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AMENDMENT TO CREDIT AGREEMENT AND CERTAIN OTHER DOCUMENTS
THIS AMENDMENT is made as of June 3, 1996 by and among MASADA SECURITY,
INC., a Delaware corporation (the "Borrower"); CIBC INC. ("CIBC"), as a Lender;
SUNTRUST BANK, CENTRAL FLORIDA, N.A. ("SunTrust"), as Co-Agent and as a Lender;
and CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY as Administrative Agent
(the "Agent") for CIBC, SunTrust and other financial institutions who are or
who become Lenders under, and as defined in the Credit Agreement referred to
below.
RECITALS
A. The Borrower, CIBC, SunTrust and the Agent are parties to a Credit
Agreement dated as of March 28, 1996 (the "Credit Agreement"). Capitalized
terms used herein without definition have the meanings assigned to them in the
Credit Agreement.
B. The Borrower has requested the consent of the Agent and the Lenders to
the terms and conditions of the Secure America Acquisition pursuant to Section
7.07 of the Credit Agreement. The Borrower has informed the Agent and the
Lenders that it intends to accomplish the Secure America Acquisition as
follows: Secure America, Inc. has been merged into Alarms by HRD, Inc. with
Alarms by HRD, Inc. being the surviving corporation of such merger. The
Borrower proposes to acquire all of the issued and outstanding capital stock of
Alarms by HRD, Inc. pursuant to the terms of the Stock Purchase Agreement (as
originally executed, the "Stock Purchase Agreement") dated May 31, 1996 among
the Borrower and Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxxx (collectively, "Sellers"). Alarms by HRD, Inc. is
hereinafter referred to as the "Florida Subsidiary".
C. Subject to certain terms and conditions, the Agent and the Lenders are
willing to agree to such request, as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENTS TO LOAN AGREEMENT.
The Loan Agreement is hereby amended as follows:
A. DEFINITIONS.
1. The definitions of "Subsidiary" or "Subsidiaries" are amended to
provide that after the consummation of the Secure America Acquisition the only
Subsidiaries of the Borrower shall be the Austin Subsidiary and the Florida
Subsidiary.
2. A new definition is added to read as follows:
Florida Subsidiary: Alarms by HRD, Inc., a
wholly-owned subsidiary of the Borrower.
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B. REPRESENTATIONS AND WARRANTIES.
1. Section 4.01 is amended by adding thereto the following sentence at
the end thereof:
The Florida Subsidiary is a corporation duly
organized, validly existing and in good standing
under the laws of the State of Florida.
2. All references in Article IV to the Austin Subsidiary (other than the
representation relating to its existence as a Texas corporation) shall
hereafter refer to each of the Austin Subsidiary and the Florida Subsidiary.
C. RESTRICTED ESCROWS.
Section 2.01(c) is amended by changing the phrase at the end of the first
sentence thereof from "it being understood and agreed that all future escrows
shall be held by the Co-Agent and pledged to the Lenders as expressed in
Section 2.01(a)" to read "it being understood and agreed that all future
escrows shall be pledged to the Lenders as expressed in Section 2.01(a) and the
Borrower shall use its best efforts to ensure that all future escrows shall be
held by the Co-Agent".
II. AMENDMENT TO SECURITY AND PLEDGE AGREEMENT. Reference is made to the
Security and Pledge Agreement dated as of March 28, 1996 (the "Security
Agreement") between the Borrower and the Agent. Pursuant thereto, the Borrower
hereby agrees that all of the issued and outstanding stock of the Florida
Subsidiary shall be included within the definition of "Pledged Securities"
under the Security Agreement, and the Borrower hereby reaffirms and grants to
Agent on behalf of Lenders a security interest in, and pledge and collateral
assignment of, all of the shares of issued and outstanding capital stock of the
Florida Subsidiary and rights relating thereto and proceeds thereof. The
Borrower is delivering to the Agent contemporaneously with the execution
hereof, certificates representing all of the issued and outstanding capital
stock of the Florida Subsidiary, in suitable form for transfer by delivery,
accompanied by duly executed stock powers relating thereto in blank.
III. AMENDMENT TO AFFILIATE SUBORDINATION AGREEMENT. Reference is made to
the Affiliate Subordination Agreement dated as of March 28, 1996 among the
Borrower, Masada Security Holdings, Inc., Kristynik Security Systems, Inc. and
the Agent (the "Subordination Agreement"). Pursuant thereto, the Borrower
hereby agrees that the Florida Subsidiary shall be included within the
definition of "Creditor" under the Subordination Agreement, and the
Subordination Agreement shall hereafter be applicable to the Florida
Subsidiary, in addition to the other Creditors thereunder, as if the Florida
Subsidiary had been an original signatory thereto. The Florida Subsidiary
agrees, by executing a joinder hereto, to be liable as a Creditor and to assume
all obligations as a Creditor under said Subordination Agreement.
IV. NO FURTHER AMENDMENTS. Except as specifically amended hereby, the
Credit Agreement, the Security Agreement and the Subordination Agreement shall
remain unmodified and in full force and effect and are hereby ratified and
affirmed in all respects, and the indebtedness of the Borrower to the Agent and
the Lenders evidenced thereby and by the Notes is hereby reaffirmed in all
respects.
V. CERTAIN REPRESENTATIONS. As a material inducement to the Agent and the
Lenders to enter into this Amendment, the Borrower hereby represents and
warrants (which
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representations and warranties shall survive the delivery of this Amendment),
after giving effect to this Amendment, as follows:
A. The execution and delivery of this Amendment, the Conditional
Assignment dated on or about the date hereof from the Borrower in favor of the
Agent (the "Conditional Assignment"), the Guaranty of the Florida Subsidiary
dated on or about the date hereof in favor of the Agent and the Lenders (the
"Guaranty"), the Security Agreement dated on or about the date hereof executed
by the Florida Subsidiary in favor of the Agent (the "Security Agreement"), and
the Stock Purchase Agreement and any and all agreements executed by or on
behalf of the Borrower or any of its Subsidiaries relating to the Secure
America Acquisition (collectively, the "Purchase Documents") have been duly
authorized by all requisite corporate action on the part of the Borrower and
its Subsidiaries.
B. The representations and warranties contained in the Credit Agreement,
any of the Purchase Documents or any of the other Transaction Documents are
true and correct in all material respects on and as of the date of this
Amendment as though made at and as of such date. No material adverse change
has occurred in the assets, liabilities, financial condition, business or
prospects of the Borrower or either Subsidiary from that disclosed in the
financial statements most recently furnished to the Agent. No Event of Default
or condition or event which would, with notice or the lapse of time or both,
result in an Event of Default has occurred and is continuing.
C. Neither Borrower nor either Subsidiary is required to obtain any
consent, approval or authorization from, or to file any declaration or
statement with, any governmental instrumentality or other agency or any other
person or entity, in connection with or as a condition to the execution,
delivery or performance of any of the Purchase Documents or this Amendment or
any of the other documents executed in connection herewith.
D. Each of this Amendment, the Conditional Assignment, the Security
Agreement and the Guaranty constitutes the legal, valid and binding obligation
of the Borrower and its Subsidiaries who are parties thereto, enforceable
against each of them in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights and remedies of creditors generally or the application of principles
of equity, whether in any action at law or proceeding in equity, and subject to
the availability of the remedy of specific performance or of any other
equitable remedy or relief to enforce any right thereunder.
VI. CONDITIONS. The willingness of the Agent and the Lenders to agree to
the foregoing is subject to the conditions:
A. The Borrower and the Subsidiaries shall have executed and delivered to
the Agent (or shall have caused to be executed and delivered to the Agent by
the appropriate persons) the following:
(1) This Amendment;
(2) The Conditional Assignment, the Guaranty and the
Security Agreement, (and the Agent shall be satisfied that it
has been granted a perfected pledge and security interest in,
and first lien on, all assets of the Florida Subsidiary and
all issued and outstanding capital stock thereof);
(3) True, complete and correct copies of the Purchase
Documents;
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(4) True and complete copies of any required
stockholders' and directors' consents and/or resolutions,
authorizing the execution and delivery of this Amendment, the
Conditional Assignment, the Guaranty, the Security Agreement
and the Purchase Documents, certified by the Secretary of the
appropriate company;
(5) Opinions of counsel to Borrower and its
Subsidiaries and counsel to Sellers, satisfactory to Agent,
and such other supporting documents and certificates as the
Agent or its counsel may reasonably request.
B. The transactions contemplated by the Stock Purchase Agreement shall
have been consummated, with the exception of that portion of the purchase price
thereunder being paid with proceeds of an Advance, and the Agent shall have
received an opinion of counsel to the Borrower and the Subsidiaries to such
effect, dated as of the date hereof, in form and substance satisfactory to the
Agent.
C. All legal matters incident to the transactions hereby contemplated
shall be satisfactory to the Agent's counsel.
VII. MISCELLANEOUS.
A. As provided in the Credit Agreement, the Borrower agrees to reimburse
the Agent upon demand for all reasonable fees and disbursements of counsel to
the Agent incurred in connection with the preparation of this Amendment and the
documents relating hereto.
B. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York.
C. This Amendment may be executed by the parties hereto in several
counterparts hereof and by the different parties hereto on separate
counterparts hereof, all of which counterparts shall together constitute one
and the same agreement.
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IN WITNESS WHEREOF, the Agent, the Borrower, CIBC and SunTrust have caused
this Amendment to be duly executed as a sealed instrument by their duly
authorized representatives, all as of the day and year first above written.
MASADA SECURITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Vice President
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CANADIAN IMPERIAL BANK OF COMMERCE, NEW
YORK AGENCY
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx,
Authorized Signatory
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ Xxxxxxxxxxx Xxxxxxx
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Title: First V.P.
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CIBC INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx,
Managing Director
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JOINDER
The undersigned, Alarms by HRD, Inc. and Kristynik Security Systems, Inc.,
hereby join in the execution of the foregoing Amendment dated as of June 3,
1996 for the purpose of agreeing and consenting thereto and agreeing to be
bound by the provisions thereof applicable to each of them, all as of June 3,
1996. The undersigned, Kristynik Security Systems, Inc., hereby also confirms
its Guaranty and Security Agreement in favor of Agent, each dated as of March
28, 1996, and agrees that each of such agreements remain in full force and
effect, enforceable in accordance with the terms thereof.
ALARMS BY HRD, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Vice President
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KRISTYNIK SECURITY SYSTEMS, INC.
By: /s/ Xxxxx Xxxxx
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Title: President
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