EXHIBIT 4.3
AMENDMENT NO. 8
This AMENDMENT NO. 8 (this "Amendment") is dated as of March 14, 1996 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 5 hereof, the
Credit Support Parties (as defined in Section 5 hereof) listed on the signature
pages hereof, and is made with reference to that certain Credit Agreement dated
as of January 27, 1993, as amended as of November 2, 1993, January 24, 1994,
June 30, 1994, December 14, 1994, March 15, 1995, October 16, 1995 and December
18, 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 by
(i) amending certain of the financial covenants contained therein and (ii)
making certain other amendments as set forth below; and
WHEREAS, the Company has requested that the Banks consent to the terms and
conditions of the Alarm Services Contract Securitization Facility; and
WHEREAS, subject to the terms and conditions of this Amendment, the Banks
are willing to agree to such amendments and to consent to such terms and
conditions;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS
1.1 Amendments to Section 6: Company's Negative Covenants.
(a) Contingent Obligations. Section 6.4 (xii) of the Credit Agreement is
hereby amended by deleting the period at the end thereof and substituting the
following therefor:
"; and Contingent Obligations of the Company's Consolidated
Subsidiaries with respect to the Alarm Services Contract
Securitization Facility."
(b) Interest Coverage Ratio. Section 6.6.a of the Credit Agreement is
hereby amended by deleting the table set forth therein in its entirety and
substituting the following therefor:
Minimum
"Fiscal Quarter Ended Interest Coverage Ratio
-------------------- -----------------------
September 30, 1995 2.25:1.00
December 31, 1995 2.20:1.00
March 31, 1996 2.15:1.00
June 30, 1996 2.15:1.00
September 30, 1996 2.15:1.00
December 31, 1996 2.15:1.00
March 31, 1997 2.20:1.00
June 30, 1997 2.25:1.00
September 30, 1997 2.30:1.00
December 31, 1997 2.35:1.00
March 31, 1998 2.40:1.00
June 30, 1998 2.50:1.00
September 30, 1998 2.55:1.00
December 31, 1998 2.65:1.00"
(c) Leverage Ratio. Section 6.6.B of the Credit Agreement is hereby amended
by deleting the table set forth therein in its entirety and substituting the
following therefor:
"Fiscal Quarter Ended Maximum Leverage Ratio
--------------------- ----------------------
September 30, 1995 3.75:1.00
December 31, 1995 4.20:1.00
March 31, 1996 4.05:1.00
June 30, 1996 3.85:1.00
September 30, 1996 3.75:1.00
December 31, 1996 3.60:1.00
March 31, 1997 3.45:1.00
June 30, 1997 3.30:1.00
September 30, 1997 3.15:1.00
December 31, 1997 3.05:1.00
March 31, 1998 2.90:1.00
June 30, 1998 2.75:1.00
September 30, 1998 2.65:1.00
December 31, 1998 2.45:1.00"
(d) Consolidated EBITDA. Section 6.6.D of the Credit Agreement is hereby
amended by deleting the table set forth therein in its entirety and substituting
the following therefor:
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MAXIMUM CONSOLIDATED
"FISCAL QUARTER ENDED EBITDA
--------------------- --------------------
September 30, 1995 $125,000,000
December 31, 1995 $125,000,000
March 31, 1996 $126,500,000
June 30, 1996 $128,000,000
September 30, 1996 $128,000,000
December 31, 1996 $129,700,000
March 31, 1997 $133,000,000
June 30, 1997 $135,300,000
September 30, 1997 $137,600,000
December 31, 1997 $138,900,000
March 31, 1998 $139,300,000
June 30, 1998 $142,700,000
September 30, 1998 $144,000,000
December 31, 1998 $147,400,000"
(e) Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Section 6.7(v) of the Credit Agreement is hereby amended by deleting clause (a)
contained in the first proviso thereof in its entirety and substituting the
following therefor: "(a)(1) such Asset Sale is pursuant to the Alarm Services
Contract Securitization Facility or (2) such Asset Sale is made for the fair
market value of such assets and for at least eighty-five percent (85%) cash,
and".
1.2 Amendments to Section 7: Events of Default.
(a) Receivables Facilities. Concurrently with the repayment in full of the
Senior Notes, Section 7.14 of the Credit Agreement shall be amended by (1)
deleting the word "or" at the end of clause (iv) thereof and (2) by adding a new
clause (vi) at the end thereof as follows:
"(vi) any condition or event shall occur which constitutes a Lessee
Notice Event (as defined in the Alarm Services Contract Securitization
Facility) under clause (iv) of Section 20.1 of the Alarm Services Contract
Securitization Facility involving an amount in excess of $2,500,000; or any
condition or event shall occur which constitutes an Event of Seller Default
involving an amount in excess of $2,500,000 (as defined in the Security
Agreement executed in connection with the Alarm Services Contract
Securitization Facility)."
SECTION 2. CONSENT
(a) Alarm Services Contract Securitization Facility. Each Bank executing
this Amendment hereby consents to the terms and
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conditions of the Alarm Services Contract Securitization Facility substantially
in the form annexed hereto as Annex A.
(b) Amendment of Term Loan Facility. Each Bank executing this Amendment
hereby consents to the amendment of the Term Loan Facility substantially in the
form annexed hereto as Annex B.
(c) Amendment of BT Credit Facility. Each Bank executing this Amendment
hereby consents to the Amendment of the BT Credit Agreement substantially in the
form annexed hereto as Annex C.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 and Section 2 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "Amendment
Effective Date"):
(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) the following, each, unless
otherwise noted, dated the Amendment Effective Date:
(1) Signature and incumbency certificates of its officers executing
this Amendment; and
(2) Copies of this Amendment, executed by the Company and each of the
Credit Support Parties.
(b) Banks Execution. On or before the Amendment Effective Date, the
Required Banks shall have delivered to the Agent originally executed copies of
this Amendment.
(c) Term Loan Facility. On or before the Amendment Effective Date,
corresponding consents and amendments shall have been obtained or made with
respect to the Term Loan Facility. Such amendment shall be satisfactory in form
and substance to the Agent and the Required Banks.
(d) 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. Such amendment shall be satisfactory in
form and substance to the Agent and the Required Banks.
(e) 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
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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 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) Accounting Method. The materials provided to the Agent and the Banks in
connection with this Amendment were prepared using accounting methods consistent
with the accounting methods used to prepare the Company's financial statements
for its fiscal year ended December 31, 1995.
(c) 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.
(d) 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 the 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.
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(e) 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.
(f) 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.
(g) 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 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.
(h) 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.
SECTION 5. 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 the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations", "Guarantied
Obligations" and "Secured Obligations", as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations", "Guarantied
Obligations" or "Secured Obligations", as the case may be, in respect of the
Obligations of 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) notwithstanding the conditions to effectiveness set forth in this
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Credit Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other 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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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", "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) 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.
(e) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1 and
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Section 2 hereof, the effectiveness of which is governed by Section 3 hereof)
shall become effective upon the execution of a counterpart hereof by the
Company, the Required Banks and each of the Credit Support Parties and receipt
by the Company and the Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[Signature pages follow]
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