AMENDMENT NO. 6 AND WAIVER
Exhibit 99.1
AMENDMENT NO. 6 AND WAIVER
AMENDMENT NO. 6 AND WAIVER (this “Amendment”), dated as of October 11, 2007, to that
certain Credit Agreement, dated as of March 4, 2005, (the “Credit Agreement”; capitalized
terms used herein and not defined herein shall have the meaning set forth in the Credit Agreement),
among RURAL/METRO OPERATING COMPANY, LLC, a Delaware limited liability company
(“Borrower”); the Lenders; CITIBANK, N.A., as LC Facility issuing bank (in such capacity,
the “LC Facility Issuing Bank”); CITICORP NORTH AMERICA, INC., as administrative agent (in
such capacity, the “Administrative Agent”) for the Lenders; JPMORGAN CHASE BANK, N.A.
(“JPMCB”), as syndication agent (in such capacity, the “Syndication Agent”); and
CITIGROUP GLOBAL MARKETS INC. (“CGMI”) and X.X. XXXXXX SECURITIES INC. (“JPMSI”),
as joint lead arrangers and joint lead bookrunners (in such capacities, the “Joint Lead
Arrangers”).
W I T N E S S E T H:
WHEREAS, Section 9.08 of the Credit Agreement permits the Credit Agreement to be amended and
waived from time to time;
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION ONE. Amendments.
(a) The following definitions shall be added in Section 1.01:
“Amendment No. 6 Effective Date” means the date upon which Amendment No. 6 and
Waiver to the Credit Agreement becomes effective pursuant to the terms thereof.
“Repricing Transaction” means the refinancing or repricing by Borrower of the
Loans and/or LC Facility Deposits under this Agreement (x) with any debt or “synthetic”
letter of credit arrangements (including, without limitation, any new or additional term
loans under this Agreement) or (y) in connection with any amendment to this Agreement, in
either case, (i) having or resulting in an effective interest rate or weighted average yield
(to be determined by the Administrative Agent, in consultation with Borrower, consistent
with generally accepted financial practice, after giving effect to margins, upfront or
similar fees or original issue discount shared with all lenders or holders thereof, but
excluding the effect of any arrangement, structuring, syndication or other fees payable in
connection therewith that are not shared with all lenders or holders thereof) as of the date
of such refinancing that is, or could be by the express terms of such Indebtedness (and not
by virtue of any fluctuation in any “base” rate), less than the Applicable Margin for, or
weighted average yield (to be determined by the Administrative Agent, in consultation with
Borrower, on the same basis) of the Loans and/or LC Facility Deposits, as applicable, as of
the date of such repricing and (ii) in the
case of a refinancing of the Loans and/or LC
Facility Deposits, the proceeds of which are used to repay, in whole or in part, principal of outstanding Loans and/or reduce the LC
Facility Deposits; provided that “Repricing Transaction” shall not include the
refinancing of all (and not less than all) of the Loans, Commitments and LC Facility
Deposits in connection with a transaction in which the Equity Interests of Parent are
converted into, or converted into the right to receive, or exchanged for, cash and/or Equity
Interests of another Person.
(b) The definition of “Applicable Margin” in Section 1.01 shall be replaced in its entirety
with the following:
“Applicable Margin” means (i) with respect to Revolving Loans (x) that are
Eurodollar Loans, 350 basis points and (y) that are ABR Loans, 000 xxxxx xxxxxx, (xx) with
respect to Term Loans (x) that are Eurodollar Loans, 350 basis points and (y) that are ABR
Loans, 250 basis points, and (iii) with respect to LC Facility Deposits, 350 basis points.
(c) The definition of Obligations shall be amended by adding the words “and premium, if any,”
after the words “unpaid principal of”.
(d) Section 2.05(c)(ii) of the Credit Agreement shall be amended by adding at the end of such
clause the following sentence:
“Notwithstanding the foregoing, all of the Net Proceeds of any Asset Sale permitted by
Section 6.05(x) shall applied in accordance with Section 2.05(e) within five (5) Business
Days of receipt thereof and shall not be permitted to be reinvested.”
(e) A new Section 2.05(c)(vi) shall be added as follows:
“If, prior to the first anniversary of the Amendment No. 6 Effective Date, (x) Borrower
effects any prepayment of Loans or reduction of LC Facility Deposits in connection with any
Repricing Transaction, or (y) effects any amendment of this Agreement resulting in a
Repricing Transaction, Borrower shall pay to the Administrative Agent, for the ratable
account of each Lender, (I) in the case of clause (x), a prepayment premium of 1% of the
amount of Loans and/or LC Facility Deposits being prepaid or returned, as applicable, and
(II) in the case of clause (y), a payment equal to 1% of the aggregate amount of Loans
and/or LC Facility Deposits outstanding immediately prior to such amendment. In addition,
if Borrower exercises its right under Section 9.08(e) prior to the first anniversary of the
Amendment No. 6 Effective Date, it shall pay to the Non-Consenting Lender a payment equal to
1% of the aggregate amount of Loans and LC Facility Deposits assigned by the Non-Consenting
Lender pursuant to Section 9.08(e).”
(f) Section 2.08(c)(i) shall be amended by adding the words “and premium, if any” after the
words “in the case of principal of”.
(g) Section 2.13(c) shall be amended by adding the words “, premium, if any, “ in each case
after the word “principal”.
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(h) Section 2.13(d) shall be amended by adding the words “, premium, if any,” after the word
“principal” in paragraph Fourth and adding the words “and premium, if any,” after the words
“principal amount” in the paragraph Fifth thereof.
(i) Section 6.05 of the Credit Agreement shall be amended by deleting “and” immediately
preceding clause (ix) and adding immediately following the end of clause (ix) the following:
“; and
(x) the sale of the real property located at 0000 X. Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx;
provided that (A) at the time of any such Asset Sale, no Default shall exist or
would result from such Asset Sale, (B) 100% of the consideration for such Asset Sale shall
be received in the form of cash, (C) the fair market value of such Property shall not exceed
$20,000,000 and (D) all of the Net Proceeds thereof are used to repay the Loans in
accordance with the last sentence of Section 2.05(c)(ii)”.
(j) The table in Section 6.14 of the Credit Agreement (Interest Expense Coverage Ratio) shall
be amended by replacing the ratios set forth therein with respect to the periods set forth below
with the following:
July 1, 2007 - December 31, 2007 |
1.50 to 1.0 | |||
January 1, 2008 - March 31, 2008 |
1.75 to 1.0 | |||
April 1, 2008 - June 30, 2008 |
1.90 to 1.0 |
(k) The table in Section 6.15 of the Credit Agreement (Total Leverage Ratio) shall be amended
by replacing the ratios set forth therein with respect to the periods set forth below with the
following the following:
July 1, 2007 - September 30, 2007 |
6.00 to 1.0 | |||
October 1, 2007 - December 31, 2007 |
6.00 to 1.0 | |||
January 1, 2008 - March 31, 2008 |
5.50 to 1.0 | |||
April 1, 2008 - June 30, 2008 |
5.00 to 1.0 |
(l) The table in Section 6.16 of the Credit Agreement (Fixed Charge Coverage Ratio) shall be
amended by replacing the ratios set forth therein with respect to the periods set forth below with
the following the following:
July 1, 2007 - June 30, 2008 |
1.00 to 1.0 |
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(k) Section 7.01(a)(i) shall be amended by adding “or premium” after the word “principal”.
SECTION TWO. Waiver and Acknowledgment.
(a) The Lenders hereby waive the Default arising out of (i) the Borrower’s failure to comply
with Section 5.01(a) and (c) of the Credit Agreement with respect to the fiscal year ended June 30,
2007 and any failure of Borrower to provide the related notification required by 5.01(g) with
respect thereto and (ii) any Default under Section 7.01(e) due to a default under any Material
Indebtedness arising solely out of the failure to timely file an annual report on Form 10-K, or
otherwise provide financial information or certification, for the fiscal year ended June 30, 2007;
provided that this clause (ii) shall not apply if the maturity of any Material Indebtedness
is accelerated or the prepayment, repurchase, redemption or defeasance thereof is required prior to
its scheduled maturity. However, if any Default described in clause (i) or (ii) exists on November
23, 2007, such Default shall constitute an Event of Default on November 23, 2007.
(b) The Lenders hereby acknowledge and agree that the adjustments to the financial statements
of the Borrower described in Parent’s Form 12b-25 dated September 14, 2007, which adjustments have
the impacts described to the Lenders who have agreed to receive material non-public information
with respect to the Borrower, do not result in a breach of Section 3.06 or 3.16 of the Credit
Agreement or any Default under Section 7.01(b) of the Credit Agreement.
SECTION THREE. Conditions to Effectiveness. This Amendment shall become effective as
of September 1, 2007 (the “Effective Date”) when (w) the Administrative Agent shall have
received counterparts of this Amendment executed by the Borrower and the Administrative Agent, (x)
the Administrative Agent shall have received executed consents to this Amendment from the Requisite
Lenders, (y) the Borrower shall have paid a consent fee to the Administrative Agent, for the
ratable account of the applicable Lenders, equal to 0.50% of the aggregate principal amount of Term
Loans plus 0.50% of the aggregate amount of Revolving Credit Commitments of the Lenders plus 0.50%
of the aggregate amount of the LC Facility Participations, who have delivered executed consents to
this Amendment not later than the later of (i) 5:00 pm (New York City time) on October 11, 2007 and
(ii) when the Administrative Agent has received executed consents to this Amendment from the
Requisite Lenders and (z) all fees payable by the Borrower to the Administrative Agent shall have
been paid.
SECTION FOUR. Representations and Warranties. The Loan Parties hereby represent and
warrant that, as of the date hereof and as of the Effective Date, the conditions set forth in
Section 4.02(b) and 4.02(c) of the Credit Agreement are satisfied, in each case after giving effect
to this Amendment.
SECTION FIVE. Reference to and Effect on the Credit Agreement. On and after the
Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof”
or words of like import referring the Credit Agreement, and each reference in each of the Loan
Documents to “the Credit Agreement,” “thereunder,” “thereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement, as
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amended by this Amendment. The Credit Agreement and each of the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or any Agent under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
SECTION SIX. Amendment of Section 2.05(c)(vi). Borrower hereby agrees, without the
consent of each Lender, that it will not seek to change or waive, or effect any change or waiver
of, the provisions of Section 2.05(c)(vi) or the definitions of terms used therein.
SECTION SEVEN. Costs and Expenses. Borrower agrees to pay all reasonable costs and
expenses of the Administrative Agent in connection with the preparation, execution and delivery of
this Amendment and the other instruments and documents to be delivered hereunder, if any.
SECTION EIGHT. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together shall constitute but
one and the same agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this
Amendment.
SECTION NINE. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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| RURAL/METRO OPERATING COMPANY, LLC, as Borrower |
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| By: | /s/ Xxxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxxx Xxxxxxx | |||
| Title: | Senior Vice President and Chief Financial Officer |
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| CITICORP NORTH AMERICA, INC., as Administrative Agent |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
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