SECOND AMENDED AND RESTATED TERM LOAN AND
ACQUISITION CREDIT AGREEMENT
by and among
ALARMGUARD, INC.,
as Borrower,
SECURITY SYSTEMS HOLDINGS, INC. AND TRITON GROUP LTD. (TO BE
RENAMED ALARMGUARD HOLDINGS, INC.),
as the Guarantors,
BANK OF BOSTON CONNECTICUT,
GENERAL ELECTRIC CAPITAL CORPORATION,
IBJ XXXXXXXX BANK & TRUST COMPANY
AND
THE OTHER BANKS AND LENDERS WHICH MAY BECOME A PARTY TO THIS
AGREEMENT,
as the Lenders,
BANK OF BOSTON CONNECTICUT
as the Administrative Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Documentation Agent.
AS OF APRIL 15, 1997
SECOND AMENDED AND RESTATED TERM LOAN AND
ACQUISITION CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED TERM LOAN AND ACQUISITION
CREDIT AGREEMENT (the "Agreement") is made as of this 15th day of
April, 1997 by and among ALARMGUARD, INC., a Delaware
corporation, with its chief executive office located at 000
Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000 ("Borrower"), the
Guarantors which are or may become parties to this Agreement, the
banks, financial institutions and other lenders which are or may
become parties to this Agreement (individually, a "Lender" and
collectively, the "Lenders"), BANK OF BOSTON CONNECTICUT, a
Connecticut savings bank, with its head office located at 00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 as Administrative Agent
for the Lenders (in such capacity, the "Administrative Agent"),
and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation,
with an office located at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000-0000 as the Documentation Agent for the
Lenders (in such capacity, the "Documentation Agent").
W I T N E S S E T H:
Borrower is currently a direct wholly-owned subsidiary of
Security Systems Holdings, Inc., a Delaware corporation ("SSH").
Prior to or concurrently with the execution of this Agreement,
SSH will undergo a merger with Triton Acquisition Corp., a
Delaware corporation and a direct wholly-owned subsidiary of
Triton Group, Ltd., a Delaware corporation (the "Triton Merger"),
with SSH continuing as the surviving corporation after the Triton
Merger. In connection with the Triton Merger, Triton Group, Ltd.
will immediately thereafter change its name to Alarmguard
Holdings, Inc. (as so renamed, "Alarmguard Holdings").
Borrower, Bank of Boston Connecticut and IBJ Xxxxxxxx Bank &
Trust Company entered into a certain Amended and Restated Term
Loan and Acquisition Credit Agreement dated as of September 29,
1994 and amended from time to time thereafter (as amended and in
effect from time to time, the "Original Credit Agreement")
pursuant to which Bank of Boston Connecticut and IBJ Xxxxxxxx
Bank & Trust Company (such Lenders being referred to in such
capacity, the "Existing Lenders") agreed to make loans and
advances to Borrower. Upon the execution of this Agreement,
Borrower is currently indebted to the Existing Lenders in the
aggregate principal amount of $31,835,830.00 (the "Existing
Loans"), exclusive of accrued and unpaid interest and other
amounts due and payable under the Original Credit Agreement.
Borrower has requested that the Lenders amend and restate the
terms and conditions of the Original Credit Agreement, inter
alia, to continue the Existing Loans, to increase the amount of
credit available to Borrower thereunder, to amend the purposes
for which Borrower is permitted to use the proceeds of loans and
advances thereunder, to make General Electric Capital Corporation
a party thereto and a lender thereunder (General Electric Capital
Corporation being referred to in such capacity as the "Additional
Lender"), to substitute Bank of Boston Connecticut for IBJ
Xxxxxxxx Bank & Trust Company as the Administrative Agent for the
Lenders and to appoint General Electric Capital Corporation as
the Documentation Agent for the Lenders.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Lenders, the
Administrative Agent, the Documentation Agent and Borrower hereby
agree that the Original Credit Agreement shall (subject to the
satisfaction of the conditions set forth in Section 5 hereof) be
amended and restated as follows:
SECTION 1. DEFINITIONS
All capitalized terms used in this Agreement, the Notes or the
Other Documents, or in any certificate, report or other document,
instrument or agreement executed or delivered pursuant hereto and
thereto (unless otherwise indicated therein) shall have the
meanings ascribed to such terms below.
Section 1.1. "Acquisition" means the Pro Acquisition and each
other acquisition of the assets or Capital Stock of a Person made
by Borrower or a Subsidiary of Borrower as permitted under
Section 6.3. hereof.
Section 1.2. "Acquisition Documents" means the documents,
agreements and instruments executed and delivered in connection
with an Acquisition.
Section 1.3. "Acquisition Loan" means each Revolving Loan
obtained by Borrower to finance the purchase price for, and the
reasonable fees, expenses and costs, including integration costs,
incurred by Borrower in connection with, an Acquisition.
Section 1.4. "Additional Lender" shall have the
meaning set forth in the Preamble hereof.
Section 1.5. "Adjusted Eurodollar Rate" means, as applied to
any Interest Period for a Eurodollar Loan, a rate per annum
determined by the Administrative Agent pursuant to the following
formula:
AER = [ IOR ] *
[1.00 - RP]
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
RP = Reserve Percentage
* The amount in brackets shall be rounded upwards, if
necessary to the next higher 1/100 of 1%.
Where:
"Interbank Offered Rate" applicable to any Eurodollar
Loan for any Interest Period means the rate of interest
determined by the Administrative Agent to be the prevailing rate
per annum at which deposits in U.S. dollars are offered to the
Administrative Agent by first-class banks in the interbank
Eurodollar market in which it regularly participates on or about
10:00 a.m. (Boston, Massachusetts time) two Business Days before
the first day of such Interest Period in an amount approximately
equal to the principal amount of the Eurodollar Loan to which
such Interest Period is to apply for a period of time
approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period
means the rate (expressed as a decimal) applicable to any member
bank of the Federal Reserve System during such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, without limitation, any
basic, supplemental, emergency or marginal reserve requirement)
of such member bank with respect to "Eurocurrency liabilities" as
that terms is defined under such regulations.
Section 1.6. "Administrative Agent" shall have the meaning
set forth in the Preamble hereof and shall include any successor
to the Administrative Agent appointed pursuant to Section 10.10.
hereof.
Section 1.7. "Administrative Questionnaire" shall have the
meaning set forth in Section 10.17. hereof.
Section 1.8. "Affiliate" means any Person (i) which directly
or indirectly controls, or is controlled by, or is under common
control with, Borrower or any Subsidiary of Borrower; (ii) which
directly or indirectly beneficially owns or holds ten percent
(10%) or more of any class of voting stock of Borrower or any
Subsidiary of Borrower or ten percent (10%) or more of the
voting stock of which is directly or indirectly beneficially
owned or held by Borrower or any Subsidiary of Borrower; or (iii)
which is an officer, director, joint venturer or partner of any
Person referred to in clause (i) or (ii) above. The term
"control" (and its correlative meanings "controlled by" and
"under common control with") as used in this Section 1.8. means
the possession, directly or indirectly, of the power to direct,
or cause the direction of, the management and policies of a
Person, whether through ownership of voting stock, by contract or
otherwise. Notwithstanding any provision of this Section 1.8. to
the contrary, the Administrative Agent, the Documentation Agent
and the Lenders shall not be considered an Affiliate of any
Credit Party for purposes of this Agreement.
Section 1.9. "Affiliate Subordination Agreement" means each
subordination agreement executed by an Affiliate of Borrower in
favor of the Administrative Agent and the Lenders with respect to
any Indebtedness due by Borrower to such Affiliate in
substantially the form of Exhibit F-1 attached hereto by SSH, as
any such Affiliate Subordination Agreement may be amended,
supplemented, modified or confirmed from time to time.
Section 1.10. "AG Holdings" means AG Holdings Co., Inc., a
Delaware corporation.
Section 1.11. "AG Holdings Merger" means the merger of AG
Holdings with and into SSH completed prior to or concurrently
with the execution of this Agreement.
Section 1.12. "Agreement" means this Second Amended and
Restated Term Loan and Acquisition Credit Agreement, including
all schedules and exhibits attached hereto, and any and all
amendments, modifications and supplements hereto.
Section 1.13. "Alarmguard Holdings" shall have the meaning
set forth in the Preamble hereof.
Section 1.14. "Alarmguard Holdings Guarantee" means the
Guarantee Agreement of even date herewith executed by Alarmguard
Holdings in favor of the Administrative Agent for the ratable
benefit of the Lenders, substantially in the form of Exhibit F-2
attached hereto, as such Alarmguard Holdings Guarantee may be
amended, supplemented, modified or confirmed from time to time.
Section 1.15. "Alarmguard Holdings Pledge" means the Pledge
Agreement of even date herewith executed by Alarmguard Holdings
in favor of the Administrative Agent for the ratable benefit of
the Lenders, substantially in the form of Exhibit F-3 attached
hereto, as such Alarmguard Holdings Pledge may be amended,
supplemented, modified or confirmed from time to time.
Section 1.16. "Applicable Lending Office" means, for each
Lender and for each type of Loan, the lending office of such
Lender designated for such type of Loan as set forth on Schedule
1.16. attached hereto, as said Schedule 1.16. is amended,
supplemented or modified from time to time, as the office by
which its Loans of such type are to be made and maintained.
Section 1.17. "Asset Sale" means any sale, transfer or other
disposition by Borrower or any of its Subsidiaries to any Person
(other than to Borrower or a Subsidiary) of any asset (including,
without limitation, any Capital Stock of another Person, but
excluding the sale by such Person of its own Capital Stock) of
Borrower or such Subsidiary.
Section 1.18. "Assignment and Acceptance" shall have the
meaning set forth in Section 13.1. hereof.
Section 1.19. "Bankruptcy Code" means Title 11 of the United
States Code, entitled "Bankruptcy", as amended from time to time,
and all rules and regulations promulgated thereunder.
Section 1.20. "Base Rate" means the greater of (i) the rate
of interest announced from time to time by The First National
Bank of Boston at its head office located at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 as its "Base Rate", or (ii) the
Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded
upwards, if necessary, to the next 1/16 of 1%).
Section 1.21. "Base Rate Loan" means any Loan bearing
interest at a rate determined by reference to the Base Rate.
Section 1.22. "Base Rate Margin" means a percentage per annum
determined as set forth in Section 2.3.5. hereof.
Section 1.23. "Borrower" shall have the meaning set forth in
the Preamble hereof.
Section 1.24. "Borrower Pledge Agreement" means the Pledge
Agreement of even date herewith executed by Borrower in favor of
the Administrative Agent for the ratable benefit of the Lenders,
substantially in the form of Exhibit F-4 attached hereto, as such
Borrower Pledge Agreement may be amended, supplemented, modified
or confirmed from time to time.
Section 1.25. "Borrower Security Agreement" means the
Amended and Restated Security Agreement of even date herewith
executed by Borrower in favor of the Administrative Agent for the
ratable benefit of the Lenders, substantially in the form of
Exhibit F-5 attached hereto, as such Borrower Security Agreement
may be amended, supplemented, modified or confirmed from time to
time.
Section 1.26. "Borrowing Base" means, as of any date as of
which the amount thereof shall be determined, an amount which is
equal to RMR as of such date multiplied by 22.5.
Section 1.27. "Business Day" means, in the case of a
Eurodollar Loan, any day in which dealings in foreign currencies
and exchange between lenders may be carried on in the place where
the Eurodollar Office is located and in Boston, Massachusetts and
Hartford, Connecticut and, in all other cases, any day other than
a Saturday, Sunday, legal holiday or other day on which lenders
in the State of Connecticut or the Commonwealth of Massachusetts
are required or permitted by law to close.
Section 1.28. "Capital Expenditures" means, without
duplication, for any period, the aggregate of all expenditures
made by Borrower and its Subsidiaries that, in conformity with
GAAP, are required to be included in the "additions to property,
plant, equipment" or similar fixed asset account reflected within
the consolidated Financial Statements of Borrower and its
Subsidiaries.
Section 1.29. "Capital Lease" means any lease of any property
(whether real, personal or mixed) that, in conformity with GAAP,
should be accounted for as a capital lease.
Section 1.30. "Capital Stock" means any and all shares,
interests, participations or other equivalents, however
designated, of the capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any
of the foregoing.
Section 1.31. "Cash Proceeds" means, with respect to any
Asset Sale, the aggregate cash payments (including any cash
received by way of deferred payment pursuant to a note receivable
issued in connection with such Asset Sale, other than the portion
of such deferred payment constituting interest, but only as and
when so received) received by Borrower and/or any of its
Subsidiaries from such Asset Sale.
Section 1.32. "Change in Control Event" means any event which
results in (i) Alarmguard Holdings ceasing to own directly 100%
on a fully diluted basis of the Capital Stock of SSH (other than
as a result of the consolidation of Alarmguard Holdings with
SSH), (ii) SSH or Alarmguard Holdings ceasing to own directly
100% on a fully diluted basis of the Capital Stock of the
Borrower, or (iii) any Person (other than a Continuing
Shareholder) or "group" (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act) (other than a group of the
Continuing Shareholders) directly or indirectly having directly
or indirectly acquired beneficial or record ownership of more
than 20% of the aggregate ordinary voting power represented by
the issued and outstanding shares of the Capital Stock of
Alarmguard Holdings (including, but not being limited to, the
acquisition of such beneficial or record ownership by way of
proxy, voting trust, voting agreement or stock pledge) or (iv)
the board of directors of Alarmguard Holdings ceasing to consist
of a majority of Continuing Directors.
Section 1.33. "Closing Date" means the date hereof or, if
later, the date on which all conditions precedent to the
amendment and restatement of the Original Credit Agreement and
the making of the initial Extension of Credit are satisfied or
waived.
Section 1.34. "Code" means the Internal Revenue Code of 1986
and the rules and regulations promulgated thereunder,
collectively, as the same may from time to time be supplemented
or amended and remain in effect.
Section 1.35. "Collateral" means all collateral received or
delivered as security for the Obligations pursuant to the
Security Documents, and any properties and interests provided in
addition to or in substitution for any of the foregoing.
Section 1.36. "Collateral Disclosure List" means each list
completed by Borrower for the purpose of disclosing certain
information with respect to the Collateral in substantially the
form attached hereto as Exhibit F-6, as any such Collateral
Disclosure List may be amended, supplemented or modified from
time to time.
Section 1.37. "Commitment" means, with respect to each
Lender, at any time, such Lender's several obligation to make
Revolving Loans, which obligation shall not exceed, in the case
of each Lender, an amount equal to the Total Commitment Amount at
such time multiplied by such Lender's Commitment Percentage.
Section 1.38. "Commitment Percentage" means, with respect to
each Lender, the percentage set forth opposite such Lender's name
on Schedule 1.38. attached hereto, as such Schedule 1.38. may be
amended, modified and/or substituted from time to time by the
Administrative Agent in accordance with Section 13.2. hereof.
Section 1.39. "Consolidated Current Assets" means, as of any
date as of which the amount thereof shall be determined, all
amounts that should, in accordance with GAAP, be included as
current assets on a consolidated balance sheet of Borrower and
its Subsidiaries prepared as of such date; provided, however,
that such amounts shall not include (a) cash or cash equivalents,
(b) any amounts for any Indebtedness owing by an Affiliate of
Borrower, unless such Indebtedness arose in connection with the
sale of goods or other property in the ordinary course of
business and would otherwise constitute current assets in
conformity with GAAP, (c) any Capital Stock issued by an
Affiliate of Borrower, (d) the cash surrender value of any life
insurance policy or (e) any Consolidated Intangibles.
Section 1.40. "Consolidated Current Liabilities" means, as of
any date as of which the amount thereof shall be determined, all
amounts that should, in accordance with GAAP, be included as
current liabilities (inclusive of deferred revenue) on the
consolidated balance sheet of Borrower and its Subsidiaries
prepared as of such date, plus, to the extent not already
included therein, (a) all Indebtedness of any such Person that is
payable upon demand or within one (1) year from such date of
determination unless such Indebtedness is renewable or extendable
at the option of Borrower or any Subsidiary to a date more than
one (1) year from such date of determination and (b) all reserves
in respect of liabilities or Indebtedness payable on demand or,
at the option of the Person to whom such Indebtedness is owed,
within one (1) year from such date of determination, the validity
of which is contested at such date, but excluding any payments in
respect of any Indebtedness of any such Person (whether
installment, serial maturity or sinking fund payments or
otherwise) having an original term of more than one (1) year
required to be made not more than one (1) year after such date of
determination.
Section 1.41. "Consolidated EBITDA" means, in respect of
Borrower and its consolidated Subsidiaries, for any period, the
sum for such period of (a) Consolidated Net Income, (b) the sum
of provisions for taxes, interest expense and depreciation and
amortization expense used in determining such Consolidated Net
Income and (c), without duplication of any amounts set forth in
subsection (b) hereof, the Direct Marketing Program Net Loss for
such period.
Section 1.42. "Consolidated Intangibles" means, as of any
date as of which the amount thereof shall be determined, all
assets of Borrower and its Subsidiaries, determined on a
consolidated basis as of such date, that would be classified as
intangible assets in accordance with GAAP, but in any event
including, without limitation, items such as (a) unamortized debt
discount and expense, (b) unamortized organization and
reorganization expense, (c) costs in excess of the net asset
value of acquired companies, (d) patents, trade and service marks
and names, copyrights, (e) research and development expenses
except prepaid expenses, (f) all reserves not already deducted
from assets; (g) any write-up in the book value of assets
resulting from any reevaluation thereof (other than revaluations
arising out of foreign currency valuations in accordance with
GAAP) subsequent to the date of the Financial Statements referred
to in Section 4.7 hereof, and (h) the value of any minority
interests in any Person.
Section 1.43. "Consolidated Net Income" means, for any
period, the consolidated net income (or deficit) of Borrower and
its consolidated Subsidiaries for such period, determined in
accordance with GAAP but excluding (a) the income (or
deficit) of any Person accrued prior to the date on which it
becomes a Subsidiary or is merged into or consolidated with
Borrower or any Subsidiary, (b) the income (or deficit) of any
Person (other than a Subsidiary) in which Borrower or any
Subsidiary has an ownership interest, except to the extent that
any such income has been actually received by Borrower or such
Subsidiary in the form of dividends or similar distributions, (c)
the undistributed earnings of any Subsidiary to the extent that
the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation or Requirement of Law applicable to
such Subsidiary, (d) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was
made out of income accrued during such period, (e) any aggregate
net gain (but not aggregate net loss) during such period arising
from the sale, exchange or other disposition of capital assets
(such term to include all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), (f) any write-up
of any asset, (g) any net gain from the collection of the
proceeds of life insurance policies, (h) any gain arising from
the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of Borrower or any Subsidiary, (i) in
the case of a successor to Borrower by merger or consolidation or
as a transferee of its assets, any earnings of the successor
corporation prior to such merger, consolidation or transfer of
assets, (j) any deferred credit representing the excess of equity
in any Subsidiary at the date of acquisition over the cost of the
investment in such Subsidiary and (k) any extraordinary gains or
losses other than those described in (a) through (j) above.
Section 1.44. "Consolidated Senior Debt" means, as of any
date or for any period as of which the amount thereof shall be
determined, the aggregate Indebtedness of Borrower and its
Subsidiaries to the Lenders under this Agreement as of such date
or during such period determined on a consolidated basis.
Section 1.45. "Consolidated Total Debt Service" means, for
any period, the sum of (a) the amounts deducted for Consolidated
Total Interest in determining Consolidated Net Income for such
period and (b) the amounts of scheduled payments of principal of
Indebtedness of Borrower and its consolidated Subsidiaries during
such period.
Section 1.46. "Consolidated Total Debt" means, as of any date
or for any period as of which the amount thereof shall be
determined, the aggregate Indebtedness of any Person and its
Subsidiaries as of such date or during such period determined on
a consolidated basis but excluding, in the case of Borrower and
its consolidated Subsidiaries, Indebtedness evidenced by the
Steffanato Note.
Section 1.47. "Consolidated Total Interest" means, for any
period, the amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or
similar caption (including without limitation, imputed interest
included in payment under Capital Leases) on a consolidated
income statement of Borrower and its consolidated Subsidiaries
for such period, less the amount of any interest earned during
such period but excluding interest accreted in respect of the
Steffanato Note.
Section 1.48. "Contingent Obligation" means, as applied to
any Credit Party or any of its Subsidiaries, any guarantee,
endorsement or other contingent or surety obligation with respect
to obligations of any other Person, whether or not reflected on
the consolidated balance sheet of such Credit Party and its
Subsidiaries, including any obligation to furnish funds, directly
or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of
goods, supplies or services, or by way of stock purchase, capital
contribution, advance or loan, or to enter into a contract for
any of the foregoing, for the purpose of payment of obligations
of any other Person.
Section 1.49. "Continuing Directors" means the directors of
Alarmguard Holdings on the Closing Date as set forth on Schedule
1.49. attached hereto and each other director elected or
appointed after the Closing Date if such director's nomination or
appointment to the board of directors is recommended by a
majority of the then Continuing Directors.
Section 1.50. "Continuing Shareholders" means the Persons
possessing shares of the Capital Stock of Alarmguard Holdings as
of the Closing Date and listed on Schedule 1.50. attached hereto.
Section 1.51. "Contractual Obligation" means, as applied to
any Person, any indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
Section 1.52. "Control" means the possession, directly or
indirectly, of the power to direct, or cause the direction of,
the management and policies of a Person, whether through
ownership of voting stock, by contract or otherwise.
"Controlling" and "Controlled" shall have meanings correlative
thereto.
Section 1.53. "Controlled Group" means all trades or
businesses (whether or not incorporated) under common control
that together with Borrower or any Subsidiary, are treated as a
single employer under Section 413(b) or 413(c) of the Code or
Section 4001 of ERISA.
Section 1.54. "Credit Parties" means Borrower, each of its
Subsidiaries, SSH and Alarmguard Holdings, collectively.
Section 1.55. "Credit Party" means Borrower, each of its
Subsidiaries, SSH or Alarmguard Holdings, individually.
Section 1.56. "Customer Contracts" means contracts and
agreements (x) which have been duly executed by and between
Borrower and its customers, or any Subsidiary of Borrower and its
customers (other than Protective Alarms of Canada, Inc. following
the Pro Acquisition), for regular and ongoing electrical
protection, monitoring, closed circuit television and access
control services and maintenance, testing and other related
services and (y) which (i) have not been canceled by Borrower or
any Subsidiary of Borrower in accordance with Borrower's
cancellation policies and procedures in effect on the Closing
Date as set forth in the Price Waterhouse Report, (ii) are not
subject to cancellation in accordance with such policies and
procedures or (iii) have not otherwise been canceled or
terminated by Borrower or a customer.
Section 1.57. "Default" means an event or condition that, but
for the lapse of time, the giving of notice, or both, would
constitute an Event of Default if that event or condition was not
cured or removed within any applicable grace or cure period.
Section 1.58. "Default Rate" means the rate of interest
determined by increasing the rate of interest otherwise
chargeable under this Agreement to a rate which shall be the
lower of (i) the highest rate allowed by law or (ii) two
percentage points (2.0%) above the rate of interest which would
otherwise be in effect under this Agreement.
Section 1.59. "Defaulting Lender" shall have the meaning set
forth in Section 2.6.2. hereof.
Section 1.60. "Deferred Purchase Price Obligations" means any
and all obligations of any Credit Party other than Borrower or a
Subsidiary of Borrower incurred as permitted under Section
8.1.(g) hereof for amounts deferred or withheld in respect of the
purchase price for any Acquisition, including amounts withheld as
potential set-offs against Customer Contract terminations,
purchase price adjustments or otherwise.
Section 1.61. "Direct Marketing Capital Expenditures" means,
without duplication, for any period, the aggregate of all Capital
Expenditures made by Borrower in connection with the Direct
Marketing Program.
Section 1.62. "Direct Marketing Program" means an internal
marketing program conducted by Borrower (and formerly conducted
by SSH for the benefit of Borrower), the costs and expenses of
which are separately identified and segregated for accounting
purposes in a manner satisfactory to the Administrative Agent and
the Lenders for the purpose of generating new Customer Contracts
through telemarketing or other marketing techniques by making an
investment in the initial installation of a residential or small
commercial security alarm monitoring system.
Section 1.63. "Direct Marketing Program Costs" means, as of
any date as of which the amount thereof shall be determined, the
aggregate amount of all Direct Marketing Program Capital
Expenditures as of such date plus the Direct Marketing Program
Net Loss as of such date.
Section 1.64. "Direct Marketing Program Net Loss" means, for
any period, the difference between (i) the revenue derived from
the Direct Marketing Program during such period less (ii) all
expenses (excluding depreciation and amortization for such period
relating to the Direct Marketing Program) incurred by Borrower in
connection with the Direct Marketing Program during such period,
all of the foregoing being calculated in accordance with GAAP.
Section 1.65. "Dividend" or "Dividends" means the payment of
any dividend or other distribution in respect of the Capital
Stock of a Person in cash or other property (excepting
distribution in the form of such Capital Stock) or the redemption
or acquisition of any Capital Stock or security of a Person.
Section 1.66. "Documentation Agent" shall have the meaning
set forth in the Preamble hereof.
Section 1.67. "Dollars" and "$" means dollars in the lawful
currency of the United States of America.
Section 1.68. "Encumbrance or "Encumbrances" means any
security interest, mortgage, pledge, lien, claim, charge,
encumbrance, title retention agreement, lessor's interest under a
financing lease or any analogous arrangements in any Credit
Party's properties or assets, intended as, or having the effect
of, security.
Section 1.69. "Environmental Certificate" shall have the
meaning set forth in Section 5.2.11. hereof.
Section 1.70. "Environmental Laws" means any and all
applicable laws, statutes, ordinances, rules, regulations,
orders, or determinations of any Governmental Authority
pertaining to the environment, including without limitation, the
Clean Water Act, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of
1986 ("XXXX"), and as may be further amended (all together herein
called "CERCLA"), the Federal Water Pollution Control Amendments,
the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Hazardous Materials Transportation Act of 1975, as
amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, and any comparable or similar
applicable environmental laws of the State of Connecticut and any
other state in which Borrower maintains business premises.
Likewise, the terms "hazardous substance," "release," and
"threatened release" herein referenced in connection with
Environmental Laws shall have the meanings specified in CERCLA
and the terms "solid waste" and "dispose" (or "disposed") shall
have the meanings specified in RCRA; provided, however, in the
event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined therein, such broader meaning shall
apply subsequent to the effective date of such amendment, and
provided further that, to the extent the laws of any state which
establish a meaning for "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply to
business operations conducted in that particular state.
Section 1.71. "ERISA" means the Employee Retirement Income
Security Act of 1974 and the rules and regulations promulgated
thereunder; collectively, as the same may from time to time be
supplemented or amended and remain in effect.
Section 1.72. "Eurodollar Loan" means any Loan which is
bearing interest at a rate determined by reference to the
Adjusted Eurodollar Rate.
Section 1.73. "Eurodollar Margin" means a per annum
percentage determined in the manner set forth in Section 2.3.5.
hereof.
Section 1.74. "Eurodollar Tranche" means all Eurodollar Loans
with respect to which the Interest Periods applicable thereto
begin on the same date and end on the same later date (whether or
not such Loans were originally made on the same day).
Section 1.75. "Event of Default" shall have the meaning set
forth in Section 11. hereof.
Section 1.76. "Excess Cash Flow" means, for any Fiscal Year,
all amounts which would be included in Consolidated Net Income of
Borrower and its Subsidiaries during such Fiscal Year,
plus, (a) the sum of (i) to the extent that such amounts have
been deducted in determining Consolidated Net Income
for such fiscal period, all amounts attributable to
depreciation and/or amortization and other non-cash charges
to Consolidated Net Income and (ii) the decrease, if any, in
the amount of the excess of Consolidated Current Assets over
Consolidated Current Liabilities at the end of such Fiscal
Year compared to the amount of the excess of Consolidated
Current Assets over Consolidated Current Liabilities at the
end of the immediately preceding Fiscal Year,
minus, (b) the sum of (i) the amount of all regularly
scheduled payments of principal of the Loans actually made
during such Fiscal Year and the amount of any voluntary
prepayment of principal of the Loans made during such Fiscal
Year, (ii) the amount of Capital Expenditures permitted by
Section 8.9. actually made during such Fiscal Year, (iii) the
amount of payments made in respect of Capital Leases actually
made during such Fiscal Year and (iv) the increase, if any,
in the amount of the excess of Current Consolidated Assets
over Consolidated Current Liabilities at the end of such
Fiscal Year compared to the amount of the excess of
Consolidated Current Assets over Current Consolidated
Liabilities at the end of the immediately preceding Fiscal
Year.
Section 1.77. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
Section 1.78. "Existing Lenders" shall have the meaning set
forth in the Preamble hereof.
Section 1.79. "Existing Loans" shall have the meaning set
forth in the Preamble hereof.
Section 1.80. "Extension of Credit" means any Loan or other
extension of credit made by the Lenders to Borrower under this
Agreement or the Other Documents.
Section 1.81. "Facility Fee" shall have the meaning set forth
in Section 2.4.1. hereof.
Section 1.82. "Federal Funds Effective Rate" means for any
day, a fluctuating interest rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative
Agent from three (3) Federal funds brokers of recognized standing
selected by the Administrative Agent.
Section 1.83. "Fees" means the Facility Fee and any other
fees payable under this Agreement to the Lenders, including, but
not being limited to, any fees payable under Section 2.3.7. and
Section 2.5.2., but excluding any fees payable to the
Administrative Agent for its own account.
Section 1.84. "Financial Statement" or "Financial Statements"
means, as of any date, or with respect to any period, as
applicable, a financial report or reports consisting of (i) a
balance sheet; (ii) an income statement; (iii) a statement of
cash flow; and (iv) a statement of changes in stockholders'
equity.
Section 1.85. "Fiscal Quarter" means each fiscal period of
Borrower and its Subsidiaries ending on each March 31, June 30,
September 30 and December 31 in each Fiscal Year.
Section 1.86. "Fiscal Year" means each fiscal period of
Borrower and its Subsidiaries commencing on January 1 in each
calendar year and ending on December 31 in such year.
Section 1.87. "Forecasts" shall have the meaning set forth in
Section 4.8. hereof.
Section 1.88. "GAAP" means generally accepted accounting
principles in the United States of America as in effect on the
Closing Date, consistently applied but subject to adjustment in
accordance with Section 14.20. hereof.
Section 1.89. "Governing Documents" means, as to any Person,
the articles or certificate of incorporation and by-laws or other
organic organizational or governing documents of such Person.
Section 1.90. "Governmental Authority" means any Federal,
state, local or foreign court, commission or tribunal, or
governmental, administrative or regulatory agency, department,
authority, instrumentality or other body exercising executive,
legislative, judicial, regulatory or administrative functions of,
or pertaining to, government.
Section 1.91. "Government Obligations" means securities which
are general obligations of the United States of America or which
are unconditionally guaranteed by the United States of America as
to timely payment of principal and interest.
Section 1.92. "Guarantee" means the Alarmguard Holdings
Guarantee, the SSH Guarantee or any Subsidiary Guarantee,
individually.
Section 1.93. "Guarantees" means the Alarmguard Holdings
Guarantee, the SSH Guarantee and each Subsidiary Guarantee,
collectively.
Section 1.94. "Guarantor" means Alarmguard Holdings, SSH or
any Subsidiary of Borrower, individually.
Section 1.95. "Guarantors" means Alarmguard Holdings, SSH and
the Subsidiaries of Borrower, collectively.
Section 1.96. "Hazardous Materials" means (i) any chemical,
compound, material, mixture or substance that is now or hereafter
defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "restricted hazardous waste", or
"toxic substances" or terms of similar import under any
applicable Federal, state or local law or under the regulations
adopted or promulgated pursuant thereto, including, without
limitation, Environmental Laws; (ii) any oil, petroleum or
petroleum derived substance, any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives,
any radioactive materials, any hazardous wastes or substances,
any toxic wastes or substances or any other materials or
pollutants which (a) could pose a hazard to any properties or
assets of Borrower or its Subsidiaries or (b) could cause any of
such properties or assets to be in violation of any Environmental
Laws; (iii) asbestos in any form, urea formaldehyde foam
insulation, electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty (50) parts per million; and (iv) any other
chemical, material or substance, exposure to, or disposal of,
which is now or hereafter prohibited, limited or regulated by any
Federal, state or local governmental body, instrumentality or
agency.
Section 1.97. "Indebtedness" means, as of any date as applied
to any Person, without duplication: (a) all indebtedness for
borrowed money (whether by loan or the issuance and sale of debt
securities); (b) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (c) notes payable and
drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money; (d) any obligation
owed for all or any part of the deferred purchase price of
property or services if the purchase price is due more than six
months from the date the obligation is incurred or is evidenced
by a note or similar written instrument; (e) obligations of such
Person under interest rate swaps, caps, collars and similar
arrangements and (f) all indebtedness secured by any Encumbrance
on any property or asset owned or held by that Person regardless
of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that
Person but Indebtedness shall not include Deferred Purchase Price
Obligations or amounts payable by Alarmguard Holdings to the
Internal Revenue Service in an aggregate amount not to exceed
$977,000.00.
Section 1.98. "Interest Period" means,
(a) with respect to each Eurodollar Loan, the period
commencing on the date of the making or continuation of, or
conversion to, such Eurodollar Loan and ending one (1), two (2),
three (3) or six (6) months thereafter, as Borrower may elect in
the applicable Notice; and
(b) with respect to each Base Rate Loan, the period
commencing on the date of the making or continuation of, or
conversion to, such Base Rate Loan and ending on the Maturity
Date or such earlier date as the Borrower may elect in the
applicable Notice;
provided, however, that:
(i) any Interest Period (other
than an Interest Period determined pursuant to
clause (iii) below) that would otherwise end on a
day that is not a Business Day shall be extended
to the next succeeding Business Day unless, in
the case of Eurodollar Loans, such Business Day
falls in the next calendar month, in which case
such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period
applicable to a Eurodollar Loan that begins on
the last Business Day of a calendar month (or on
a day for which there is no numerically
corresponding day in the calendar month at the
end of such Interest Period) shall, subject to
clause (iii) below, end on the last Business Day
of a calendar month;
(iii) any Interest Period that
would otherwise end after the Maturity Date shall
end on the Maturity Date; and
(iv) notwithstanding clause (iii)
above, no Interest Period applicable to a
Eurodollar Loan shall have a duration of less
than one (1) month and if any Interest Period
applicable to such Loan would be for a shorter
Interest Period, such Interest Period shall not
be available hereunder.
Section 1.99. "Interest Protection Arrangement" means any
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedging agreement
or other similar interest rate protection agreement or
arrangement.
Section 1.100. "Investment" means, as applied to any Credit
Party and its Subsidiaries, (i) the purchase or acquisition of
(x) any share of Capital Stock, indebtedness or other equity
security of any other Person, or (y) all or any material portion
of the properties and assets of any Person, (ii) any loan,
advance or extension of credit to, or contribution to the capital
of, any other Person, (iii) any real estate held for sale or
investment, (iv) any commodities futures contracts held other
than in connection with bona fide hedging transactions permitted
under this Agreement, (v) any other investment in any other
Person, and (vi) the making of any commitment or acquisition of
any option to make an Investment.
Section 1.101. "Lease Assignment" means each Collateral
Assignment of Lease executed by Borrower in favor of the
Administrative Agent for the ratable benefit of the Lenders,
substantially in the form of Exhibit F-7 attached hereto, as any
such Lease Assignment may be amended, supplemented, modified or
confirmed from time to time.
Section 1.102. "Lease Obligations" means, for any period, the
aggregate rental obligation of Borrower and its Subsidiaries
payable during such period in respect of real and/or personal
property (net of income from subleases thereof, but including
taxes, insurance, maintenance and similar expenses which the
lessee is obligated to pay under the terms of such leases),
whether or not such obligations are reflected as liabilities or
commitments on a consolidated balance sheet of Borrower and its
Subsidiaries or in the notes thereto but excluding obligations
under Capital Leases.
Section 1.103. "Leasehold Mortgage" means each leasehold
mortgage or deed of trust executed or amended and confirmed by
Borrower in favor of the Administrative Agent for the ratable
benefit of the Lenders, substantially in the form of Exhibit F-8
attached hereto, individually or collectively, as the case may
be, as any such Leasehold Mortgage may be amended, supplemented,
modified or confirmed from time to time.
Section 1.104. "Lender" shall have the meaning set forth in the
Preamble hereof, and shall specifically refer to any Existing
Lender or the Additional Lender.
Section 1.105. "Lenders" shall have the meaning set forth in
the Preamble hereof, and shall specifically refer to the Existing
Lenders and the Additional Lender.
Section 1.106. "Lender Affiliate" or "Lender Affiliates"
means any affiliate of the Administrative Agent, the
Documentation Agent, the Lenders or their parent holding
companies.
Section 1.107. "Lender Agents" shall have the meaning set
forth in Section 2.2.7. hereof.
Section 1.108. "Leverage Ratio" means, for any period with
respect to Borrower and its Subsidiaries, the ratio of
Consolidated Total Debt as of the last day of such period to
Consolidated EBITDA for such period.
Section 1.109. "Line of Credit" shall have the meaning set
forth in Section 2.1.1. hereof.
Section 1.110. "Loan" means each Existing Loan, Revolving
Loan and each Swingline Loan.
Section 1.111. "Loan Account" means the account established
by Borrower with the Administrative Agent for purposes of
administering the Line of Credit.
Section 1.112. "Mandatory Borrowing" shall have the meaning
set forth in Section 2.2.4. hereof.
Section 1.113. "Margin Change" shall have the meaning set
forth in Section 2.3.5. hereof.
Section 1.114. "Material Adverse Effect" means a material
adverse effect upon the (i) business, operations, assets or
financial condition or prospects of any Credit Party and its
Subsidiaries, taken as a whole, or (ii) the enforceability of
this Agreement, the Notes or the Other Documents or the rights or
remedies of the Administrative Agent, the Documentation Agent or
any Lender hereunder or thereunder or (iii) the ability of the
Administrative Agent, the Documentation Agent or any Lender to
enforce or collect any of the Obligations including the
obligations of any Guarantor to perform, or of the Administrative
Agent, the Documentation Agent or any Lender to enforce, any
Guarantee. In determining whether any individual event would
result in a Material Adverse Effect, notwithstanding that such
event does not of itself have such an effect, a Material Adverse
Effect shall be deemed to have occurred if the cumulative effect
of such event and all other then existing events would result in
a Material Adverse Effect.
Section 1.115. "Maturity Date" means March 31, 2004.
Section 1.116. "Net Proceeds" means the excess of (i) Cash
Proceeds received by Borrower or any Subsidiary in connection
with any Asset Sale over (ii) the out-of-pocket expenses incurred
by Borrower or such Subsidiary (other than any expenses paid to
any Affiliate of Borrower or such Subsidiary) in connection with
such Asset Sale and the amounts of any taxes incurred in
connection with such Asset Sale, in each case as certified by a
Responsible Officer to the Administrative Agent at the time of
such Asset Sale.
Section 1.117. "Non-Defaulting Lender" means each Lender
which is not a Defaulting Lender.
Section 1.118. "Note" means any Revolving Credit Note or the
Swingline Note.
Section 1.119. "Notes" means the Revolving Credit Notes and
the Swingline Note.
Section 1.120. "Notice" means a Notice of Borrowing, a Notice
of Continuation or Conversion or a Swingline Notice.
Section 1.121. "Notice of Borrowing" shall have the meaning
set forth in Section 2.1.3. hereof.
Section 1.122. "Notice of Continuation or Conversion" shall
have the meaning set forth in Section 2.3.2. hereof.
Section 1.123. "Notice Office" means the office of the
Administrative Agent located at 000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 or such other office as the Administrative
Agent may designate for such purpose to Borrower and the Lenders
from time to time.
Section 1.124. "Obligations" means any and all loans,
advances, indebtedness, liabilities, obligations, covenants or
duties of Borrower to the Administrative Agent, the Documentation
Agent or the Lenders of any kind or nature, including obligations
to pay money and to perform acts or refrain from taking action,
arising under or pursuant to this Agreement, the Notes or the
Other Documents, and any and all extensions and renewals thereof,
and modifications and amendments thereto, whether in whole or in
part, whether created directly or acquired by assignment,
purchase, discount or otherwise, whether any of the foregoing are
direct or indirect, joint or several, absolute or contingent
under, due or to become due, now existing or hereafter arising,
and whether or not evidenced by a writing and specifically
including but not being limited to (i) the unpaid principal
amount outstanding at any time under the Notes, plus all accrued
and unpaid interest thereon, together with all fees, expenses,
including attorneys' fees, penalties, and other amounts owing by
or chargeable to the Borrower under this Agreement, the Notes or
the Other Documents and (ii) interest which accrues after the
commencement of any case or proceeding in bankruptcy after the
insolvency of, or for the reorganization of, any Credit Party,
whether or not allowed in such case or proceeding.
Section 1.125. "Original Credit Agreement" has the meaning
set forth in the Preamble hereof.
Section 1.126. "Other Documents" means the Collateral
Disclosure List, the Guarantees, the Security Documents and the
Affiliate Subordination Agreement and any other document,
agreement or instrument executed by any Credit Party in
connection with any Extension of Credit and any and all
amendments, modifications and supplements thereto.
Section 1.127. "Outstanding Amount" means, as of any date as
of which the amount thereof shall be determined, the outstanding
principal amount of all Revolving Loans as of the date of
determination.
Section 1.128. "PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to all or part of its
functions under ERISA.
Section 1.129. "Permitted Acquisition" means, following the
satisfaction of all applicable conditions precedent set forth in
Section 6.2. hereof, the Pro Acquisition and any other
Acquisition as to which all of the applicable conditions
precedent set forth in Section 6.3. hereof have been satisfied.
Section 1.130. "Permitted Encumbrance" shall have the meaning
set forth in Section 8.5. hereof.
Section 1.131. "Permitted Indebtedness" shall have the
meaning set forth in Section 8.1. hereof.
Section 1.132. "Permitted SSH Activities" means holding the
Capital Stock of Borrower, guaranteeing the Loans and granting
security therefor under the Security Documents, serving as the
maker of any Indebtedness permitted to be incurred under Section
8.1. hereof, employing corporate staff and serving as the lessor
of certain leased equipment used in connection with the Direct
Marketing Program to be transferred as soon as practicable
following the Closing Date to the Borrower.
Section 1.133. "Person" means an individual, partnership,
corporation, limited liability company, business trust, joint
stock company, trust, unincorporated association, joint venture
or other entity of whatever nature, whether public or private.
Section 1.134. "Plan" means, at any time, an employee pension
or other benefit plan that is subject to Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by Borrower or any member of
the Controlled Group for employees of Borrower or any member of
the Controlled Group or (ii) if such plan is established,
maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one (1) employer makes
contributions and to which Borrower or any member of the
Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five (5) plan years
made contributions.
Section 1.135. "Post Closing Matters" shall have the meaning
set forth on Section 11.1.(l) hereof.
Section 1.136. "Price Waterhouse Report" means that certain
Limited Collateral Analysis report dated November 8, 1996
delivered by Price Waterhouse LLP to the Administrative Agent
with respect to the procedures performed by Price Waterhouse LLP
related to the Customer Contracts and management information
system environment of the Borrower and supplemented by that
certain letter dated as of April 15, 1997.
Section 1.137. "Pro Acquisition" means the acquisition of the
Capital Stock of Protective Alarms, Inc. by SSH as contemplated
by, and in accordance with the terms and conditions of, the Pro
Acquisition Documents.
Section 1.138. "Pro Acquisition Documents" means that certain
Stock Purchase and Sale Agreement made as of December 20, 1996 by
and among SSH and the stockholders of Protective Alarms, Inc. and
as amended as of Februar 28, 1997 and all other documents,
agreements, instruments and certificates executed and delivered
in connection therewith.
Section 1.139. "Prohibited Transaction" shall have the
definition set forth in Section 406 of ERISA and Section 4975 of
the Code, other than those transactions in which an exemption
from the prohibited transaction rules apply under Section 408 of
ERISA and Section 4975(d) of the Code and applicable regulations
thereunder, including prohibited transaction class exemptions.
Section 1.140. "Qualification" means, with respect to any
report of independent public accountants covering any Financial
Statements of Borrower and its Subsidiaries, a qualification to
such report (such as a "subject to" or "except for" statement
therein) (i) resulting from a limitation on the scope of
examination of the Financial Statements or the underlying data;
(ii) as to the capability of the Person whose Financial
Statements are certified to continue operations as a going
concern; or (iii) which could be eliminated by changes in the
Financial Statements or notes thereto covered by such report
(such as, by the creation of or increase in a reserve or a
decrease in the carrying value of assets) and which if so
eliminated by the making of any such change and after giving
effect thereto would constitute an Event of Default; provided
that the following shall not constitute a Qualification: a
consistency exception relating to a change in accounting
principles with which the independent public accountants for the
Person whose Financial Statements are being examined have
concurred.
Section 1.141. "Qualified Investments" means, as applied to
Borrower and its Subsidiaries, investments in (i) Governmental
Obligations; (ii) certificates of deposit or other deposit
instruments or accounts of Lenders or trust companies organized
under the laws of the United States or any state thereof that
have capital and surplus of at least FIVE HUNDRED MILLION AND
NO/100 DOLLARS ($500,000,000.00) having maturities of not more
than ninety (90) days from the date of acquisition; (iii)
commercial paper that is rated not less than prime-one or A-1 or
their equivalents by Xxxxx'x Investors Service, Inc. or Standard
& Poor's Corporation, respectively, or their successors having
maturities of not more than ninety (90) days from the date of
acquisition; and (iv) any repurchase agreement secured by any one
(1) or more of the foregoing with a term of not more than seven
(7) days.
Section 1.142. "Recurring Monthly Revenue" or "RMR" means,
for any calendar month, the aggregate recurring regular monthly
amount billed under Customer Contracts for a one-month period
(regardless of whether billed monthly or less frequently with
xxxxxxxx made other than on a monthly basis being adjusted to the
equivalent monthly amount) for electrical protection, monitoring,
maintenance, closed circuit television and access control service
charges, fire and police panel charges, equipment lease rental
charges relating to Customer Contracts derived from the Direct
Marketing Program and fire testing charges (but excluding
revenues from any Customer Contracts relating to any non-
recurring, special or other one-time charges) as such RMR is
calculated by Borrower in accordance with the practices, policies
and procedures followed by Borrower therefor on the Closing Date
as set forth in the Price Waterhouse Report and reflected in the
RMR Report.
Section 1.143. "Register" shall have the meaning set forth in
Section 13.2. hereof.
Section 1.144. "Release" means any release, emission,
disposal, leaching, or migration into the environment,
(including, without limitation, the abandonment or disposal of
any barrels, containers, or other closed receptacles containing
any Hazardous Materials), or into or out of any property owned,
occupied or used by Borrower.
Section 1.145. "Replacement Lender" shall have the meaning
set forth in Section 2.5.7. hereof.
Section 1.146. "Reportable Event" means any of the events
described in Section 4043(b) of ERISA, other than those events as
to which the thirty day notice period is waived under applicable
regulations issued by PBGC.
Section 1.147. "Required Lenders" means collectively (and not
individually) Non-Defaulting Lenders the sum of whose Commitments
(or if after the Total Commitment Amount has been terminated,
outstanding Loans and percentages of outstanding Swingline Loans)
constitute greater than 66.66% of the Total Commitment Amount
less the aggregate Commitments of Defaulting Lenders (or if after
the Total Commitment Amount has been terminated, outstanding
Loans and percentages of outstanding Swingline Loans).
Section 1.148. "Requirement of Law" means any laws,
ordinances, rules regulations and orders of any Governmental
Authority applicable to any Credit Party or its Subsidiaries or
their business, properties and assets.
Section 1.149. "Responsible Officer" means Xxxxx Xxxxxxxxx,
Xxxx Xxxxxx or any other senior officer of Borrower or any other
Credit Party, as the case may be, designated as such by written
notice to the Administrative Agent and acceptable to the
Administrative Agent in its sole and absolute discretion.
Section 1.150. "Revolving Credit Note" or "Revolving Credit
Notes" shall have the meaning set forth in Section 2.1.9. hereof.
Section 1.151. "Revolving Credit Period" means the period
beginning on the Closing Date and extending through and including
the Revolving Credit Termination Date or such earlier date on
which the obligation of the Lenders to make Revolving Loans is
terminated or the Commitment Amount is reduced to zero (0) in
accordance with the terms hereof.
Section 1.152. "Revolving Credit Termination Date" means
April 30, 1999.
Section 1.153. "Revolving Loans" shall have the meaning set
forth in Section 2.1.1. hereof, and shall in any event include
any loan(s) or advance(s) deemed made pursuant to said Section
2.1.1.
Section 1.154. "RMR Report" shall have the meaning set forth
in Section 7.2.3. hereof.
Section 1.155. "Security Documents" means the Borrower Pledge
Agreement, the Borrower Security Agreement, each Lease
Assignment, each Leasehold Mortgage, the Alarmguard Holdings
Pledge Agreement, the SSH Pledge Agreement, each Subsidiary
Pledge Agreement and each Subsidiary Security Agreement.
Section 1.156. "Solvent" means, when used with respect to any
Person, that as of the date as to which the Person's solvency is
to be determined:
(a) the fair value of such Person's properties and
assets is in excess of the total amount of the liabilities
(including contingent liabilities) of such Person;
(b) the fair salable value of the properties and assets of
such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they
become absolute and matured;
(c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or
transaction, for which such Person's properties and assets would
constitute an unreasonably small capital.
The amount of contingent liabilities (such as litigation,
Guarantees and pension plan liabilities) at any time shall be
computed as the amount which, in light of all the facts and
circumstances existing at the time, represents an amount which
can be reasonably expected to become an actual or matured
liability.
Section 1.157. "SSH" shall have the meaning set forth in the
Preamble hereof.
Section 1.158. "SSH Guarantee" means the Amended and Restated
Guarantee Agreement of even date herewith executed by SSH in
favor of the Administrative Agent for the ratable benefit of the
Lenders, substantially in the form of Exhibit F-9 attached
hereto, as such SSH Guarantee may be amended, supplemented,
modified or confirmed from time to time.
Section 1.159. "SSH Pledge" means the Amended and Restated
Pledge Agreement of even date herewith executed by SSH in favor
of the Administrative Agent for the ratable benefit of the
Lenders, substantially in the form of Exhibit F-10 attached
hereto, as such SSH Pledge may be amended, supplemented, modified
or confirmed from time to time.
Section 1.160. "Steffanato Note" means that certain promissory
note, dated September 29, 1994, made by Borrower in favor of
Alarmguard of New York, Inc. (succeeded to by Borrower), in the
original principal amount of $1,132,216, which promissory note
was thereafter endorsed to Xxxx Xxxxxxxxxx, Xx.
Section 1.161. "Subordinated Indebtedness" means
Indebtedness, whether now existing or hereafter arising, with
respect to which the payment of the principal of and interest on
is expressly subordinated and junior in right of payment as set
forth on Exhibit L attached hereto or in such other form and
terms approved by the Administrative Agent and the Lenders in
writing to the prior indefeasible payment in full of the
Obligations and which is not subject to terms, conditions, rights
or remedies, including but not limited to, events of default,
affirmative and negative covenants and otherwise, which are
either (i) more restrictive upon any Credit Party than those set
forth in this Agreement or (ii) more favorable to the holders of
any such Subordinate Indebtedness than those possessed by the
Lenders under this Agreement. Notwithstanding any provision of
this Section 1.161. to the contrary, no Subordinated Indebtedness
shall contain or be subject to any covenant with respect to which
the compliance by any Credit Party therewith is determined by
reference to the financial performance or financial condition of
such Credit Party.
Section 1.162. "Subsidiary" means any Person of which more
than fifty percent (50%) or more of the ordinary voting power for
the election of a majority of the members of the board of
directors or other governing body of such Person is held or
Controlled by Borrower or a Subsidiary of Borrower; or any other
such organization the management of which is Controlled by
Borrower or a Subsidiary of Borrower; or any joint venture,
whether incorporated or not, in which Borrower has more than
fifty percent (50%) ownership interest.
Section 1.163. "Subsidiary Guarantee" means each Guarantee
Agreement executed by a Subsidiary of Borrower in favor of the
Administrative Agent for the ratable benefit of the Lenders,
substantially in the form of Exhibit F-11 attached hereto, as any
such Subsidiary Guarantee may be amended, supplemented, modified
or confirmed from time to time.
Section 1.164. "Subsidiary Pledge Agreement" means each
Pledge Agreement executed by a Subsidiary of Borrower in favor of
the Administrative Agent for the ratable benefit of the Lenders,
substantially in the form of Exhibit F-12 attached hereto, as any
such Subsidiary Pledge Agreement may be amended, supplemented,
modified or confirmed from time to time.
Section 1.165. "Subsidiary Security Agreement" means each
Security Agreement executed by a Subsidiary of Borrower in favor
of the Administrative Agent for the ratable benefit of the
Lenders, substantially in the form of Exhibit F-13 attached
hereto, as any such Subsidiary Security Agreement may be amended,
supplemented, modified or confirmed from time to time.
Section 1.166. "Swingline" shall have the meaning set forth
in Section 2.2.1. hereof.
Section 1.167. "Swingline Commitment" means the amount of TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00).
Section 1.168. "Swingline Loans" means each loan and advance
made by the Administrative Agent to Borrower under the Swingline.
Section 1.169. "Swingline Note" shall have the meaning set
forth in Section 2.2.3. hereof.
Section 1.170. "Swingline Notice" shall have the meaning set
forth in Section 2.2.2. hereof.
Section 1.171. "Total Commitment Amount" means, as of any
date as of which the amount thereof shall be determined, (a) if
such date is prior to the Revolving Credit Termination Date, the
amount of SIXTY MILLION AND NO/100 DOLLARS ($60,000,000.00) or
any lesser amount, including zero (0), resulting from a
termination or reduction of such amount in accordance with
Section 2.1.12. or Section 12.1. hereof and (b) if such date is
on or after the Revolving Credit Termination Date, the
outstanding principal amount of the Loans as of such date.
Section 1.172. "Transaction Documents" means any and all
documents, agreements, certificates and instruments executed
and/or delivered by any Credit Party in connection with the
Triton Merger or any transactions associated therewith, including
the AG Holdings Merger.
Section 1.173. "Triton Merger" shall have the meaning set
forth in the Preamble hereof.
Section 1.174. "Type" means, as to any Loan, such Loan's
characterization as either a Base Rate Loan or a Eurodollar Loan.
Section 1.175. "Unused Commitment" means, in the case of each
Lender, as of the date as of which the amount thereof shall be
determined, the positive difference, if any, between (i) the
amount of such Lender's Commitment as of such date and (ii) such
Lender's Commitment Percentage of the Outstanding Amount as of
such date.
Section 1.176 "Unused Total Commitment Amount" means, as of
any date as of which the amount thereof shall be determined, the
positive difference, if any, between (i) the Total Commitment
Amount as of such date and (ii) the Outstanding Amount as of such
date.
Section 2. THE CREDIT FACILITIES
Section 2.1. The Line of Credit.
Section 2.1.1. Revolving Loans. Upon the execution of
this Agreement, the Lenders agree to extend to Borrower a line of
credit, so that as long as no Default or Event of Default has
occurred and is continuing and all conditions precedent to the
making of any Extension of Credit have been satisfied, the
Existing Lenders agree, subject to the provisions of Section
2.1.4.(b) hereof, to continue the Existing Loans and each Lender
severally agrees to make revolving credit loans ("Revolving
Loans") from time to time during the Revolving Credit Period in
an aggregate principal amount at any one time not to exceed the
lesser of (i) such Lender's Unused Commitment, and (ii) such
Lender's Commitment Percentage of the Borrowing Base then in
effect; provided, that in no event shall any Revolving Loan be
made if, after giving effect to such Revolving Loan, the sum of
the Unused Total Commitment Amount and the aggregate amount of
Swingline Loans then outstanding would exceed the Total
Commitment Amount (the "Line of Credit"). During the Revolving
Credit Period, the Borrower may use the Commitments by borrowing,
prepaying Existing Loans and Revolving Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions
hereof.
Section 2.1.2. Requirements for Revolving Loans. Except
as otherwise provided in this Agreement or permitted by the
Lenders, Revolving Loans shall be (i) designated in U.S. Dollars,
(ii) in an amount which is at least, in the case of Base Rate
Loans, THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00)
and, in the case of Eurodollar Loans, ONE MILLION AND NO/100
DOLLARS ($1,000,000.00), (iii) in an amount which is an integral
multiple of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00), (iv) at the option of Borrower, obtained and
maintained as, or continued or converted into, Base Rate Loans or
Eurodollar Loans, and (v) limited, in the case of Eurodollar
Loans, to no more than five (5) Eurodollar Tranches.
Section 2.1.3. Notice of Borrowing. Except as provided
in Section 2.3.6. hereof, whenever Borrower desires to obtain a
Revolving Loan (excluding Revolving Loans incurred pursuant to a
Mandatory Borrowing or under Section 2.1.4.(b) hereof), Borrower
shall provide the Administrative Agent with written notice (or
telephonic notice promptly confirmed in writing) received at its
Notice Office no later than 12:00 noon (Boston, Massachusetts
time) on the date one (1) Business Day before the day on which
the requested Revolving Loan is to be made as a Base Rate Loan,
and received no later than 12:00 noon (Boston, Massachusetts
time) on the date three (3) Business Days before the day on which
the requested Revolving Loan is to be made as a Eurodollar Loan.
Each such notice (a "Notice of Borrowing") shall, except as
provided in Section 2.3.6. hereof, be irrevocable, be in the form
of Exhibit A attached hereto and be appropriately completed to
specify: (i) the amount of the requested Revolving Loan; (ii) the
effective date of such Revolving Loan, (iii) the Type of Loan to
be applicable thereto; (iv) whether such Revolving Loan is to be
an Acquisition Loan and (v) the duration of the Interest Period,
if any (subject to the provisions of the definition of Interest
Period). The Administrative Agent shall, except as provided in
Section 2.2.4. hereof, promptly (and in no event later than 1:00
p.m. (Boston, Massachusetts time)) give each Lender written
notice (or telephonic notice promptly confirmed in writing) of
each requested Revolving Loan, such Lender's proportionate share
thereof and such other matters covered by the Notice of
Borrowing. Borrower hereby acknowledges and agrees that the
Administrative Agent may, prior to the receipt of written
confirmation, act without liability upon the basis of any
telephonic notice provided under this Section 2.1.3., believed by
the Administrative Agent, in good faith, to be from a Responsible
Officer of Borrower and Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of such
telephonic notice. Revolving Loans which relate to Mandatory
Borrowings shall be made upon the delivery of the notice
specified in Section 2.2.4. hereof with Borrower hereby
irrevocably agreeing, by its incurrence of any Swingline Loan to
the making of Mandatory Borrowings as set forth in such Section
2.2.4. hereof.
Section 2.1.4. Funding of Loans.
(a) Except as set forth in subsection (b) below and
Section 2.2. hereof, not later than 2:00 p.m. (Boston,
Massachusetts time) on the date of the making of each Revolving
Loan, each Lender shall make available to the Administrative
Agent, at the office designated by the Administrative Agent for
payment on the Administrative Questionnaire, in U.S. Dollars and
in immediately available funds, such Lender's pro rata share of
the requested Revolving Loan. The Administrative Agent will,
except as set forth in subsection (b) below, promptly make such
amounts available to Borrower by depositing to the Loan Account
the aggregate of such amounts so made available to the
Administrative Agent in the type of funds received.
(b) Notwithstanding any provision of this Agreement to
the contrary, on the Closing Date the Additional Lender and each
Existing Lender that is making Revolving Loans in an amount in
excess of the then outstanding Existing Loans of such Existing
Lender shall make a Revolving Loan at the place and in the manner
set forth in subsection (a) above in the amount which is
necessary to cause the Loans made or continued by any such Lender
as of the Closing Date (after taking into account any Revolving
Loan requested by Borrower as of the Closing Date) to be in the
proportion that such Lender's Commitment bears to the Total
Commitment Amount as set forth in Section 2.1.5. hereof.
Notwithstanding any provision of subsection (a) above to the
contrary, the Administrative Agent shall pay any the proceeds of
any such Revolving Loans pro rata to each Existing Lender to
reduce the outstanding Existing Loans of such Existing Lender as
of the Closing Date to an amount which is equal to the proportion
which such Existing Lender's Commitment bears to the Total
Commitment Amount as of the Closing Date. The Administrative
Agent shall pay any such amounts in immediately available funds
to such Existing Lenders by wire transfer on the Closing Date
(subject to the receipt of any such amounts from the Additional
Lender and any Existing Lender providing the same). Any part of
any Existing Loan refinanced between the Lenders as aforesaid
shall be deemed to be repaid in accordance with the terms of this
Agreement with the proceeds of the aforementioned Revolving
Loans.
Section 2.1.5. Relationship of Revolving Loans to Total
Commitment Amount. Each Loan shall consist of either an Existing
Loan continued by or a Revolving Loan made by each Lender in
respect of its Commitment, which Loan shall be continued or made
by each Lender in the proportion that such Lender's Commitment
bears to the Total Commitment Amount; provided, however, that,
except as provided in Section 2.2. hereof, if at any time, for
any reason, the proportion that any Lender's Unused Commitment
bears to the Unused Total Commitment Amount is not equal to the
proportion that the Commitment of such Lender bears to the Total
Commitment Amount, then, each such Lender shall promptly purchase
or sell, as may be necessary, participations in the Loans held by
the other Lenders in such amounts as will (but only if and to the
extent that the purchase of such participations would not cause
any Lender to have outstanding Loans in an amount in excess of
its Commitment and would not cause any Lender to exceed its
lending limit or to violate any other legal requirement to which
it is subject), and make such other adjustments from time to time
as shall be necessary to, cause the proportion that such Lender's
Unused Commitment bears to the Unused Total Commitment Amount to
be equal to the proportion that such Lender's Commitment bears to
the Total Commitment Amount.
Section 2.1.6. Loan Account. Each Loan shall be recorded
in the Loan Account. There shall also be recorded in the Loan
Account all prepayments and payments made by Borrower in respect
of the Line of Credit and other appropriate debits and credits as
herein provided. The Administrative Agent shall from time to
time, but at least monthly, and upon Borrower's reasonable
request, render and send to Borrower a statement of the Loan
Account showing the respective outstanding principal balance of
the Line of Credit, together with interest and other appropriate
debits and credits as of the date of the statement. The
statement of the Loan Account shall be considered correct in all
respects and accepted by and be conclusively binding upon
Borrower absent manifest error unless Borrower makes specific
written objection thereto within sixty (60) days after the date
the statement of the Loan Account is sent.
Section 2.1.7. Several Obligations. The failure of any
Lender to make available its proportionate share of any Revolving
Loan on the date specified therefor shall not relieve any other
Lender of its obligation to make available its proportionate
share of such Revolving Loans on such date, but no Lender shall
be responsible for the failure of any other Lender to make
available such other Lender's proportionate share of the
Revolving Loan.
Section 2.1.8. Calculation of Borrowing Base. The
Borrowing Base as of any time shall be calculated by reference to
the most recent RMR Report and other financial reports delivered
by Borrower under Sections 6.1.2. or 7.2.3. hereof and such
other information as may be available to the Administrative
Agent, the Documentation Agent or the Lenders from time to time
Section 2.1.9. Revolving Credit Notes. On the Closing
Date, Borrower shall issue to each of the Lenders a promissory
note executed by Borrower in substantially the form attached
hereto as Exhibit B with all blanks appropriately completed in
conformity with this Agreement (each a "Revolving Credit Note"
and, collectively, the "Revolving Credit Notes"), with all blanks
therein appropriately completed. The Revolving Credit Notes
shall evidence the obligation of Borrower to repay to the Lender
to which it is issued all Loans continued or made by such Lender
to Borrower on account of such Lender's Commitment, including all
Revolving Loans made by any Lender under Section 2.1.4.(b)
hereof. Each Revolving Credit Note shall (i) be payable to the
Lender to which it is issued or its registered assigns, (ii) be
dated as of the Closing Date, (iii) be in a stated principal
amount equal to the Commitment of such Lender, (iv) be payable in
the principal amount of such Lender's pro rata percentage of the
Loans evidenced thereby, (v) mature on the Maturity Date, (vi)
bear interest as provided in Section 2.3.4. hereof, (vii) be
subject to voluntary prepayments as provided in Section 2.1.13.
hereof and mandatory prepayments as provided in Section 2.1.14.
hereof and (viii) be entitled to the benefit of this Agreement
and the Other Documents, and all security granted or provided to
the Administrative Agent for the ratable benefit of the Lenders
thereunder. Each Lender shall prior to any transfer or
assignment of its Revolving Credit Note endorse on the reverse
side thereof the outstanding principal amounts of the Loans
evidenced thereby; provided, however, that such Lender's failure
to make any such record or endorsement shall not affect
Borrower's obligations in respect thereof. In addition,
following the effectiveness of this Agreement, and, if possible,
on the Closing Date, each of the Existing Lenders shall deliver
to the Administrative Agent the notes or promptly thereafter an
affidavit of lost note then held by such Existing Lender
evidencing loans and advances under the Original Credit Agreement
for delivery to and cancellation by the Borrower.
Section 2.1.10. Payment of Principal. The aggregate
unpaid principal amount of all Loans, together with accrued and
unpaid interest thereon, as evidenced by the Revolving Credit
Notes, shall, unless sooner accelerated by the Lenders following
the occurrence of an Event of Default, be repaid by Borrower in
twenty (20) consecutive quarterly installments in an amount equal
to the following percentages of the outstanding principal amount
of the Loans on the Revolving Credit Termination Date commencing
on June 30, 1999 and continuing on the last day of each
succeeding calendar quarter thereafter as follows:
DATE OF PAYMENT PERCENTAGE OF OUTSTANDING
PRINCIPAL AMOUNT
June 30, 1999 3.75%
September 30, 1999 3.75%
December 31, 1999 3.75%
March 31, 2000 3.75%
June 30, 2000 5%
September 30, 2000 5%
December 31, 2000 5%
March 31, 2001 5%
June 30, 2001 5%
September 30, 2001 5%
December 31, 2001 5%
March 31, 2002 5%
June 30, 2002 5%
September 30, 2002 5%
December 31, 2002 5%
March 31, 2003 5%
June 30, 2003 6.25%
September 30, 2003 6.25%
December 31, 2003 6.25%
March 31, 2004 6.25%
Section 2.1.11. Use of Proceeds. Revolving Loans shall
be used solely for the working capital needs and general
corporate purposes of Borrower, for Permitted Acquisitions, for
Direct Marketing Program Costs, to refinance the existing
Indebtedness of Borrower set forth on Schedule 2.1.11. attached
hereto, to pay expenses associated with the consummation of the
transactions contemplated by this Agreement and to pay amounts to
SSH to pay expenses associated with the Triton Merger as set
forth on said Schedule 2.1.11.
Section 2.1.12. Reduction of Total Commitment Amount.
Borrower may from time to time, by written notice delivered to
the Administrative Agent at least five (5) Business Days prior to
the date of the requested reduction, reduce the Unused Total
Commitment Amount by integral multiples of ONE MILLION AND NO/100
DOLLARS ($1,000,000.00). No reduction of the Total Commitment
Amount shall be subject to reinstatement.
Section 2.1.13. Voluntary Prepayments. Borrower shall
have the right to prepay the Loans, in whole or in part, without
penalty or premium except as otherwise provided in this Agreement
from time to time on the following terms and conditions: (i)
Borrower shall provide written notice to the Administrative Agent
at its Notice Office (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans
are Existing Loans, Revolving Loans or Swingline Loans, the
amount of such prepayment and, in the case of Eurodollar Loans,
the specific Loans to which such prepayment is to be made, which
notice shall be provided prior to 12:00 noon (Boston,
Massachusetts time) (x) at least one (1) Business Day prior to
the date of such prepayment in the case of Base Rate Loans, (y)
on the date of such prepayment in the case of Swingline Loans and
(z) at least three (3) Business Days prior to the date of such
prepayment in the case of Eurodollar Loans and (ii) each
prepayment shall be in an aggregate principal amount of at least
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00)(or ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100,000.00) in the case of
Swingline Loans); provided, that no partial prepayment of any
Eurodollar Loan shall reduce the remaining aggregate outstanding
principal amount of such Eurodollar Loan to an amount which is
less than the minimum borrowing amount applicable under this
Agreement for Eurodollar Loans. Except with respect to
prepayments of Swingline Loans, the Administrative Agent shall
promptly notify each Lender of any such intended prepayment.
Upon receipt by the Administrative Agent, any such prepayment
shall be applied pro rata among the Loans of each of the Lenders;
provided, however, that such prepayment shall not be applied to
any Loans of a Defaulting Lender, until such time as the
proportion that such Lender's Unused Commitment bears to the
Total Commitment Amount is equal to the proportion that such
Lender's Commitment bears to the Total Commitment Amount.
Section 2.1.14. Mandatory Prepayments.
(a) If, at any time, the Outstanding Amount, together
with the amount of the Swingline Loans, shall exceed the
Borrowing Base in effect from time to time then any such excess
amount shall be immediately due and payable without notice or
demand by the Administrative Agent or the Lenders. Any payments
made by Borrower under this subsection (a) shall be applied first
to any outstanding Swingline Loans and then to outstanding
Revolving Loans.
(b) Borrower shall prepay the Loans in an amount equal
to the Net Proceeds from any Asset Sale in excess of ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100,000.00); provided, however,
that Borrower may conduct an Asset Sale with respect to the
assets comprising its "Sonitrol" business during the Fiscal Year
ending December 31, 1997 without regard to the application of
this subsection (b). Notwithstanding the foregoing proviso, any
Asset Sale of Borrower's "Sonitrol" assets shall be subject to
subsection (a) above if any such Asset Sale results in the
applicability of such subsection (a). Any amounts payable under
this subsection (b) shall be payable concurrently with Borrower's
receipt of any such Net Proceeds.
(c) Borrower shall prepay the Loans in an amount equal
to fifty percent (50%) of Excess Cash Flow for each Fiscal Year
commencing with the Fiscal Year ending December 31, 1999,
together with interest on the amount being prepaid. Any amounts
payable under this subsection (c) shall be payable on or before
the earlier of (i) the date on which the Financial Statements
required to be delivered under Section 7.1.1. hereof in respect
of such Fiscal Year are required to be delivered or (ii) the date
on which such Financial Statements are actually delivered.
(d) Any amounts payable under this Section 2.1.14.
shall be applied prior to the Revolving Credit Termination Date
to Swingline Loans and then to all other Loans outstanding under
the Line of Credit and following the Revolving Credit Termination
Date to installments of principal due on the Loans in inverse
order of maturity.
Section 2.2. Swingline Loans.
Section 2.2.1. The Swingline. Upon the execution of
this Agreement, the Administrative Agent in its individual
capacity hereby agrees to extend to Borrower a line of credit, so
that as long as no Default or Event of Default has occurred and
is continuing, the Administrative Agent agrees to lend to
Borrower, and Borrower may borrow, repay and reborrow, on a
revolving basis, in one (1) or more Swingline Loans from time to
time during the period commencing on the Closing Date and
continuing through the close of business on the Revolving Credit
Termination Date, amounts which do not exceed at any one time
outstanding the Swingline Commitment (the "Swingline"). All
Swingline Loans shall constitute usage of the Administrative
Agent's Commitment under this Agreement. Notwithstanding any
provision of this Agreement to the contrary, Swingline Loans (i)
shall be made and maintained as Base Rate Loans, (ii) shall be
denominated in U.S. Dollars, (iii) may be repaid and reborrowed
in accordance with the provisions of this Agreement, (iv) shall
not exceed in the aggregate at any one time outstanding the
Swingline Commitment and (v) shall not, together with all
Revolving Loans, exceed in the aggregate at any one time
outstanding the lesser of the Borrowing Base or the Total
Commitment Amount.
Section 2.2.2. Notice for Swingline Loans. Except as
provided in Section 2.2.4. hereof, whenever Borrower desires to
obtain a Swingline Loan, Borrower shall provide the
Administrative Agent with written notice (or telephonic notice
promptly confirmed in writing) received at its Notice Office no
later than 12:00 noon (Boston, Massachusetts time) on the day on
which the requested Swingline Loan is to be made. Each such
notice (a "Swingline Notice") shall be irrevocable, be in
substantially the form of Exhibit C attached hereto and be
appropriately completed to specify: (i) the amount of the
requested Swingline Loan and (ii) the effective date of such
Swingline Loan., Borrower hereby acknowledges and agrees that the
Administrative Agent may, prior to the receipt of written
confirmation act without liability upon the basis of any
telephonic notice provided under this Section 2.2.2., believed by
the Administrative Agent, in good faith, to be from a Responsible
Officer of Borrower and Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of such
telephonic notice. Notwithstanding the foregoing, the
Administrative Agent shall not make any Swingline Loans if the
Administrative Agent has received prior to the making of the
requested Swingline Loan a certificate or notice from Borrower or
any Lender stating the existence of Default or Event of Default
or that any conditions to the making of such Swingline Loan have
not been satisfied.
Section 2.2.3. Swingline Note. On the Closing Date,
Borrower shall issue to the Administrative Agent a promissory
note executed by Borrower in substantially the form attached
hereto as Exhibit D with all blanks appropriately completed in
conformity with this Agreement (the "Swingline Note"). The
Swingline Note shall evidence the obligation of Borrower to repay
to the Administrative Agent all Swingline Loans by the
Administrative Agent to Borrower. The Swingline Note shall (i)
be payable to the Administrative Agent or its registered assigns,
(ii) be dated as of the Closing Date, (iii) be in a stated
principal amount equal to the Swingline Commitment, (iv) be
payable in the principal amount of the Swingline Loans evidenced
thereby, (v) mature on the Revolving Credit Termination Date,
(vi) bear interest as provided in Section 2.3.4. hereof, (vii)
be subject to voluntary prepayments as provided in Section
2.1.13. hereof and mandatory prepayments as provided in Section
2.1.14. hereof and (viii) be entitled to the benefit of this
Agreement and the Other Documents, and all security granted or
provided to the Administrative Agent for the ratable benefit of
the Lenders thereunder. The Administrative Agent shall record on
its internal records the amount of each Swingline Loan made by it
and each payment received by it in respect thereof and will prior
to any transfer or assignment of the Swingline Note endorse on
the reverse side thereof the outstanding principal amount of the
Swingline Loan evidenced thereby; provided, however, that the
Administrative Agent's failure to make any such record or
endorsement shall not affect Borrower's obligations in respect
thereof.
Section 2.2.4. Mandatory Borrowings. On any Business
Day, the Administrative Agent may, in its sole discretion, and,
in any event, upon the day which is seven (7) days after the
borrowing of a Swingline Loan (of if such day is not a Business
Day, the next succeeding Business Day) shall provide notice
(which notice shall be deemed to have been automatically provided
upon the occurrence of a Default or Event of Default under
Section 11.1.(g) or 11.1.(h) to the Lenders that all outstanding
Swingline Loans shall be repaid pursuant to Revolving Loans to be
made by the Lenders as Base Rate Loans on the immediately
succeeding Business Day (such Revolving Loans, a "Mandatory
Borrowing") pro rata based upon each Lender's Commitment
Percentage, and the proceeds of such Revolving Loans shall be
applied directly to repay the Administrative Agent for such
outstanding Swingline Loans. Each Lender hereby irrevocably
agrees to make Base Rate Loans upon one (1) Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the
manner provided in the foregoing sentence and on the date
specified by the Administrative Agent notwithstanding (i) that
the amount of the Mandatory Borrowing may not comply with the
minimum borrowing amount otherwise required under this Agreement,
(ii) whether any of the conditions precedent in Section 6 of this
Agreement shall have been satisfied, (iii) whether a Default or
Event of Default shall have occurred and be continuing, (iv) the
date of such Mandatory Borrowing and (v) any reduction in the
Total Commitment Amount after such Swingline Loans were made. In
the event that any Mandatory Borrowing cannot be made as set
forth above for any reason, including, without limitation, the
commencement of a proceeding under the Bankruptcy Code with
respect to Borrower), each Lender (other than the Administrative
Agent) hereby agrees that it shall forthwith purchase from the
Administrative Agent (without recourse or warranty) an assignment
of such outstanding Swingline Loans as shall be necessary to
cause the Lenders to share in such Swingline Loans ratably based
upon their respective Commitment Percentages; provided, however,
that all interest payable on the Swingline Loans shall be for the
account of the Administrative Agent until the effective date of
the purchase of each respective assignment and, to the extent
attributable to the purchased assignment, shall be payable to the
Lender purchasing the same from and after such effective date.
Section 2.3. Interest on the Loans.
Section 2.3.1. Base Rate. Each adjustment in the Base
Rate shall result immediately, without notice or demand of any
kind, in a new rate of interest effective with respect to periods
on and after the date of such adjustment. The Base Rate is a
base interest rate for loans making reference thereto and is not
necessarily the lowest rate at which any Lender may lend money.
The Base Rate is neither tied to any external rate of interest
nor is it a rate charged by any Lender to any particular class or
category of customer. If the Base Rate shall be discontinued or
for any other reason not be available for determining the rate of
interest chargeable under this Agreement, then the Administrative
Agent (with the consent of the Required Lenders) shall select a
substitute method of determining the rate of interest chargeable
under this Agreement and shall notify Borrower of such selection,
which method shall, in the Administrative Agent's estimation,
yield a rate of return to each Lender substantially equivalent to
the rate of return that such Lender would have expected to
receive if the Base Rate remained available for that purpose.
Section 2.3.2. Continuation or Conversion of Loans. As
long as no Default or Event of Default shall have occurred and be
continuing, Borrower may continue or convert all or any part (in
integral multiples of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00) of any outstanding Loan as a Loan of the same Type
or into a Loan of any other Type provided for in this Agreement.
If Borrower wishes to continue or convert a Loan as aforesaid,
Borrower shall provide the Administrative Agent with written
notice (or telephonic notice promptly confirmed in writing)
received at its Notice Office no later than 10:00 a.m. (Boston,
Massachusetts time) on the date one (1) Business Day before the
day on which the requested Loan is to be continued as or
converted to a Base Rate Loan, and received no later than 10:00
a.m. (Boston, Massachusetts time) on the date three (3) Business
Days before the day on which the requested Loan is to be
continued as or converted to a Eurodollar Loan. Each such notice
(a "Notice of Continuation or Conversion") shall, except as
provided in Section 2.3.6. hereof, be irrevocable, be in the form
of Exhibit E attached hereto and be appropriately completed to
specify: (i) the amount of the Loan to be continued or converted,
(ii) the effective date of such continuation or conversion which
shall, in the case of Eurodollar Loan, be the last day of the
Interest Period applicable thereto, (iii) the Type or Types of
Loans to be applicable thereto; and (iv) the duration of the
Interest Period, if any (subject to the provisions of the
definition of Interest Period). The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of each requested continuation or
conversion of a Loan, such Lender's proportionate share thereof
and such other matters covered by the Notice of Conversion or
Continuation. Borrower hereby acknowledges and agrees that the
Administrative Agent may, prior to the receipt of written
confirmation act without liability upon the basis of any
telephonic notice provided under this Section 2.3.2, believed by
the Administrative Agent, in good faith, to be from a Responsible
Officer of Borrower and Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of such
telephonic notice.
Section 2.3.3. Duration of Interest Periods.
(a) Subject to the provisions of the definition of
Interest Period, the duration of each Interest Period applicable
to a Loan shall be as specified in the applicable Notice.
(b) If the Administrative Agent does not receive a
Notice for a Eurodollar Loan pursuant to subsection (a) above
within the applicable time limits specified therein, or if, when
such notice must be given, a Default or Event of Default shall
have occurred and be continuing, Borrower shall be deemed to have
elected to convert such Loan in whole into a Base Rate Loan on
the last day of the then current Interest Period with respect
thereto.
(c) Notwithstanding the foregoing, Borrower may not
select an Interest Period that would end, but for the provisions
of the definition of Interest Period, after the Maturity Date.
Section 2.3.4. Interest Rates and Payments of Interest.
(a) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof at a rate per annum equal to
the Base Rate in effect from time to time plus the Base Rate
Margin. Interest accruing in respect of each Base Rate Loan
shall be payable on the last day of each month commencing May 31,
1997 and continuing until such Base Rate Loan is due (whether at
maturity, by reason of acceleration, prepayment or otherwise).
(b) Each Eurodollar Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the Adjusted
Eurodollar Rate plus the Eurodollar Margin, which interest shall
be payable on the last day of each Interest Period (but, in the
case of Interest Periods having a duration of six (6) months or
greater, if available, at least quarterly) and when such
Eurodollar Loan is due (whether at maturity, by reason of
acceleration or otherwise).
(c) Interest shall be computed daily on the basis of a
year of three hundred sixty (360) days and paid for the actual
number of days elapsed during each Interest Period. If the due
date for any payment of principal is extended by operation of
law, interest shall be payable for such extended time. If any
payment required by this Agreement becomes due on a day that is
not a Business Day such payment may be made on the next
succeeding Business Day (subject to clause (i) of the definition
of Interest Period), and such extension shall be included in
computing interest in connection with such payment.
Section 2.3.5. Interest Rate Margins. As of the Closing
Date and during any period in which a Default or Event of Default
shall have occurred and be continuing, the Base Rate Margin shall
be 1.50% and the Eurodollar Margin shall be 3.0%. Commencing
with the end of the first Fiscal Quarter following the Closing
Date and continuing on the last day of each succeeding Fiscal
Quarter, and as long as no Default or Event of Default shall have
occurred and be continuing, the Base Rate Margin and the
Eurodollar Margin shall be subject to change (each such change, a
"Margin Change") by reference to Borrower's Leverage Ratio as of
the last day of any such Fiscal Quarter as follows:
LEVERAGE RATIO BASE RATE MARGIN EURODOLLAR MARGIN
Equal to or greater 1.50% 3.00%
than
3.75 to 1.0 (or if
a Default or Event
of Default
shall exist)
Equal to or greater 1.25% 2.75%
than
3.50 to 1.0 but
less than 3.75 to
1.0
Equal to or greater 1.00% 2.50%
than
3.00 to 1.0 but
less than 3.50 to
1.0
Less than 3.0 to .75% 2.25%
1.0
The calculation of the Leverage Ratio for purposes of a Margin
Change shall be reviewed and verified by the Administrative
Agent, in its sole and absolute discretion, by reference to the
Financial Statements to be provided by Borrower under Section
7.1. hereof. In making such calculation, and for purposes of the
determination of any Margin Change only, Consolidated EBITDA
shall be calculated on an annualized basis by reference to the
most recent Fiscal Quarter then ending multiplied by four (4).
Each Margin Change shall be effective, including with respect to
Loans which are then outstanding, as of the date on which the
Financial Statements referred to in Section 7.1. hereof are
provided to the Administrative Agent (notwithstanding the fact
that the calculation of the Leverage Ratio associated with such
Margin Change is reviewed and verified by the Administrative
Agent at a later date). The Administrative Agent shall review
and verify the Borrower's calculation of the Leverage Ratio no
later than three (3) Business Days after its receipt of such
Financial Statements. The Administrative Agent shall, as soon as
practicable, promptly notify each Lender of the occurrence of any
Margin Change.
Section 2.3.6. Changed Circumstances. In the event that
(x) in the case of clause (i) below, the Administrative Agent or
(y) in the case of clause (ii) below, any Lender, shall have
determined in a commercially reasonable manner (which
determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on any date on which the
Eurodollar Rate would otherwise be set the
Administrative Agent shall have determined in
good faith (which determination shall be
final and conclusive) that adequate and fair
means do not exist for ascertaining the
Interbank Offered Rate, or
(ii) at any time such Lender shall
have determined in good faith that:
(A) the making or
continuation of or conversion of any
Loan to a Eurodollar Loan has been made
impracticable or unlawful by (1) the
occurrence of a contingency that
materially and adversely affect the
interbank Eurodollar market or (2)
compliance by such Lender in good faith
with any Requirement of Law enacted
after the date hereof or interpretation
or change thereof after the date hereof
by any Governmental Authority charged
with the interpretation or
administration thereof or with any
request or directive of any such
Governmental Authority (whether or not
having the force of law); or
(B) the Adjusted
Eurodollar Rate shall, after the date
hereof, no longer represent the
effective cost to such Lender for U.S.
dollar deposits in the interbank
Eurodollar market for deposits in which
it regularly participates;
then, and in any such event, such Lender (or the Administrative
Agent in the case of clause (i) above) shall (x) within five (5)
Business Days after any such event and (y) within five (5)
Business Days of the date on which such event no longer exists
give notice (in writing or by telephone confirmed in writing) to
Borrower and (except in the case of clause (i) above) to the
Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to the other
Lenders). Thereafter, (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as
the Administrative Agent notifies Borrower and the Lenders that
the circumstances giving rise to such notice by the
Administrative Agent no longer apply, and any Notice given by
Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by Borrower and (y) in the
case of clause (ii) above, Borrower shall, as applicable, either
(a) pay to such Lender, upon written demand therefor (accompanied
by the written notice referred to below), any such additional
amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender may
determine in its sole discretion) as shall be required to
compensate such Lender for any increased costs or reductions in
amounts received or receivable under this Agreement (a written
notice as to the additional amounts owed to such Lender showing
the basis for the calculation thereof, submitted to Borrower by
such Lender, shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) or (b), as
promptly as possible, and, in any event, with the time period
required by law, either (A), if any affected Eurodollar Loan has
not yet been made, continued or converted, cancel any such Notice
by giving the Administrative Agent a telephonic notice (confirmed
promptly in writing) thereof on the same date that Borrower was
notified by a Lender as aforesaid or (B), if any affected
Eurodollar Loan has been made, continued or converted, upon at
least three (3) Business Days' notice to the Administrative
Agent, require the affected Lender (and any other similarly
affected Lender) to convert each such affected Eurodollar Loan
into a Base Rate Loan (which conversion shall occur no later than
the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date if required by any
Requirement of Law).
Section 2.3.7. Compensation. Borrower shall compensate
each Lender, promptly upon its written request (which request
shall be accompanied by a notice setting forth the basis for such
compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any such loss,
expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans but excluding loss of anticipated
profit with respect to any Eurodollar Loans) which such Lender
may sustain: (i) if for any reason (other than a default by the
Administrative Agent or such Lender) a Eurodollar Loan is not
made, continued or converted on the date specified therefor in a
Notice (whether or not withdrawn by Borrower or deemed withdrawn
under Section 2.3.6. hereof), (ii) if any repayment (including
any voluntary or mandatory repayment under Sections 2.1.13. and
2.1.14. hereof or a the result of the acceleration of the Loans)
or conversion of Eurodollar Loan occurs on a date which is not
the last day of the Interest Period applicable thereto, (iii) if
any prepayment of any Eurodollar Loans is not made on any date
specified in a notice of prepayment given by Borrower, (iv) as a
consequence of (x) any other failure or default by Borrower to
repay Eurodollar Loans when required by this Agreement or (y) any
election by Borrower under Section 2.3.6. hereof. The
calculation of all amounts payable to a Lender under this Section
2.3.7. shall be made as though that Lender has actually funded
its relevant Eurodollar Loan through the purchase of a Eurodollar
deposit bearing interest at the Adjusted Eurodollar Rate in an
amount equal to the amount of such Eurodollar Loan, having a
maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar deposit from an offshore office
of such Lender to a domestic office of such Lender; provided,
however, that each Lender may fund each of its Eurodollar Loans
in any manner which its elects in its sole and absolute
discretion. It is further understood and agreed by Borrower that
if any repayment of Eurodollar Loans pursuant to Sections 2.1.13.
or 2.1.14. or any conversion of Eurodollar Loans shall occur on a
day which is not the last day of an Interest Period applicable
thereto, such repayment or conversion shall be accompanied by any
amounts owing to any Lender under this Section 2.3.7.
Section 2.3.8. Interest under the Original Credit
Agreement. On the Closing Date, the Borrower shall pay or cause
to be paid to the Administrative Agent for the account of the
Existing Lenders all interest accrued but unpaid in respect of
the Existing Loans as of the Closing Date (calculated at the
rates and in the manner set forth in the Original Credit
Agreement as of the close of business on the day immediately
preceding the Closing Date).
Section 2.4. Fees Applicable to this Agreement and
Extensions of Credit.
Section 2.4.1. Facility Fee. Borrower shall pay to the
Administrative Agent for the account of the Lenders during the
Revolving Credit Period a facility fee (the "Facility Fee")
computed at the rate of one-half of one percent (.50%) per annum
on the average daily amount of the Unused Total Commitment Amount
in effect during the period for which payment is made. The
Facility Fee shall be payable monthly in arrears commencing May
31, 1997 and continuing on the last day of each month thereafter
during the Revolving Credit Period and on the Revolving Credit
Termination Date.
Section 2.4.2. Agency Fee. Borrower shall pay to the
Administrative Agent for its own account an agency fee in the
amount of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) for each
year or portion thereof in which the Obligations remain
outstanding in consideration of its service as the Administrative
Agent for the Lenders under this Agreement (the "Agency Fee").
The Agency Fee shall be payable in advance on the Closing Date
and on each anniversary thereof.
Section 2.4.3. Calculation of Fees. Any Fees due and
payable under this Section 2.4. (excluding fees payable under
Section 2.4.4.) to the Administrative Agent for the account of
the Lenders shall be calculated on the basis of a year of 360
days and according to the actual number of days elapsed in each
accrual period.
Section 2.4.4. Fees under the Original Credit Agreement.
On the Closing Date, the Borrower shall pay or cause to be paid
to the Administrative Agent for the account of the Existing
Lenders all fees, charges and other amounts due and owing to such
Existing Lenders under the Original Credit Agreement as of the
Closing Date (calculated in the manner set forth in the Original
Credit Agreement as of the close of business on the day
immediately preceding the Closing Date).
Section 2.5. General Terms Applicable to Any Extension of
Credit
Section 2.5.1. Increased Costs and Capital Adequacy.
(a) If the Administrative Agent, the Documentation
Agent or any Lender determines that any change in any law or
regulation or directive or bulletin or in the interpretation
thereof after the Closing Date by any court or administrative or
governmental authority charged with the administration thereof
shall either (i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any credit
extended by the Administrative Agent, the Documentation Agent or
any Lender under this Agreement, or (ii) impose on the
Administrative Agent, the Documentation Agent, any Lender or
their parent holding company any other condition regarding this
Agreement and the result of any event referred to in the
preceding clause (i) or (ii) above shall be to increase the cost
to the Administrative Agent, the Documentation Agent, any Lender
or such holding company of issuing, funding or maintaining any
Extension of Credit (which increase in cost shall be determined
by the Administrative Agent, the Documentation Agent's or such
Lender's reasonable allocation of the aggregate of such cost
increases resulting from such event), then, upon written demand
by the Administrative Agent, the Documentation Agent or any such
Lender, Borrower shall pay to the Administrative Agent, the
Documentation Agent or such Lender from time to time as specified
by the Administrative Agent, the Documentation Agent or any such
Lender, additional amounts which shall be sufficient to
compensate the Administrative Agent, the Documentation Agent or
any such Lender for such increased cost from the date of such
change. A certificate as to such increased cost incurred by the
Administrative Agent, the Documentation Agent or any Lender as a
result of any event mentioned in clause (i) or (ii) above
prepared in reasonable detail (which shall include the method
employed by the Administrative Agent, the Documentation Agent or
any such Lender in determining the allocation of such costs to
Borrower) and otherwise in accordance with this subsection (a),
submitted by the Administrative Agent, the Documentation Agent or
any such Lender to Borrower, shall be conclusive evidence, absent
manifest error, as to the amount thereof.
(b) If any the Administrative Agent, the Documentation
Agent or any Lender shall determine that the adoption after the
Closing Date of any applicable law, rule or regulation pursuant
to or arising out of the July 1988 report of the Basle Committee
on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other
law, rule, or regulation regarding capital adequacy, or any
change therein, or any change after the date hereof in the
interpretation or administration thereof, or compliance by the
Administrative Agent, the Documentation Agent, any Lender or
their parent holding company with any requirement or directive
regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency,
except any such adoption or change or any such compliance with a
request or directive which applies or has been applied solely to
the Administrative Agent, the Documentation Agent, any such
Lender or such parent holding company by reason of events or
conditions relating solely to the Administrative Agent, the
Documentation Agent or any such Lender, has the effect of
reducing the rate of return on the Administrative Agent's, the
Documentation Agent's, any Lender's or their parent holding
company's capital as a consequence of its commitment hereunder or
to a level below that which the Administrative Agent, the
Documentation Agent, any such Lender or such holding company
could have achieved but for such adoption, change or compliance
by an amount deemed by the Administrative Agent, the
Documentation Agent or any such Lender to be material (for which
reduction of the rate of return shall be determined by the
Administrative Agent's, the Documentation Agent's, any such
Lender's or such holding company's reasonable allocation of such
reduction of the rate of return resulting from such event) then,
upon written demand by the Administrative Agent, the
Documentation Agent or any such Lender, Borrower shall pay to
the Administrative Agent, the Documentation Agent or such Lender,
from time to time as specified by the Administrative Agent, the
Documentation Agent or any such Lender, such additional amount or
amounts which shall be sufficient to compensate the
Administrative Agent, the Documentation Agent or any such Lender
for such reduction. A certificate as to such increased cost
incurred by the Administrative Agent, the Documentation Agent or
any such Lender as a result of any event mentioned in this
subsection (b), prepared in reasonable detail (which shall
include the method employed by the Administrative Agent, the
Documentation Agent or any such Lender in determining the
allocation of such costs to Borrower) and otherwise in accordance
with this subsection (b) submitted by the Administrative Agent,
the Documentation Agent or any such Lender to Borrower, shall be
conclusive evidence, absent manifest error, as to the amount
thereof.
(c) Amounts payable by Borrower pursuant to this
Section 2.5.1. shall be payable within ten (10) Business Days of
receipt by Borrower of a certificate described in subsection (a)
or (b) of this Section 2.5.1.
Section 2.5.2. Method of Payment. All payments and
prepayments of principal and all payments of Fees and interest
shall be made by Borrower to the Administrative Agent for the
ratable account of the Lenders at the head office of the
Administrative Agent (or such other place specified by the
Administrative Agent for such purpose) in immediately available
funds and in U.S. Dollars, on or before 12:00 noon (Boston,
Massachusetts time) on the due date thereof, free and clear of,
and without any deduction or withholding for, any taxes or other
payments. Any payments which are made later than 12:00 noon
(Boston, Massachusetts time) shall be deemed to have been made on
the next Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a day which is not a Business Day
(unless otherwise provided herein), the due date thereof shall be
extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such
extension as the applicable rate in effect immediately prior to
such extension of time.
Section 2.5.3. Taxes. All payments by Borrower under
this Agreement shall be made without set-off, counterclaim or
other claim or defense. Except as otherwise provided herein, all
payments by or on behalf of Borrower hereunder shall be made free
and clear of, and without deduction or withholding for, any and
all current or future taxes, levies, imposts, duties, fees,
assessments or other charges of any kind or nature now or
hereinafter imposed by a Governmental Authority with respect to
any such payment but excluding, except as provided below, (i) any
tax imposed on or measured by the net income or net profits of
any Lender or transferee or assignee thereof (a "Transferee")
pursuant to any Requirement of Law, or (ii)or franchise taxes
imposed on net income or in lieu thereof on any Lender or
Transferee or (iii) any tax imposed by reason of any connection
between the jurisdiction imposing such tax and any Lender or
Transferee (other than a connection arising solely by virtue of
the making of any Extension of Credit under this Agreement) and
all interest, penalties or similar liabilities (all such non-
excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to as "Taxes"). If any Taxes are
required to be withheld or deducted from any payment under this
Agreement, Borrower agrees to pay the full amount of such Taxes
deducted to the relevant Government Authority in accordance with
applicable law, and the payments under this Agreement shall be
increased by such additional amounts as may be necessary so that
every payment under this Agreement, after required withholding or
deduction on account of any Taxes, will not be less than the
amount otherwise required to be paid under this Agreement.
Borrower shall furnish to the Administrative Agent within thirty
(30) days after the date the payment of any Taxes is due
certified copies of any tax receipts evidencing such payment by
Borrower. Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Documentation Agent and each Lender,
and reimburse the Administrative Agent, the Documentation Agent
and each Lender upon its written request, for the amount of any
Taxes specified in this Section 2.5.3. as are paid by such
Lender, the Administrative Agent or the Documentation Agent. A
certificate as to the amount of any such indemnification prepared
by such Lender, the Administrative Agent or the Documentation
Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
Section 2.5.4. Withholding Tax Exemption. Each Lender
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) agrees to deliver to Borrower
and the Administrative Agent on or prior to the Closing Date (i)
two complete executed copies of Internal Revenue Service Form
4224 or Form 1001 (or successor forms thereto) certifying such
Lender's entitlement to an exemption from United States
withholding tax with respect to payment to be made under this
Agreement or (ii) if the Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Form 4224 or Form 1001, a certificate in a form approved
by the Administrative Agent and two complete executed copies of
Internal Revenue Service Form W-8 (or successor form thereto)
certifying such Lender's entitlement to exemption from such
withholding. In addition, each Lender agrees to deliver to
Borrower and the Administrative Agent updates or replacements to
the foregoing forms and certificates from time to time when due
to the lapse of time, the change in circumstances or otherwise,
any such form or certificate previously provided under this
Section 2.5.4. shall become obsolete or inaccurate. Each Lender
agrees to immediately notify Borrower and the Administrative
Agent in the event that it is unable to certify that it is
entitled to an exemption from withholding as aforesaid.
Notwithstanding any provision of Section 2.5.3 or this Section
2.5.4. to the contrary, Borrower shall be entitled, to the extent
required by any Requirement of Law, to deduct and withhold income
or similar taxes imposed by the United States (or any other
Governmental Authority) from interest, fees or other amounts
payable hereunder for the account of any Lender which is not a
United States person (as defined above) for U.S. Federal income
tax purposes to the extent that such Lender has not provided to
Borrower forms establishing an exemption therefrom as aforesaid
and Borrower shall not be obligated to pay any amounts under this
Section 2.5.4. hereof in respect of income or withholding taxes
imposed by the United States if any Lender has not provided the
forms required to be provided pursuant to this Section 2.5.4.
hereof or, in the case of a payment, other than interest, to a
Lender to the extent that any such forms do not establish a
complete exemption from withholding of such taxes.
Section 2.5.5. Lending Offices. Loans of each Type made
by any Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type. Each Lender
agrees that, upon the occurrence of any event giving rise to the
operation of Section 2.3.6., 2.5.1. or 2.5.3. hereof with respect
to such Lender, it will, if requested by Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender)
to designate another lending office for any Extension of Credit
affected by such event; provided that in the sole judgment of
such Lender, such Lender and its lending office suffer no
economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the
operation of any of the foregoing Sections. Nothing in this
Section 2.5.5. shall affect or postpone any of the obligations of
Borrower or the rights of any Lender under said Sections 2.3.6.,
2.5.1. or 2.5.3.
Section 2.5.6. Replacement of Lenders. (x) If any Lender
becomes a Defaulting Lender, (y) upon the occurrence of any event
giving rise to the operation of Sections 2.3.6., 2.5.1. or 2.5.3.
with respect to any Lender which results in such Lender charging
to Borrower increased costs in excess of those being generally
charged by the other Lenders or (z) in the case of a refusal by a
Lender to consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been
approved by the Required Lenders as provided in Section 10.13.
hereof Borrower shall have the right, if no Default or Event of
Default then exists or, in the case of clause (z) above, would
exist after giving effect to such replacement, to replace such
Lender (the "Replaced Lender") with one or more other lenders,
none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the "Replacement Lender") and
each of whom shall be acceptable to the Administrative Agent;
provided that (i) at the time of any replacement pursuant to this
Section 2.5.6., the Replacement Lender shall enter into an
Assignment and Acceptance pursuant to Section 13.1. (and with all
fees payable pursuant to said Section 13.1 to be paid by the
Replacement Lender) pursuant to which the Replacement Lender
shall acquire the Commitment and the Loans of the Replaced Lender
and, in connection therewith, shall pay to (x) the Replaced
Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on,
all outstanding Loans of the Replaced Lender and (B) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender and (y) the Administrative Agent an amount equal
to such Replaced Lender's pro rata share of any Mandatory
Borrowing to the extent such amount was not theretofore funded by
such Replaced Lender, and (ii) all obligations of Borrower then
owing to the Replaced Lender (other than those specifically
described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid, but
including all amounts, if any, owing under Section 2.3.6.) shall
be paid in full to such Replaced Lender concurrently with such
replacement. Upon the execution of the respective Assignment and
Acceptance, the payment of amounts referred to in clauses (i) and
(ii) above, recordation of the assignment on the Register by the
Administrative Agent pursuant to Section 13.2. and, if so
requested by the Replacement Lender of the appropriate Note or
Notes executed by Borrower, the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement, which shall
survive as to such Replaced Lender.
Section 2.6. Payments among the Administrative Agent and the
Lenders.
Section 2.6.1. Pro Rata Treatment. Except as otherwise
provided herein: (A) each borrowing from the Lenders pursuant to
Section 2.1.1. hereof will be made from the Lenders pro rata in
accordance with the amounts of their respective Commitment
Percentages, (B) payments and prepayments of principal or
interest will be made to the Administrative Agent for the account
of the Lenders pro rata in accordance with the unpaid principal
amount of the Line of Credit, (C) any reduction in the Total
Commitment Amount shall reduce each Lender's Commitment
Percentage pro rata based upon their then respective Commitment
Percentages and (D) all payments of Fees made to the
Administrative Agent for the account of the Lenders shall be made
pro rata based upon their then respective Commitment Percentages.
Section 2.6.2. Non-Receipt of Funds by the Administrative
Agent.
(a) Unless the Administrative Agent shall have
received notice from a Lender prior to the date on which such
Lender is to provide funds to the Administrative Agent for a
Revolving Loan under such Lender's Commitment (including
Revolving Loans required to be made under Section 2.1.4.(b)
hereof) that such Lender will not make available to the
Administrative Agent such funds, the Administrative Agent may
assume that such Lender has made such funds available to the
Administrative Agent on such date, and the Administrative Agent,
in its sole discretion, may, but shall not be obligated to, in
reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent such Lender
shall not have so made such funds available to the Administrative
Agent, such Lender (a "Defaulting Lender") agrees to repay to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such
amount is repaid to the Administrative Agent, at the Federal
Funds Effective Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Revolving Loan under its
Commitment for purposes of this Agreement. If such Lender does
not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent
shall be entitled to all interest earned thereon or Fees earned
in respect thereof through the date of the payment of any such
amount by such Lender. A Defaulting Lender (regardless of
whether such Lender serves as the Administrative Agent) shall be
deemed to have assigned to the extent of the delinquency any and
all payments due to it from Borrower, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining
Non-Defaulting Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans. The
Defaulting Lender hereby authorizes the Administrative Agent to
distribute such payments to the Non-Defaulting Lenders in
proportion to their respective pro rata shares of all outstanding
Loans. A Defaulting Lender shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the Non-Defaulting
Lenders, the Lenders' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately
prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
(b) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Lenders hereunder that the Borrower will
not make such payment in full, the Administrative Agent may
assume that the Borrower has made such payment in full to the
Administrative Agent on such date, and the Administrative Agent
in its sole discretion may, but shall not be obligated to, in
reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent that the Borrower shall not
have so made such payment in full to the Administrative Agent,
each Lender shall repay to the Administrative Agent forthwith on
demand, which shall be made promptly after discovery thereof,
such amount distributed to such Lender together with interest
thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate.
(c) Nothing contained in this Section 2.6.2 shall be
construed to relieve any Lender of its obligation to make funds
available to the Administrative Agent under this Agreement except
as otherwise expressly provided herein, nor to relieve the
Borrower of its obligations to make any payment when due.
(d) The Administrative Agent shall have no obligation
to remit to the Lenders any amounts under this Agreement not
actually collected from the Borrower. In addition, in the event
that any payment received by the Administrative Agent is
rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or upon the appointment of any
intervenor or conservator of, or trustee or similar official for,
the Borrower or any substantial part of its properties or assets,
or otherwise, and if the Administrative Agent paid any Lender its
pro rata share of such payment, then such Lender shall, on demand
from the Administrative Agent, immediately pay to the
Administrative Agent an amount equal to such Lender's pro rata
share of any such payment which must be rescinded, restored or
returned by the Administrative Agent. Any such amount shall be
paid no later than 3:00 p.m. (Boston, Massachusetts time) on the
Business Day following the date of demand for payment by the
Administrative Agent shall bear interest at the rate and in the
manner set forth in Section 2.6.2.(b) hereof.
Section 2.6.3. Sharing of Payments, Etc. Borrower hereby
agrees that, in addition to (and without limitation of) any right
of set-off, banker's lien or counterclaim a Lender may have
hereunder or otherwise, each Lender and Lender Affiliate shall be
entitled at its option, to offset balances held by it at any of
its offices against any principal of or interest on any Revolving
Loans, or any fee or expense payable to the Administrative Agent,
the Documentation Agent or the Lenders that is not paid when due
(regardless of whether such balances are then due to Borrower),
in which case it shall promptly notify Borrower and the
Administrative Agent thereof; provided, that its failure to give
such notice shall not affect the validity thereof. If a Lender
shall effect payment of any principal, interest, fee or expense
under this Agreement through the exercise of any right of
set-off, banker's lien, counterclaim or similar right, it shall
be deemed to have purchased from each of the other Lenders
participations in the Loans made by the other Lenders in such
amounts, and make such other adjustments from time to time as
shall be equitable, to the end that the Lenders shall share the
benefit of such payment pro rata in accordance with the
respective amounts of unpaid principal of and interest on the
Revolving Loans made by each of them. To such end, the Lenders
shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. Borrower agrees that
any Lender so purchasing a participation in the Revolving Loans
made by the other Lenders may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender were a direct
holder of the Revolving Loans in the amount of such
participation. Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation
of Borrower to such Lender.
SECTION 3. SECURITY FOR THE OBLIGATIONS
Section 3.1. Collateral Disclosure List. Borrower shall
deliver to the Administrative Agent and the Documentation Agent
on or prior to the Closing Date a completed Collateral Disclosure
List certified by a Responsible Officer.
Section 3.2. Security. The Obligations shall be secured by:
Section 3.2.1. All properties and assets of Borrower,
including goods, accounts receivable, inventory, contract rights,
accounts, documents, instruments and chattel paper, business and
financial records and general intangible assets of Borrower
(including all Capital Stock of each Subsidiary of Borrower
(other than Protective Alarms of Canada, Inc.)), and all proceeds
thereof, as more particularly defined in and pursuant to the
Borrower Pledge Agreement and the Borrower Security Agreement.
Section 3.2.2. The guarantee of Alarmguard Holdings and
SSH pursuant to the Alarmguard Holdings Guarantee and the SSH
Guarantee, respectively.
Section 3.2.3. A pledge of all of SSH's right, title and
interest in and to all shares of Capital Stock of Borrower
pursuant to the SSH Pledge Agreement.
Section 3.2.4. A pledge of all of Alarmguard Holding's
right, title and interest in and to all shares of Capital Stock
of SSH pursuant to the Alarmguard Holdings Pledge Agreement.
Section 3.2.5. A leasehold mortgage, deed of trust or
collateral assignment with respect to all of Borrower's right,
title and interest, as lessee, in, to and under leases for the
premises listed and described on Schedule 3.2.5. attached hereto
pursuant to a Leasehold Mortgage or a Lease Assignment,
respectively.
Section 3.2.6. The guarantee of each Subsidiary of
Borrower (excluding, unless otherwise required by the Lenders,
Protective Alarms of Canada, Inc.) pursuant to a Subsidiary
Guarantee.
Section 3.2.7. All properties and assets of each
Subsidiary of Borrower which has executed a Subsidiary Guarantee,
including goods, accounts receivable, inventory, contract rights,
accounts, documents, instruments and chattel paper, business and
financial records and general intangible assets of each such
Subsidiary (including all Capital Stock of any Subsidiaries of
any such Subsidiary), and all proceeds thereof, as more
particularly defined in or pursuant to a Subsidiary Pledge
Agreement and a Subsidiary Security Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, the Documentation
Agent and the Lenders to enter into this Agreement and to make
any Extension of Credit, each Credit Party, as applicable, makes
the following representations and warranties to the
Administrative Agent, the Documentation Agent and the Lenders,
which shall be deemed made both before and after giving effect to
the Triton Merger as of the date hereof and, except as otherwise
provided in this Section 4., on the date of each Extension of
Credit. Any knowledge acquired by the Administrative Agent, the
Documentation Agent or the Lenders shall not diminish their
rights to rely upon such representations and warranties.
Section 4.1. Corporate Existence. Each Credit Party is a
corporation duly incorporated, validly existing and in good
standing under the laws of its respective state of incorporation
and is duly qualified in all other jurisdictions in which the
properties and assets owned, leased or operated by it, or the
nature of the business conducted by it, make such qualification
necessary and where failure to so qualify could reasonably be
expected to have a Material Adverse Effect.
Section 4.2. Corporate Authority. The execution, delivery
and performance of this Agreement, the Notes, the Other Documents
and the Transaction Documents, the consummation of the
transactions herein and therein contemplated, the fulfillment of
and compliance with the terms and provisions hereof and thereof
have been duly authorized by all necessary corporate action of
each Credit Party and are within its corporate power and will not
result in a violation of its Governing Documents.
Section 4.3. Binding Obligations. This Agreement, the Notes,
the Other Documents and the Transaction Documents constitute the
legal, valid and binding obligations of each Credit Party which
is a party thereto, enforceable against it in accordance with
their respective terms.
Section 4.4. Noncontravention. The execution, delivery and
performance by each Credit Party of this Agreement, the Notes,
the Other Documents and the Transaction Documents will not
violate any existing law, ordinance, rule, regulation or order of
any Governmental Authority or result in a breach of any of the
terms of, or constitute a default under, any Contractual
Obligation to which any such Credit Party is a party or by which
it or any of its properties or assets are bound or result in or
require the imposition of any Encumbrance on any of such Credit
Party's properties or assets except to the extent that such
violation or breach could not reasonably be expected to have a
Material Adverse Effect.
Section 4.5. Permits. Each Credit Party possesses all
material permits, authorizations, licenses, approvals, waivers
and consents, without unusual restrictions or limitations, the
failure of which to possess could not reasonably be expected to
have a Material Adverse Effect, all of which are in full force
and effect.
Section 4.6. No Consents. The execution, delivery and
performance of this Agreement, the Notes, the Other Documents and
the Transaction Documents does not require any approval, consent
or waiver under any Contractual Obligation except where the
absence thereof could not reasonably be expected to have a
Material Advise Effect. No approval, authorization, consent,
waiver or order of, or registration, application or filing with,
any Governmental Authority is required in connection with the
transactions contemplated by this Agreement, the Notes, the Other
Documents and the Transaction Documents except where the absence
thereof could not reasonably be expected to have a Material
Adverse Effect.
Section 4.7. Financial Statements. Borrower has provided to
the Administrative Agent and the Documentation Agent the
consolidated Financial Statements of SSH and its Subsidiaries
dated as of December 31, 1996 and related footnotes, audited and
certified by Ernst & Young, LLP. Borrower has also provided to
the Administrative Agent and the Documentation Agent the
internally prepared consolidated Financial Statements of SSH and
its Subsidiaries dated as of February 28, 1997, certified by the
chief financial officer of Borrower but subject, however, to
normal, recurring year-end adjustments that shall not in the
aggregate be material in amount. All Financial Statements of
Borrower heretofore provided to the Administrative Agent and the
Documentation Agent present fairly the financial condition and
results of business operations of SSH and its Subsidiaries for
the periods indicated in accordance with GAAP. Neither SSH,
Borrower nor any of their Subsidiaries has any material direct or
contingent liabilities, liabilities for taxes, unusual
commitments or unrealized or unanticipated losses not disclosed
in such Financial Statements. Since the date of the latest dated
consolidated balance sheet included in the Financial Statements
specified in this Section 4.7., there has been no development or
event which could reasonably be expected to have a Material
Adverse Effect and no Dividends have been declared or made to
stockholders, nor has any of its Capital Stock been purchased or
acquired by any Person in any manner nor has SSH, Borrower or any
of their Subsidiaries made any Investment except as set forth on
Schedule 4.7 attached hereto.
Section 4.8. Financial Forecasts. Borrower has provided to
the Administrative Agent and the Documentation Agent forecasted
Financial Statements together with appropriate supporting details
and a statement of the underlying assumptions, prepared on a
monthly basis covering the one (1) year period commencing on May
1, 1997 and a pro forma consolidated balance sheet for SSH as of
the Closing Date reflecting the consummation of the Triton Merger
(the "Forecasts"). The Forecasts have been prepared in good
faith and have a reasonable basis.
Section 4.9. Financial Information. All written data,
reports and information which any Credit Party has supplied to
the Administrative Agent, the Documentation Agent or the Lenders
or caused to be so supplied by a third party on its behalf in
connection with this Agreement, was, at the time so supplied,
when taken as a whole, true and accurate in all material
respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material
fact necessary to make such information at such time in light of
the circumstances under which such information was provided.
Section 4.10. Business Relationships. There exists no actual
or, to any Credit Party's knowledge threatened, termination,
cancellation or limitation of, or any modification or change in,
the business relationship of any Credit Party with any customer
or group of customers, or with any supplier (other than in the
ordinary course of business where one supplier is replaced by
another offering terms which are no less favorable to such Credit
Party) which could reasonably be expected to have a Material
Adverse Effect.
Section 4.11. Brokers. No broker or finder has brought about
the obtaining, making or closing of, and no broker's or finder's
fees or commissions will be payable by any Credit Party or its
Affiliates to any Person in connection with, the transactions
contemplated by this Agreement.
Section 4.12. Use of Proceeds. Borrower is not an
"investment company," or a company "controlled by" an "investment
company," as such terms are defined in the Investment Company Act
of 1940, as amended (14 U.S.C. 80(a)(1) et seq.). No Extension
of Credit, the application of the proceeds and repayment thereof
by Borrower or the performance of the transactions contemplated
by this Agreement will violate any provision of said Act, or any
rule, regulation or order issued by the Securities and Exchange
Commission thereunder. The proceeds of each Extension of Credit
will be used only for the purposes set forth in this Agreement.
None of the proceeds of any Extension of Credit will be used, or
have been used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" or for the purpose of
reducing or retiring any Indebtedness which was originally
incurred to purchase or carry any "margin stock" or for any other
purpose which might constitute such Extension of Credit a
"purpose credit" within the meaning of said Regulation U or
Regulations G or X of the Federal Reserve Board. Borrower will
not take, or permit any Person acting on its behalf to take, any
action which might cause this Agreement or any document or
instrument delivered pursuant hereto to violate any regulation of
the Federal Reserve Board.
Section 4.13. Statutory Compliance. Each Credit Party is in
compliance with all material laws, ordinances, rules, regulations
and orders of any Governmental Authority applicable to it, its
properties or assets or the business conducted by it (excepting
ERISA and Environmental Laws which are the subject of other
provisions of this Agreement), except where non-compliance could
not reasonably be expected to have a Material Adverse Effect.
Section 4.14. Commitments. No Credit Party has any fixed,
contingent or other obligations to issue any of its Capital Stock
except as set forth on Schedule 4.14. attached hereto.
Section 4.15. Events of Default. No Default or Event of
Default has occurred and is continuing.
Section 4.16. Other Defaults. No Credit Party is in default
in the performance, observance or fulfillment of any Contractual
Obligation which could reasonably be expected to have a Material
Adverse Effect.
Section 4.17. Taxes. Each Credit Party has filed all tax
returns and reports required to be filed by it with any
Governmental Authority and has paid in full, or made adequate
provisions or established adequate reserves in accordance with
GAAP for, the payment of all taxes, interest, penalties,
assessments or deficiencies shown to be due or claimed to be due
on or in respect to such tax returns and reports.
Section 4.18. Ownership of Borrower. SSH is the holder of
all of the issued and outstanding shares of capital stock of
Borrower, and no other Person has any rights and/or claim to any
issued or unissued shares of such capital stock.
Section 4.19. Solvency. Both before and after giving effect
to (a) any Extension of Credit to be made on the Closing Date or
such other date on which any Extension of Credit requested
hereunder is made, (b) the disbursement of the proceeds of any
such Extension of Credit pursuant to the instructions of
Borrower, (c) the Triton Merger and the other transactions
contemplated by this Agreement, the Other Documents and the
Transaction Documents and (d) the payment and accrual of costs
and expenses incurred in connection with the foregoing, each
Credit Party is Solvent. No Credit Party is contemplating
either the filing of a petition by it under Bankruptcy Code or
any state bankruptcy or insolvency law or the liquidating of all
or a major portion of its properties and assets, and no Credit
Party has any knowledge of any Person contemplating the filing of
any such petition against it.
Section 4.20. Business Name. Each of Borrower and its
Subsidiaries conducts its business solely through the names set
forth on Schedule 11 of the Collateral Disclosure List, without
the use of any trade name, or the intervention of or through any
other Person. Neither Borrower nor any of its Subsidiaries has,
except as set forth in the Collateral Disclosure List, during the
preceding five (5) years, conducted its business through any
other name or trade name or been the surviving corporation in a
merger or consolidation or acquired all or substantially all of
the assets of any other Person.
Section 4.21. Affiliate Contracts. Except as otherwise
provided in this Agreement or as set forth on Schedule 4.21.
hereof, all contracts and transactions between any Credit Party
and any Affiliate or Subsidiary of such Credit Party have been
executed or will be executed on such terms as would be contained
in an agreement executed at arms' length with an unrelated third
party.
Section 4.22. Capitalization. The outstanding shares of
Capital Stock of each Credit Party which have been pledged to the
Administrative Agent for the ratable benefit of the Lenders under
the Security Documents have been duly issued and are fully paid
and non-assessable.
Section 4.23. Litigation. Except as set forth on Schedule
4.23 attached hereto, there are no actions, suits or proceedings
by or before any Governmental Authority or any arbitration or
alternate dispute resolution proceeding, pending or, to the
knowledge of any Credit Party or any of its officers, threatened,
against any Credit Party or its properties and assets, which if
adversely determined, could reasonably be expected to have a
Material Adverse Effect.
Section 4.24. Title to Properties. Each of Borrower and its
Subsidiaries has good and marketable title to all of its
properties and assets as are reflected in the Financial
Statements referred to in Section 4.7. (except such properties,
assets or rights as have been disposed of in the ordinary course
of business since the date thereof), free from all Encumbrances
except Permitted Encumbrances or those Encumbrances disclosed in
Schedule 4.24. attached hereto, and, free from all defects of
title that could reasonably be expected to have a Material
Adverse Effect. The properties, assets and rights of Borrower
and its Subsidiaries are sufficient to permit Borrower and such
Subsidiaries to conduct the business in which it is presently
engaged. Borrower and its Subsidiaries possess all trademarks,
service marks, trade names, trade service styles, copyrights and
patents that may be necessary to own their properties and assets,
and to conduct their business as it is presently conducted or as
intended to be conducted hereafter, without any infringement or
conflict with the rights of any other Person or any violation of
law which could reasonably be expected to have a Material Adverse
Effect.
Section 4.25. Labor Relations. No Credit Party is a party
to any collective bargaining or other agreement with any union
and there are no material grievances, disputes or controversies
with any union or other organization of such Credit Party's
employees, or threats of strikes, work stoppages or demands by
any union or such other organization.
Section 4.26. Contingent Obligations. No Credit Party is a
party to any Guarantee or other similar type of agreement, and it
has not offered its endorsement to any Person which would in any
way create a contingent liability (except by endorsement of
negotiable instruments payable at sight for deposit or collection
or similar banking transactions in the ordinary course of
business).
Section 4.27. Subsidiaries. As of the date of this
Agreement, all of the Subsidiaries and Affiliates of Borrower are
set forth on Schedule 13 of the Collateral Disclosure List.
Borrower or a Subsidiary of Borrower is the owner free and clear
of all Encumbrances, of all of the issued and outstanding Capital
Stock of each Subsidiary. Neither Borrower nor any of its
Subsidiaries is engaged in any joint venture, partnership or
other business arrangement with any other Person except as
described on said Schedule 13.
Section 4.28. ERISA. Each Credit Party and each member of
the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to
each Plan and are in substantial compliance in all material
respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under
Title IV of ERISA except where non-compliance or liability could
not reasonably be expected to have a Material Adverse Effect; and
no Prohibited Transaction or Reportable Event has occurred with
respect to any Plan.
Section 4.29. Environmental Protection. Except as set forth
on Schedule 4.29. attached hereto:
(a) The business operations of each of Borrower and
its Subsidiaries comply in all material respects with all
Environmental Laws except where non-compliance could not
reasonably be expected to have a Material Adverse Effect.
(b) Neither Borrower nor any of its Subsidiaries
has received (i) any notice or claim to the effect that it is or
may be liable to any Person as a result of the Release or
threatened Release of any Hazardous Materials or (ii) any letter
or request for information under CERCLA or any other
Environmental Laws, and, to the best of Borrower's or any such
Subsidiaries' actual knowledge, based upon reasonable
investigation, the business operations of Borrower and such
Subsidiaries are not the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is
needed to respond to a Release or threatened Release of any
Hazardous Material or claim, or threatened lawsuit or claim
arising under or related to any Environmental Law except, in each
case, where non-compliance could not reasonably be expected to
have a Material Adverse Effect.
(c) Borrower, its Subsidiaries and their properties,
assets and operations are not subject to any outstanding written
order or agreement with any Governmental Authority or private
party respecting any Environmental Laws except for any such
written order or agreement which could not reasonably be expected
to have a Material Adverse Effect.
(d) Neither Borrower nor any of its Subsidiaries has
filed any notice under any Environmental Law indicating past or
present treatment or disposal of Hazardous Materials, and none of
the operations of Borrower or any such Subsidiaries involve the
generation, transportation, treatment, storage or disposal of
Hazardous Materials except where such activity could not
reasonably be expected to have a Material Adverse Effect.
(e) To the best of Borrower's and its Subsidiaries'
actual knowledge, based upon reasonable investigation, no
Hazardous Material exists on, under or about any of the
properties or assets of Borrower or any such Subsidiaries, real
or personal, in a manner that is likely to give rise to any
claim or suit against Borrower or any such Subsidiaries, and
neither Borrower nor any Subsidiary of Borrower has filed any
notice or report of a Release of any Hazardous Materials that
could give rise to any such claim or suit against Borrower
except, in each case, where such claim or suit or filing could
not reasonably be expected to have a Material Adverse Effect.
Section 4.30. Investments. Except as set forth on Schedule
4.30., attached hereto no Credit Party has an Investment in any
Person other than existing Investments in Subsidiaries and
Qualified Investments.
Section 4.31. Security Documents.
(a) The provisions of each Security Document are
effective to create in favor of the Administrative Agent for the
ratable benefit of the Lenders, a legal, valid and enforceable
lien or security interest in all right, title and interest of the
Credit Party which is a party thereto in the Collateral described
therein.
(b) (i) When UCC financing statements, assignment and/or
amendments have been filed in the offices in the jurisdictions
listed in Schedule 3 of the Collateral Disclosure List, the
Borrower Security Agreement shall constitute a fully perfected
first lien on, and security interest in, all right, title and
interest of Borrower in the Collateral described therein, which
can be perfected by such filing.
(ii) When certificates representing the Pledged Stock
(as such term is defined in the SSH Pledge Agreement) are
delivered to the Administrative Agent, together with stock powers
endorsed in blank by a duly authorized officer of SSH, the SSH
Pledge Agreement shall constitute a fully perfected first lien
on, and security interest in, all right, title and interest of
SSH in the Collateral described therein.
(iii) When certificates representing the Pledged
Stock (as such term is defined in the Alarmguard Holdings Pledge
Agreement) are delivered to the Administrative Agent, together
with stock powers endorsed in blank by a duly authorized officer
of Alarmguard Holdings, the Alarmguard Holdings Pledge Agreement
shall constitute a fully perfected first lien on, and security
interest in, all right, title and interest of Alarmguard Holdings
in the Collateral described therein.
(iv) When the Leasehold Mortgage, or assignments and
amendments thereto, have been filed in the offices and
jurisdictions listed in Schedule 2 of the Collateral Disclosure
List, each Leasehold Mortgage shall constitute a fully perfected
first lien on all right, title and interest of Borrower in the
Collateral described therein.
(c) Borrower does not own any properties or assets, or
have any interest in any properties or assets, that is not
subject to a fully perfected first priority lien on, or security
interest in, such properties or assets in favor of the
Administrative Agent, other than properties or assets having an
aggregate fair market value at any one time not exceeding
$50,000.00.
Section 4.32. Insurance. Each of Borrower and its
Subsidiaries maintains its properties and assets insured against
fire and other hazards (so called "All Risk Coverage") in amounts
and with companies set forth on Schedule 4.32. attached hereto
covering such risks as is customary in such Credit Party's line
of business. Borrower and each of its Subsidiaries also maintain
public liability coverage against claims for personal injuries or
death, errors and omissions, directors and officers coverage,
business interruption, worker's compensation, employment or
similar insurance with coverages and in amounts as set forth on
Schedule 4.32.
SECTION 5. CONDITIONS TO OBLIGATION OF THE LENDERS
The Administrative Agent, the Documentation Agent and the
Lenders shall have no obligation under this Agreement to amend
and restate the Original Credit Agreement or to continue or make
any Extension of Credit unless and until they are satisfied, in
their sole and absolute discretion, that all of the following
conditions shall have been satisfied prior to or on the Closing
Date:
Section 5.1. Representations and Warranties True. The
representations and warranties contained in Section 4 are true
and correct, and each Credit Party, by a Responsible Officer,
shall have so certified to the Administrative Agent, the
Documentation Agent and the Lenders.
Section 5.2. Delivery of Documents. Each Credit Party shall
have duly executed and delivered to the Administrative Agent, the
Documentation Agent and the Lenders, in form and substance
satisfactory to the Administrative Agent, the Documentation
Agent, the Lenders and their legal counsel, this Agreement, the
Notes, the Other Documents and all further documents as the
Administrative Agent, the Documentation Agent and the Lenders may
request to evidence the Obligations or to create, perfect or
continue any security interest or lien contemplated by this
Agreement and the Other Documents. In addition, the
Administrative Agent, the Documentation Agent and the Lenders
shall have received or agreed in writing to waive or delay the
receipt of:
Section 5.2.1. Copies of all corporate action taken by
each Credit Party to authorize the execution and delivery of this
Agreement, the Notes, the Other Documents and the Transaction
Documents, together with a certificate of the corporate secretary
of such Credit Party certifying that the same are true, correct
and complete as of the Closing Date.
Section 5.2.2. Copies of each Credit Party's Governing
Documents, together with a certificate of the corporate secretary
of such Credit Party certifying that the same are true, correct
and complete as of the Closing Date.
Section 5.2.3. A certificate issued by the office of the
Secretary of State of the state of each Credit Party's
incorporation to the effect that each such Credit Party is
legally existing and in good standing under the laws of such
states.
Section 5.2.4 A certificate issued by the office of the
Secretary of State of each state in which each Credit Party is
qualified as a foreign corporation to the effect that each such
Credit Party is duly qualified and in good standing as a foreign
corporation under the laws of such states.
Section 5.2.5. A certificate of the corporate secretary
of each Credit Party certifying to the incumbency and signatures
of all officers of such Credit Party who are authorized to
execute this Agreement, the Notes, the Other Documents and the
Transaction Documents.
Section 5.2.6. An ALTA title insurance policy with
respect to the Leasehold Mortgages satisfactory in form and
substance to the Administrative Agent, the Documentation Agent,
the Lenders and their legal counsel.
Section 5.2.7. UCC and land record searches conducted by
a Person satisfactory to the Administrative Agent and the
Documentation Agent for each Credit Party under each name set
forth on the Collateral Disclosure List listing the filings
against each such Credit Party as debtor under such names at each
filing office in each jurisdiction in which any Collateral or
Credit Party is located.
Section 5.2.8. Objective evidence satisfactory to the
Administrative Agent, the Documentation Agent, the Lenders and
their legal counsel that the Indebtedness (other than
Indebtedness under this Agreement and the Steffanato Note) of
each Credit Party to any Person in excess of $600,000 as of the
Closing Date constitutes Subordinated Indebtedness.
Section 5.2.9. Such UCC financing statements, assignments
and amendments as the Administrative Agent, the Documentation
Agent and the Lenders deem necessary to perfect any security
interests contemplated by this Agreement or the Other Documents
and such other instruments of assignment acceptable to the
Administrative Agent from IBJ Xxxxxxxx Bank & Trust Company in
its capacity as the Agent for the lenders under the Original
Credit Agreement for the purpose of assigning to the
Administrative Agent for the ratable benefit of the Lenders the
Encumbrances granted to IBJ Xxxxxxxx Bank & Trust Company as
Agent to secure the obligations under the Original Credit
Agreement.
Section 5.2.10. Insurance policies and certificates
evidencing adequate insurance coverage in amounts satisfactory to
the Administrative Agent and the Documentation Agent on the
Credit Parties' properties and assets which insurance policies
shall name the Administrative Agent as an additional insured/loss
payee.
Section 5.2.11. An environmental certificate and
indemnity agreement executed by Borrower satisfactory in form and
substance to the Administrative Agent, the Documentation Agent,
the Lenders and their legal counsel (the "Environmental
Certificate").
Section 5.2.12. True and correct copies of the
employment agreements by and between any Credit Party and Xxxxxxx
XxxXxxxxxx and Xxxxx Xxxxxxxxx.
Section 5.2.13. Such further documents, instruments and
agreements as the Administrative Agent, the Documentation Agent
and the Lenders shall reasonable request, all satisfactory in
form and substance satisfactory to the Administrative Agent, the
Documentation Agent, the Lenders and their legal counsel.
Section 5.3. Validity of Liens. All Encumbrances in the
Collateral shall have been created or maintained in favor of the
Administrative Agent for the benefit of the Lenders, which
Encumbrances shall constitute legal, valid and enforceable and,
unless otherwise consented to by the Administrative Agent, the
Documentation Agent and the Lenders, first security interests in
and liens upon the Collateral. All filings, recordings,
deliveries of instruments and other actions necessary or
desirable in the sole and absolute discretion of the
Administrative Agent, the Documentation Agent, the Lenders and
their legal counsel to create said Encumbrances shall have been
made, taken and/or effected.
Section 5.4. Transaction Documents. The Administrative Agent
and the Documentation Agent shall have received, with a copy for
each Lender, a true and correct copy of the Transaction
Documents, including all schedules and exhibits thereto, and such
other documents, agreements and instruments executed and
delivered in connection therewith or otherwise affecting the
terms thereof. The terms and conditions of the transactions
contemplated by the Transaction Documents shall have not been
amended, modified or supplemented in any manner from those terms
and conditions set forth in the Proxy Statement/Prospectus dated
March 14, 1997 issued by Alarmguard Holdings (then known as
Triton Group, Ltd.) to its stockholders.
Section 5.5. Mergers. The Triton Merger and the AG Holdings
Merger shall have been consummated in all material respects in
accordance with the terms and conditions of the Transaction
Documents and applicable law, including the filing of
certificates of merger with the Secretary of the State of
Delaware, and the Administrative Agent and the Documentation
Agent shall have received objective evidence satisfactory to it
as to the consummation of such mergers as aforesaid.
Section 5.6. Capitalization. The Administrative Agent, the
Documentation Agent and the Lenders shall have received objective
evidence satisfactory to it that, immediately after the
consummation of the Triton Merger and any Extension of Credit to
be made on the Closing Date, that the capitalization of Borrower,
SSH, and Alarmguard Holdings shall be as set forth on Schedule
5.6 attached hereto, the terms and conditions, and documentation,
of all matters relating to such capitalization shall be in form
and substance satisfactory to the Administrative Agent, the
Documentation Agent and the Lenders and Alarmguard Holdings shall
possess cash or cash equivalents in the form of Qualified
Investments in an amount not less than $14,000,000.00.
Section 5.7. RMR. The Administrative Agent, the
Documentation Agent and the Lenders shall have received a
certificate of a Responsible Officer of Borrower, satisfactory in
form and substance to the Administrative Agent and the
Documentation Agent, certifying that RMR as of the Closing Date
is at least $1,400,000.00. The Administrative Agent, the
Documentation Agent and the Lenders shall have received the Price
Waterhouse Report.
Section 5.8. Direct Marketing Program. SSH shall have
transferred and assigned to Borrower operational responsibility
for and all of its right, title and interest in and to the Direct
Marketing Program in a manner satisfactory to the Administrative
Agent, the Documentation Agent and the Lenders.
Section 5.9. Opinions of Counsel. The Administrative Agent,
the Documentation Agent and the Lenders shall have received from
legal counsel for the Credit Parties written opinions, in the
form of Exhibit G-1 and Exhibit G-2 attached hereto, satisfactory
in form and substance to the Administrative Agent, the
Documentation Agent, the Lenders and their legal counsel. The
Administrative Agent, the Documentation Agent and the Lenders
shall have received from legal counsel to Alarmguard Holdings
(then known as Triton Group, Ltd.) the written opinion to be
delivered to SSH in connection with the Triton Merger.
Section 5.10. Payment of Fees. Borrower shall have paid any
applicable fees and expenses due to the Administrative Agent, the
Documentation Agent and the Lenders at closing, including the
fees and expenses of their legal counsel.
Section 5.11. Legal Matters. All legal matters incident to
the transactions hereby contemplated shall be satisfactory to the
Administrative Agent, the Documentation Agent, the Lenders and
their legal counsel.
SECTION 6. CONDITIONS TO EXTENSION OF CREDIT
The Administrative Agent, the Documentation Agent and the
Lenders shall have no obligation to make any Extension of Credit,
including the initial Extension of Credit, unless and until, they
are satisfied, in their sole and absolute discretion, that all of
the following conditions shall have been fulfilled prior to or
contemporaneously with the making of such Extension of Credit.
Section 6.1. In General.
Section 6.1.1. Notice of Borrowing. The Administrative
Agent shall have received, in a timely manner, a Notice of
Borrowing in a form satisfactory to the Administrative Agent.
Section 6.1.2. RMR Report. The Administrative Agent and
the Documentation Agent shall have received a RMR Report, in a
timely manner, as required under Section 7.2.3. hereof,
satisfactory in form and substance to the Administrative Agent
and the Documentation Agent showing that the Borrowing Base is
sufficient to permit the Lenders to make the requested Extension
of Credit.
Section 6.1.3. Truth of Representations and Warranties.
All of the representations and warranties set forth in Section 4
of this Agreement (with the exception of representations and
warranties which, by their terms, are limited to an earlier date)
are true and correct as of the date on which the requested
Extension of Credit is made.
Section 6.1.4. No Default. No Default or Event of
Default shall have occurred and be continuing or shall occur as a
result of the requested Extension of Credit or the application of
the proceeds of such Extension of Credit.
Section 6.1.5. Payment of Fees. Borrower shall have paid
any applicable fees and expenses due to the Administrative Agent,
the Documentation Agent and the Lenders including any fees and
expenses of their legal counsel.
Section 6.1.6. Corporate Action. The corporate action of
each Credit Party referred to in Section 5.2.1. continues to be
in full force and effect and the incumbency of officers
continues to be as stated in the certificates of incumbency
delivered pursuant to Section 5.2.6. or as subsequently reflected
in a new certificate of incumbency delivered to the
Administrative Agent in connection with the requested Extension
of Credit.
Section 6.1.7. Legal Matters. All legal matters incident
to the transactions contemplated by the requested Extension of
Credit shall be satisfactory to the Administrative Agent, the
Documentation Agent and their legal counsel and no change shall
have occurred in any law or regulation or interpretation thereof,
which, in the opinion of either the Administrative Agent or, the
Documentation Agent and their respective legal counsel, would
make it illegal or against the policy of any Governmental
Authority for the Lenders to make the requested Extension of
Credit.
Section 6.2. Pro Acquisition. In addition to the satisfaction
of the conditions set forth in Section 6.1. hereof, the
obligation of the Lenders to make any Acquisition Loan in
connection with the Pro Acquisition is subject to the
satisfaction of the following conditions precedent:
Section 6.2.1. Pro Acquisition Documents. The
Administrative Agent, the Documentation Agent and the Lenders
shall have received the proposed form of Pro Acquisition
Documents and any amendments thereto as in effect on the Closing
Date.
Section 6.2.2. Financial Information. The Administrative
Agent, the Documentation Agent and the Lenders shall have
received:
(i) a copy of Protective Alarms, Inc.'s most recent
audited Financial Statements and internally prepared Financial
Statements as of February 28, 1997;
(ii)a forecasted RMR Report reflecting the consummation of
the Pro Acquisition prepared as of April 30, 1997;
(iii)an estimated analysis of the purchase price for the
Pro Acquisition and the sources of funds to be used for the
payment thereof;
(iv)a summary analysis of the RMR being acquired in
connection with the Pro Acquisition; and
(v) such further financial and related information as the
Administrative Agent, the Documentation Agent and the Lenders may
request in connection with the Pro Acquisition,
all of the foregoing items set forth in subsections (i) through
(v) above to be satisfactory in form and substance to the
Administrative Agent, the Documentation Agent and the Lenders.
Section 6.2.3. Liabilities. Borrower shall not incur or
assume any Indebtedness, Contractual Obligations, Contingent
Liabilities or other liabilities in connection with the Pro
Acquisition except for Acquisition Loans necessary to pay all or
a portion of the purchase price relating thereto or as set forth
in the Pro Acquisition Documents.
Section 6.2.4. Collateral. Borrower shall have delivered
an updated Collateral Disclosure List reflecting the proposed
consummation of the Pro Acquisition. Borrower and each other
Credit Party shall take such actions, and execute and deliver
such documents, agreements and instruments as the Administrative
Agent and the Documentation Agent and their respective legal
counsel shall require to insure that the Administrative Agent
obtains a first priority perfected lien on, and the right to
access any of the properties and assets (other than the Capital
Stock of and the properties and assets of Protective Alarms of
Canada, Inc.) acquired by Borrower or such other Credit Party in
connection with the Pro Acquisition, including but not being
limited to uniform commercial code financing statements and
termination statements, all of the foregoing to be acceptable to
the Administrative Agent, the Documentation Agent, the Lenders
and their respective legal counsel.
Section 6.2.5. Structure and Subsidiaries. The proposed
Acquisition will be effected through the merger of Protective
Alarms, Inc. with and into Borrower concurrently with the
consummation of the Pro Acquisition. Interstate Central Systems,
Inc. shall, if required by the Lenders, become a party to this
Agreement by executing a joinder agreement in a form satisfactory
to the Administrative Agent and its legal counsel, shall
guarantee the Obligations pursuant to a Subsidiary Guarantee,
shall xxxxx x xxxx and security interest in all of its properties
and assets to the Administrative Agent for the ratable benefit of
the Lenders pursuant to a Subsidiary Security Agreement and
Borrower shall pledge all of the Capital Stock of such Subsidiary
to the Administrative Agent for the ratable benefit of the
Lenders, all in a manner satisfactory to the Administrative
Agent, the Documentation Agent, the Lenders and their respective
legal counsel.
Section 6.2.6. No Default. Borrower shall have certified
by a Responsible Officer that no Default or Event of Default
exists as of the date on which the Pro Acquisition shall be
consummated, or would result as a result of the making of any
Acquisition Loan in connection therewith, the consummation of the
Pro Acquisition or the application of the proceeds of such
Acquisition Loan.
Section 6.2.7. Certificate as to the Pro Acquisition.
Borrower shall deliver a certificate to the Administrative Agent,
the Documentation Agent and the Lenders stating that (i) the Pro
Acquisition shall have been consummated in accordance with the
terms and conditions of the Pro Acquisition Documents in effect
on the Closing Date without material amendment, modification or
revision and (ii) none of the parties to the Pro Acquisition
shall have failed to perform any material agreement, obligation
or covenant or make any representation or warranty required to be
performed or made by such party, as applicable, in connection
therewith.
Section 6.2.8. Legal Opinions. The Administrative Agent,
the Documentation Agent and the Lenders shall have received from
legal counsel for the Credit Parties a written opinion
satisfactory in form and substance to the Administrative Agent,
the Documentation Agent, the Lenders and their legal counsel as
to certain matters relating to the Pro Acquisition. The
Administrative Agent, the Documentation Agent and the Lenders
shall have received from legal counsel to Protective Alarms, Inc.
the written opinion to be delivered to SSH in connection with the
Pro Acquisition.
Section 6.3. Subsequent Acquisition Loans. In addition to the
satisfaction of the conditions set forth in Section 6.1. hereof,
the obligation of the Lenders to make any Acquisition Loan is
subject to the satisfaction of the following conditions
precedent:
Section 6.3.1. Consent of Lenders for Other
Acquisitions. The Administrative Agent, the Documentation Agent
and the Lenders shall have consented to the proposed Acquisition
in writing; provided, however, that the consent of the
Administrative Agent, the Documentation Agent and the Lenders
shall not be required if:
(i) the proposed Acquisition involves a purchase price
(including any Deferred Purchase Price Obligations) which does
not exceed (x) $2,500,000.00 or (y) $7,500,000.00 if
$5,000,000.00 or more of the purchase price paid in connection
with such Acquisition consists of the capital stock of Alarmguard
Holdings; and
(ii)the purchase price (including any Deferred Purchase
Price Obligations) for the proposed Acquisition, when aggregated
with the purchase price (including Deferred Purchase Price
Obligations) of all other Acquisitions completed by Borrower
(other than the Pro Acquisition) since the Closing Date, does not
exceed $15,000,000; and
(iii)the proposed Acquisition consists solely of, and is
structured as, the acquisition by Borrower of assets which
consist of, Customer Contracts (and, in each case, inventory and
vehicles not to exceed $100,000 of the purchase price thereof)
and will not result in the creation of a new Subsidiary of
Borrower; and
(iv)the proposed Acquisition will not result in an
expansion of Borrower's business outside of the geographic areas
set forth on Schedule 6.3. attached hereto.
Section 6.3.2. Liabilities. Neither Borrower nor any
Subsidiary of Borrower shall incur or assume any Indebtedness,
Contractual Obligations, Contingent Liabilities or other
liabilities in connection with the proposed Acquisition except
for Acquisition Loans necessary to pay all or a portion of the
purchase price relating thereto.
Section 6.3.3. Subordination of Deferred Purchase Price
Obligations. Any Deferred Purchase Price Obligations shall comply
with the terms of Section 8.1.(g) hereof.
Section 6.3.4. Collateral. Borrower and each other
Credit Party shall promptly take such actions, and execute and
deliver such documents, agreements and instruments as the
Administrative Agent and the Documentation Agent and their
respective legal counsel shall require to insure that the
Administrative Agent obtains a first priority perfected lien on
any of the properties and assets acquired by Borrower or such
other Credit Party in connection with the proposed Acquisition,
including but not being limited to uniform commercial code
financing statements and termination statements, all of the
foregoing to be acceptable to the Administrative Agent, the
Documentation Agent, the Lenders and their respective legal
counsel.
Section 6.3.5. Subsidiaries. If the proposed Acquisition
will be effected by Borrower through the establishment of a new
Subsidiary or the acquisition of the Capital Stock of a Person
with the effect of establishing such Person as a new Subsidiary
of Borrower, such Subsidiary shall become a party to this
Agreement by executing a joinder agreement in a form satisfactory
to the Administrative Agent and its legal counsel, shall
guarantee the Obligations pursuant to a Subsidiary Guarantee,
shall xxxxx x xxxx and security interest in all of its properties
and assets to the Administrative Agent for the ratable benefit of
the Lenders pursuant to a Subsidiary Security Agreement and/or
Subsidiary Pledge Agreement and Borrower shall pledge all of the
Capital Stock of such Subsidiary to the Administrative Agent for
the ratable benefit of the Lenders, all in a manner satisfactory
to the Administrative Agent, the Documentation Agent, the Lenders
and their respective legal counsel.
Section 6.3.6. No Default. Borrower shall have certified
by a Responsible Officer that no Default or Event of Default
exists as of the date of the requested Acquisition Loan, or would
result as a result of the making of such Acquisition Loan, the
consummation of the proposed Acquisition or the application of
the proceeds of such Acquisition Loan.
Section 6.3.7. Hostile Acquisitions. The proposed
Acquisition shall not be considered by the Administrative Agent,
the Documentation Agent and the Lenders, in their sole and
absolute discretion, to be a so-called "hostile acquisition."
Section 6.3.8. RMR From Permitted Acquisitions. Borrower
shall not include any RMR resulting from an Acquisition which
does not require the consent of the Lenders under Section 6.3.1.
hereof within the Borrowing Base unless and until Borrower has
delivered to the Administrative Agent a Notice of Borrowing with
respect to the Proposed Acquisition, accompanied by a true and
correct copy of the proposed draft purchase and sale agreement
relating to the Acquisition. Borrower shall not include any RMR
resulting from any Acquisition requiring the consent of the
Lenders unless and until Borrower has satisfied (i) any and all
terms and conditions imposed by the Lenders in connection with
the provision of such consent and (ii) all of the legal matters
associated with such Acquisition have been satisfied to the
satisfaction of the Administrative Agent and its legal counsel,
including, but not being limited to, the confirmation of the
filing of any and all documents, agreements and instruments
required under Section 6.3.4. hereof and the receipt of opinions
from legal counsel to Borrower as to certain matters relating to
the proposed Acquisition satisfactory in form and substance to
the Administrative Agent, the Lenders and their legal counsel.
Section 6.3.9. Certificate as to the Proposed Acquisition.
Within three (3) Business Days following the consummation of any
Permitted Acquisition, Borrower shall deliver a certificate to
the Administrative Agent, the Documentation Agent and the Lenders
stating that (i) the proposed Acquisition shall have been
consummated in accordance with (x) the terms and conditions of
the Acquisition Documents relating thereto and (y), in the case
of Acquisitions requiring the prior consent of the Lenders, the
terms and conditions approved by the Lenders without material
amendment, modification or revision, (ii) none of the parties to
the proposed Acquisition shall have failed to perform any
material agreement, obligation or covenant or make any
representation or warranty required to be performed or made by
such party, as applicable, in connection therewith and (iii) the
Administration Agent has a first priority Encumbrance in the
Collateral acquired. If Borrower fails to deliver such
certificate within such three (3) Business Day period, then any
RMR purchased in connection with such Acquisition shall be
immediately deleted from the Borrowing Base and Borrower shall,
if necessary comply with the requirements of Section 2.1.14.(a)
hereof.
SECTION 7. AFFIRMATIVE COVENANTS
Borrower and each of the other Credit Parties, as applicable,
covenant and agree that from the date hereof until the payment
and performance in full of the Obligations and the termination of
the Commitments:
Section 7.1. Financial Statements and Reporting Requirements.
Borrower shall furnish to the Administrative Agent, the
Documentation Agent and the Lenders:
Section 7.1.1. Annual Reports. As soon as available, but
in no event later than ninety (90) days after the end of each
Fiscal Year of Borrower, consolidated Financial Statements for
such Fiscal Year of (i) Alarmguard Holdings and its Subsidiaries
and (ii) Borrower and its Subsidiaries, in each case audited and
certified by Ernst & Young (or other independent certified public
accountants of nationally recognized standing) and consisting of
a consolidated balance sheet as of the end of such Fiscal Year
and the related statements of income and statements of cash flows
for such Fiscal Year, setting forth in each case in comparative
form the figures for the previous Fiscal Year, and reported on
without a Qualification. Further, concurrently with the delivery
of the foregoing, a report from Ernst & Young (or other
independent certified public accounts of nationally recognized
standing) setting forth the result of certain agreed upon
procedures to be performed by Ernst & Young (or such other
accountants) with respect to the Direct Marketing Program, such
procedures to be mutually agreed upon by Borrower and the
Required Lenders within the time period set forth on Schedule
11.1.(l) attached hereto.
Section 7.1.2. Monthly Reports. As soon as available,
but in no event later than thirty (30) days after the end of each
calendar month (forty-five (45) days if the end of such calendar
quarter coincides with the end of a Fiscal Quarter), an
unaudited, internally prepared consolidated and consolidating
balance sheet of Borrower, the Direct Marketing Program and the
consolidated Subsidiaries of Borrower as of the end of such
calendar month, and the related unaudited, internally prepared
consolidated and, if applicable, consolidating statements of
income and statements of cash flows for such calendar month and
the portion of the Fiscal Year through such calendar month, all
in form and substance satisfactory to the Administrative Agent,
the Documentation Agent and the Required Lenders and setting
forth in each case in comparative form the figures for the
previous Fiscal Year and the Forecasts, certified by a
Responsible Officer as being fairly stated in all material
respects when considered in relation to the consolidated
Financial Statements of Borrower and its consolidated
Subsidiaries but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount
and the absence of footnotes.
Section 7.1.3. GAAP Compliance. All Financial Statements
provided under this Section 7.1. shall fairly present the
financial conditions and results of business operations for the
periods indicated accordance with GAAP (but subject, in the case
of monthly or other interim Financial Statements, to the absence
of footnotes and year-end adjustments).
Section 7.2. Certificates and Other Information. Borrower
shall furnish to the Administrative Agent, the Documentation
Agent and the Lenders:
Section 7.2.1. Default Certificate. Concurrently with the
delivery of the Financial Statements referred to in Section
7.1.1. above, a certificate of Ernst & Young, LLP (or such other
independent certified public accountant) reporting on such
Financial Statements stating that in making the examination
necessary therefor no knowledge was obtained of the existence of
any Default or Event of Default as a result of non-compliance by
any Credit Party with any of the financial covenants set forth in
Section 9 hereof except as set forth in such certificate.
Section 7.2.2. Officer's Certificate. Concurrently with
the delivery of the Financial Statements referred to in Section
7.1.1. and 7.1.2. above, a certificate of a Responsible Officer
substantially in the form of Exhibit H attached hereto, (i)
stating that, to the best of such officer's knowledge, Borrower
and each other Credit Party, as applicable, during the period
covered by any such Financial Statements has observed or
performed all of its covenants, obligations and other
agreements, and satisfied the terms and conditions, contained in
this Agreement to be observed, performed or satisfied by Borrower
or such Credit Party, and that such Responsible Officer has
obtained no knowledge of the occurrence or continuance of any
Default or Event of Default except as set forth in such
certificate and (ii) showing in detail the breakdown and
calculation of Borrower's compliance with the financial covenants
set forth in Section 9 of this Agreement.
Section 7.2.3. RMR Report. Concurrently with the delivery
of the Financial Statements referred to in Section 7.1.2. above,
a report setting forth RMR for the month covered by such
Financial Statements and such other information in respect of
RMR, any component thereof and the calculation thereof as the
Administrative Agent or the Documentation Agent may require, and
being accompanied by an internally prepared report reconciling
said report and the information set forth thereon to such
Financial Statements, all of the foregoing being in substantially
the form of Exhibit I attached hereto, and being certified as
being true, correct, complete, and calculated in accordance with
the requirements of Section 1.142. hereof by a Responsible
Officer (the "RMR Report").
Section 7.2.4. Forecasts. As soon as available, but in no
event later than thirty (30) days after the end of each Fiscal
Year, forecasts as to the operating budget and cash flow of
Borrower and its Subsidiaries for the next succeeding Fiscal
Year, and including a forecasted consolidated balance sheet and
the related statement of income and statement of cash flow, and
accompanied by a certificate of a Responsible Officer to the
effect that such forecasts have been prepared in accordance with
the standards set forth in Section 4.8. hereof and that such
officer has no reason to believe that the same are false or
misleading in any material respect.
Section 7.2.5. Management and Other Reports. Within five
(5) days following the receipt thereof, copies of any and all
reports or similar documents submitted to any Credit Party by
Ernst & Young, including, without limitation, any formally issued
management letter commenting upon any Credit Party's internal
controls, submitted by such accountants to management in
connection with their annual audit report.
Section 7.2.6. Shareholder and SEC Reports. Within ten
(10) days after the same are sent, copies of all financial
statements and financial and other reports which any Credit Party
sends to its shareholders or which any such Credit Party makes or
files with any securities exchange or the United States
Securities and Exchange Commission (or any successor or analogous
Governmental Authority), and promptly upon the availability of
the same, copies of all other notices and proxy statements sent
or made available and all final registration and prospectuses, if
any, filed by any such Credit Party with any such securities
exchange or Governmental Authority.
Section 7.2.7. Insurance. During the month of
September in each calendar year, a report of a reputable
insurance broker with respect to the insurance maintained by
Borrower and its Subsidiaries in accordance with the provisions
of this Agreement and the Security Documents and such other
supplemental reports relating thereto as the Administrative Agent
and the Documentation Agent may reasonably request from time to
time.
Section 7.2.8. Acquisition Information. As soon as
available, but in no event later than thirty (30) days following
the consummation thereof, the following documents, agreements,
reports and other information with respect to each Acquisition:
(a) True and correct copies of any and all documents,
agreements and instruments executed and delivered in connection
with the Acquisition, together with all schedules and exhibits
thereto, certified as true, correct and complete by a Responsible
Officer of Borrower;
(b) An updated Collateral Disclosure List reflecting
the consummation of the Acquisition if the proposed Acquisition
requires the consent of the Lenders under Section 6.3.1. hereof;
(c) A pro forma consolidated balance sheet for
Borrower reflecting the consummation of the Acquisition if the
purchase price for the proposed Acquisition is greater than
$2,500,000.00; and
(d) Such other information as the Administrative
Agent, the Documentation Agent or the Lenders may reasonably
request relating to any such Acquisition.
Section 7.2.9. Other Information. Promptly following any
request therefor, such additional financial and other operating
information in respect of the Credit Parties which the
Administrative Agent, the Documentation Agent or any Lender may
reasonably request from time to time.
Section 7.3. Fire and Hazard Insurance. Each of Borrower and
its Subsidiaries shall keep its properties and assets insured
against fire and other hazards (so called "All Risk Coverage") in
amounts and with companies reasonably satisfactory to the
Administrative Agent and the Documentation Agent to the same
extent and covering such risks as is customary in such Credit
Party's line of business (but in no event shall such insurance
fail to cover such risks or be in amounts less than the insurance
coverages in effect on the Closing Date as set forth on Schedule
4.32. attached hereto) which policies shall name the
Administrative Agent as first loss payee for the ratable benefit
of the Lenders as its interest may appear. Borrower and each of
its Subsidiaries shall also maintain public liability coverage
against claims for personal injuries or death, errors and
omissions, business interruption, worker's compensation,
employment or similar insurance with coverage and in amounts
satisfactory to the Administrative Agent and the Documentation
Agent and as may be required by applicable law (but in no event
shall such insurance fail to cover such risks or be in amounts
less than the insurance coverages in effect on the Closing Date
as set forth on Schedule 4.32. attached hereto). Such all risk
policy shall name the Administrative Agent as an additional
insured and provide for a minimum of thirty (30) days' written
cancellation or material change notice to the Administrative
Agent. Borrower agrees to deliver full information as to all of
the aforesaid insurance policies to the Administrative Agent, the
Documentation Agent and the Lenders upon request therefor. In
the event of any loss or damage to the Collateral, Borrower shall
give immediate written notice to the Administrative Agent and to
its insurers of such loss or damage and shall promptly file proof
of loss with its insurers. Borrower also agrees to review the
foregoing insurance in connection with each Acquisition and
increase the amount of coverage thereunder as a result of any
such Acquisition if requested by the Required Lenders.
Section 7.4. Maintenance of Existence. Except as otherwise
permitted under Section 8 of this Agreement, each Credit Party
shall preserve and maintain its corporate existence and its
material rights, franchises and privileges, including its
corporate name, in the jurisdiction of its incorporation, and
qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is necessary or
desirable.
Section 7.5. Preservation of Collateral. Each Credit Party
shall preserve and maintain the Collateral in good repair,
working order and operating condition (ordinary wear and tear
excepted) and shall promptly notify the Administrative Agent of
any event causing material loss in the value of the Collateral.
Section 7.6. Taxes and Other Assessments. Each Credit Party
shall pay and discharge, and maintain adequate reserves for the
payment and discharge of, all taxes, assessments, government
charges or levies, or claims for labor, supplies, rent or other
obligations made against it or its properties and assets which,
if unpaid, might become an Encumbrance against such Credit Party
or its properties and assets, except liabilities which are being
contested in good faith in appropriate proceedings. Each Credit
Party shall file all Federal, state and local tax returns and
other reports that it is required by law to file and shall
promptly notify or cause notice to be given to the Administrative
Agent of any pending or future audits of its income tax returns
by the Internal Revenue Service or by any state in which any
such Credit Party conducts business operations and the results of
each such audit.
Section 7.7. Books and Records; Inspection Rights. Each
Credit Party will, and will cause each of its Subsidiaries to,
keep proper books of record and account, in which full, true and
complete entries are made of all dealings and transactions in all
material respects in relation to its business and activities.
Each Credit Party will, and will cause each of its Subsidiaries
to, permit any representatives designated by the Administrative
Agent or the Documentation Agent (upon prior notice to the
Administrative Agent),and as long as no Default or Event of
Default shall have occurred, upon reasonable prior notice to
Borrower, to visit and inspect its properties, to examine and
make abstracts of its books and records, and to discuss its
affairs, finances and condition with its officers and, subject to
a representatives of any such Credit Party being provided the
opportunity to be present, independent accountants, all at such
reasonable times and as often as reasonably requested. In
handling any information obtained in connection with any of the
foregoing, the Administrative Agent, the Documentation Agent, the
Lenders or their respective designees shall exercise the same
degree of care that it exercises with respect to its own
proprietary information of the same types, to maintain the
confidentiality of any non-public information thereby received or
received pursuant to Section 7.1. or Section 7.2. hereof except
that disclosure of such information may be made (i) to Lender
Affiliates in connection with their present or prospective
business relations with Borrower; (ii) to prospective transferees
or purchasers of an interest in the Obligations; (iii) as, in the
opinion of Lender's legal counsel, required by law, regulation,
rule or order, subpoena, judicial order or similar order; (iv)
as may be requested or required in connection with the
examination, audit or similar investigation of any Lender, (v) to
any legal counsel or other professional advisors of the
Administrative Agent, the Documentation Agent or any Lender, (vi)
in connection with the exercise of any rights and remedies under
this Agreement, the Notes or the Other Documents or any other
litigation or proceeding to which the Administrative Agent, the
Documentation Agent or any Lender is a party or (vii) to the
extent that any such information ceases to be confidential
through no fault of the Administrative Agent, the Documentation
Agent or the Lenders.
Section 7.8. Notices. Borrower shall promptly upon becoming
aware of the occurrence of a Default or Event of Default notify
the Administrative Agent and the Lenders thereof in writing.
Borrower shall also advise the Administrative Agent and the
Lenders as soon as practicable:
(a) of any action, suit, or proceeding by or before any
Government Authority or arbitration or alternate dispute
resolution proceeding, which could reasonably be expected to have
a Material Adverse Effect;
(b) of any change in Borrower's independent certified
public accountants from Ernst & Young; or
(c) of any other matter which could be reasonably expected
to have a Material Adverse Effect.
Each notice pursuant to this Section 7.8. shall be accompanied by
a statement of a Responsible Officer setting forth details
relating to the matters reported therein and the action which
Borrower or any other Credit Party proposes to take with respect
thereto.
Section 7.9. Maintenance of Permits. Except as otherwise
permitted under this Section 7, Borrower and its Subsidiaries
shall obtain and/or maintain in full force and effect all
material permits, authorizations, licenses, approvals, waivers
and consents which it presently possesses or which may become
necessary in the future to conduct its business operations.
Section 7.10. Use of Proceeds. Borrower will use the
proceeds of any Extension of Credit solely for the purposes set
forth in Section 2.1.11. hereof.
Section 7.11. INTENTIONALLY OMITTED.
Section 7.12. Additional Offices. Borrower shall give the
Administrative Agent written notice of each additional facility
or office of Borrower or its Subsidiaries to be opened after the
Closing Date. Except to the extent set forth in any such notice,
the chief executive office of Borrower and all records relating
to the Collateral shall be located at the locations set forth in
the Collateral Disclosure List.
Section 7.13. Access to Collateral. With respect to each
location at which the Collateral is now or hereafter located,
Borrower will obtain such lien waivers, estoppel certificates or
subordination agreements as the Administrative Agent, the
Documentation Agent or the Lenders may reasonably require to
insure the priority and perfection of their security interest in,
and their ability to take possession of, the Collateral situated
at such locations.
Section 7.14. Compliance with Laws. Each Credit Party shall
comply with all Requirements of Law applicable to it and its
Subsidiaries in all material respects except where non-compliance
is being contested in good faith and in accordance with
applicable procedures therefor.
Section 7.15. ERISA. The Credit Parties shall: (i) make
prompt payments of contributions required to meet the minimum
funding standards set forth under ERISA with respect to each and
every Plan and, promptly after the filing thereof, furnish to the
Administrative Agent copies of each annual report required to be
filed under ERISA in connection with each and every Plan for each
and every Plan year; (ii) notify the Administrative Agent
immediately of any fact, including, but not limited to, any
Reportable Event, arising in connection with any Plan which might
constitute grounds for the termination thereof by the PBGC or for
the appointment by the appropriate United States district court
of a trustee to administer the Plan; (iii) promptly after the
issuance thereof, furnish to the Administrative Agent a copy of
any notice of any Reportable Event given to the PBGC with respect
to any Plan; (iv) promptly after receipt thereof, furnish to the
Administrative Agent a copy of any notice received from the PBGC
relating to the intention of the PBGC to terminate any Plan or to
appoint a trustee to administer any Plan; and (v) furnish to the
Administrative Agent, promptly upon its request therefor, such
additional information concerning each and every Plan as may be
reasonably requested.
Section 7.16. Compliance with Environmental Laws.
(a) Borrower shall, from time to time, if requested by the
Administrative Agent or the Required Lenders, upon reasonable
cause, retain, at Borrower's expense, an independent professional
consultant to prepare a report relating to Hazardous Materials at
any or all of the properties and assets of Borrower or any of its
Subsidiaries and to conduct an investigation of any or all of the
properties and assets of Borrower or any of its Subsidiaries.
Borrower agrees also that the Administrative Agent (or its
Administrative Agents) may, from time to time retain, an
independent professional consultant to advise the Administrative
Agent as to any such report relating to Hazardous Materials and
Borrower shall be responsible for the reasonable fees and
expenses of such consultant. Borrower hereby grants to the
Administrative Agent, its Administrative Agents, employees,
consultants and contractors the right to enter into or onto
Borrower's or its Subsidiaries' business premises to view the
premises as is reasonably necessary to provide such advice,
provided, however, that the Administrative Agent shall provide
reasonable prior notice of such visit and not unreasonably
interfere with operations at such premises.
(b) Borrower shall promptly advise the Administrative
Agent and the Lenders in writing and in reasonable detail of any
of the following to the extent that the occurrence thereof could
reasonably be expected to have a Material Adverse Effect (i) any
Release of any Hazardous Material required to be reported to any
Governmental Authority under any applicable Environmental Laws;
(ii) any and all written communications with respect to claims or
suits under such laws or any Release of Hazardous Materials
required to be reported to any Governmental Authority; (iii) any
remedial action taken by Borrower, any of its Subsidiaries or any
other Person in response to (A) any Hazardous Materials on, under
or about the properties or assets of Borrower or any of its
Subsidiaries or (B) any claim or suit arising under Environmental
Laws; (iv) Borrower's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of Borrower's or
any of its Subsidiaries' business premises that could reasonably
be expected to cause such premises or any part thereof to be
classified as "border-zone property" or to be otherwise subject
to any restrictions on the ownership, occupancy, transferability
or use thereof under any Environmental Laws; and (v) any request
for information from any Governmental Authority that indicates
such authority, instrumentality or agency is investigating
whether Borrower or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Materials.
(c) Borrower shall, at its own expense, provide copies of
such documents or information as the Administrative Agent, the
Documentation Agent or any Lender may reasonably request in
relation to any matters disclosed pursuant to this Section 7.16.
(d) Borrower and its Subsidiaries shall comply with all
Environmental Laws in all material respects. Borrower and its
Subsidiaries shall promptly take any and all necessary remedial
action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or
about its business premises. If Borrower or any of its
Subsidiaries undertakes any remedial action with respect to any
Hazardous Materials on, under or about its business premises,
Borrower or such Subsidiary shall conduct and complete such
remedial action in compliance with the policies, orders and
directives of any Governmental Authority except when and only to
the extent that Borrower's or such Subsidiary's liability for
such presence, storage, use, disposal, transportation or
discharge of any Hazardous Material, or such policies, orders or
directives, are being contested in good faith by Borrower or such
Subsidiary.
Section 7.17. Interest Rate Protection. Borrower shall
obtain no later than one (1) year following the Closing Date and
thereafter maintain at all times an Interest Protection
Arrangement in respect of a minimum of thirty percent (30%) of
the Total Commitment Amount, the terms and conditions of said
Interest Protection Arrangement to be satisfactory to the
Required Lenders.
Section 7.18. Use of Proceeds for Direct Marketing Program.
The proceeds of any Revolving Loan requested with respect to the
Direct Marketing Program shall be used solely to finance Direct
Marketing Program Costs.
SECTION 8. NEGATIVE COVENANTS
Borrower and each other Credit Party, as applicable, covenants
and agrees that from the date hereof until the payment and
performance in full of the Obligations and the termination of the
Commitments:
Section 8.1. Limitation on Indebtedness. Neither any Credit
Party nor any of its Subsidiaries shall create, incur, assume,
guarantee or be or remain liable with respect to any Indebtedness
other than the following ("Permitted Indebtedness"):
(a) Indebtedness of Borrower or any of its Subsidiaries
incurred in respect of any Extension of Credit under this
Agreement;
(b) Indebtedness existing as of the date of this Agreement
and disclosed on Schedule 8.1. attached hereto or in the
Financial Statements referred to in Section 4.7. hereof and any
refinancings or refundings of such Indebtedness which will not
increase the principal amount of such Indebtedness being
refinanced or refunded or change the amortization thereof (other
than to extend the same) and otherwise be on terms and conditions
no less favorable to any Credit Party or the Lenders, as
determined by the Required Lenders, than the Indebtedness being
refinanced or refunded;
(c) Indebtedness consisting of Capital Leases and motor
vehicle and office equipment and furnishings installment sales
contracts permitted under Section 8.9. hereof;
(d) Subordinated Indebtedness due to SSH, Alarmguard
Holdings or any other Affiliate of Borrower covered by the
Affiliate Subordination Agreement or otherwise incurred with the
prior consent of the Required Lenders;
(e) Subordinated Indebtedness due to any Person other than
an Affiliate of Borrower and not incurred in connection with an
Acquisition existing on the date hereof or otherwise incurred
with the prior consent of the Required Lenders;
(f) Indebtedness consisting of an Interest Rate Protection
Arrangement having terms acceptable to the Required Lenders and
entered into solely in respect of all or a portion of the Loans
and other Extensions of Credit under this Agreement as required
by Section 7.17. hereof and as such Interest Rate Protection
Arrangement may be amended, modified or supplemented from time to
time with the prior consent of the Required Lenders;
(g) Indebtedness constituting Deferred Purchase Price
Obligations; provided, that (A) the aggregate unpaid principal
amount of all such Indebtedness shall not exceed TEN MILLION AND
NO/100 DOLLARS ($10,000,000.00) at any time and (B) such
Indebtedness shall be unsecured; and
(h) other Indebtedness of Borrower and its Subsidiaries in
an aggregate outstanding principal amount not exceeding TWO
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) in the
aggregate at any time.
Section 8.2. Contingent Liabilities. Neither any Credit
Party nor any of its Subsidiaries shall create, incur, assume,
guarantee or remain liable with respect to any Contingent
Obligations other than the following:
(a) The Guarantees;
(b) Contingent Obligations existing on the date of this
Agreement and disclosed on Schedule 8.2. attached hereto;
(c) Contingent Obligations resulting from the endorsement
of negotiable instruments for collection in the ordinary course
of business;
(d) Contingent Obligations with respect to surety, appeal
performance and return-of-money and other similar obligations
incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money) not exceeding TWO
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) in any
one (1) instance of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00) in the aggregate at any time;
(e) Contingent Obligations of normal trade debt relating
to the acquisition of goods and supplies; and
(f) Contingent Obligations which consist of normal and
customary buyer indemnification obligations incurred by SSH or
Alarmguard Holdings in connection with Permitted Acquisitions.
Section 8.3. Leases. No Credit Party shall during any Fiscal
Year enter into any agreement in respect of, or become liable
for, Lease Obligations except that any Credit Party or its
Subsidiaries may enter into any such agreement in respect of, or
become liable for, Lease Obligations which do not increase the
aggregate amount of Lease Obligations of such Credit Party and
its Subsidiaries in excess of TWO HUNDRED AND NO/100 DOLLARS
($200,000.00) in any Fiscal Year.
Section 8.4. Sale and Leaseback. Neither any Credit Party
nor any of its Subsidiaries shall enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any
property owned by it in order to lease such property or lease
other property that any such Credit Party or Subsidiary intends
to use for substantially the same purpose as the property being
sold or transferred.
Section 8.5. Encumbrances. Neither any Credit Party nor any
of its Subsidiaries shall create, incur, assume or suffer to
exist any Encumbrance upon any of its properties and assets, or
assign or otherwise convey any right to receive income, with or
without recourse, except the following ("Permitted
Encumbrances"):
(a) Encumbrances in favor of the Administrative Agent
under the Security Documents for the ratable benefit of the
Lenders;
(b) Encumbrances existing as of the date of this
Agreement, consented to by the Required Lenders and disclosed in
Schedule 4.24. attached hereto;
(c) liens for taxes, fees, assessments and other
governmental charges to the extent that payment of the same may
be postponed, is being contested and is otherwise not required to
be paid in accordance with the provisions of Section 7.6. hereof;
(d) landlords' and lessors' liens in respect of rent not
in default or liens in respect of pledges or deposits under
worker's compensation, unemployment insurance, social security
laws, or similar legislation (other than ERISA) or in connection
with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the
obligations secured by such liens are not then delinquent; liens
securing the performance of bids, tenders, contracts (other than
for the payment of money); and statutory obligations incidental
to the conduct of its business and that do not in the aggregate
materially detract from the value of its property or materially
impair the use thereof in the operation of its business;
(e) attachments, garnishments and judgment liens not
constituting an Event of Default;
(f) liens in favor of lessors under Capital Leases and
sellers under motor vehicles installment sales contracts
permitted under Section 8.9. hereof as long as the collateral
subject thereto is limited solely to the property that is the
subject of such Capital Leases or sales contracts and secures
only the amounts owing in respect of such leases and contracts;
(g) easements, rights of way, restrictions and other
similar charges or Encumbrances relating to real property and not
interfering in a material way with the ordinary conduct of its
business;
(h) Encumbrances on property or assets created in
connection with the refinancing or refunding of Indebtedness
referred to in Section 8.1.(b) hereof; provided, however, that
the amount of Indebtedness secured by any such Encumbrance shall
not be increased as a result of such refinancing or refunding and
no such Encumbrance shall extend to property and assets of any
such Credit Party or Subsidiary not encumbered prior to any such
refinancing or refunding; and
(i) Encumbrances securing Indebtedness for Capital
Expenditures to the extent such Indebtedness is permitted under
Section 8.1 hereof, provided, that (i) each such Encumbrance is
given solely to secure the purchase price of such property, does
not extend to any other property and is given at the time of
acquisition of the property, and (ii) the Indebtedness secured
thereby does not exceed the lesser of the cost of such property
or its fair market value at the time of acquisition.
Section 8.6. Sale or Lease of Assets; Merger; Consolidation.
Neither Borrower nor any of its Subsidiaries shall sell, lease or
otherwise dispose of properties or assets (valued at the lower of
cost or market); provided, however, that subject to the
requirements of Section 2.1.14. hereof, Borrower may effect (a)
the sale of any asset for cash, for aggregate consideration not
exceeding FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) in any
calendar year, the Net Proceeds of which are intended to be
invested in the acquisition of new RMR or applied to repay the
Loans in accordance with Section 2.1.14. hereof, (b) the sale of
any obsolete or worn out tangible asset for cash the Net Proceeds
of which are to be reinvested in replacement tangible assets;
provided, however, that if such Net Proceeds are not reinvested
in the acquisition of tangible assets replacing the obsolete or
worn out assets being sold by Borrower within three (3) months
following the date of sale, such Net Proceeds sale be
automatically applied to repay the Loans under Section 2.1.14.
hereof and (c) the leasing of commercial or residential systems
to customers, for aggregate consideration not exceeding THREE
HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) in any calendar
year, in connection with the provision of monitoring services
under Customer Contracts. Neither Borrower nor any Subsidiary of
Borrower may merge or consolidate into or with any other Person;
provided, however, that any Subsidiary of Borrower may merge or
consolidate into or with (i) Borrower if no Default or Event of
Default has occurred and is continuing or would result from such
merger and if Borrower is the surviving company, or (ii) any
other wholly-owned Subsidiary of Borrower.
Section 8.7. Additional Stock Issuance. Borrower shall not
permit any of its Subsidiaries to issue any additional shares of
its Capital Stock or any securities convertible thereto other
than to Borrower. Neither Borrower nor any of its Subsidiaries
shall sell, transfer or otherwise dispose of any of the Capital
Stock of a Subsidiary, except (i) to Borrower or any of its
wholly-owned Subsidiaries, or (ii) in connection with a
transaction permitted by Section 8.6.
Section 8.8. Dividends. Borrower shall not pay any Dividends
on any class of its Capital Stock or make any other distribution
or payment on account of or in redemption, retirement or purchase
of such Capital Stock. This Section 8.8 shall not apply to (i)
the issuance, delivery or distribution by Borrower of shares of
its Capital Stock pro rata to its existing shareholders, (ii) the
purchase or redemption by Borrower of its Capital Stock solely
with the proceeds of the issuance of additional shares of Capital
Stock or (iii) payments permitted under Section 8.14.(d) hereof.
Section 8.9. Capital Expenditures. Neither Borrower nor any
of its Subsidiaries shall make or commit to make any Capital
Expenditures (excluding Direct Marketing Capital Expenditures and
normal replacements and maintenance which are properly charged to
current operations and excluding replacements of obsolete or used
equipment involving expenditures in an amount in any Fiscal Year
not exceeding the lesser of (i) the Net Proceeds of the sale of
any obsolete or used equipment and (ii) ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00)) except for Capital Expenditures in
the ordinary course of business not exceeding, in the aggregate,
during any Fiscal Year, the following amounts:
Fiscal Year Ending Amount
December 31, 1997 $600,000.00 (calculated from
the Closing Date)
December 31, 1998 $1,200,000.00
December 31, 1999 and $1,500,000.00
thereafter
If during any Fiscal Year the amount of Capital Expenditures
permitted during such Fiscal Year (exclusive of any carryover
from a preceding Fiscal Year) is not so utilized, such unutilized
amount may be carried over and made in the immediately following
Fiscal Year (but not in any subsequent Fiscal Year).
Section 8.10. Investments. Neither Borrower nor any of its
Subsidiaries shall make or maintain any Investments other than
(i) existing Investments in Subsidiaries, (ii) Permitted
Acquisitions, (iii) extensions of trade credit in the ordinary
course of business in accordance with Borrower's historic
business practices; (iv) advances to employees in accordance with
Borrower's historic practices thereof in an amount not to exceed
$100,000 in the aggregate at any time or (iv) Qualified
Investments.
Section 8.11. ERISA. Neither Borrower nor any member of the
Controlled Group shall permit any Plan maintained by it to (i)
engage in any Prohibited Transaction; (ii) incur any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) whether
or not waived which could reasonably be expected to have a
Material Adverse Effect; or (iii) terminate any Plan in a manner
that could result in the imposition of an Encumbrance on the
property and assets of Borrower or any of its Subsidiaries
pursuant to Section 4068 of ERISA.
Section 8.12. Change in Terms and Prepayment of Subordinated
Indebtedness. Borrower shall not, except as provided in Section
8.1.(b) hereof:
(a) effect or permit any change in or amendment to (i) the
terms by which any Subordinated Indebtedness purports to be
subordinated to the payment and performance of the Obligations,
(ii) the terms relating to the repayment (other than extensions
of the time during which payment is due) of any Subordinated
Indebtedness or (iii) increase the rate of interest applicable
thereto; or
(b) directly or indirectly, make any payment of any
principal of or in redemption, retirement or repurchase of
Subordinated Indebtedness except payments required by the
instruments evidencing such Indebtedness.
Section 8.13. Change Name or Location. Neither Borrower nor
any of its Subsidiaries shall change its corporate name or
conduct its business under any name other than those set forth in
the Collateral Disclosure List or change its chief executive
office, place of business or location of the Collateral or
records relating to the Collateral from the locations set forth
in the Collateral Disclosure List unless it has given the
Administrative Agent at least thirty (30) days prior written
notice.
Section 8.14. Affiliate Transactions. Borrower will not, and
will not permit any of its Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates,
except (a) on terms and conditions not less favorable to Borrower
or such Subsidiary than could be obtained on an arm's length
basis from unrelated third parties, (b) transactions between or
among Borrower and/or its wholly owned Subsidiaries (other than
Protective Alarms of Canada, Inc.) not involving any other
Affiliate, (c) the transactions listed and described on Schedule
8.14. attached hereto and (d) following the end of each Fiscal
Quarter (i) for which Borrower shall have delivered the monthly
Financial Statements required by Section 7.1.2. hereof which
coincide with the end of such Fiscal Quarter and (ii) during or
in respect of which no Default or Event of Default shall have
occurred and be continuing (or result from the payment of any
amount permitted under this subsection (d), Borrower may pay to
SSH a management fee in an amount not to exceed the amount of
$500,000.00 in any Fiscal Year to reimburse SSH and Alarmguard
Holdings for amounts actually expended by SSH in respect of
normal and customary fees, expenses, franchise tax and similar
obligations and filing fees. Any management fee permitted to be
paid by Borrower under this subsection (d) shall be payable as of
the end of each Fiscal Quarter only following payment by Borrower
of any principal, interest, Fees and other amounts due under this
Agreement and for amounts actually paid during such Fiscal
Quarter (or previously due but not paid by Borrower) and the
submission to the Administrative Agent of a certificate setting
forth the fees, expenses or obligations for which reimbursement
is sought and demonstrating the making of any such payment shall
not result in the occurrence of a Default or Event of Default.
With respect to any Fiscal Quarter during or in respect of which
a Default or Event of Default shall have occurred, such
management fee shall accrue (without interest thereon) but may
not be paid; provided, however, that if (i) such Default or Event
of Default shall have been cured by Borrower, and for so long as
no other Default or Event of Default shall have occurred and be
continuing, any such accrued management fees may be paid by
Borrower to SSH or Alarmguard Holdings in quarterly installments
not to exceed $100,000.00, commencing with the end of the Fiscal
Quarter next following the calendar month in which such Event of
Default shall have been cured and (ii) if such Default or Event
of Default shall have been waived by the requisite percentage of
Lenders, such accrued and unpaid management fees may not be paid
by Borrower to SSH unless and until the Required Lenders shall
consent to such payment.
Section 8.15. Lines of Business. No Credit Party shall make
a material change in or discontinue its existing lines of
business nor enter into any new line or lines of business except
for the possible discontinuance of the Direct Marketing Program
or the Borrower's integrated systems, i.e., "Sonitrol", business.
Section 8.16. Fiscal Year. Borrower shall not change the end
of its Fiscal Year from December 31.
Section 8.17. Governing Documents
. Borrower shall not amend its Governing Documents in any
manner which could be reasonably expected to have a Material
Adverse Effect; provided, however, that in no event may any such
amendment establish or authorize a new series or other issue of
its Capital Stock or change the rights, powers or preferences of
an existing series or other issue of its Capital Stock.
Section 8.18. RMR Policies and Procedures. Borrower shall
not change, amend, revise or otherwise modify the practices,
policies and procedures followed by Borrower for the calculation
of RMR or any component thereof from those practices, policies
and procedures in effect on the Closing Date. In addition,
Borrower shall not change. amend, revise or otherwise modify
Borrower's policies and procedures for the cancellation of
Customer Contracts from those in effect on the Closing Date.
Section 8.19. Acquisitions. No Credit Party shall make an
Acquisition except for Permitted Acquisitions.
Section 8.20. Subsidiaries. Borrower shall not create any
Subsidiaries except for Subsidiaries created with the prior
consent of the Lenders in connection with Permitted Acquisitions.
SECTION 9. FINANCIAL COVENANTS.
Borrower covenants and agrees that from the date hereof, until
the payment and performance in full of the Obligations and the
termination of the Commitments:
Section 9.1. RMR. Alarmguard Holdings shall not permit the
ratio of Consolidated Total Debt of Alarmguard Holdings to RMR to
exceed 30 to 1 at any time.
Section 9.2. Adjusted RMR. Borrower shall not permit the
ratio of its Consolidated Senior Debt to RMR to exceed 22.5 to 1
at any time.
Section 9.3. Interest Coverage. Borrower shall not permit
the ratio of its Consolidated EBITDA to its Consolidated Total
Interest to be less than 2.0 to 1.0 as of the end of each
calendar month. Borrower's compliance with this covenant shall
be determined on a rolling basis by reference to the month then
ending and the eleven (11) immediately preceding calendar months.
Section 9.4. Debt Service Coverage. Borrower shall not
permit the ratio of its Consolidated EBITDA to its Consolidated
Total Debt Service to be less than 1.20 to 1.0 as of the end of
each calendar month. Borrower's compliance with this covenant
shall be determined on a rolling basis by reference to the month
then ending and the eleven (11) immediately preceding calendar
months.
Section 9.5. Leverage Ratio. Borrower shall not permit the
ratio of its Consolidated Senior Debt to its Consolidated EBITDA
to exceed the following amount as of the end of each of the
following calendar months:
LEVERAGE RATIO CALENDAR MONTH ENDING
6.0 to 1.0 April 30, 1997 through August
31, 1997
5.0 to 1.0 September 30, 1997 and
thereafter
For purposes of this covenant, Consolidated EBITDA shall be
calculated by multiplying Consolidated EBITDA for the calendar
month then ending and the two (2) immediately preceding calendar
months by 4.
Section 9.6. Adjusted Leverage Ratio. Borrower shall not
permit the ratio of its Consolidated Senior Debt to its
Consolidated EBITDA to exceed 4.50 to 1.0 as of the end of each
calendar month. For purposes of this covenant, (i) Consolidated
EBITDA shall be calculated by multiplying Consolidated EBITDA for
the calendar month then ending and the two (2) immediately
preceding calendar months by 4 and (ii) any Loans used in
connection with the Direct Marketing Program and Acquisition
Loans made to Borrower during the calendar month then ending and
the two (2) immediately preceding calendar months shall be
excluded from the calculation of Consolidated Senior Debt.
Section 9.7. Direct Marketing Program Creation Multiple.
Borrower shall not permit the multiple resulting from dividing
(x) the aggregate amount of Direct Marketing Program Costs by
(y) the amount of RMR created by such Direct Marketing Program
Costs to exceed 35. Borrower's compliance with this covenant
shall be determined as of the end of each calendar month and be
calculated in the manner set forth in Exhibit I attached hereto.
Section 9.8. Direct Marketing Program Costs. Borrower shall
not permit the aggregate amount of Direct Marketing Program
Costs to exceed the amount of TWELVE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($12,500,000.00). Borrower's
compliance with this covenant shall be calculated as of the end
of each calendar month on a cumulative basis dating from the end
of the calendar month immediately preceding the Closing Date.
SECTION 10. THE AGENTS
Section 10.1. Appointment, Powers and Immunities. Each
Lender and each subsequent holder of the Notes hereby irrevocably
appoints and authorizes Bank of Boston Connecticut to act as its
Administrative Agent and General Electric Capital Corporation to
act as its Documentation Agent under this Agreement and the Other
Documents with such powers as are specifically delegated to the
Administrative Agent and the Documentation Agent by the terms of
this Agreement and the Other Documents together with such other
powers as are reasonably incidental thereto. The Administrative
Agent and the Documentation Agent shall have no duties or
responsibilities except those expressly set forth in this
Agreement and the Other Documents and shall not be a trustee for
any Lender. The Administrative Agent and the Documentation Agent
shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this
Agreement or the Other Documents or in any certificate or other
document referred to or provided for in, or received by any of
them under, this Agreement or the Other Documents, or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the Other Documents or any other
document referred to or provided for herein or therein or for the
collectibility of the Loans or for any failure by the Borrower
or any other Person to perform any of its obligations under this
Agreement, the Notes or the Other Documents. The Administrative
Agent and the Documentation Agent may employ Administrative
Agents and attorneys-in-fact and shall not be answerable, except
as to money or securities received by it or its authorized
Administrative Agents, for the negligence or misconduct of any
such Administrative Agents or attorneys-in-fact selected by it
with reasonable care. Neither the Administrative Agent, the
Documentation Agent nor any of its directors, officers, employees
or Administrative Agents shall be liable or responsible for any
action taken or omitted to be taken by it or them under this
Agreement, or under the Other Documents or in connection herewith
or therewith, except for its or their own gross negligence or
willful misconduct.
Section 10.2. Reliance. The Administrative Agent and the
Documentation Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by the
Administrative Agent and the Documentation Agent to be genuine
and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected
by the Administrative Agent and the Documentation Agent. As to
any matters not expressly provided for by this Agreement or the
Other Documents, the Administrative Agent and the Documentation
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or the Other
Documents in accordance with instructions signed by the Required
Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders. The Administrative Agent and the
Documentation Agent shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the Other Documents. The
Administrative Agent and the Documentation Agent may utilize the
services of such Persons as the Administrative Agent or the
Documentation Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such
Persons shall be paid by Borrower.
Section 10.3. Payments.
(a) A payment by the Borrower to the Administrative Agent
and the Documentation Agent under this Agreement, the Notes or
any of the Other Documents for the account of any Lender shall
constitute a payment to such Lender. Except as otherwise
provided in this Agreement, the Administrative Agent and the
Documentation Agent, as applicable, agree promptly to distribute
to each Lender such Lender's pro rata share of payments received
by the Administrative Agent or the Documentation Agent for the
account of the Lenders.
(b) If in the opinion of the Administrative Agent or the
Documentation Agent, the distribution of any amount received by
the Administrative Agent or the Documentation Agent in such
capacity hereunder, under this Agreement, the Notes or any of the
Other Documents could reasonably be expected to involve the
Administrative Agent or the Documentation Agent in liability, the
Administrative Agent or the Documentation Agent may refrain from
making distribution until the Administrative Agent's or the
Documentation Agent's right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent or the Documentation
Agent is to be repaid, each Person to whom any such distribution
shall have been made shall either repay to the Administrative
Agent or the Documentation Agent, as applicable, its
proportionate share of the amount so adjudged to the repaid or
shall pay over the same in such manner and to such Persons as
shall be determined by such court.
Section 10.4. Holders of Notes. The Administrative Agent and
the Documentation Agent may deem and treat the payee of any Note
as the absolute owner for all purposes hereof until the
Administrative Agent or the Documentation Agent, as applicable,
shall have been furnished in writing by the Lender with a
different name by such payee or be a subsequent holder, assignee
or transferee.
Section 10.5. Events of Default. Neither the Administrative
Agent or the Documentation Agent shall be deemed to have
knowledge of the occurrence of an Event of Default or the
occurrence of an event that, with the giving of notice, the lapse
of time or both, would constitute an Event of Default (other than
the nonpayment of principal of or interest on the Loans) unless
the Administrative Agent and the Documentation Agent has received
notice from a Lender or the Borrower specifying such Event of
Default or Default and stating that such notice is a "Notice of
Default." In the event that the Administrative Agent or the
Documentation Agent receives such a "Notice of Default" or in the
event of any nonpayment of principal or interest on the Loans,
the Administrative Agent and the Documentation Agent, as
applicable, shall give notice thereof to the Lenders and the
Administrative Agent shall take such action with respect to such
Event of Default or Default as shall be directed by such Lenders
as required under Section 10.14. hereof.
Section 10.6. Rights as a Lender. With respect to its
Commitment
and the Loans made by it, each of the Administrative Agent and
the Documentation Agent in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as
the Administrative Agent or the Documentation Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent and the Documentation
Agent, as applicable, in its individual capacity. The
Administrative Agent, the Documentation Agent and their Lender
Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with any Credit Party,
as if it were not acting as the Administrative Agent or the
Documentation Agent, and the Administrative Agent and the
Documentation Agent may accept fees and other consideration from
any Credit Party Borrower for services in connection with this
Agreement or any of the Other Documents or otherwise without
having to account for the same to the Lenders.
Section 10.7. Indemnification. The Lenders shall indemnify
the Administrative Agent (to the extent not reimbursed by
Borrower under Section 13.4. hereof), ratably in accordance with
their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as the
Administrative Agent, as applicable, under this Agreement in any
way relating to or arising out of this Agreement or any of the
Other Documents or any other document contemplated hereby or
thereby or referred to herein or therein (including, without
limitation, the costs and expenses which Borrower is obligated
to pay under Section 13.4. hereof, but excluding, unless an Event
of Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms of this
Agreement, the Other Documents or of any such other documents;
provided, however, that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or
willful misconduct of the Person to be indemnified.
Section 10.8. Non-Reliance on the Administrative Agent, the
Documentation Agent and other Lenders. Each Lender agrees that
it has, independently and without reliance on the Administrative
Agent, the Documentation Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made
its own credit analysis of Borrower and each other Credit Party
and of its decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative
Agent, the Documentation Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or the Other
Documents. Neither the Administrative Agent or the Documentation
Agent shall be required to keep itself informed as to the
performance or observance by any Credit Party of this Agreement
or the Other Documents or any other document referred to or
provided for herein or therein or to inspect the properties or
books of any Credit Party. Except for notices, reports and other
documents and written information delivered by any Credit Party
to the Administrative Agent or the Documentation Agent hereunder
or under the Other Documents, neither the Administrative Agent or
the Documentation Agent shall have any duty or responsibility to
provide any Lender with any credit or other information
concerning the financial condition or business of any Credit
Party, which may come into the possession of the Administrative
Agent, the Documentation Agent or any of their Lender Affiliates.
Section 10.9. Failure to Act. Except for action expressly
required of the Administrative Agent or the Documentation Agent
hereunder or under the Other Documents, the Administrative Agent
and the Documentation Agent shall in all cases be fully justified
in failing or refusing to act hereunder or thereunder unless it
shall be indemnified to its satisfaction by the Lenders against
any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.
Section 10.10. Resignation. The Administrative Agent or the
Documentation Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Lenders and Borrower;
provided, however, that such resignation shall not be effective
in the case of the Administrative Agent until the appointment of
a successor Administrative Agent as provided for herein. Upon
any such resignation, the Lenders shall have the right, upon
consultation with Borrower, to appoint a successor Administrative
Agent or successor Documentation Agent. Unless a Default or
Event of Default shall have occurred and be continuing, such
successor Administrative Agent or successor Documentation Agent
shall be reasonably acceptable to Borrower. If no successor
Administrative Agent shall have been so appointed by the Lenders
and shall have accepted such appointment within thirty (30) days
after the Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent,
which shall be a Lender or financial institution having total
assets in excess of FIVE HUNDRED MILLION AND NO/100 DOLLARS
($500,000,000.00). In addition, the Administrative Agent or the
Documentation Agent may be removed by the Required Lenders at any
time on not less than thirty (30) days prior written notice to
the Administrative Agent, the Documentation Agent and the
Lenders, as applicable. Upon the acceptance of any appointment as
the Administrative Agent or the Documentation Agent hereunder by
a successor Administrative Agent or successor Documentation
Agent, such successor Administrative Agent or successor
Documentation Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the
retiring Administrative Agent or retiring Documentation Agent,
and the retiring Administrative Agent or retiring Documentation
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's or retiring
Documentation Agent's resignation, the provisions of this
Agreement and the Other Documents shall continue in effect for
its benefit in respect of any actions taken or omitted to be
taken by the Administrative Agent or the Documentation Agent
while it was acting as the Administrative Agent or the
Documentation Agent.
Section 10.11. Cooperation of Lenders. The Administrative
Agent and the Documentation Agent shall provide the other Lenders
with such information and documentation as such other Lender
shall reasonably request relating to the performance of its
duties hereunder, including all information relative to the
outstanding balance of principal, interest and other sums owed to
such other Lenders by Borrower; and cooperate with the other
Lenders with respect to any and all collections and/or
foreclosure procedures at any time commenced against Borrower or
otherwise in respect of the Collateral on behalf of the Lenders.
Section 10.12. Actions by Administrative Agent. In case one
or more Events of Default have occurred and shall be continuing,
and whether or not acceleration of the Obligations shall have
occurred, the Administrative Agent shall, if (a) so requested by
the Required Lenders and (b) the Required Lenders have provided
to the Administrative Agent such additional indemnities and
assurances against expenses and liabilities as the Administrative
Agent may reasonably request, proceed to enforce the provisions
of any of the Other Documents authorizing the sale or other
disposition all or any part of the Collateral and exercise all or
any such other legal and equitable and other rights or remedies
as it may have in respect of such Collateral. The Required
Lenders may direct the Administrative Agent in writing as to the
method and the extent of any such sale or other disposition and
exercise of such other rights or remedies as it may have in
respect of such Collateral,, the Lenders hereby agreeing to
indemnify and hold the Administrative Agent, harmless from all
liabilities incurred in respect of all actions taken or omitted
in accordance with such directions; provided, however, that the
Administrative Agent need not comply with any such direction to
the extent that the Administrative Agent reasonably believes the
Administrative Agent's compliance with such direction to be
unlawful or commercially unreasonable in any applicable
jurisdiction. In any event, the Lenders agree, as among
themselves, that the Administrative Agent shall not, without the
consent or approval of the Required Lenders and subject to
Section 10.14. hereof, (i) make any sale or disposition of the
Collateral, (ii) release or subordinate the security interest of
the Lenders in any of the Collateral or release or discharge any
Person which is a party to this Agreement or the Other Documents,
(iii) consent or agree to any amendment or waiver of any material
provision of this Agreement or the Other Documents, (iv) declare
any Default, (v) exercise any right or remedy with respect to the
acceleration or collection of the Obligations or (vi) take any
other action which requires the consent or approval of the
Lenders under this Agreement or the Other Documents.
Section 10.13. Security.
(a) The Administrative Agent acknowledges to the other
Lenders that it is acting in an agency capacity hereunder and
that the liens and security interests in the Collateral secures
the Obligations of Borrower owing to all of the Lenders. In the
event of any Default, the Administrative Agent will apply and/or
pay over to the Lenders any net proceeds derived from the
Collateral in the manner set forth in Section 10.3. hereof.
(b) Notwithstanding anything to the contrary set forth
herein, each of the parties hereto acknowledges and agrees that
the respective rights, benefits and privileges of the
Administrative Agent, the Documentation Agent and the Lenders
under each of the Other Documents and all other instruments,
documents and agreements providing the benefit of any collateral
security or guarantees for the prompt payment and performance of
the Obligations are for the ratable benefit of the Lenders, and
each of the rights, benefits and privileges thereunder shall be
exercised (or not exercised) solely by the Administrative Agent
but only at the direction and with the consent and approval of
such Lenders as are required by Section 10.14. hereof.
Section 10.14. Required Approval. Any action which requires
the consent or approval of the Lenders under this Agreement may
be taken upon the affirmative consent or approval of the Required
Lenders to be effective; provided, however, that the following
action shall require the unanimous affirmative approval of all of
the Lenders:
(a) any increase or decrease in the amount of the Total
Commitment Amount or the Swingline Commitment which can be issued
or created hereunder;
(b) any amendment of the Borrowing Base which would have
the effect of increasing credit availability thereunder;
(c) any extension of the Revolving Credit Termination Date
or the Maturity Date;
(d) any increase or decrease in any Lender's Commitment
Percentage, Commitment other than in connection with assignments
under Section 13 hereof or in any provision of this Agreement
providing for pro rata payments among the Lenders, the sharing of
payments of principal, interest, fees and any other amounts due
and payable under this Agreement and the sharing of any amounts
obtained by any Lender by set-off or otherwise;
(e) any decrease in the rate of interest applicable to the
Loans (other than as a result of fluctuations in the Base Rate)
or in any Fees (other than fees assessed for the account of the
Administrative Agent);
(f) the release of any Collateral (except for Collateral
having a de minimis value or as otherwise expressly provided in
this Agreement or in the Security Documents);
(g) any amendment of this Section 10.14. and Sections
10.15., 13., 14.11. or 14.12. of this Agreement and any provision
of this Agreement providing for the reimbursement of the Lenders
for any fees, costs or expenses or the indemnification of any
Lender;
(h) the release of any Credit Party under any Guarantee;
or
(i) the amendment or modification of the definition of the
term "Required Lenders"; or
(j) any amendment or waiver of the provisions of Section 5
or 6 of this Agreement, including, but not being limited to, the
provision of any consent of the Lenders in respect of Permitted
Acquisitions required under Section 6.3. hereof; or
(k) any deferral or postponement in the payment or accrual
of interest or Fees; or
(l) any amendment to the amortization schedule for the
Loans.
Section 10.15. Replacement of Non-Consenting Lenders. If,
in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as
contemplated by Section 10.14. hereof, the consent of the
Required Lenders is obtained but the consent of one or more other
Lenders whose consent is required is not obtained, then Borrower
shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either
clause (A) or (B) below, to either (A) replace each such non-
consenting Lender or Lenders with one or more Replacement Lenders
pursuant to Section 2.5.6. so long as the time of such
replacement, each Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Commitment and repay in full such
Lender's outstanding Loans; but only if, in each such case, such
Replacement Lender and such action is acceptable to the
Administrative Agent and the Documentation Agent provided that,
unless the Commitment which is terminated and Loans which are
repaid pursuant to the preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders
or the increase of the Commitments and/or outstanding Revolving
Loans of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Lenders (determined before
giving effect to the proposed action) shall specifically consent
thereto.
Section 10.16. Amendment. Borrower hereby agrees that the
foregoing provisions of this Section 10 constitute an agreement
among, and solely for the benefit of, the Lenders, the
Administrative Agent and the Documentation Agent, and the Lenders
acknowledge that no Credit Party is a party to or bound by such
foregoing provisions and that any and all of the provisions of
this Section 10 may be amended at any time by the Lenders, with
the consent of the Administrative Agent and the Documentation
Agent, without the consent or approval of, or notice to, any
Credit Party (other than the requirement of notice to the
Borrower of the resignation of the Administrative Agent or the
Documentation Agent).
Section 10.17. Questionnaire. In order to assist the
Administrative Agent and the Documentation Agent in the
administration and performance of their duties under this
Agreement, each of the Lenders hereby agrees to complete and
deliver to the Administrative Agent and the Documentation Agent a
questionnaire in substantially the form of Exhibit J attached
hereto (an "Administrative Questionnaire").
SECTION 11. DEFAULT
Section 11.1. The occurrence of any of the following events
shall constitute a default under this Agreement, the Notes and
the Other Documents (an "Event of Default"):
(a) Borrower shall fail to pay (i) any outstanding
principal amount of the Loans when due, (ii) any accrued and
unpaid interest on the Loans within three (3) days of the due
date therefor or (iii) any fees or expenses payable under this
Agreement, the Notes or the Other Documents within five (5) days
of the due date therefor; or
(b) Any Credit Party shall fail to perform any term,
covenant or agreement contained in Sections 7.1., 7.2., 7.3.,
7.4., 7.5., 7.6., 7.7., 7.8., 7.12., 7.15., 7.17., 7.18. and 8.1.
through 8.20. of this Agreement; provided, however, that no Event
of Default shall occur under this subsection (b) by virtue of
Borrower's failure to timely deliver any financial statement or
report required to be delivered under any of the foregoing
sections until the lapse of a ten (10) day grace period; or
(c) Any Credit Party shall fail to perform any other term,
covenant or agreement (other than in respect of terms, covenants
and agreements which are the subject of Sections 11.1.(a) or
11.1.(b) and Section 11.1.(k) hereof) contained in this Agreement
and such default shall continue for thirty (30) days after notice
thereof has been sent to Borrower by the Administrative Agent; or
(d) any default or event of default shall occur under (i)
the Other Documents or (ii) the Transaction Documents which could
have a Material Adverse Effect; or
(e) any representation or warranty of any Credit Party
made in this Agreement, the Notes, the Other Documents or the
Transaction Documents or in any certificate or report delivered
hereunder or thereunder shall prove to have been false in any
material respect upon the date when made or deemed to have been
made; or
(f) Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness
(other than the Loans) or in the payment of any Contingent
Obligation or any Lease Obligation, beyond any period of grace
(not to exceed thirty (30) days, if any, provided in the
instrument or agreement under which such Indebtedness, Contingent
Obligation or Lease Obligation was created, if the aggregate
amount of the Indebtedness, Contingent Obligations or Lease
Obligations in respect of which such default or defaults shall
have occurred is at least FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) or (ii) default in the observance or
performance of any other agreement or condition relating to any
such Indebtedness, Contingent Obligation or Lease Obligation or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to permit the holder or holders of such Indebtedness, Contingent
Obligation or Lease Obligations to cause, with the giving of
notice if required, the same to become due prior to its stated
maturity, to become payable or to terminate Borrower or any
Subsidiary's use thereof prior to the specified term therefor; or
(g) Any Credit Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or
of all or a substantial part of its properties and assets; (ii)
be generally not paying its debts as such debts become due; (iii)
make a general assignment for the benefit of its creditors; (iv)
commence a voluntary case under the Bankruptcy Code; (v) take any
action or commence any case or proceeding under any law relating
to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or any other law providing
for the relief of debtors; (vi) fail to contest in a timely or
appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code
or other law; (vii) take any action under the laws of its
jurisdiction of incorporation or organization similar to any of
the foregoing; or (viii) take any corporate action for the
purpose of effecting any of the foregoing; or
(h) a proceeding or case shall be commenced, without the
application or consent of any Credit Party in any court of
competent jurisdiction, seeking (i) the liquidation,
reorganization, dissolution, winding up, or composition or
readjustment of its debts; (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or of all or
any substantial part of its properties and assets; or (iii)
similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition
or adjustment of debts or any other law providing for the relief
of debtors, or an order for relief shall be entered in an
involuntary case under the Bankruptcy Code, against any such
Credit Party; or action under the laws of the jurisdiction of
incorporation or organization of any such Person similar to any
of the foregoing shall be taken with respect to any such Credit
Party; or
(i) an uninsured or self-insured judgment or order for the
payment of money shall be entered against any Credit Party by any
court, or a warrant of attachment or execution or similar process
shall be issued or levied against property of any Credit Party,
that in the aggregate exceeds TWO HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($250,000.00) in value and such judgment, order,
warrant or process shall continue undischarged or unstayed for
sixty (60) days; or
(j) Any Credit Party or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating in
excess of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00) that it shall have become liable to pay to the PBGC
or to a plan under Title IV of ERISA; intent to terminate a Plan
or Plans shall be filed under Title IV of ERISA by any Credit
Party, any member of the Controlled Group, any plan administrator
or any combination of the foregoing, other than in the case of a
"statutory termination" as defined in Title IV of ERISA, when the
amount of such liability to any Credit Party could reasonably be
expected to have a Material Adverse Effect; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans against any Credit Party and such proceedings
shall not have been dismissed within thirty (30) days thereafter
where the liability to any Credit Party could have a Material
Adverse Effect; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated where the liability to any
Credit Party could have a Material Adverse Effect; or
(k) Borrower shall fail to meet any financial covenant set
forth in Section 9. hereof; or
(l) The failure of any Credit Party to execute, deliver or
address, or cause to be executed, delivered and addressed, the
matters set forth on Schedule 11.1. attached hereto within the
time periods set forth on said Schedule 11.1. (the "Post Closing
Matters"); or
(m) Any Government Authority shall condemn, seize or
otherwise appropriate, or take custody or control of, or file a
lien, levy or assessment in respect of, all or any substantial
portion of the properties or assets of any Credit Party or any of
its Subsidiaries; or
(n) Any Governmental Authority or other Person shall
garnish, seize or levy or execute upon any monies of Borrower or
any of its Subsidiaries on deposit with or otherwise in the
custody of the Administrative Agent, the Documentation Agent, the
Lenders or any Lender Affiliate; or
(o) This Agreement, the Notes or the Other Documents shall
cease to be in full force and effect in any material respect, or
any Credit Party shall so assert, or, except to the extent
resulting from the negligent or willful acts or omissions of the
Administrative Agent, the Encumbrances created by the Security
Documents shall cease to be fully perfected enforceable first
priority security interest on the Collateral as provided herein
and therein; or
(p) Any Guarantee shall cease to be in full force and
effect, or any Guarantor shall so assert; or
(q) SSH shall engage in any activity other than
Permitted SSH Activities; or
(r) a Change in Control Event shall have occurred.
SECTION 12. REMEDIES
Section 12.1. Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter while such Event of Default
is continuing, immediately and automatically in the case of an
Event of Default specified in Section 11.1(g) or 11.1.(h), and in
all other cases, upon the Administrative Agent's declaration at
the request or consent of the Required Lenders:
(a) The Administrative Agent's and the Lenders' obligation
to make any Extension of Credit shall terminate;
(b) the unpaid principal amount of the Loans, together
with accrued interest thereon, and all other Obligations shall
become immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby
expressly waived;
(c) The Administrative Agent, the Documentation Agent, the
Lenders and any Lender Affiliate may exercise any right of setoff
granted to the Administrative Agent, the Documentation Agent, the
Lenders and any Lender Affiliate pursuant to Section 14.2.4.
hereof; and
(d) The Administrative Agent, the Documentation Agent and
the Lenders may exercise any and all other rights and remedies
they have under this Agreement, the Notes or the Other Documents
or at law or in equity, and proceed to protect and enforce their
rights by any action at law, in equity or other appropriate
proceeding.
Section 12.2. Default Interest Rate. Immediately upon the
occurrence of an Event of Default specified in Section 11.1.(a)
hereof, and in all other cases at option of the Required Lenders,
which may be exercised following the occurrence of any other
Event of Default, and whether or not the Lenders exercise any
other right or remedy, the Obligations (including, to the extent
permitted by law, overdue interest and fees) shall bear interest
thereafter until paid in full at the Default Rate.
SECTION 13. ASSIGNMENT
Section 13.1. Assignment.
(a) Each Lender may assign to one or more Persons all or a
portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment and the
same portion of the Loans at the time owing to it and the Notes
held by it); provided, however, that (i) except in the case of an
assignment to a Lender or a Lender Affiliate, the Administrative
Agent and, as long as no Default or Event of Default shall have
occurred or be continuing, the Borrower must give their prior
written consent to such assignment (which consent shall not be
unreasonably withheld or delayed); (ii) each such assignment
shall be of a constant, and not a varying, percentage of all the
assigning Lender's interests, rights and obligations under this
Agreement; (iii) the amount of the Commitment and the Loans of
the assigning Lender subject to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall
not be less than FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00)
or, if less, the entire remaining Commitment and all of the Loans
at the time owing to such assigning Lender; (iv) the parties to
each such assignment shall execute and deliver to the
Administrative Agent an assignment and acceptance in the form of
Exhibit K attached hereto (the "Assignment and Acceptance"),
together with the Note or Notes subject to such assignment and a
processing and recordation fee of TWO THOUSAND FIVE HUNDRED AND
NO/100 DOLLARS ($2,500.00); (v) the assignee shall be a Lender or
financial institution having total assets in excess of FIVE
HUNDRED MILLION AND NO/100 DOLLARS ($500,000,000.00)), (vi) the
assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire, (vii) as
long as no Default or Event of Default shall have occurred or be
continuing, such assignment shall not result in increased costs
to any Credit Party by virtue of such assignment and (viii), in
the case of Bank of Boston Connecticut, no such assignment shall
result, unless otherwise agreed by Borrower, in a reduction of
the amount of the Commitment of Bank of Boston Connecticut to
less than TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00).
Upon such execution, delivery, acceptance and recording pursuant
to Section 13.2. hereof from and after the effective date
specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under
this Agreement; and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's interests, rights
and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the
benefits of any indemnity, waiver, release or limitation of
liability contained herein, as well as to any Fees accrued for
its account and not yet paid).
(b) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment and the outstanding
balances of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth
in subsection (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement, the Notes, the Other Documents or any other
agreement, document or instrument furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent Financial
Statements delivered pursuant to Section 7.1. hereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently
and without reliance upon the Administrative Agent or the
Documentation Agent, such assigning Lender or any other Lender
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(vi) such assignee appoints and authorizes the Administrative
Agent and the Documentation Agent to take such action as
Administrative Agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent
and the Documentation Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.
Section 13.2. Maintenance of a Register. The Administrative
Agent shall maintain at one of its principal offices a copy of
each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and
the Commitment and the Commitment Percentage, and principal
amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the
Register shall be conclusive in the absence of manifest error and
Borrower, the Administrative Agent, the Documentation Agent and
the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available
for inspection by Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice. The
Administrative Agent shall also be authorized to amend, modify
and substitute Schedule 1.38. attached hereto from time to time
to properly reflect the Commitment Percentages of the Lenders
under this Agreement.
Section 13.3. Questionnaire. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning
Lender and an assignee together with the Note subject to such
assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
Section 13.1. above and, if required, the written consent of the
Administrative Agent and/or Borrower to such assignment, the
Administrative Agent shall (i) accept such Assignment and
Acceptance; (ii) record the information contained therein in the
Register; and (iii) give prompt notice thereof to the Lenders.
Within five (5) Business Days after receipt of notice, Borrower,
at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for the surrendered Note, a new
Note to the order of such assignee in a principal amount equal to
the applicable Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has
retained a Commitment, a new Note to the order of such assigning
Lender in a principal amount equal to the applicable Commitment
retained by it. Such new Note shall be in an aggregate principal
amount equal to the aggregate principal amount of such
surrendered Note; shall be dated the date of the surrendered
Notes which they replace and shall otherwise be in substantially
the form of Exhibit B attached hereto, as applicable. Canceled
Notes shall be returned to the Borrower.
Section 13.4. Sale of Participations. Each Lender may
without the consent of the Borrower or the Administrative Agent
sell participations to one or more Lenders, financial
institutions or other entities in all or a portion of its rights
and obligations under this Agreement (including all or a portion
of its Commitment and the same portion of the Loans owing to
Lender and the Note held by it); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations; (iii) the
participating Lenders, financial institutions or other entities
shall be entitled to the benefit of the cost protection
provisions contained in this Agreement only to the extent the
Lender or Lenders selling a participation to them are entitled
thereto; (iv) Borrower, the Administrative Agent, the
Documentation Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights, interests and obligations under this Agreement,
and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers
decreasing any Fees payable hereunder or the amount of principal
of or the rate at which interest is payable on the Loans,
extending any scheduled principal payment date or date fixed for
the payment of interest or other amounts on the Loans or changing
or extending the Commitments or Section 2.14. hereof) and (v)
such participation shall not result in increased costs to any
Credit Party by virtue of the sale of such participation.
Section 13.5. Disclosure of Information. Any Lender or
participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 13, disclose to the assignee or participant or
proposed assignee or participant any information relating to
Borrower furnished to such Lender by or on behalf of Borrower;
provided, however, that, prior to any such disclosure of
information designated by Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall
agree (subject to customary exceptions) to preserve the
confidentiality of such confidential information in accordance
with Section 7.7. hereof.
Section 13.6. Assignee or Participant Affiliated with
Borrower. If any assignee Lender is an Affiliate of Borrower,
then any such assignee Lender shall have no right to vote as a
Lender hereunder or under any of the Other Documents for purposes
of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to this Agreement or any of the
Other Documents or for purposes of making requests to the
Administrative Agent pursuant to Section 10 hereof, and the
determination of the Lenders shall for all purposes of this
Agreement and the Other Documents be made without regarding to
such assignee Lender's interest in any of the Loans. If any
Lender sells a participating interest in any of the Loans to a
participant, and such participant is Borrower or an Affiliate of
the Borrower, then such transferor Lender shall promptly notify
the Administrative Agent of the sale of such participation. A
transferor Lender shall have no right to vote as a Lender under
this Agreement or any of the Other Documents for purposes of
granting consents or waivers or for purposes of agreeing to
amendments or modifications to this Agreement or any of the Other
Documents or for purposes of making requests to the
Administrative Agent pursuant to Section 10 hereof to the extent
that such participation is beneficially owned by Borrower or any
Affiliate of Borrower, and the determination of the Lender shall
for all purposes of this Agreement and the Other Documents be
made without regard to the interest of such transferor Lender in
the Loans to the extent of such participation.
Section 13.7. Miscellaneous Assignment Provisions. If any
assignee Lender is not incorporated under the laws of the United
States of America or any state thereof, it shall, prior to the
date on which any interest or fees are payable under this
Agreement or any of the Other Documents for its account, deliver
to Borrower and the Administrative Agent certification as to its
exemption from deduction or withholding of any United States
federal income taxes. Anything contained in this Section 13 to
the contrary notwithstanding, any Lender may at any time pledge
all or any portion of its interest and rights under this
Agreement (including all or any portion of its Note) to any of
the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act. No such pledge or the enforcement
thereof shall release the pledgor Lender from its obligations
under this Agreement or any of the Other Documents.
Section 13.8. No Assignment or Delegation by Borrower.
Borrower shall not assign or delegate any of its rights or duties
under this Agreement.
SECTION 14. MISCELLANEOUS
Section 14.1. Cross Collateral. The security interests,
liens and other rights and interests in and relative to any
collateral now or hereafter granted to the Administrative Agent,
the Documentation Agent or the Lenders by Borrower by or in any
instrument or agreement, including but not limited to this
Agreement and the Other Documents, shall serve as security for
any and all obligations of Borrower or any other Credit Party to
the Administrative Agent, the Documentation Agent and the
Lenders, and, for the repayment thereof, the Administrative
Agent, the Documentation Agent or the Lenders may resort to any
security held by them in such order and manner as they may elect.
Section 14.2. Waivers.
Section 14.2.1. In General. Borrower waives presentment,
demand, notice, protest, notice of acceptance, notice of loans
made, credit extended, collateral received or delivered or other
action taken in reliance hereon and all other demands and notices
of any description. With respect both to the Obligations and the
Collateral, Borrower assents to any extension or postponement of
the time of payment or any other indulgence, to any substitution,
exchange or release of the Collateral, to the addition or release
of any party or Person primarily or secondarily liable therefor,
to the acceptance of partial payments thereon and the settlement,
compromising or adjusting of any thereof, all in such manner and
at such time or times as the Lenders may deem advisable in their
sole and absolute discretion. The Administrative Agent, the
Documentation Agent and the Lenders shall have no duty, other
than to act in a commercially reasonable manner, as to the
collection or protection of the Collateral or any income thereon,
as to the preservation of rights or remedies against prior
parties, or as to the preservation of any rights and remedies
pertaining thereto. The Administrative Agent, the Documentation
Agent and the Lenders may exercise their rights and remedies with
respect to the Collateral without resorting or regard to other
collateral or sources of reimbursement for liability. The
Administrative Agent, the Documentation Agent and the Lenders
shall not be deemed to have waived any of their rights and
remedies with respect to the Obligations or the Collateral unless
such waiver be in writing. No delay or omission on the part of
the Administrative Agent, the Documentation Agent or the Lenders
in exercising any right or remedy shall operate as a waiver of
such right or remedy or any other right or remedy. A waiver on
any one occasion shall not be construed as a bar to any
subsequent enforcement by the Administrative Agent, the
Documentation Agent or the Lenders. All rights and remedies of
the Administrative Agent, the Documentation Agent or the Lenders
with respect to the Obligations or the Collateral shall be
cumulative and may be exercised singularly or concurrently.
Section 14.2.2. PREJUDGMENT REMEDY. EACH CREDIT PARTY
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A
PART IS A COMMERCIAL TRANSACTION AND HEREBY WAIVES ITS RIGHT TO
NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES OR BY OTHER APPLICABLE LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY WHICH THE ADMINISTRATIVE AGENT, THE
DOCUMENTATION AGENT OR THE LENDERS MAY DESIRE TO USE.
Section 14.2.3. JURY TRIAL. EACH CREDIT PARTY HEREBY
WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART
AND/OR IN THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT, THE
DOCUMENTATION AGENT OR THE LENDERS OF ANY OF THEIR RIGHTS AND
REMEDIES HEREUNDER OR UNDER APPLICABLE LAW. EACH CREDIT PARTY
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND
ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH
ITS ATTORNEY.
Section 14.2.4. Lien and Setoff. Regardless of the
adequacy of any collateral or other means of obtaining repayment
of the Obligations, any deposits (general or special, time or
demand, the provisional or final), balances or other sums
credited by or due from the Administrative Agent, the
Documentation Agent, the Lenders, or any Lender Affiliate to any
Credit Party (other than payroll and payroll tax deposit
accounts) may, at any time and from time to time after the
occurrence of an Event of Default, without notice to any such
Credit Party or compliance with any other condition precedent now
or hereafter imposed by statute, rule of law, or otherwise (all
of which are hereby expressly waived) be setoff, appropriated,
and applied by the Administrative Agent, the Documentation Agent,
the Lenders or any Lender Affiliate against any and all
obligations of the Credit Parties to the Administrative Agent,
the Documentation Agent, the Lenders or any Lender Affiliate in
such manner as the Administrative Agent, the Documentation Agent,
the Lenders or any Lender Affiliate in their sole and absolute
discretion may determine, and each Credit Party hereby grants to
the Administrative Agent, the Documentation Agent and the Lenders
a continuing security interest in such deposits, balances or
other sums for the payment and performance of all such
obligations. The rights provided to the Administrative Agent,
the Documentation Agent, the Lenders and any Lender Affiliate in
this Section 14.2.4. shall be in addition to and shall not limit
any common law right of setoff available to the Administrative
Agent, the Documentation Agent, the Lenders or any Lender
Affiliate.
Section 14.2.5. Claims. Borrower does hereby (i) waive
any claim in tort, contract or otherwise which Borrower may have
against the Administrative Agent, the Documentation Agent, the
Lenders, any Lender Affiliate or any Lender Agents which may
arise out of the relationship between Borrower and the
Administrative Agent, the Documentation Agent, the Lenders or any
Lender Affiliate prior to the Closing Date; and (ii) absolutely
and unconditionally release and discharge the Administrative
Agent, the Documentation Agent, the Lenders and any Lender
Affiliate or Lender Agents from any and all claims, causes of
action, losses, damages or expenses which may arise out of any
relationship between it and the Administrative Agent, the
Documentation Agent, the Lenders or any Lender Affiliate which
Borrower may have as of the Closing Date. Borrower acknowledges
that it makes this waiver and release knowingly, voluntarily and
only after considering the ramifications of this waiver and
release with its attorney.
Section 14.3. Notices. All notices, requests, demands or
other communications required by this Agreement shall be made in
writing, and unless otherwN CONNECTICUT
By: ___________________________
Name:
Title:
THE DOCUMENTATION AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: ___________________________
Name:
Title:
