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EXHIBIT 10.1
SECOND AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement, dated
as of March __, 1997 (this "Agreement"), is between PROTECTION ONE ALARM
MONITORING, INC., a Delaware corporation ("Borrower"), the Lenders identified on
the signature pages hereto and HELLER FINANCIAL, INC., a Delaware corporation,
in its individual capacity as a Lender and in its capacity as agent for the
Lenders, "Agent".
WITNESSETH:
WHEREAS, Agent, Borrower and Lenders are parties to that certain
Amended and Restated Credit Agreement dated as of June 7, 1996 (as heretofore
amended, the "Credit Agreement"; capitalized terms not otherwise defined herein
shall have the definitions provided therefor in the Credit Agreement) and to
certain other documents executed in connection with the Credit Agreement; and
WHEREAS, the parties wish to further amend the Credit Agreement as
provided herein;
NOW, THEREFORE, the parties agree as follows:
1. Amendments to the Credit Agreement.
(a) The definition of "Indebtedness Ratio Test" set forth in subsection
1.1 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
"Indebtedness Ratio Test" means, as of any date of
determination, that (i) the Senior Indebtedness to Annualized EBIDAT
Ratio as of such date does not exceed: 2.75 as of any date of
determination on or prior to December 31, 1997; 3.00 as of any date of
determination during the period from January 1, 1998 to September 30,
1998; 2.75 as of any date of determination during the period from
September 30, 1998 to June 30, 1999; and 2.50 as of any date of
determination on or after June 30, 1999; (ii) the Total Indebtedness to
Annualized EBIDAT Ratio as of such date does not exceed (A) for any
date of determination on or prior to December 31, 1997, the lesser of
(I) 6.25 or (II) the Debt to EBIDAT Ratio then in effect under
subsection 4.03(a) of the Subordinated Discount Note Indenture (after
giving effect to clauses (i) through (vi) thereof), and (B) for any
date of determination after December 31, 1997, 6.0; and (iii) the
Senior Indebtedness to MRR Ratio as of such date does not exceed: 21 as
of any date of determination prior to September 30, 1998; and 19 as of
any date of determination on or after September 30, 1998. All
calculations shall be based upon the EBIDAT and MRR for the most recent
month for which financial statements are required to be delivered
pursuant to subsection 5.1(A), adjusted to include (a) pro forma EBIDAT
and MRR for any prior acquisitions made during the course of the month
covered by such financial statements and (b) pro forma EBIDAT and MRR
for any prior acquisitions made subsequent to the date of such
financial statements.
(b) Subsection 2.2(A) of the Credit Agreement is hereby amended by
inserting the following new paragraph immediately preceding the last paragraph
of said subsection:
"If at any time through and including December 31, 1997 the
Total Indebtedness to Annualized EBIDAT Ratio exceeds 6.0, an amount of
the Loans equal to the Excess Indebtedness shall bear interest as
follows:
(X) if a Base Rate Loan, then at the sum of the Base Rate plus
two percent (2%) per annum; and
(Y) if a LIBOR Rate Loan, then at the sum of the LIBOR Rate
plus three and one-half percent (3.50%) per annum.
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For purposes of this subsection 2.2(A), (i) "Excess Indebtedness"
means, for any monthly period, (I) Total Indebtedness minus (II) (A)
six multiplied by (B) EBIDAT for such one month period multiplied by
twelve (12); provided that Excess Indebtedness shall never be less than
zero; and (ii) "Total Indebtedness" means, at any date of
determination, the aggregate principal amount of all Indebtedness of
Holdings, Borrower and Borrower's Subsidiaries as of such date on a
consolidated basis plus the aggregate liquidation preference or
redemption amount of all Disqualified Stock as of such date. Further,
for purposes of this paragraph only, Total Indebtedness shall be
calculated based on: (x) the average daily balance of all Indebtedness
(excluding Subordinated Indebtedness) during such one month Interest
Period, and (y) the Subordinated Indebtedness outstanding as of the
last day of such month. Excess Indebtedness for any month, and the
corresponding additional interest charge, shall be calculated by Agent
as soon as reasonably practicable after receipt by Agent of financial
information for the month in question from Borrower sufficient to allow
Agent to make the necessary calculations. Any such calculation of the
additional interest charge by Agent shall, absent manifest error, be
deemed to be conclusive and binding on Borrower. Borrower hereby
covenants and agrees to provide Agent with the necessary financial
information on or before the thirtieth day of each month through
January 1998."
(c) Subsection 6.1 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
6.1 Capital Expenditure Limits.
The aggregate amount of all Capital Expenditures of Borrower
and its Subsidiaries will not exceed $6,000,000 during any Fiscal Year.
2. No Waiver of Past Defaults. Nothing contained herein shall be
deemed to constitute a waiver of any Event of Default that may heretofore or
hereafter occur or have occurred and be continuing or to modify any provision of
the Credit Agreement except as expressly provided herein.
3. Representations and Warranties. To induce Agent and Lenders to
enter into this Agreement, Borrower represents and warrants to Agent on behalf
of the Lenders that the execution, delivery and performance by Borrower of this
Agreement are within its corporate powers, have been duly authorized by all
necessary corporate action and do not and will not contravene or conflict with
any provision of law applicable to Borrower, the Certificate of Incorporation or
Bylaws of Borrower, or any order, judgment or decree of any court or other
agency of government or any contractual obligation binding upon Borrower; and
the Credit Agreement as amended as of the date hereof is the legal, valid and
binding obligation of Borrower enforceable against Borrower in accordance with
its terms.
4. Conditions. The effectiveness of the amendments stated in this
Agreement is subject to each of the following conditions precedent or
concurrent:
(a) No Default. No Default or Event of Default under the
Credit Agreement, as amended hereby, shall have occurred and be continuing;
(b) Warranties and Representations. The warranties and
representations of Borrower contained in this Agreement shall be true and
correct as of the effective date hereof, with the same effect as though made on
such date; and
(c) Amendment Fee. Borrower shall have paid to Agent, for the
pro rata benefit of Lenders, an amendment fee of $100,000.
(d) Subordinated Indebtedness. No default under the
Subordinated Indebtedness shall have occurred and be continuing or be caused by
the effectiveness of this Agreement.
5. Miscellaneous.
(a) Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
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(b) Governing Law. This Agreement shall be a contract made
under and governed by the laws of the State of Illinois, without regard to
conflict of laws principles. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(c) Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement.
(d) Successors and Assigns. This Agreement shall be binding
upon Agent, Borrower, and Lenders and their respective successors and assigns,
and shall inure to the sole benefit of Agent, Borrower and Lenders and the
successors and assigns of Agent, Borrower and Lenders.
(e) References. Any reference to the Credit Agreement
contained in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Agreement shall be
deemed to include this Agreement unless the context shall otherwise require.
(f) Continued Effectiveness. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation as to the Credit Agreement. The parties hereto
expressly do not intend to extinguish the Credit Agreement. Instead, it is the
express intention of the parties hereto to reaffirm the indebtedness created
under the Credit Agreement which is evidenced by the Revolving Note and secured
by the Collateral. The Credit Agreement as amended hereby and each of the other
Loan Documents remains in full force and effect.
(g) Costs, Expenses and Taxes. Borrower affirms and
acknowledges that subsection 10.1 of the Credit Agreement applies to this
Agreement and the transactions and Agreements and documents contemplated
hereunder.
Delivered at Chicago, Illinois, as of the day and year first above
written.
PROTECTION ONE
ALARM MONITORING, INC.
By:_______________________________
Name Printed:_____________________
Title:____________________________
HELLER FINANCIAL, INC.,
as Lender and as Agent
By:______________________________
Name Printed:____________________
Title:___________________________
BANQUE NATIONALE DE PARIS, NEW YORK
BRANCH, as a Lender
By:______________________________
Name Printed:____________________
Title:___________________________
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MERITA BANK, LTD., as a Lender
By:______________________________
Name Printed:____________________
Title:___________________________
TORONTO DOMINION (TEXAS), INC.,
as Lender
By:______________________________
Name Printed:____________________
Title:___________________________
IBJ SCHRODER BANK & TRUST, as Lender
By:______________________________
Name Printed:____________________
Title:___________________________
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, as Lender
By:______________________________
Name Printed:____________________
Title:___________________________
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Acknowledgment
PROTECTION ONE, INC. hereby acknowledges and consents to the terms of
this Agreement and hereby affirms, ratifies and confirms all of the terms and
provisions of the Amended and Restated Guaranty dated June 7, 1996.
PROTECTION ONE, INC.
By:_____________________________________
Name Printed:___________________________
Title:__________________________________
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