Exhibit 10.10


 


AMENDED AND RESTATED


FORBEARANCE AGREEMENT AND AMENDMENT TO CREDIT AGREEMENT


 


This
Amended and Restated Forbearance Agreement and Amendment to Credit Agreement
(this “Agreement”) is dated as of February 16th,
2008 by and among FCC, LLC and Siemens First Capital Commercial Finance, LLC
(collectively, “Lender”), and Alarm Funding, LLC (‘‘Borrower’’).
This Agreement is made in reference to that certain Forbearance Agreement dated
as of November 27, 2007 as it has been or may be amended (“Original Forbearance Agreement”) relating to certain
defaults that existed under that certain Credit Agreement dated as of May 25,
2007, between Lender and Borrower as amended by the Amendment to Credit
Agreement and Credit Documents dated as of August 17, 2007 as it has been
or may hereafter be amended (“Credit Agreement”),
and various related instruments, documents and agreements.


 


Whereas,
Lender and Borrower are parties to the Credit Agreement; and


 


Whereas,
certain Events of Default have occurred and are continuing under the Credit
Agreement as set forth on Schedule A hereto; and


 


Whereas,
Lender agreed to forbear from enforcing its rights that arise because of the
Existing Defaults for a limited period of time pursuant to the terms of the
Forbearance Agreement; and


 


Whereas,
certain Forbearance Defaults occurred under the Original Forbearance Agreement
and Lender agreed to waive such Forbearance Defaults pursuant to the Limited
Waiver of Defaults and Amendment to Forbearance Agreement dated as of January 21,
2008;


 


Whereas,
the Original Forbearance Agreement expired February 15, 2008 and certain
Forbearance Defaults occurred under the Original Forbearance Agreement as
amended, which defaults are set forth on Schedule B hereto (“Existing
Forbearance Defaults”);


 


Whereas,
Borrower has requested that Lender forbear from enforcing it arising as a
result of the Events of Default under the Credit Agreement and the Existing
Forbearance Defaults;


 


Whereas,
Lender is willing to forbear from enforcing its rights that arise because of
the Existing Defaults and the Existing Forbearance Defaults for a limited
period of time, provided that Borrower performs and meets the conditions of
this Agreement;


 


Whereas,
Lender and Borrower wish to amend certain provisions of the Credit Agreement
which shall take effect after the expiration of the forbearance period set
forth herein,


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:


 


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SECTION 1. DEFINITIONS


 


1.1                                 This Agreement
replaces and supersedes the Original Forbearance Agreement in its entirety.


 


1.2                                 All capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement.


 


1.3                                 The following
terms used in this Agreement shall have the meanings set forth below:


 


“Existing
Defaults” means the Events of Default listed on Schedule A hereto.


 


“Existing
Forbearance Defaults” means the Events of Default listed on Schedule B hereto.


 


“Forbearance
Default” means (a) the occurrence of any Event of Default other than the
Existing Defaults, (b) the failure of Borrower to comply with any term,
condition or covenant set forth in this Agreement in any material manner, (c) if
any representation made by Borrower under or in connection with this Agreement
shall prove to be materially false as of the date when made, (d) any
material adverse change in the financial condition, results or prospects of the
Collateral, the Borrower or SAID occurs after the date of this Agreement but
prior to April 30, 2008, provided, however, that for purposes hereof, a
material adverse change shall be deemed to have occurred after the date of this
Agreement to the extent Lender either receives information or otherwise becomes
aware of such material adverse change after the date of this Agreement) or (e) the
filing of any petition (voluntary or involuntary) under the insolvency or
bankruptcy laws of the United States or any state with respect to Borrower, its
affiliates, or any of its or their subsidiaries, provided, however, that
notwithstanding any terms of the Credit Agreement to the contrary, for the
purpose of determining whether a Forbearance Default has occurred under
subsections (a) and (b) hereof and
solely for such purpose, i) an Event of Default shall not be deemed
to have occurred under the Credit Agreement so long as the Attrition Rate for
the months of February and March 2008 does not exceed 15% in any such
month and ii) an Event of Default shall not be deemed to have occurred under
the Credit Agreement based on the Annual or Quarterly Attrition Rate results
achieved during February and March 2008.


 


“Termination
Date” means the earlier to occur of (a) 5:00 P.M. (New York time) on April 30,2008
or (b) the date upon which a Forbearance Default has occurred.


 


SECTION 2A. AGREEMENT TO FORBEAR


 


2A.1                       Provided that
no Forbearance Default occurs, Lender hereby agrees to refrain through the
Termination Date from exercising any of its rights under the Credit Agreement
or any of the Loan Documents that may exist by virtue of the Existing Defaults
or Existing Forbearance Defaults.


 


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2A.2                       Nothing in this
Agreement shall be construed as a waiver of or acquiescence of any Existing
Default or Existing Forbearance Defaults, which shall continue in existence
subject only to Lender’s agreement, as set forth herein, not to enforce its
remedies for a limited period of time. Except as expressly provided herein, the
execution and delivery of this Agreement shall not: (a) constitute an
extension, modification, or waiver of any aspect of the Credit Agreement or the
other Loan Documents; (b) extend the terms of the Credit Agreement or the
due date of any of the Obligations; (c) give rise to any obligation on the
part of Lender to extend, modify or waive any term or condition of the Credit
Agreement or the other Loan Documents; or (d) give rise to any defenses or
counterclaims to Lender’s right to compel payment of the Obligations or to
otherwise enforce its tights and remedies under the Credit Agreement and the
other Loan Documents. Except as expressly limited herein, Lender hereby
expressly reserves all of its rights and remedies under the Loan Documents and
under applicable law with respect to such Existing Default or Existing
Forbearance Default. From and after the Termination Date Lender shall be
entitled to enforce the Loan Documents according to the original terms of the
Loan Documents as herein amended by this Agreement.


 


SECTION 2B AMENDMENT TO CREDIT AGREEMENT


 


2B.1                         So long as no
Forbearance Default has occurred or is continuing, effective from and after the
Termination Date, the definition of Attrition Rate contained in Section 1.1
of the Credit Agreement shall be amended in its entirety and as so amended
shall read as follows:


 


“Attrition Rate shall mean the annualized ratio of (
a) to (b), expressed as a percentage, each without duplication:


 


(a)                                   (i)                                     all RMR that
cancelled or failed to renew, plus,


 


(ii)                                     all RMR with
balances more than 90 days past Due Date, minus the previous month’s RMR with
balances more than 90 days past Due Date, plus


 


(iii)                                       all RMR rate
decreases, divided by


 


(b)                                  all RMR with balances 90
days or less past Due Date at the beginning of the period.


 


Beginning
May 1, 2008, the “Annual Attrition Rate” shall be calculated as of the
last day of each calendar month for the 12 months then ended reported as a
monthly average; provided, however, that the Annual Attrition Rate calculated
as of the last day of each month in 2008 shall be for the number of months that
have transpired since February 1, 2008. For example, the Annual Attrition
Rate for April 2008 shall be calculated for the 3 months then ended; May 2008
shall be calculated for the 4 months then ended, and so on. The “Quarterly
Attrition Rate” shall be calculated as of the last day of each calendar month
for the 3 months then ended.”


 


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2B.2                         Provided no
Forbearance Default has occurred or is continuing, as of and from the
Termination Date, Lender will be deemed to have waived the Existing Defaults
and the Existing Forbearance Defaults.


 


2B.3                         Effective as of
the date of this Agreement and notwithstanding any provision of the Credit
Agreement to the contrary, the Revolving Credit Commitments shall be limited to
$75,000,000.


 


SECTION 3. REPRESENTATIONS AND WARRANTIES


 


In
consideration of Lender’s promise to forbear herein contained, Borrower hereby
represents and warrants to Lender as of the date hereof:


 


3.1                                 In connection
with the execution of this Agreement, and as of the date of the execution of
this Agreement, Borrower has made full disclosures to Lender as is required
under the Credit Agreement.


 


3.2                                 The execution,
delivery and performance of this Agreement by Borrower is within its corporate
power and has been duly authorized by all necessary corporate action on its
part, and this Agreement constitutes a valid and binding Agreement.


 


3.3                                 All Loan
Documents, including without limitation the Credit Agreement, constitute valid
and legally binding obligations of Borrower and are enforceable against
Borrower and the Collateral in accordance with the terms thereof.


 


SECTION 4. COVENANTS


 


In
consideration of Lender’s promise to forbear herein contained, Borrower hereby
covenants and agrees with Lender:


 


4.1                                 Borrower shall,
upon reasonable notice from Lender, make its officers and other management
personnel available for meetings with Lender and Lender’s consultants,
including, without limitation, any auditors, consultants, appraisers,
investment bankers or other professionals designated by Lender to discuss the
financial condition, the Collateral, and the operations of Borrower. Borrower
acknowledges and agrees that all fees, costs and expenses incurred by Lender in
connection with the engagement of such auditors, consultants, appraisers,
investment bankers and other professionals shall be part of the Obligations,
payable within five (5) business days of Lender’s demand upon Borrower and
secured by the Collateral.


 


4.2                                 Borrower will
cooperate fully, and cause its officers, accountants, and consultants, to
cooperate fully, in furnishing information as and when reasonably requested by
Lender regarding the Collateral and Borrower’s affairs, finances, financial
condition and business operations. Borrower authorizes Lender to meet and/or
have discussions with any of Borrower’s officers, managers, accountants,
investment bankers, and employees from time to time to discuss any reasonable matters
regarding the Collateral and Borrower’s affairs, finances, financial condition
or business operations, and direct and authorize all such persons and entities
to fully


 


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disclose
to Lender all information reasonably requested by Lender regarding the
Collateral and Borrower’s affairs, finances, financial conditions or business
operations. Borrower waives and releases any such consultant, investment
banker, or accountant from the operation and provisions of any confidentiality
agreement with Borrower to which such entity is a party so that such entity is
not prohibited from providing information to Lender. Borrower shall promptly,
when and as requested by Lender, provide Lender with access to Borrower’s original
books and records and permit Lender to make copies thereof.


 


4.3                                 Borrower shall
throughout the term of this Agreement continue to make a full and complete
disclosure of all material aspects of its financial condition and business
operations.


 


4.4                                 Borrower shall
continue to perform and observe all terms and conditions contained in the Loan
Documents that are not specifically addressed in this Agreement.


 


4.5                                 Contemporaneously
with its execution and delivery of this Agreement, Borrower shall pay to Lender
a fee of Ten Thousand Dollars and 00/100 ($10,000). Borrower shall also pay to
Lender all of its of pocket fees and expenses in connection with this
Agreement.


 


4.6                                 Subject to the
conditions set forth herein and in the Credit Agreement, Lender may, in its
sole discretion make additional Revolving Credit Loans advances not to exceed
i) $1,250,000, plus ii) any payments permitted under Section 4.12 hereof,
during each 30 calendar day cycle until the Termination Date.


 


4.7                                 Borrower must
furnish to Lender no later than April 15, 2008, an audit of Borrower’s
annual financial statements for Borrower’s fiscal year ended June 30,
2007, certified by an independent certified public accountant satisfactory to
Lender. If such audit is not delivered to Lender on or prior to the required
delivery date, Borrower shall pay to Lender a reporting delinquency fee of
$20,000, provided, however, that so long as Borrower is paying any applicable
fee due under this section 4.7, no Forbearance Default shall be deemed to have occurred
prior to April 30, 2008 due to Borrower’s failure to comply with the
provisions of this section.


 


4.8                                 No later than March 30,
2008 Borrower must provide to Lender a written action plan detailing how it
would transfer servicing of its Contracts to a new servicer (other than SAI)
and such plan must be confirmed in writing by such new servicer.


 


4.9                                 No later than April 15,
2008, Lender must have received from SAI all information required to prepare
the financial reports required by the Credit Agreement. If such audit is not
delivered to Lender on or prior to the required delivery date, Borrower shall
pay to Lender a reporting delinquency fee of $20,000, provided, however, that
so long as Borrower is paying any applicable fee due under this section 4.9, no
Forbearance Default shall be deemed to have occurred prior to April 30,
2008 due to Borrower’s failure to comply with the provisions of this section.


 


4.10                           Borrower shall
continue to retain GSC until such time as the action plan described in 4.8
hereof is completed.


 


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4.11                           Confirmation in
writing by SAI by March 15, 2008 of its current status in complying with
the requirements relating to AMPS.


 


4.12                           Effective for
all interest payments made on the Subordinated Indebtedness at’ Subordinated
Note on or after February 16, 2008, Borrower shall obtain Lender’s prior
written consent at the time of each such proposed payment of interest.
Notwithstanding Lender’s consent to the payment of such interest, Borrower may
only make payments on the Subordinated Indebtedness or Subordinated Note at a
rate not to exceed 8%. Lender shall not consent to any payment of interest if a
Forbearance Default has occurred (including the occurrence of any Event of
Default other than the Existing Defaults identified on Schedule A hereto) or
there is any material adverse change in Borrower’s or SAI’s financial
condition, results or prospects.


 


4.13                           From February 16,
2008 through the Termination Date, the Applicable Margin shall be equal to four
percent (4%) (reflecting the increase in the Applicable Margin as provided for
in the Credit Agreement based upon Attrition Rates) and the Default Rate of
Interest shall apply resulting in an effective Interest Rate of the Euro Rate
plus seven percent (7%). The Applicable Margin shall be recomputed from and
after the Termination Date in accordance with the terms of the Credit
Agreement. So long as no Forbearance Default has occurred or is continuing,
from and after the Termination Date, the Default Rate of Interest shall not
apply unless otherwise required by the terms of the Credit Agreement.


 


SECTION 5. MISCELLANEOUS


 


5.1                                 Headings. Section headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.


 


5.2                                 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES.


 


5.3                                 Counterparts. This
Agreement may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.


 


5.4                                 Continued
Effectiveness. Except as expressly set forth in this Agreement, the terms,
provisions and conditions of the Credit Agreement and each of the Loan
Documents are unchanged, and said agreements, as amended, shall remain in full
force and effect and are hereby confirmed and ratified.


 


5.5                                 No Novation.
This Agreement shall not be deemed or construed to be a satisfaction,
reinstatement, novation, or release of the Credit Agreement or of any of the
other Loan Documents, or, except as expressly provided herein, a waiver by
Lender of any of the


 


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rights
of Lender under the Credit Agreement or any of the other Loan Documents, or any
of them, or at law or in equity.


 


5.6                                 Reaffirmation.
The Borrower hereby reaffirms each and every covenant, condition, obligation
and provision set forth in the Loan Documents, as modified hereby.


 


5.7                                 Construction.
Borrower acknowledge that they have been represented by their own legal counsel
in connection with the Loan Documents and this Agreement, that they have
exercised independent judgment with respect to the Loan Documents and this
Agreement, and that they have not relied on the Lender or on Lender’s counsel
for any advice with respect to the Loan Documents or this Agreement.


 


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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth above, by the respective duly authorized officers.


 


 


	
  FCC, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Lee Elmore

  	
   

  
	
   

  	
  Title:
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIEMENS FIRST CAPITAL COMMERCIAL FINANCE, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  P. Shah

  	
   

  
	
   

  	
  Title:
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Anthony Casciano

  	
   

  
	
   

  	
  Title:
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  ALARM FUNDING, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Eric Kamisher

  	
   

  
	
   

  	
  Title:
  Secretary

  	
   

  



 


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SCHEDULE A TO FORBEARANCE AGREEMENT


RE: ALARM FUNDING, LLC


 


LIST OF EXISTING DEFAULTS


 


1.                                       Breach of
section 7.2.20 of the Credit Agreement as a result of Borrower’s non-compliance
with the Annual Attrition Rate and Quarterly Attrition Rate covenants set forth
therein through the period ending January 31, 2008.


 


2.                                       Breach of
section 8.1.4 of the Credit Agreement as a result of SAI’s default in the observance
or performance of any covenant, condition or provision of any Credit Document.


 


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SCHEDULE A TO FORBEARANCE
AGREEMENT


RE: ALARM FUNDING, LLC


 


LIST OF EXISTING FORBEARANCE DEFAULTS


 


1.                                       Breach by Borrower
of the following provisions of the Forbearance Agreement:


 


5.1                                 Borrower shall
continue to perform and observe all terms and conditions contained in the Loan
Documents and in the Forbearance Agreement that are not specifically mentioned
in this Agreement.


 


5.6                                 No later than February 15,
2008, Borrower must provide to Lender a written action plan detailing how it
would transfer to a new servicer (other than SAI).


 


5.8                                 No later than January 31,
2008, Lender must have received from SAI all information required to prepare
financial reports. No later than February 5, 2008, Borrower must furnish
to Lender an audit of Borrower’s annual financial statements for Borrower’s
fiscal year ended June 30, 2007, certified by an independent certified
public accountant satisfactory to Lender.


 


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