.00
March 31, 1999 2.70:1.00
June 30, 1999 2.70:1.00"
(p) Section 6.6.B of the Credit Agreement is hereby amended by deleting
the section in its entirety and by substituting the following therefor:
"B. Leverage Ratio. The Company will not permit the ratio as of
the last day of each of the fiscal quarters shown below of Funded Debt
to Consolidated EBITDA for the four consecutive preceding fiscal
quarters ended on such date to be more than the correlative ratio
indicated for such date:
Fiscal Quarter Ended Maximum Leverage Ratio
-------------------- ----------------------
September 30, 1995 3.75:1.00
December 31, 1995 4.20:1.00
March 31, 1996 4.10:1.00
June 30, 1996 3.90:1.00
September 30, 1996 3.80:1.00
December 31, 1996 3.65:1.00
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March 31, 1997 3.50:1.00
June 30, 1997 3.35:1.00
September 30, 1997 3.20:1.00
December 31, 1997 3.10:1.00
March 31, 1998 3.00:1.00
June 30, 1998 2.90:1.00
September 30, 1998 2.80:1.00
December 31, 1998 2.65:1.00
March 31, 1999 2.55:1.00
June 30, 1999 2.45:1.00"
(q) Section 6.6.C of the Credit Agreement is hereby amended by deleting
the section in its entirety and by substituting the following therefor:
"C. Consolidated Net Worth. The Company will not permit its
Consolidated Net Worth as of the last day of the fiscal quarters set
forth below and at all times thereafter (until the last day of the
next fiscal quarter when such amounts shall be increased as provided
for herein) to be less than the correlative amount indicated below:
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Fiscal Quarter Ended Consolidated Net Worth
-------------------- ----------------------
September 30, 1995 $ 31,000,000
December 31, 1995 33,000,000
March 31, 1996 36,000,000
June 30, 1996 39,000,000
September 30, 1996 42,000,000
December 31, 1996 46,000,000
March 31, 1997 49,000,000
June 30, 1997 54,000,000
September 30, 1997 58,000,000
December 31, 1997 65,000,000
March 31, 1998 70,000,000
June 30, 1998 75,000,000
September 30, 1998 82,000,000
December 31, 1998 90,000,000
March 31, 1999 96,000,000
June 30, 1999 103,000,000"
(r) Section 6.6.D of the Credit Agreement is hereby amended by deleting
the section in its entirety and by substituting the following therefor:
"D. Consolidated EBITDA. The Company will not permit
Consolidated EBITDA 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 amount indicated below:
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Minimum Consolidated
Fiscal Quarter Ended EBITDA
-------------------- --------------------
September 30, 1995 $ 125,000,000
December 31, 1995 125,000,000
March 31, 1996 129,000,000
June 30, 1996 134,000,000
September 30, 1996 135,000,000
December 31, 1996 139,000,000
March 31, 1997 144,000,000
June 30, 1997 148,000,000
September 30, 1997 152,000,000
December 31, 1997 155,000,000
March 31, 1998 157,000,000
June 30, 1998 162,000,000
September 30, 1998 165,000,000
December 31, 1998 170,000,000
March 31, 1999 172,000,000
June 30, 1999 175,000,000"
(s) Section 6.6.E of the Credit Agreement is hereby amended by:
(1) Deleting the word "Adjusted" from the phrase "Adjusted Interest
Coverage Ratio" contained therein; and
(2) Concurrently with the repayment in full of the Senior Notes, by
deleting the phrase "if the Company's Interest Coverage Ratio for such
fiscal year is greater than 2.90 to 1.00" from the first proviso thereof
and substituting therefor the phrase "if the Company's Interest Coverage
Ratio for such fiscal year is not less than 3.00 to 1.00 and the ratio of
the Company's Funded Debt to Consolidated EBITDA for such fiscal year is
not greater than 2.60 to 1.00, in each case".
(t) (1) Section 6.7(iv) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
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"(iv) the 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
Amendment No. 5 hereto plus the amount of all Investments made under
Section 6.3(vii), (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 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 of 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 that in calculating the purchase price of
such Acquisitions, the purchase price attributable to any assets
required in the IT Exchange may be excluded; provided, however, in the
event that thereafter the Company no longer meets the conditions set
forth in 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 Unmatured Default or Default shall occur under
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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 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 the Company or its Consolidated Subsidiaries
for such Acquisitions for purposes of determining compliance with the
provisions of 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"
(2) Concurrently with the repayment in full of the Senior Notes,
Section 6.7(iv) of the Credit Agreement shall be amended by deleting it in
its entirety and substituting the following therefor:
"(iv) the 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
Amendment No. 6 hereto plus the amount of all Investments made under
Section 6.3(vii) does not exceed $5,000,000 in the aggregate for all
such Acquisitions; provided that in calculating the purchase price of
such Acquisitions, the purchase price attributable to any assets
acquired in the IT Exchange may be excluded; provided further that to
the extent that the Company pays all or any portion of the purchase
price for an Acquisition
-20-
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 Acquisitions for purposes of determining
compliance with the provisions of 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"
(u) Section 6.8 of the Credit Agreement is hereby amended by deleting it
its entirety and substituting therefor the following:
"SECTION 6.8. Sales and Leasebacks
--------------------
Other than with respect to the IT Exchange and any other similar
transfer of information technology assets, the Company and its Consolidated
Subsidiaries shall not directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether
an operating lease or a Capital Lease, of any property (whether real,
personal or mixed), whether now owned or hereafter acquired, (i) which the
Company or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than the Company or any of its
Subsidiaries) or (ii) which the Company or any of its Subsidiaries intends
to use for substantially the same purpose as any other property which has
been or is to be sold or transferred by the Company or any of its
Subsidiaries to any Person (other than the Company or any of its
Subsidiaries) in connection with such lease, except to the extent that the
Net Cash Proceeds of any such transactions are applied in accordance with
the provisions of Section 2.4.A(ii)(a) of the BT Credit Agreement."
(v) Section 6.10 of the Credit Agreement is hereby amended by adding the
word "Stonington," immediately after the
-21-
phrase "financial advisory arrangements for services rendered by" in clause
(iii) thereof.
(w) Section 6.13 of the Credit Agreement is hereby amended by deleting it
in its entirety and substituting therefor the following:
"SECTION 6.13. Amendments or Waivers Relating to Other Agreements.
--------------------------------------------------
A. Neither the Company nor any of its Subsidiaries will (i)
amend, waive or otherwise change the terms of any Subordinated
Indebtedness, or make any payment consistent with an amendment, waiver or
change thereto, without the consent of the Required Banks; provided that
notwithstanding the foregoing the Company may agree to amend any provision
of the Subordinated Indebtedness (a) to cure any ambiguity, to correct or
supplement any provision therein which may be defective or inconsistent
with any other provision of such Subordinated Indebtedness, (b) to comply
with the Trust Indenture Act of 1939, or (c) to make modifications of a
technical or clarifying nature which are no less favorable to the Banks
than the provisions of the Subordinated Indebtedness in effect on the
Closing Date; or (ii) defease, or make any payments the effect of which is
to defease (whether pursuant to the defeasance provisions of the
Subordinated Indebtedness or otherwise and including without limitation any
covenant defeasance), the Subordinated Indebtedness in whole or in part.
B. Neither the Company nor any of its Subsidiaries will amend,
modify, waive or supplement or otherwise change any of the terms of the
Receivables Facilities from those in effect on the effective date of
Amendment No. 5 hereto, in the case of the Existing Receivables Facility,
or on the initial closing date for such Receivables Facilities, in the case
of the Receivables Bridge Facility, the New Receivables Facility or the
Alarm Services Contract Securitization Facility, without the prior written
consent of the Required Banks if such amendment, modification, waiver,
supplement or change would be less
-22-
favorable to, or increase the obligations of the Company or any of its
Subsidiaries or would confer additional rights on any other party to such
agreement adverse to the Company or any of its Subsidiaries or would be
adverse to the Banks under this Agreement. The Company agrees to deliver to
the Agent upon execution thereof copies of all program documents (other
than any fee or expense letters) for the Receivables Bridge Facility and
the New Receivables Facility and any amendments, modifications, waivers,
supplements or changes thereto (without regard to whether the prior written
consent of the Required Banks is required thereto).
C. Neither the Company nor any of its Subsidiaries will amend,
modify, waive or supplement or otherwise change any of the terms of
Sections 5, 6 and 7 of the Term Loan Facility or any definition of any term
used therein or amend any of the other covenants or provisions of the Term
Loan Facility, or enter into any other agreement (or amendment thereto)
with the lenders under the Term Loan Facility if the effect thereof is to
impose any further affirmative or negative covenants or events of default
on the Company or any of its Subsidiaries or to make more restrictive or
burdensome with respect to the Company or any of its Subsidiaries any
affirmative or negative covenant or event of default contained therein, in
either case without obtaining the prior written consent of the Required
Banks, provided that this Section 6.13.C shall not require the consent of
the Required Banks to any waiver or amendment of any term or provision of
the Term Loan Facility if the effect of such waiver or amendment is to make
any such term or provision less restrictive or burdensome on the Company or
any of its Subsidiaries or to relieve the Company or any of its
Subsidiaries from the burden of compliance with such term or provision or
to waive the failure to comply with such term or provision.
D. Neither the Company nor any of its Subsidiaries will amend,
modify, waive or supplement or otherwise change any of the terms of the
Term Loan Facility or enter into any other agreement with the lenders under
the Term Loan Facility that would have the effect of (i)
-23-
shortening the maturity of or requiring the earlier payment of any
principal of any loan thereunder, (ii) imposing any additional prepayment
obligations on the Company with respect to the loans thereunder or (iii)
changing the definition of "Requisite Lenders" in the Term Loan Facility,
in each case without the prior written consent of the Required Banks.
E. The Company agrees to deliver to Agent upon the execution
thereof any amendment, waiver or modification of the Term Loan Facility."
(x) Concurrently with the repayment in full of the Senior Notes,
Section 6 of the Credit Agreement shall be amended to add the following:
"SECTION 6.15. Fiscal Year. The Company will not change its Fiscal
Year-end from December 31."
(y) Concurrently with the repayment in full of the Senior Notes, Section
7.2 of the Credit Agreement shall be amended by deleting it in its entirety and
by substituting therefor:
"SECTION 7.2. Default in Other Agreements . (i) Failure of the Company
or any of its Subsidiaries to pay when due (a) any principal of or interest
on any Indebtedness (other than Indebtedness referred to in Section 7.1) in
an individual principal amount of $2,500,000 or more or any items of
Indebtedness with an aggregate principal amount of $5,000,000 or more or
(b) any Contingent Obligation in an individual principal amount of
$2,500,000 or more or any Contingent Obligations with an aggregate
principal amount of $5,000,000 or more, in each case beyond the end of any
grace period provided therefor; or (ii) breach or default by the Company or
any of its Subsidiaries with respect to any other material term of (a) any
evidence of any Indebtedness in an individual principal amount of
$2,500,000 or more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or any Contingent Obligation in an individual
principal amount of $2,500,000 or more or any
-24-
Contingent Obligations with an aggregate principal amount of $5,000,000 or
more or (b) any loan agreement, mortgage, indenture or other agreement
relating to such Indebtedness or Contingent Obligation(s), if the effect of
such breach or default is to cause, or to permit the holder or holders of
that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of
such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case
may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or"
(z) Concurrently with the repayment in full of the Senior Notes, Section 7
of the Credit Agreement shall be amended by deleting the period at the end of
Section 7.13 and substituting therefor "; or" and by adding the following:
-25-
"SECTION 7.14. Receivables Facilities . (i) Any condition or event
shall occur under the Existing Receivables Facility that constitutes a
Termination Event (as such term is defined in the Existing Receivables
Facility as of the effective date of Amendment No. 6 hereto), or any
condition or event shall occur under any Receivables Facility the effect of
which is the same as, or similar to, any such Termination Event; (ii) any
condition or event shall occur under the Receivables Bridge Facility or the
New Receivables Facility that constitutes an Early Amortization Event (as
such term is defined in the Draft Information Memorandum with respect to
the Receivables Bridge Facility or the New Receivables Facility as of the
effective date of Amendment No. 6 hereto) or an event or condition which,
after notice or lapse of time or both, would constitute an Early
Amortization Event if that event or condition were not cured or removed
within any applicable grace or cure period (an "Unmatured Early
Amortization Event"), or any condition or event shall occur under any
Receivables Facility the effect of which is the same as, or similar to, any
such Early Amortization Event or Unmatured Early Amortization Event; (iii)
any condition or event shall occur, or any breach or default by the Company
or any of its Subsidiaries shall occur, under any Receivables Facility if
the effect of such condition, event, breach or default is to cause, or to
permit any purchaser or other investor under any Receivables Facility to
cause, upon the giving or receiving of notice, lapse of time, both or
otherwise, any commitment to purchase receivables or to advance or invest
funds for the purchase of receivables under any such Receivables Facility
in whole or in part to be suspended or terminated or any principal
repayment or amortization or accumulation period to commence prior to
January 1, 1999 in the case of the Receivables Bridge Facility or the New
Receivables Facility or prior to the scheduled commencement date for such
repayment, amortization or accumulation as in effect on the initial closing
date for such Receivables Facility in the case of the Alarm Services
Contract Securitization Facility; (iv) the Company or any of its
Subsidiaries shall optionally redeem, retire, prepay, purchase for value or
make any similar optional payment of
-26-
the principal of, any Receivables Certificates (as defined in Section
9.12.B) issued to finance the purchase of receivables under the Receivables
Bridge Facility (excluding however the refinancing of the Receivables
Bridge Facility with the proceeds of the New Receivables Facility) or the
New Receivables Facility; or (v) the Company shall fail to draw down on the
Receivables Bridge Facility on or prior to November 30, 1995 to refinance
the Existing Receivables Facility in its entirety, in the event that by
November 30, 1995 (x) the Existing Receivables Facility is not extended
pursuant to an extension agreement in form and substance satisfactory to
the Required Banks or (y) the proceeds of the New Receivables Facility have
not been utilized to refinance in full the Existing Receivables Facility;
or"
(aa) Article IX of the Credit Agreement is hereby amended by adding a new
Section 9.12 as follows:
"SECTION 9.12. Certain Intercreditor Agreements
A. The Banks agree, for the benefit of the lenders from time to
time under the Term Loan Facility, not to take any action as "Requisite
Obligees" under the Intercreditor Agreement without the prior written
consent of Requisite Lenders (as defined in the Term Loan Facility),
including without limitation authorizing any amendment, modification,
supplement or waiver of any provision of any Loan Guaranty under the
Intercreditor Agreement, the Collateral Documents or the Intercreditor
Agreement.
B. The Banks agree, for the benefit of the holders from time to
time of trade receivables backed certificates issued in connection with the
Receivables Bridge Facility and the New Receivables Facility (the
"Receivables Certificates") not to:
(a) challenge the transfers of receivables and related assets
from the sellers under such Receivables Facilities (the "Sellers") to
BPS Financial Services, Inc. (the "Transferor"), whether on the
grounds that such sales were disguised financings or fraudulent
-27-
conveyances or otherwise, so long as such transfers are carried out in
all material respects in accordance with the Purchase Agreement and
the Pooling Agreement described (and as defined) in the Draft
Information Memorandum or the Receivables Bridge Facility, as the case
may be;
(b) assert that the Transferor and any Seller should be
substantively consolidated; or
(c) institute or join any other Person in instituting any
bankruptcy or other insolvency proceeding against the Transferor so
long as any of the Receivables Certificates shall be outstanding or
there shall not have lapsed one year plus one day since the last day
on which any of the Receivables Certificates shall have been
outstanding."
(bb) Schedule 1 (Fronting Commitments) to the Credit Agreement is amended
to read in its entirety in the form of Schedule 1 hereto. Section 2.1.A(b) of
the Credit Agreement is amended by adding the following language at the end
thereof before the period:
", provided that such Issuer may in its discretion issue such Letter
of Credit at the Company's request so long as the condition set forth in
the foregoing clause (a) is met".
(cc) Schedule 2 (Participation Commitments and Percentages) to the Credit
Agreement is amended to read in its entirety in the form of Schedule 2 hereto.
(dd) The following definitions contained in Annex I to the Credit Agreement
are hereby amended by deleting each definition in its entirety and by
substituting the following therefor:
"Asset Sale" means the sale, lease, assignment or other transfer
for value by the Company or any of its Subsidiaries to any Person, whether
in a single transaction or a series of related transactions (other than to
the
-28-
Company or any of its Subsidiaries) of (i) any of the stock of any of the
Company's Subsidiaries; (ii) all or substantially all of the assets of any
division or line of business of the Company or any of its Subsidiaries; or
(iii) any other assets or rights (including, without limitation, any assets
that do not constitute substantially all of the assets or rights of any
division or line of business of the Company or any of its Subsidiaries)
having a book value or market value in excess of $50,000, other than in
each case (A) the sale in the ordinary course of business of personal
property held for resale in the ordinary course of business of the Company
or any of its Subsidiaries, (B) the sale or discount of notes, accounts
receivable, contracts, leases or other receivables to the extent sold or
discounted in connection with the Existing Receivables Facility, the
Receivables Bridge Facility and the New Receivables Facility and (C) the IT
Exchange.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed
as to interest and principal by the United States Government or (b) issued
by any agency of the United States the obligations of which are backed by
the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued
by any state of the United States of America or any political subdivision
of any such state or any public instrumentality thereof, in each case
maturing within one year after such date and having, at the time of the
acquisition thereof, the highest rating obtainable from either Standard &
Poor's Ratings Services, a division of the McGraw Hill Companies ("S&P") or
Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper
maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued or
accepted by any Bank or by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of
Columbia that (a) is at
-29-
least "adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as defined
in such regulations) of not less than $100,000,000; and (v) shares of any
money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has
the highest rating obtainable from either S&P or Moody's.
"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
"Base Rate" (as defined in the BT Credit Agreement) then in effect for
Loans outstanding under the BT Credit Agreement (without reference to the
"Base Rate Margin", as defined in the BT Credit Agreement).
"Centaur Settlement Amount" means all amounts paid or contributed
by the Company to 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 hereto for the purpose of settling litigation pending against Centaur
or against the Company but relating to Centaur; 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 hereto.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of the Company and its
Consolidated Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of the Company and its Consolidated Subsidiaries,
including, without limitation, all
-30-
commissions, discounts and other fees and charges owed with respect to
letters of credit and with respect to any sale, discount or other financing
of receivables and net costs under Interest Rate Agreements but excluding,
however, the amortization of the costs of issuance and original issuance
discount related to the 9 1/8% Subordinated Notes, and any fees or other
similar financing costs payable in connection with the Term Loan Facility,
the Receivables Facilities or the amendments to the BT Credit Agreement or
this Agreement which are capitalized by the Company.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect the Company or any of
its Subsidiaries against fluctuations in interest rates; provided that the
counterparty to any such agreement shall be a Bank, a lender under the BT
Credit Agreement or a lender under the Term Loan Facility or any of their
respective Affiliates or ML & Co. or any of its Affiliates or any other
Person reasonably acceptable to the Agent and the Required Banks; provided
further that the calculation of payments for early termination shall be
made on a reasonable basis in accordance with customary industry practices;
and provided still further that all such payments (guarantied and
unguarantied) shall constitute Indebtedness.
"New Receivables Facility" means an off-balance sheet receivables
financing facility, the terms and conditions of which are substantially as
set forth in the Draft Information Memorandum and the proceeds of which are
to be used to refinance the Existing Receivables Facility or the
Receivables Bridge Facility; provided that notwithstanding anything to the
contrary contained in the Draft Information Memorandum, (i) the aggregate
principal amount of the New Receivables Facility shall not be less than
$100,000,000; (ii) the interest rate payable by the Company or its
Subsidiaries with respect to the New Receivables Facility, if variable,
shall not exceed the Adjusted Eurodollar Rate (as defined in the BT Credit
Agreement as in effect on October 16, 1995) plus 2.75% per
-31-
annum and, if fixed, shall not exceed the lesser of the swapped equivalent
of such variable rate (determined as of the date on which a final Offering
Memorandum for the New Receivables Facility is printed) or 12% per annum;
and (iii) Pre-Bill Receivables shall not be required to be included as
Eligible Receivables (as such terms are defined in the Draft Information
Memorandum), as such New Receivables Facility may be amended, supplemented
or modified from time to time to the extent permitted under this Agreement.
(ee) Concurrently with the repayment in full of the Senior Notes, the
definition of "Centaur Settlement Amount" contained in Annex I to the Credit
Agreement shall be amended by deleting each reference to "Amendment No. 5
hereto" contained therein and substituting therefor "Amendment No. 6 hereto".
(ff) Annex I to the Credit Agreement is hereby further amended by deleting
the definition of "Adjusted Interest Coverage Ratio" and adding thereto the
following definitions, which definitions shall be inserted in proper
alphabetical order:
"Alarm Services Contract Securitization Facility" means one or
more off-balance sheet facilities providing for the sales of receivables,
contracts and/or leases by Wells Fargo Alarm Services, Inc., BW-Canada
Alarm (Wells Fargo) Corporation, and their respective wholly owned
subsidiaries, the terms and conditions of which shall be satisfactory in
form and substance to the Required Banks, as such Alarm Services Contract
Securitization Facility may be amended, supplemented or otherwise modified
from time to time to the extent permitted under this Agreement.
"Centaur" means Centaur Insurance Company, an Illinois
corporation and one of the BW-Other Corporations.
"Draft Information Memorandum" means the October 7, 1995 draft
Preliminary Offering Memorandum (together with changed pages thereto dated
October 12 and 13, 1995) describing up to $120,000,000 of trade receivables
backed certificates to be issued by BPS Financial Services, Inc., a wholly-
owned limited-purpose receivables subsidiary
-32-
of the Company, as such Draft Information Memorandum may be amended or
supplemented by materials distributed to all Banks prior to the effective
date of Amendment No. 6 hereto or which are otherwise approved by the
Required Banks after the effective date of Amendment No. 6 hereto, which
materials are specifically identified as amendments or supplements to such
Draft Information Memorandum.
"Existing Receivables Facility" means the Company's off-balance
sheet receivables purchase facility with Enterprise Funding Corporation
providing for the purchase of up to $100 million of receivables from the
Company and its Subsidiaries, as such Existing Receivables Facility may
hereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under this Agreement.
"Fiscal Year" means the fiscal year of Company and its
Subsidiaries ended on December 31 of each calendar year.
"Interest Coverage Ratio" means the ratio of Consolidated EBITDA
to Consolidated Interest Expense.
"IT Exchange" means the transfer to a third party of the
information technology assets, including hardware, software and
communications assets, of any or all of Wells Fargo Alarm Services, Inc.,
Borg-Warner Protective Services Corporation or the Company, in exchange for
services to be provided by such third party or its affiliates.
"9 1/8% Subordinated Notes" means the Company's $150,000,000 in
initial aggregate principal amount of 9 1/8% Senior Subordinated Notes due
2003.
"9 1/8% Subordinated Note Indenture" means the indenture pursuant
to which the 9 1/8% Subordinated Notes were issued, as such indenture may
be amended from time to time to the extent permitted under this Agreement.
-33-
"Receivables Bridge Commitment Letter" means the commitment
letter dated October 13, 1995, among Bankers Trust Company, the Company and
BPS Financial Services, Inc., with respect to Bankers Trust Company's
commitment to provide the Receivables Bridge Facility.
"Receivables Bridge Facility" means an off-balance sheet
receivables bridge facility, the terms and conditions of which are
substantially as set forth in the Draft Information Memorandum, with such
differences as are in the "Summary of Certain Differences Between
Receivables Bridge Facility and Receivables Refinancing" annexed as Annex B
to the Receivables Bridge Commitment Letter excluding the preamble to such
Summary, or such other differences as are more favorable to the Company and
its Subsidiaries, the proceeds of which are used to refinance the Existing
Receivables Facilities, as such Receivables Bridge Facility may be amended,
supplemented or modified from time to time to the extent permitted under
this Agreement.
"Receivables Certificates" is defined in Section 9.12.
"Receivables Facilities" means and includes the Existing
Receivables Facility, the Receivables Bridge Facility, the New Receivables
Facility and the Alarm Services Contract Securitization Facility, in each
case as such facilities may be amended from time to time to the extent
permitted under this Agreement.
"Sellers" is defined in Section 9.12.
"Stonington" means Stonington Partners, L.P., a Delaware limited
partnership.
"Term Loan Facility" means the Credit Agreement dated as of
October 16, 1995 among the Company, as borrower, the financial institutions
party thereto, as lenders and Bankers Trust Company, as agent, providing
for a term loan to the Company of up to $200,000,000, as such Term Loan
-34-
Facility may hereafter be amended, supplemented or otherwise modified from
time to time to the extent permitted under this Agreement.
"Transferor" is defined in Section 9.12.
(gg) Concurrently with the repayment in full of the Senior Notes, Annex I
to the Credit Agreement shall be amended by adding thereto the following
definition, which definition shall be inserted in proper alphabetical order:
"Unmatured Early Amortization Event" is defined in Section 7.14.
(hh) Section 1.3 of the Credit Agreement is hereby amended by deleting the
reference to "December 31, 1991" contained in the last sentence thereof and
substituting "December 31, 1994" therefor.
(ii) Exhibit E (Form of Compliance Certificate) to the Credit Agreement is
amended to read in its entirety in the form of Exhibit E-1 hereto. Concurrently
with the repayment in full of the Senior Notes, Exhibit E to the Credit
Agreement shall be amended by deleting it in its entirety and substituting
therefor a new Exhibit E in the form of Exhibit E-2 hereto.
(jj) Schedule A to the Credit Agreement is hereby amended by deleting it in
its entirety and substituting therefor a new Schedule A in the form of Schedule
A hereto.
2. CONSENT
A. Term Loan Facility. Each Bank executing this Amendment hereby
consents to the terms and conditions of the Term Loan Facility substantially in
the form annexed hereto as Annex A and to the Company's designation of
Indebtedness incurred under the Term Loan Facility as "Specified Senior
Indebtedness" under the 9 1/8% Subordinated Note Indenture.
B. Amendment of BT Credit Agreement. Each Bank executing this
Amendment hereby consents to the amendment of the
-35-
BT Credit Agreement substantially in the form annexed hereto as Annex B.
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 "Amendment Effective Date") prior to
October 31, 1995:
(a) Company Documents. 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 an amendment
to the Company Pledge Agreement (the "Pledge Amendment") pledging the
shares and certain promissory notes of BPS Financial Services, Inc. to the
Collateral Agent, and the performance 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 and the Pledge Amendment;
(3) Executed copies of this Amendment and the Pledge 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.
-36-
(b) Subsidiary Documents. On or before the Amendment Effective Date, each
of the Borg-Warner Guarantor Subsidiaries that are Material Subsidiaries and
each of the other Borg-Warner Subsidiaries that are Material Subsidiaries shall
execute and deliver to the Banks (or to the Agent with sufficient originally
executed copies, where appropriate, for each Bank) the following, each, unless
otherwise noted, dated the Amendment Effective Date:
(i) Certified copies of its Certificate of Incorporation, together
with a good standing certificate from the Secretary of State of the State
of Delaware and each other state in which its headquarters office is
located and a certificate or other evidence of good standing as to payment
of any applicable franchise or similar taxes from the appropriate taxing
authority of each of such states (or in lieu of such certificate as to the
payment of such taxes, an Officers' Certificate to such effect), each dated
a recent date prior to the Amendment Effective Date;
(ii) Copies of its Bylaws, certified as of the Amendment Effective
Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of the Borg-Warner Subsidiary
Guaranty by the Borg-Warner Subsidiary Guarantors and of the Borg-Warner
Subsidiary Pledge Agreement by the Material Subsidiaries, certified as of
the Amendment Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of its officers executing
the other Credit Documents to which it is to be a party;
(v) Executed originals of the Credit Documents to which it is a party;
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(vi) Such other documents as the Agent or the Required Banks may
reasonably request;
(vii) Signature and incumbency certificates of its officers executing
this Amendment; and
(viii) Executed copies of this Amendment.
(c) Fees. On or before the Amendment Effective Date, each Bank shall have
received an amendment/extension fee in the amount equal to such Bank's
Participation Commitment (as set forth on Schedule 2 hereto) multiplied by 1.25%
and the Agent shall have received Agent's fees in an amount previously agreed to
by the Company and the Agent.
(d) Banks Execution. On or before the Amendment Effective Date, the Banks
shall have delivered to the Agent originally executed copies of this Amendment.
(e) BT Credit Agreement. On or before the Amendment Effective Date,
corresponding consents and amendments shall have been obtained or made with
respect to the BT Credit Agreement.
(f) Term Loan Facility. On the Amendment Effective Date, the Company and
the lenders party thereto shall have executed and delivered the Term Loan
Facility and an executed copy thereof and of the other loan documents related
thereto shall have been delivered to the Agent.
(g) Completion of Proceedings. 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.
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(h) Receivables Purchase Facility. On or before the Amendment Effective
Date, the Company and Bankers Trust Company shall have executed and delivered
the Receivables Bridge Commitment Letter and such Receivables Bridge Commitment
Letter shall be in full force and effect.
(i) Refinancing of LTCB Term Loan. On the Amendment Effective Date, the
Company shall have repaid in full all amounts outstanding under the LTCB Term
Loan.
(j) Consents and Approvals. The Company shall have obtained all such
consents, waivers, amendments, approvals and the like as may be required from
the Company's existing lenders to permit the extensions of credit under this
Credit Agreement and all related transactions and shall otherwise be in
compliance with such agreements.
(k) Representations and Warranties; Performance of Agreements. The Company
shall have delivered to the Agent an Officers' Certificate, dated Amendment
Effective Date and addressed to the Agent, in form and substance satisfactory to
the Agent, to the effect that (i) the representations and warranties in Section
4 hereof are true, correct and complete in all material respects on and as of
the Amendment Effective Date to the same extent as though made on and as of the
date, (ii) since December 31, 1994 through the Amendment Effective Date there
has been no change in the prospects of the Company or its Subsidiaries which has
been materially adverse to the Company or the Company and its Subsidiaries taken
as a whole, and (iii) the Company has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement as amended
hereby provides shall be performed or satisfied by it on or before the Amendment
Effective Date except as otherwise disclosed to and agreed to in writing by the
Agent and the Required Banks.
(l) Security Interest. The Company shall have taken or caused to be taken
such actions in such a manner so that the Collateral Agent, on behalf of the
Banks, has a valid and perfected, first priority security interest in the entire
Collateral (except to the extent any such security interest cannot be granted
under applicable laws). Such actions shall
-39-
include, without limitation: (1) the delivery by the Company of the Pledge
Amendment pledging the shares of BPS Financial Services, Inc., together with
stock certificates (which certificates shall be registered in the name of the
Collateral Agent or properly endorsed in blank for transfer or accompanied by
irrevocable undated stock powers duly endorsed in blank, all in form and
substance satisfactory to the Collateral Agent) representing all of the capital
stock of BPS Financial Services, Inc. and pledging the intercompany promissory
notes referred to in Section 6.1(vii) (which promissory notes shall be properly
endorsed in blank or to the Collateral Agent, in form and substance satisfactory
to the Collateral Agent); and (2) the delivery to the Collateral Agent by
Material Subsidiaries of the intercompany promissory notes referred to in
Section 6.1(vii) (which promissory notes shall be properly endorsed in blank or
to the Collateral Agent, in form and substance satisfactory to the Collateral
Agent).
(m) The Officers' Certificate. The Company shall have delivered to the
Agent an Officers' Certificate setting forth the calculation of the tangible
asset value of the Material Subsidiaries as of June 30, 1995, as set forth in
Section 4.1.D of the Credit Agreement.
4. 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
-40-
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 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,
-41-
correct and complete in all material respects on
and as of the 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 or an Unmatured Default.
5. 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", "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
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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 CONFLICT OF LAWS PRINCIPLES.
6. ACKNOWLEDGEMENT AND CONSENT
The Company is a party to the Company Pledge Agreement, as amended
through the Amendment Effective Date, pursuant to which the Company has pledged
certain Collateral to the Collateral Agent to secure the Obligations. Each of
the Borg-Warner Pledged Subsidiaries is a party to the Borg-Warner Subsidiary
Pledge Agreement, as amended through the Amendment Effective Date, pursuant to
which each such Borg-Warner Pledged Subsidiary has pledged certain Collateral to
the 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 Amendment Effective Date, pursuant to which each such Borg-
Warner Guarantor Subsidiary has guarantied the Obligations. The Company, the
Borg-Warner Pledged Subsidiaries and the Borg-Warner Guarantor Subsidiaries are
collectively referred to herein as the "Credit Support Parties," and the Company
Pledge Agreement, the Borg-Warner Subsidiary Pledge Agreement, and the Borg-
Warner Subsidiary Guaranty are
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collectively referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of 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 the Company
now or hereafter existing under or in respect of the Amended 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 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
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 the Company) 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
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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.
[Signature pages follow]
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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 6 only)
as a Credit Support Party
By:
-----------------------------
Title:
--------------------------
WELLS FARGO ARMORED SERVICE
CORPORATION (for purposes of
Section 6 only)
as a Credit Support Party
By:
-----------------------------
Title:
--------------------------
BW-CANADIAN GUARD CORPORATION
(for purposes of Section 6 only)
as a Credit Support Party
By:
-----------------------------
Title:
--------------------------
BORG-WARNER PROTECTIVE SERVICES
CORPORATION
(for purposes of Section 6 only)
as a Credit Support Party
By:
-----------------------------
Title:
--------------------------
S-1
PONY EXPRESS COURIER CORP.
(for purposes of Section 6 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:
--------------------------
S-2
THE FUJI BANK, LIMITED
By:
-----------------------------
Title:
--------------------------
THE BANK OF NEW YORK
By:
-----------------------------
Title:
--------------------------
THE TORONTO-DOMINION BANK
By:
-----------------------------
Title:
--------------------------
S-3