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Exhibit 10(d)
FIRST AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT
FIRST AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT (this "Amendment"),
dated as of October 31, 1997, between Sensormatic Electronics Corporation, as
seller and as collection agent (the "Seller") and Sensor SPC Inc., as Purchaser
(the "Purchaser"), with the acknowledgment hereon and consent hereto by
NationsBank, N.A., as agent (the "Agent") and bank investor (the "Bank
Investor"), and Kitty Hawk Funding Corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Seller, the Purchaser, the Company, and the Agent have
entered into the Receivables Purchase Agreement, dated as of June 27, 1997 (the
"Agreement");
WHEREAS, the Seller and the Purchaser have requested that the Agreement
be amended in the manner set forth below; and
WHEREAS, the Company, the Agent and the Bank Investor have agreed,
subject to the terms and conditions of this Amendment, to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein, the parties hereby agree as follows:
1. Definitions. Terms used but not defined herein shall have the
meaning assigned thereto in the Agreement.
2. Amendments of Agreement. The Agreement shall be and is hereby
amended, as of the Effective Date (as hereinafter defined), as follows:
a. In Section 1.1 of the Agreement, the definition of
"Consolidated Net Worth" is amended to read in its entirety as
follows:
"Consolidated Net Worth" shall mean the consolidated
stockholders' equity of the Seller and its Subsidiaries determined in
accordance with generally accepted accounting principles; provided,
however, solely for purposes of calculating compliance with the
financial covenants set forth in Sections 5.2(i) and 5.2(u), the
Shareholder Litigation Charge, to the extent deducted as a charge in
arriving at Consolidated Net Worth, shall be added back to Consolidated
Net Worth.
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b. In Section 1.1 of the Agreement, there shall be added the
following new definitions in the appropriate alphabetical
positions:
"Class Action Settlement" shall mean the settlement or any proposed
settlement of the shareholders' class actions filed in 1995 and consolidated
before the Xxx. Xxxxxxx Xxxxx, United States District Judge for the United
States District Court for the Southern District of Florida.
"Consolidated Net Total Interest Expense" shall mean for any period,
the sum of (a) the aggregate amount of interest expense in respect of all
Indebtedness of the Seller and its Subsidiaries for such period on a
consolidated basis determined in accordance with generally accepted accounting
principles (including, without limitation, all non-cash interest payments, the
interest portion of any deferred payment obligations and the interest component
of Capitalized Lease Obligations), minus (b) the aggregate amount of all
interest income of the Seller and its Subsidiaries for such period on a
consolidated basis determined in accordance with generally accepted accounting
principles.
"CTA" shall mean each currency translation adjustment that results in a
change (whether positive or negative) in the foreign currency adjustment account
balance which the Seller records as an equity account on its balance sheet
pursuant to generally accepted accounting principles.
"EBIT" shall mean with respect to any period, an amount equal to
Consolidated Net Income for such period after eliminating therefrom, without
duplication, all non-cash extraordinary non-recurring items of gains or losses
for such period and after eliminating therefrom the Seller's September 30, 1997
restructuring charge and the Shareholder Litigation Charge for such period in
which such charges relate, plus, to the extent otherwise deducted in arriving at
such Consolidated Net Income and without duplication, (a) tax expense for such
period, plus Consolidated Net Total Interest Expense for such period, all as
determined in accordance with generally accepted accounting principles.
"Interest Coverage Ratio" shall mean as at any date of determination,
the ratio of (a) EBIT of the Seller and its Subsidiaries on a consolidated basis
for the Reference Period ending on such date, to (b) Consolidated Net Total
Interest Expense for such Reference Period.
"Reference Period" shall mean each period of four consecutive complete
fiscal quarters of the Seller (or such shorter period of three consecutive
fiscal quarters as has elapsed since June 30, 1997).
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
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"Shareholder Litigation Charge" shall mean the after-tax charge taken
by the Seller on or before December 31, 1997, associated with the Class Action
Settlement and in accordance with generally accepted accounting principles, less
any subsequent insurance recoveries (such recoveries to be net of taxes and
expenses incurred in connection with such recoveries) received by the Seller
(whether by assignment or otherwise) in connection therewith; provided, however,
for purposes of calculating compliance with the financial covenants set forth in
Sections 5.1(i) and (t), such charge shall not exceed, in the aggregate,
$40,000,000.
c. Section 4.1(g) of the Agreement is hereby amended to read in
its entirety as follows:
(g) No Actions; Suits. Except for (i) the proceedings
described in the Reports (other than those that are subject to the
Class Action Settlement), as to which the ultimate outcome, and whether
or not such matters could reasonably be expected to have a Material
Adverse Effect, are not now known (or, if the outcome is known, such
outcome could not reasonably be expected to have a Material Adverse
Effect), and any other actions, suits or proceedings based primarily on
allegations similar to those contained in such proceedings disclosed in
such Reports, and (ii) the proceedings that are subject to the Class
Action Settlement, the outcome of which the Seller believes will not
have a Material Adverse Effect, there are no actions, suits or
proceedings pending or, to the Seller's knowledge, threatened against
or affecting the Seller or any of its Subsidiaries, at law or in equity
or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
d. Section 5.2(o) of the Agreement is hereby amended to read in
its entirety as follows:
(o) Sale and Leaseback.
The Seller will not, and will not permit any of its
Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Seller or any Subsidiary of the Seller shall sell or
transfer any property owned by it in order then or thereafter to lease
such property or lease other property that the Seller or any Subsidiary
of the Seller intends to use for substantially the same purpose as the
property being sold or transferred; provided, however, so long as no
Termination Event (other than any Termination Event arising under
Section 7.1(g), so long as the Seller is not the Collection Agent,
7.1(h) in the event of a voluntary termination of the Receivables
Purchase Agreement, or Sections 7.1(k) through 7.1(r) of the Transfer
Agreement) has occurred and is continuing or would exist as a result of
such a transaction, the Seller and its Subsidiaries shall be permitted
to
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(i) enter into a sale and leaseback transaction pertaining to the
Seller's "Corporate Office Building" located at 000 Xxxxxx Xxxx, Xxxx
Xxxxx, Xxxxxxx 00000 and the Seller's "Boca Operating Center" located
at 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 so long as the
purchase price for each such sale and leaseback is no less than the
fair market value of the applicable asset at the time of the sale, and
(ii) other sale and leaseback transactions so long as (x) the aggregate
net cash proceeds received for all such sales or dispositions does not
exceed $5,000,000 during the term of this Agreement and (y) the
purchase price for each such sale and leaseback is no less than the
fair market value of the applicable asset at the time of the sale.
e. The first sentence of Section 5.2(t) of the Agreement is
hereby amended to read in its entirety as follows (the
remainder of said Section 5.1(t) to remain unamended):
The Seller will not permit at any time its Consolidated Net Worth to be
less than (i) $730,000,000 less the Shareholder Litigation Charge, plus
(a) if the date of determination is any day during the period from and
including January 1, 1997 through June 30, 1998 ("Period No. 1"), 100%
of the aggregate net CTA from the first day of Period No. 1 through
such date of determination; (b) if the date of determination is any day
during the period from and including July 1, 1998 through June 30, 1999
("Period No. 2"), the sum of the aggregate net CTA for Period No. 1
plus 75% of the aggregate net CTA from the first day of Period No. 2
through such date of determination; and (c) if the date of
determination is any day during the period commencing on or after July
1, 1999 ("Period No. 3"), the sum of 100% of the aggregate net CTA for
Period 1 plus seventy-five (75%) of the aggregate net CTA for Period 2
plus fifty percent (50%) of the aggregate net CTA during the period
from and including the first day of Period 3 through the date of
determination, plus (ii) the cumulative sum of 50% of Consolidated Net
Income (without reduction for any net losses) for each completed Fiscal
Year of the Seller ending after June 30, 1997 and on or before the date
120 days prior to the date of determination, plus (iii) for the then
current Fiscal Year of the Seller, the cumulative sum of 50% of
Consolidated Net Income (without reduction for any net losses) from the
beginning of such year to the last day of the Fiscal Quarter of the
Seller most recently ended as of the date 60 days prior to the date of
determination.
f. At the end of Section 5.2 of the Agreement there shall be
added a new Section 5.2(v) as follows:
(v) Interest Coverage Ratio. The Seller will not, as of the
end of any Reference Period ending on any date set forth in the table
below, permit the
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Interest Coverage Ratio for such Reference Period to be less than the
ratio set forth opposite such date in such table:
Reference Period Ending Date Ratio
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March 31, 1998 1.05:1.00
June 30, 1998, 1.70:1.00
September 30, 1998 and
December 31, 1998
March 31, 1999 - June 30, 1999 1.90:1.00
Each fiscal quarter-end date
after June 30, 1999 2.00:1.00
3. Representations and Warranties. In order to induce the
Company, the Agent and the Bank Investor to enter into this Amendment, the
Transferor and the Collection Agent each makes the following representations and
warranties (which representations and warranties shall survive the execution and
delivery of this Amendment) as of the date hereof, after giving effect to the
amendments set forth herein and in the amendment of even date herewith to the
Receivables Purchase Agreement (the "RPA Amendment"):
(a) The Transferor and the Collection Agent each restates and
repeats (as of the date hereof, other than any such representations or warranty
which is made as of a specific earlier date) each of the representations and
warranties made by it contained in the Agreement, as amended by this Amendment.
(b) There has occurred and is continuing no Termination Event and
there has occurred and is continuing no event which, with the giving of notice
or the passage of time or both, would constitute a Termination Event.
4. Effective Date. This Amendment shall become effective as of
October 31, 1997 (the "Effective Date") when the Agent shall have received a
counterpart of this Amendment, duly executed and delivered by each of the
parties hereto.
5. Counterparts. This Amendment may be executed by the parties
hereto individually or in any combination, in one or more counterparts, each of
which shall be an original and all of which shall constitute one and the same
amendment.
6. Agreement and all other Related Agreements in Full Force and
Effect; Confirmation of Collateral. Except as amended by this Amendment, all of
the provisions of the Agreement and all of the provisions of each of each
related agreement shall remain in full force and effect from and after the date
hereof. The Transferor and the Collection Agent each hereby
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confirms and agrees that all collateral security and all ownership interests
granted by the Transferor in connection with the Agreement remains in full force
and effect after giving effect to this Amendment.
7. References to Agreement. From and after the Effective Date,
(a) all references in the Agreement to "this Agreement", "hereof", "herein" or
similar terms, (b) all references to the Agreement in each agreement, instrument
and other document executed or delivered in connection with the Agreement and
(c) all references to the Agreement, shall mean and refer to the Agreement as
amended by this Amendment.
8. Certain Consents by the Company, the Agent and the Bank
Investor. Each of the Company, the Agent and the Bank Investor for purposes of
Section 5.1(p) of the Agreement, consents to the amendments to the Credit
Agreement and the Note Agreement (1996) on the terms and conditions heretofore
disclosed to the Agent.
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IN WITNESS WHEREOF, the Company, the Transferor, the Collection Agent,
the Agent and the Bank Investor have caused this Amendment to be duly executed
by their respective officers thereunder duly authorized as of the day and year
first above written.
KITTY HAWK FUNDING
CORPORATION, as Company
By
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Title:
SENSOR SPC INC., as Transferor
By
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Title:
SENSORMATIC ELECTRONICS
CORPORATION, as Collection Agent
By
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Title:
NATIONSBANK, N.A., as Agent and as a
Bank Investor
By
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Title:
