1
EXHIBIT 10.4
EXECUTION COPY
PARENT GUARANTEE AGREEMENT
dated as of
July 2, 1997
between
Tyco International Ltd.
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
2
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...................................................1
SECTION 1.02. Accounting Terms and Determinations...........................7
ARTICLE 2
GUARANTEE
SECTION 2.01. The Guarantee.................................................7
SECTION 2.02. Guarantee Unconditional.......................................7
SECTION 2.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances.........................................8
SECTION 2.04. Waiver by the Guarantor.......................................8
SECTION 2.05. Subrogation...................................................9
SECTION 2.06. Stay of Acceleration..........................................9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
SECTION 3.01. Corporate Existence and Power.................................9
SECTION 3.02. Corporate and Governmental Authorization; No Contravention....9
SECTION 3.03. Binding Effect................................................9
SECTION 3.04. Financial Information.........................................9
SECTION 3.05. Litigation...................................................10
SECTION 3.06. Environmental Matters........................................10
SECTION 3.07. Taxes........................................................11
SECTION 3.08. Subsidiaries.................................................11
SECTION 3.09. Not an Investment Company....................................11
SECTION 3.10. Full Disclosure..............................................11
SECTION 3.11. Obligations to be Pari Passu.................................11
3
PAGE
ARTICLE 4
COVENANTS
SECTION 4.01. Information...................................................12
SECTION 4.02. Payment of Obligations........................................13
SECTION 4.03. Maintenance of Property; Insurance............................13
SECTION 4.04. Conduct of Business and Maintenance of Existence..............14
SECTION 4.05. Compliance with Laws..........................................14
SECTION 4.06. Inspection of Property, Books and Records; Confidentiality....14
SECTION 4.07. Debt..........................................................16
SECTION 4.08. Negative Pledge...............................................16
SECTION 4.09. Consolidations, Mergers and Sales of Assets...................18
SECTION 4.10. Transactions with Affiliates..................................18
ARTICLE 5
DEFAULTS
SECTION 5.01. Guarantor Events of Defaults..................................19
SECTION 5.02. Notice of Default.............................................22
ARTICLE 6
TAXES
SECTION 6.01. Withholding Taxes.............................................22
SECTION 6.02. Certain Other Taxes...........................................22
SECTION 6.03. Reimbursement of Taxes Paid by a Bank.........................22
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Notices.......................................................23
SECTION 7.02. No Waivers....................................................23
SECTION 7.03. Expenses; Indemnification.....................................23
SECTION 7.04. Judicial Proceedings..........................................24
SECTION 7.05. Judgment Currency.............................................25
SECTION 7.06. Amendments and Waivers........................................25
SECTION 7.07. Successors and Assigns........................................26
SECTION 7.08. GOVERNING LAW.................................................26
SECTION 7.09. Counterparts..................................................26
SECTION 7.10. No Seal.......................................................26
ii
4
PAGE
SECTION 7.11. WAIVER OF JURY TRIAL.........................................26
iii
5
PARENT GUARANTEE AGREEMENT
AGREEMENT dated as of July 2, 1997 between TYCO INTERNATIONAL LTD. and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Guarantor hereby agrees with the Agent for the
benefit of the Banks as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"ADT" means ADT Limited, a company organized under the laws of Bermuda.
"ADT'S FORM S-4" means ADT's Form S-4 as filed with the Securities and
Exchange Commission on June 3, 1997, pursuant to the Securities Exchange Act of
1934.
"ADT'S 1996 FORM 10-K" means ADT's annual report on Form 10-K for 1996, as
filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.
"AFFILIATE" means (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Guarantor (a "Controlling Person") or (ii)
any Person (other than the Guarantor or a Subsidiary) which is controlled by or
is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. The fact that an
Affiliate of a Person is a member of a law firm that renders services to such
Person or its Affiliates does not mean that the law firm is an Affiliate of such
Person.
"AGENT" means Xxxxxx Guaranty Trust Company of New York in its capacity as
agent for the Banks under the Financing Documents, and its successors in such
capacity.
"BANK" means each Person from time to time a "Bank" party to any of the
Credit Agreements.
6
"BANK DOMESTIC TAXES" means, with respect to any Bank, any taxes, levies,
imposts, duties, charges or withholding of any nature (and any interest,
penalties, or similar liabilities with respect thereto) which are not Bank
Foreign Taxes with respect to such Bank.
"BANK FOREIGN TAXES" means, with respect to any Bank, any taxes, levies,
imposts, duties, charges or withholdings of any nature (and any interest,
penalties or similar liabilities with respect thereto) now or hereafter imposed
by any jurisdiction or taxing authority (including any possession or territory
thereof) other than the jurisdiction of which such Bank is a citizen or a
resident or under the laws of which such Bank is organized or any political
subdivision thereof or taxing authority thereof or therein.
"BERMUDA COMPANIES LAW" means every Bermuda statute from time to time in
force concerning companies insofar as the same applies to the Guarantor.
"BORROWER" means Tyco International Ltd., a Massachusetts corporation, its
successors and any Person who assumes the rights and obligations of Tyco
International, Ltd. under any of the Credit Agreements.
"CONSENTS" has the meaning set forth in Section 3.01.
"CONSOLIDATED ASSETS" means, at any time, the total assets of the Guarantor
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
time.
"CONSOLIDATED DEBT" means, at any date, the aggregate amount of Debt of the
Guarantor and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date; provided that (i) if a Permitted Receivables Transaction is
outstanding at such date and is accounted for as a sale of accounts receivable
under generally accepted accounting principles, Consolidated Debt determined as
aforesaid shall be adjusted to include the additional Debt, determined on a
consolidated basis as of such date, which would have been outstanding at such
date had such Permitted Receivables Transaction been accounted for as a
borrowing at such date and (ii) Consolidated Debt shall in any event include all
Debt of any Person other than the Guarantor or a Consolidated Subsidiary which
is Guaranteed by the Guarantor or a Consolidated Subsidiary, except that
Consolidated Debt shall not include Debt of a joint venture, partnership or
similar entity which is Guaranteed by the Guarantor or a Consolidated Subsidiary
by virtue of the joint venture, partnership or similar arrangement with respect
to such entity or by operation of applicable law (and not otherwise) so long as
the aggregate outstanding principal amount of such excluded Debt at any date
does not exceed $50,000,000.
"CONSOLIDATED NET WORTH" means, at any date, the consolidated stockholders'
equity of the Guarantor and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date and adjusted so as to exclude the effect of
the currency translation adjustment as of such date.
2
7
"CONSOLIDATED SUBSIDIARY" means, at any date, with respect to any Person,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date; unless otherwise specified, Consolidated
Subsidiary means a Consolidated Subsidiary of the Guarantor.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date, (i) Consolidated Net
Worth as of such date minus (ii) Intangible Assets as of such date.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any date, the sum of
Consolidated Debt and Consolidated Net Worth, each determined as of such date.
"CREDIT AGREEMENTS" means (i) the Bridge Credit Agreement dated as of June
27, 1997 among the Borrower, the Banks listed on the signature pages thereof and
the Agent (ii) the 364-Day Credit Agreement dated as of June 27, 1997 among the
Borrower, the Banks listed on the signature pages thereof and the Agent and
(iii) the Five-Year Credit Agreement dated as of June 27, 1997 among the
Borrower, the Banks listed on the signature pages thereof and the Agent, in each
case as amended from time to time.
"DEBT" of any Person means, at any date, without duplication, (i) the
principal amount of all obligations of such Person for borrowed money, (ii) the
principal amount of all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments (it being understood that,
subject to the proviso to this definition of "Debt," performance bonds,
performance guaranties, letters of credit, bank guaranties and similar
instruments shall not constitute Debt of such Person to the extent that the
outstanding reimbursement obligations of such Person in respect thereof are
collateralized by cash or cash equivalents, which cash or cash equivalents would
not be reflected as assets on a balance sheet of such Person prepared in
accordance with generally accepted accounting principles), (iii) all obligations
of such Person to pay the deferred purchase price of property or services
recorded on the books of such Person, except for (a) trade and similar accounts
payable and accrued expenses arising in the ordinary course of business, and (b)
employee compensation and pension obligations, and other obligations arising
from employee benefit programs and agreements or other similar employment
arrangements, (iv) all obligations of such Person as lessee which are
capitalized on the books of such Person in accordance with generally accepted
accounting principles, (v) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such Person, and
(vi) all Debt of others Guaranteed by such Person; provided, however, that Debt
shall not include:
(A) contingent reimbursement obligations in respect of performance
bonds, performance guaranties, bank guaranties or letters of
credit issued in lieu of performance bonds or performance
guaranties or similar instruments, in each case, incurred by such
Person in the ordinary course of business;
3
8
(B) contingent reimbursement obligations in respect of trade letters
of credit, or similar instruments, in each case, incurred by such
Person in the ordinary course of business; or
(C) contingent reimbursement obligations in respect of standby
letters of credit or similar instruments securing self-insurance
obligations of such Person;
in each case, so long as the underlying obligation supported thereby does not
itself constitute Debt.
"ENVIRONMENTAL LAWS" means any and all statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"FINANCING DOCUMENTS" means this Agreement, the Credit Agreements, the
Subsidiary Guarantees (as defined in any of the Credit Agreements) and the
Promissory Notes (as defined in any of the Credit Agreements).
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means ADT (to be renamed Tyco International Ltd. upon
consummation of the Merger), and its successors.
4
9
"GUARANTOR DEFAULT" means any condition or event which constitutes a
Guarantor Event of Default or which with the giving of notice or lapse of time
or both would, unless cured or waived, become a Guarantor Event of Default.
"GUARANTOR EVENT OF DEFAULT" has the meaning set forth in Section 4.01.
"INDEMNITEE" has the meaning set forth in Section 7.03(b).
"INTANGIBLE ASSETS" means, at any date, the amount (if any) which would be
stated under the heading "Costs in Excess of Net Assets of Acquired Companies"
or under any other heading relating to intangible assets separately listed, in
each case, on the face of a balance sheet of the Guarantor and its Consolidated
Subsidiaries prepared on a consolidated basis as of such date.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Guarantor or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement (other than an operating lease)
relating to such asset.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, consolidated financial position or consolidated results of operations
of the Guarantor and its Consolidated Subsidiaries, considered as a whole, or
(ii) the ability of the Guarantor to perform its obligations under this
Agreement.
"MATERIAL DEBT" means Debt (other than (i) any Guarantee by the Guarantor
of Debt of a Subsidiary, (ii) any Guarantee by a Subsidiary of Debt of the
Guarantor or another Subsidiary, (iii) any Debt of the Guarantor owed to a
Wholly-Owned Consolidated Subsidiary or (iv) any Debt of a Subsidiary owed to
the Guarantor or a Wholly-Owned Consolidated Subsidiary) of the Guarantor and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate outstanding principal amount exceeding
$50,000,000.
"MERGER" means the merger of a Subsidiary of ADT with and into the Borrower
pursuant to the Plan of Merger dated March 17, 1997.
"PERMITTED RECEIVABLES TRANSACTION" means any sale or sales of, refinancing
of and/or financing secured by, any accounts receivable of the Guarantor and/or
any of its Subsidiaries (the "RECEIVABLES") pursuant to which the Guarantor and
its Subsidiaries realize aggregate net proceeds of not more than $500,000,000 at
any one time outstanding, including, without limitation, any revolving
purchase(s) of Receivables where the maximum aggregate uncollected purchase
price (exclusive of any deferred purchase price) for such Receivables at any
time outstanding does not exceed $500,000,000.
5
10
"PERSON" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PROPERTY" means any interest of any kind in any property or assets,
whether real, mixed or personal and whether tangible or intangible.
"PROSPECTS" means, at any time, results of future operations which are
reasonably foreseeable based upon the facts and circumstances in existence at
such time.
"RESPONSIBLE OFFICER" means any of the following: the Chairman, President,
Vice President and Chief Financial Officer, Treasurer and Secretary of the
Guarantor.
"SIGNIFICANT SUBSIDIARY" means, at any date, each Consolidated Subsidiary
which, including its consolidated subsidiaries, meets any of the following
conditions:
(i) the investments in and advances to such Consolidated
Subsidiary by the Guarantor and its other Consolidated Subsidiaries
exceed 15% of the total assets of the Guarantor and its Consolidated
Subsidiaries, determined on a consolidated basis as of the end of the
most recently completed fiscal year; or
(ii) the proportionate share attributable to such Consolidated
Subsidiary of the total assets of the Guarantor and its Consolidated
Subsidiaries (after intercompany eliminations) exceeds 15% of the
total assets of the Guarantor and the Consolidated Subsidiaries,
determined on a consolidated basis as of the end of the most recently
completed fiscal year; or
(iii) the Guarantor's and its Consolidated Subsidiaries' equity
in the income of such Consolidated Subsidiary from continuing
operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principle exceeds 15% of such income
of the Guarantor and its Consolidated Subsidiaries, determined on a
consolidated basis for the most recently completed fiscal year.
"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, Subsidiary means a Subsidiary of the Guarantor.
6
11
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated Subsidiary
all of the shares of capital stock or other ownership interests of which (except
directors' qualifying shares and investments by foreign nationals mandated by
applicable law) are at the time beneficially owned, directly or indirectly, by
the Guarantor.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with United
States generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Guarantor's independent public accountants) with the then most recent audited
consolidated financial statements of the Guarantor and its Consolidated
Subsidiaries delivered to the Banks; provided that, if either (i) the Guarantor
notifies the Agent that the Guarantor wishes to eliminate the effect of any
change in generally accepted accounting principles on the operation of any
covenant contained in Article 2 or (ii) the Agent notifies the Guarantor that it
wishes to effect such an elimination, then the Guarantor's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either (A) such notice is
withdrawn by the party giving such notice or (B) such covenant is amended in a
manner satisfactory to the Guarantor and the Agent to reflect such change in
generally accepted accounting principles.
ARTICLE 2
GUARANTEE
SECTION 2.01. The Guarantee. The Guarantor hereby guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of
all principal of and interest on amounts loaned to the Borrower under the
Financing Documents and all other amounts payable by the Borrower under the
Financing Documents. Upon failure by the Borrower to pay punctually any such
amount, the Guarantor shall forthwith on demand pay the amount not so paid at
the place and in the manner specified in the applicable Financing Document.
SECTION 2.02. Guarantee Unconditional. The obligations of the Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected, at any time by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower under any Financing Document,
by operation of law or otherwise;
7
12
(ii) any modification or amendment of or supplement to any Financing
Document;
(iii) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower under any
Financing Document;
(iv) any change in the corporate existence, structure or ownership of
the Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower or its assets or any resulting
release or discharge of any obligation of the Guarantor or the Borrower
contained in any Financing Document;
(v) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, the Agent, any Bank or
any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Borrower for any reason of any Financing Document, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Borrower of any amount payable by it under any Financing Document; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, the Agent, any Bank or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to the Guarantor's
obligations hereunder.
SECTION 2.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. This Agreement shall remain in full force and effect until the
commitments of the Banks under the Credit Agreements shall have terminated and
the principal of and interest on the Promissory Notes (as defined in any Credit
Agreement) and all other amounts payable by the Borrower under the Financing
Documents shall have been paid in full. If at any time any payment of principal
of or interest on any Promissory Note (as defined in any Credit Agreement) or
any other amount payable by the Borrower under the Financing Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, the Guarantor's
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had been due but not made at such time.
SECTION 2.04. Waiver by the Guarantor. The Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Person.
8
13
SECTION 2.05. Subrogation. Upon making any payment hereunder with respect
to the Borrower, the Guarantor shall be subrogated to the rights of the payee
against the Borrower with respect to such payment; provided that the Guarantor
shall not enforce any payment by way of subrogation until all amounts of
principal of and interest on the Promissory Notes (as defined in any Credit
Agreement) and all other amounts payable by the Borrower under the Financing
Documents have been paid in full.
SECTION 2.06. Stay of Acceleration. In the event that acceleration of the
time for payment of any amount payable by the Borrower under any Financing
Document is stayed upon insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the Guarantor hereunder forthwith
on demand by the Agent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants to the Agent that:
SECTION 3.01. Corporate Existence and Power. The Guarantor is a company
limited by shares duly incorporated and validly existing under the laws of
Bermuda. The Guarantor has all corporate powers and all governmental licenses,
authorizations, consents and approvals (collectively, the "Consents") required
in order to carry on its business as now conducted, other than those powers and
Consents, the failure of which to be possessed or obtained could not, based upon
the facts and circumstances in existence at the time this representation and
warranty is made or deemed made, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Guarantor of this Agreement: (a)
are within the Guarantor's corporate powers; (b) have been duly authorized by
all necessary corporate action on the part of the Guarantor; (c) require no
action by or in respect of, or filing with, any governmental body, agency or
official, in each case, on the part of the Guarantor; and (d) do not contravene,
or constitute a default by the Guarantor under, any provision of (i) applicable
law or regulation, (ii) the Memorandum of Association or Bye-Laws of the
Guarantor, or (iii) any agreement or instrument evidencing or governing Debt of
the Guarantor or any other material agreement, judgment, injunction, order,
decree or other instrument binding upon the Guarantor.
SECTION 3.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Guarantor.
SECTION 3.04. Financial Information.
9
14
(a) The consolidated balance sheet of ADT and its Consolidated Subsidiaries
as of December 31, 1996 and the related consolidated statements of income, of
shareholders' equity and of cash flows for the fiscal year then ended, reported
on by Coopers & Xxxxxxx L.L.P. and set forth in the ADT's 1996 Form 10-K, a copy
of which has been delivered to each of the Banks, fairly present, in conformity
with generally accepted accounting principles, the consolidated financial
position of the ADT and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited pro forma condensed consolidated balance sheet of ADT,
the Borrower and their respective Consolidated Subsidiaries as of March 31, 1997
and the related unaudited pro forma condensed consolidated statements of income
for the years ended December 31, 1994, 1995, and 1996 and the three-month period
ended March 31, 1997, set forth in ADT's Form S-4, subject to the footnotes
thereto, have been prepared on the basis described therein and otherwise in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section and fairly present the consolidated financial position and results of
operations of ADT, the Borrower and their respective Consolidated Subsidiaries
as if the Merger had occurred, in the case of the condensed consolidated
statements of income, as of January 1, 1994, and in the case of the condensed
consolidated balance sheets, as of March 31, 1997 (subject in the case of the
interim financial statements to year-end adjustments).
(c) Since March 31, 1997 there has been no material adverse change in the
business, financial position, results of operations or Prospects of the
Guarantor and its Consolidated Subsidiaries, considered as a whole.
SECTION 3.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Guarantor threatened against or affecting,
the Guarantor or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could, based upon the facts and circumstances in
existence at the time this representation and warranty is made or deemed made,
reasonably be expected to have a Material Adverse Effect or which in any manner
draws into question the validity of the Financing Documents.
SECTION 3.06. Environmental Matters. In the ordinary course of its
business, the Guarantor conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Guarantor
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
10
15
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or hazardous substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Guarantor has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, could not, based upon the facts and circumstances existing
at the time this representation and warranty is made or deemed made, reasonably
be expected to have a Material Adverse Effect.
SECTION 3.07. Taxes. The Guarantor and its Significant Subsidiaries have
filed all material tax returns which are required to be filed by them and have
paid all taxes shown on such returns or pursuant to any assessment received by
the Guarantor or any Subsidiary, except those assessments which are being
contested in good faith by appropriate proceedings. The charges, accruals and
reserves on the books of the Guarantor and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Guarantor, adequate.
SECTION 3.08. Subsidiaries. Each of the Guarantor's corporate Consolidated
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, except where the
failure to be so incorporated, existing or in good standing could not, based
upon the facts and circumstances existing at the time this representation and
warranty is made or deemed made, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has all corporate powers and all Consents
required to carry on its business as now conducted, other than those powers and
Consents, the failure of which to be possessed or obtained could not, based upon
the facts and circumstances in existence at the time this representation and
warranty is made or deemed made, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.09. Not an Investment Company. The Guarantor is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.10. Full Disclosure. All information heretofore furnished by or
on behalf of the Guarantor to the Agent in connection with this Agreement, does
not contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements contained herein or therein, in light of
the circumstances under which they were made, not misleading.
SECTION 3.11. Obligations to be Pari Passu. The Guarantor's obligations
under this Agreement rank PARI PASSU as to priority of payment and in all other
respects with all other unsecured and unsubordinated obligations of the
Guarantor.
11
16
ARTICLE 4
COVENANTS
The Guarantor agrees that:
SECTION 4.01. Information. The Guarantor will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Guarantor, consolidated balance sheets of the Guarantor
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, of shareholders' equity and of cash
flows for such fiscal year, setting forth, in each case in comparative form, the
figures for the previous fiscal year, all reported on by Coopers & Xxxxxxx
L.L.P. or other independent public accountants of nationally recognized standing
in a manner complying with the applicable rules and regulations promulgated by
the Securities and Exchange Commission;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Guarantor,
consolidated balance sheets of the Guarantor and its Consolidated Subsidiaries
as of the end of such quarter and the related consolidated statements of income
and consolidated statements of cash flows for such quarter and for the portion
of the Guarantor's fiscal year ended at the end of such quarter, setting forth
in the case of such statements of income and of cash flows in comparative form
the figures for the corresponding quarter and the corresponding portion of the
Guarantor's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency on behalf of the Guarantor by the chief financial
officer, the chief accounting officer or the treasurer of the Guarantor;
(c) simultaneously with the delivery of each set of financial statements
referred to in subsections (a) and (b) above, a certificate on behalf of the
Guarantor signed by the chief financial officer, the chief accounting officer or
the treasurer of the Guarantor (i) setting forth in reasonable detail the
calculations required to establish whether the Guarantor was in compliance with
the requirements of Sections 4.07 and 4.08 on the date of such financial
statements and (ii) stating whether any Guarantor Default exists on the date of
such certificate and, if any Guarantor Default then exists, setting forth, in
reasonable detail, the nature thereof and the action which the Guarantor is
taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in clause 4.01(a) above, a statement of the firm of independent
public accountants which reported on such financial statements stating that, in
making the audit necessary for the certification of such financial statements,
such firm of accountants has obtained no knowledge of any Guarantor Default, or
if it has obtained knowledge of such Guarantor Default, specifying the nature
and period of existence thereof; provided such firm of accountants shall not be
liable to any Person
12
17
by reason of such firm's failure to obtain knowledge of any Guarantor Default
which would not be disclosed in the course of an audit conducted in accordance
with generally accepted accounting principles;
(e) within five business days after any Responsible Officer obtains
knowledge of any Guarantor Default, if such Guarantor Default is then
continuing, a certificate on behalf of the Guarantor signed by the chief
financial officer, the chief accounting officer or the treasurer of the
Guarantor setting forth, in reasonable detail, the nature thereof and the action
which the Guarantor is taking or proposes to take with respect thereto;
(f) promptly following the mailing thereof to the shareholders of the
Guarantor generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all final registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and final reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Guarantor shall have filed with the Securities and
Exchange Commission;
(h) promptly following, and in any event within 10 days of, any change in a
Debt Rating by any Rating Agency, notice thereof; and
(i) from time to time, upon reasonable notice, such additional information
regarding the financial position or business of the Guarantor and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably request.
SECTION 4.02. Payment of Obligations. The Guarantor will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including, without
limitation, tax liabilities, except where (i) any such failure to so pay or
discharge could not, based upon the facts and circumstances in existence at the
time, reasonably be expected to have a Material Adverse Effect or (ii) such
liabilities or obligations may be contested in good faith by appropriate
proceedings. The Guarantor will maintain, and will cause each Subsidiary to
maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of such liabilities or obligations
SECTION 4.03. Maintenance of Property; Insurance. (a) Except as permitted
by Section 4.04 or 4.09, the Guarantor will keep, and will cause each Subsidiary
to keep, all property necessary in its business in good working order and
condition, ordinary wear and tear excepted, unless the failure to so keep could
not, based upon the facts and circumstances existing at the time, reasonably be
expected to have a Material Adverse Effect.
(b) The Guarantor will maintain, and will cause each Subsidiary to
maintain, with financially sound and reputable insurers, insurance with respect
to its assets and business against
13
18
such casualties and contingencies, of such types (including, without limitation,
loss or damage, product liability, business interruption, larceny, embezzlement
or other criminal misappropriation) and in such amounts as is customary in the
case of similarly situated corporations of established reputations engaged in
the same or a similar business, unless the failure to maintain such insurance
could not, based upon the facts and circumstances existing at the time,
reasonably be expected to have a Material Adverse Effect.
SECTION 4.04. Conduct of Business and Maintenance of Existence. The
Guarantor (a) will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Guarantor
and its Subsidiaries and reasonably related extensions thereof, and (b) will
preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect (x) their
respective corporate existence and (y) their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, unless in
the case of either the failure of the Guarantor to comply with subclause (b) (y)
of this Section 4.04 or the failure of a Subsidiary to comply with clauses (a)
or (b) of this Section 4.04, such failure could not, based upon the facts and
circumstances existing at the time, reasonably be expected to have a Material
Adverse Effect; provided that nothing in this Section 4.04 shall prohibit (i)
the merger or consolidation of a Subsidiary with or into the Guarantor or a
Wholly-Owned Consolidated Subsidiary, (ii) the sale, lease, transfer, assignment
or other disposition by a Subsidiary of all or any part of its assets to the
Guarantor or to a Wholly-Owned Consolidated Subsidiary, (iii) the merger or
consolidation of a Subsidiary with or into a Person other than the Guarantor or
a Wholly-Owned Consolidated Subsidiary, if the Person surviving such
consolidation or merger is a Subsidiary and immediately after giving effect
thereto, no Guarantor Default shall have occurred and be continuing, (iv) the
sale, lease, transfer, assignment or other disposition by a Subsidiary of all or
any part of its assets to a Person other than the Guarantor or a Wholly-Owned
Consolidated Subsidiary, if the Person to which such sale, lease, transfer,
assignment or other disposition is made is a Subsidiary and immediately after
giving effect thereto, no Guarantor Default shall have occurred and be
continuing, (v) any transaction permitted pursuant to Section 4.09 or (vi) the
termination of the corporate existence of any Subsidiary if the Guarantor in
good faith determines that such termination is in the best interest of the
Guarantor and is not materially disadvantageous to the Banks.
SECTION 4.05. Compliance with Laws. The Guarantor will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
except where (a) noncompliance therewith could not, based upon the facts and
circumstances in existence at the time, reasonably be expected to have a
Material Adverse Effect or (b) the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 4.06. Inspection of Property, Books and Records; Confidentiality.
(a) The Guarantor will keep, and will cause each Subsidiary to keep, proper
books of record and account
14
19
in which true and correct entries shall be made of its business transactions and
activities so that financial statements that fairly present its business
transactions and activities can be properly prepared in accordance with
generally accepted accounting principles.
(b) The Guarantor will permit, and will cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all upon reasonable notice to the Guarantor, at such reasonable
times and as often as may reasonably be requested by any Bank.
(c) Each Bank and the Agent shall, by its receipt of Confidential
Information (as defined below) pursuant to or in connection with this Agreement
or its exercise of any of its rights hereunder, be deemed to have agreed (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to (i) keep such information confidential, (ii) (except as
permitted by clause (iii) of this Section 4.06(c)) not disclose such information
to any Person other than an officer, director, employee, legal counsel,
independent auditor or authorized agent or advisor of the Agent or such Bank
needing to know such information (it being understood that any such officer,
director, employee, legal counsel, independent auditor or authorized agent or
advisor shall be informed by the Agent or such Bank of the confidential nature
of such information), (iii) not disclose such information to any Assignee or
Participant (or prospective Assignee or Participant), unless such Assignee or
Participant (or prospective Assignee or Participant) shall agree in writing to
be bound by the provisions of this Section 4.06(c) and (iv) not use any such
information except for purposes relating to this Agreement or the Notes. The
term "Confidential Information" shall mean non-public information furnished by
or on behalf of the Guarantor or any of its Subsidiaries to the Agent, any Bank
or other Person exercising rights hereunder or required to be bound hereby
(collectively "Recipients"), but shall not include any such information which
(1) has become or hereafter becomes available to the public other than as a
result of a disclosure by a Recipient, or (2) has become or hereafter becomes
available to a Recipient, on a non-confidential basis, from a source other than
the Guarantor or any of its Subsidiaries (or any of their respective
representatives or agents) or any Recipient, which source, to the knowledge of
the Recipient, is not prohibited from disclosing such information by a
confidentiality agreement with, or other legal or fiduciary obligation to, the
Guarantor or its Subsidiaries.
The restrictions set forth in the immediately preceding paragraph shall not
prevent the disclosure by a Recipient of any such information:
(A) with the prior written consent of the Guarantor,
(B) at the request of a bank regulatory agency or in connection
with an examination by bank examiners, or
15
20
(C) upon order of any court or administrative agency of competent
jurisdiction, to the extent required by such order and not effectively
stayed on appeal or otherwise, or as otherwise required by law;
provided that in the case of any intended disclosure under this clause
(C), the Recipient shall (unless otherwise required by applicable law)
give the Guarantor not less than five business days prior notice (or
such shorter period as may, in the good faith discretion of the
Recipient, be reasonable under the circumstances or may be required by
any court or agency under the circumstances), specifying the
Confidential Information involved and stating such Recipient's
intention to disclose such Confidential Information (including the
manner and extent of such disclosure) in order to allow the Guarantor
an opportunity to seek an appropriate protective order.
Each Recipient shall agree that, in addition to all other remedies
available, the Guarantor shall be entitled to specific performance and
injunctive and other equitable relief as a remedy for any breach of this Section
4.06(c) by such Recipient.
SECTION 4.07. Debt. Consolidated Debt will at no time exceed 52.5% of
Consolidated Total Capitalization. For purposes of this Section any preferred
stock of a Consolidated Subsidiary held by a Person other than the Guarantor or
a Wholly-Owned Consolidated Subsidiary shall be included, at the higher of its
voluntary or involuntary liquidation value, in "Consolidated Debt" and in the
"Debt" of such Consolidated Subsidiary.
SECTION 4.08. Negative Pledge. Neither the Guarantor nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any Lien existing on any asset on the Closing Date securing Debt
outstanding on the Closing Date;
(b) any Lien existing on any asset of, or capital stock of, or other
ownership interest in, any Person (such capital stock and other ownership
interests are collectively referred to herein as "Stock") at the time such
Person becomes a Subsidiary, which Lien was not created in contemplation of such
event;
(c) any Lien on any asset securing the payment of all or part of the
purchase price of such asset upon the acquisition thereof by the Guarantor or a
Subsidiary or securing Debt (including any obligation as lessee incurred under a
capital lease) incurred or assumed by the Guarantor or a Subsidiary prior to, at
the time of or within one year after such acquisition (or in the case of real
property, the completion of construction (including any improvements on an
existing property) or the commencement of full operation of such asset or
property, whichever is later), which Debt is incurred or assumed for the purpose
of financing all or part of the cost of acquiring such asset or, in the case of
real property, construction or improvements thereon; provided, that in the case
of any such acquisition, construction or improvement, the Lien shall
16
21
not apply to any asset theretofore owned by the Guarantor or a Subsidiary, other
than assets so acquired, constructed or improved;
(d) any Lien existing on any asset or Stock of any Person at the time such
Person is merged or consolidated with or into the Guarantor or a Subsidiary
which Lien was not created in contemplation of such event;
(e) any Lien existing on any asset or Stock of any Person at the time of
acquisition thereof by the Guarantor or a Subsidiary, which Lien was not created
in contemplation of such acquisition;
(f) any Lien arising out of the refinancing of any Debt secured by any Lien
permitted by any of the subsections (a) through (e) of this Section 4.08,
provided the principal amount of Debt is not increased and is not secured by any
additional assets, except as provided in the last sentence of this Section 4.08;
(g) any Lien to secure Debt of a Subsidiary to the Guarantor or to a
Wholly-Owned Consolidated Subsidiary;
(h) any Lien created pursuant to a Permitted Receivables Transaction;
(i) any Lien in favor of any country (or any department, agency,
instrumentality or political subdivision of any country) securing obligations
arising in connection with partial, progress, advance or other payments pursuant
to any contract, statute, rule or regulation or securing obligations incurred
for the purpose of financing all or any part of the purchase price (including
the cost of installation thereof or, in the case of real property, the cost of
construction or improvement or installation of personal property thereon) of the
asset subject to such Lien (including, but not limited to, any Lien incurred in
connection with pollution control, industrial revenue or similar financings);
(j) Liens arising in the ordinary course of its business which (i) do not
secure Debt, (ii) do not secure any single obligation in an amount exceeding
$50,000,000 and (iii) do not in the aggregate materially detract from the value
of its assets or materially impair the use thereof in the operation of its
business; and
(k) Liens not otherwise permitted by the foregoing clauses (a) through (j)
of this Section 4.08 securing Debt (without duplication) in an aggregate
principal amount at any time outstanding not to exceed an amount equal to the
greater of (i) $50,000,000 or (ii) 10% of Consolidated Tangible Net Worth. It is
understood that any Lien permitted to exist on any asset pursuant to the
foregoing provisions of this Section 4.08 may attach to the proceeds of such
asset and, with respect to Liens permitted pursuant to subsections (a), (b),
(d), (e), (f) (but only with respect to the refinancing of a Debt
17
22
secured by a Lien permitted pursuant to subsections (a), (b), (d) or (e)) or (g)
of this Section 4.08, may attach to an asset acquired in the ordinary course of
business as a replacement of such former asset.
SECTION 4.09. Consolidations, Mergers and Sales of Assets. (a) The
Guarantor will not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer all or substantially all of its assets to
any other Person, unless
(A) the Guarantor or a Subsidiary is the surviving corporation;
(B) the Person (if other than the Guarantor) formed by such
consolidation or into which the Guarantor is merged, or the Person
which acquires by sale or other transfer, or which leases, all or
substantially all of the assets of the Guarantor (any such Person, the
"Successor"), shall be organized and existing under the laws of
Bermuda or of the United States, any state thereof or the District of
Columbia and shall expressly assume, in a writing executed and
delivered to the Agent for delivery to each of the Banks, in form
reasonably satisfactory to the Agent, the due and punctual payment of
the principal of and interest on the Promissory Notes and the
performance of the other obligations under this Agreement and the
Promissory Notes on the part of the Guarantor to be performed or
observed, as fully as if such Successor were originally named as the
Guarantor in this Agreement;
(C) immediately after giving effect to such transaction, no
Guarantor Default shall have occurred and be continuing; and
(D) the Guarantor has delivered to the Agent a certificate on
behalf of the Guarantor signed by a Responsible Officer and an opinion
of counsel, each stating that all conditions provided in this Section
4.09 relating to such transaction have been satisfied.
The foregoing provisions of this Section 4.09 shall not restrict the merger
or consolidation of any Subsidiary with and into the Guarantor.
SECTION 4.10. Transactions with Affiliates. The Guarantor will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate (collectively, "AFFILIATE TRANSACTIONS"); provided, however, that the
foregoing provisions of this Section 4.10 shall not prohibit the Guarantor or
any of its Subsidiaries from (a) making sales to or purchases from any Affiliate
and, in
18
23
connection therewith, extending credit or making payments, or from making
payments for services rendered by any Affiliate, if such sales or purchases are
made or such services are rendered in the ordinary course of business and on
terms and conditions at least as favorable to the Guarantor or such Subsidiary
as the terms and conditions which the Guarantor would reasonably expect to be
obtained in a similar transaction with a Person which is not an Affiliate at
such time, (b) making payments of principal, interest and premium on any Debt of
the Guarantor or such Subsidiary held by an Affiliate if the terms of such Debt
are at least as favorable to the Guarantor or such Subsidiary as the terms which
the Guarantor would reasonably expect to have been obtained at the time of the
creation of such Debt from a lender which was not an Affiliate, (c)
participating in, or effecting any transaction in connection with, any joint
enterprise or other joint arrangement with any Affiliate if the Guarantor or
such Subsidiary participates in the ordinary course of its business and on a
basis no less advantageous than the basis on which such Affiliate participates,
(d) paying or granting reasonable compensation and benefits to any director,
officer, employee or agent of the Guarantor or any Subsidiary, (e) paying
reasonable legal fees and expenses to a law firm of which an Affiliate is a
member or (f) engaging in any Affiliate Transaction not otherwise addressed in
subsections (a)-(e) of this Section 4.10, the terms of which are not less
favorable to the Guarantor or such Subsidiary than those that the Guarantor
would reasonably expect to be obtained in a comparable transaction at such time
with a Person which is not an Affiliate.
ARTICLE 5
DEFAULTS
SECTION 5.01. Guarantor Events of Defaults. The following events shall
constitute "GUARANTOR EVENTS OF DEFAULT" for purposes of the Financing
Documents:
(a) the Guarantor shall fail to pay when due any principal of any Loan (as
defined in the Credit Agreements), or shall fail to pay within three Domestic
Business Days (as defined in the Credit Agreements) of the due date thereof any
interest on any Loan (as defined in the Credit Agreements) or any fees payable
hereunder;
(b) the Guarantor shall fail to observe or perform any covenant contained
in Section 4.07;
(c) the Guarantor shall fail to observe or perform any covenant contained
in Section 4.08 or 4.09 and such failure shall not be remedied within five days
after any Responsible Officer obtains actual knowledge thereof;
(d) the Guarantor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b) or (c) of this Section 5.01) for 10
19
24
days after notice thereof has been given to the Guarantor by the Agent at the
request of any Bank;
(e) any representation, warranty, certification or statement made in
writing by the Guarantor in the Financing Documents or in any certificate,
financial statement or other document required to be delivered to the Agent or
any of the Banks pursuant to the Financing Documents shall prove to have been
incorrect in any material respect when made (or deemed made);
(f) the Guarantor or any Subsidiary shall fail to make any payment in
respect of any Material Debt when due (after giving effect to any applicable
grace period);
(g) any event or condition shall occur that results in the acceleration of
the maturity of any Material Debt or that entitles the holder or holders of any
Material Debt or any Person acting on behalf of such holder or holders to
accelerate the maturity thereof; provided that neither an "Event of Default"
under (and as defined in) the Indentures of ADT Operations, Inc. dated as of
August 4, 1993, nor any right of holders of Debt issued thereunder to compel
redemption of such Debt, shall constitute an Event of Default hereunder;
(h) (i) any corporate action is taken authorizing the winding up,
liquidation, any arrangement or the taking of any other similar action of or
with respect to the Guarantor or authorizing any corporate action to be taken to
facilitate any such winding up, liquidation, arrangement, reorganization or
amalgamation or other similar action or any members' voluntary winding up of the
Guarantor as provided under the Bermuda Companies Law shall be commenced;
(ii) (A) any petition shall be filed seeking the liquidation, any
arrangement or the taking of any other similar action of or with respect to
the Guarantor by the Registrar of Companies in Bermuda, or by any other
Person or Persons, or (B) any petition shall be presented for the winding
up of the Guarantor to a court of Bermuda as provided with the Bermuda
Companies Law, or (C) any creditors' winding up of the Guarantor as
provided under the Bermuda Companies Law shall be commenced, or (D) any
receiver shall be appointed by a creditor of the Guarantor or by a court of
Bermuda on the application of a creditor of the Guarantor as provided under
any instrument giving rights for the appointment of a receiver thereto, and
in the case of any such petition, winding up, appointment, order or other
matter, such petition, winding up, appointment, order or other matter,
shall remain undismissed and unstayed for a period of 60 days;
(iii) the Guarantor or any Significant Subsidiary shall (A) commence a
voluntary case or other proceeding seeking liquidation, winding up,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or substantially all of its property, or (B)
consent
20
25
to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other similar proceeding commenced
against it, or (C) make a general assignment for the benefit of creditors,
or (D) fail generally to pay its debts as they become due, or (E) take any
corporate action to authorize any of the foregoing; or
(iv) (A) an involuntary case or other proceeding shall be commenced
against the Guarantor or any Significant Subsidiary seeking liquidation,
winding up, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or substantially all of its
property, and such involuntary case or other proceeding shall remain in
effect and undismissed and unstayed for a period of 60 days; or (B) an
order for relief shall be entered against the Guarantor or any Significant
Subsidiary under the bankruptcy laws of any jurisdiction as now or
hereafter in effect;
(i) a judgment or order for the payment of money in excess of $30,000,000
(after deducting amounts covered by insurance, except to the extent that the
insurer providing such insurance has declined such coverage) shall be rendered
against the Guarantor or any Subsidiary and, within 60 days after entry thereof,
such judgment or order is not discharged or execution thereof stayed pending
appeal, or within 60 days after the expiration of any such stay, such judgment
or order is not discharged;
(j) any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 40% or more of the
outstanding shares of common stock of the Guarantor; or, on the last day of any
period of twelve consecutive calendar months commencing on or after the day
after the date on which the Merger is consummated, a majority of members of the
board of directors of the Guarantor shall no longer be composed of individuals
(i) who were members of said board of directors on the first day of such twelve
consecutive calendar month period or (ii) whose election or nomination to said
board of directors was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
said board of directors; or
(k) the Guarantor or any Subsidiary shall fail to make any payment owing by
it in respect of any performance bond, performance guaranty or bank Guaranty
issued in lieu of a performance bond or performance guaranty (other than a
payment which is disputed by the Guarantor or such Subsidiary in good faith),
and the aggregate of all such defaulted payments shall exceed $50,000,000 at any
one time for the Guarantor and its Subsidiaries.
SECTION 5.02. Notice of Default. The Agent shall give notice to the
Guarantor under Section 5.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
21
26
ARTICLE 6
TAXES
SECTION 6.01. Withholding Taxes. Each payment by the Guarantor hereunder to
or for the account of any Bank (a "Payment") shall be made without any deduction
or withholding for any Bank Foreign Taxes with respect to such Bank; provided
that if the Guarantor shall be required by law to make any such deduction or
withholding from any Payment, the Guarantor will:
(i) pay such amounts in addition to such Payment as may be necessary
so that the amount received by the payee, after all such withholdings and
deductions, will be equal to the full amount provided for in this
Agreement;
(ii) pay the full amount deducted or withheld to the relevant taxation
or other authorities within the time allowed under applicable law; and
(iii) furnish within 45 days thereafter to the Agent, the official
receipt or receipts from the relevant taxation or other authorities for the
full amount so deducted or withheld.
SECTION 6.02. Certain Other Taxes. The Guarantor will pay (i) all Bank
Foreign Taxes imposed (otherwise than by deduction or withholding) on any Bank
which constitute Bank Foreign Taxes with respect to such Bank and (ii) all Bank
Domestic Taxes imposed on any Bank which constitute Bank Domestic Taxes with
respect to such Bank to the extent any such Bank Foreign Taxes or Bank Domestic
Taxes result from Bank Foreign Taxes or Bank Domestic Taxes paid or reimbursed
by the Guarantor pursuant to this Article 6.
SECTION 6.03. Reimbursement of Taxes Paid by a Bank. If any Bank Foreign
Taxes or Bank Domestic Taxes to be paid by the Guarantor pursuant to this
Article 6 are imposed on and paid by any Bank, the Guarantor shall, upon request
of such Bank and whether or not such Bank Foreign Taxes or Bank Domestic Taxes
shall have been correctly or legally imposed, reimburse such Bank therefor,
together with any interest, penalties and expenses in connection therewith, plus
interest thereof at the rate specified in the first sentence of Section 2.07(a)
of each Credit Agreement. To the extent that any Bank which is reimbursed by the
Guarantor as provided in this Section thereafter receives any payment allocated
to Bank Foreign Taxes or Bank Domestic Taxes in respect of which such Bank was
so reimbursed from a governmental taxing authority because such Bank Foreign
Taxes or Bank Domestic Taxes were incorrectly or illegally imposed, such Bank
shall return to the Guarantor (without interest) any such payment.
22
27
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications to
any party provided for hereunder shall be in writing (including, without
limitation, bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party at its address or facsimile or telex number set
forth on the signature pages hereof or such other address or facsimile or telex
number as such party may hereafter specify for the purpose by notice to the
other party. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile, when such facsimile is transmitted to the facsimile number
specified on the signature pages hereof and electronic, telephonic or other
appropriate confirmation of receipt is received by the sender, (iii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified on the signature pages hereof.
SECTION 7.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any other Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein and
therein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 7.03. Expenses; Indemnification. (a) The Guarantor shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including reasonable fees
and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment thereof or any default or alleged default hereunder
and (ii) if an Event of Default (as defined in any Credit Agreement) occurs, all
reasonable out-of-pocket expenses incurred by the Agent and each Bank, including
reasonable fees and disbursements of counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
in respect of this Agreement resulting therefrom.
(b) The Guarantor agrees to indemnify the Agent and each Bank, their
respective Affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses, including, without limitation, the reasonable fees and disbursements
of counsel, which may be incurred by such Indemnitee (whether or not such
Indemnitee shall be designated a party thereto) arising out of any
investigative, administrative or judicial proceeding (brought or threatened)
relating to or arising out of this Agreement, the arrangement, administration,
performance or enforcement thereof; provided that no Indemnitee
23
28
shall have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction; provided further that no Indemnitee shall have the right to be
indemnified hereunder in connection with any proceedings between it and another
Indemnitee which does not relate to the Guarantor.
(c) If any proceeding or claim shall be brought or asserted against any
Indemnitee in respect of which indemnity may be sought pursuant to the preceding
subsection, such Indemnitee shall promptly notify the Guarantor. The Guarantor
shall not be liable for any costs or expenses in connection with any settlement
entered into without its consent.
SECTION 7.04. Judicial Proceedings. (a) Consent to Jurisdiction. The
Guarantor irrevocably submits to the non-exclusive jurisdiction of any federal
or New York State court sitting in New York City over any suit, action or
proceeding arising out of or relating to this Agreement. The Guarantor
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in such court and any claim that any suit, action or
proceeding brought in such court has been brought in an inconvenient forum. The
Guarantor agrees that a final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon it and will be
given effect in Bermuda to the fullest extent permitted by applicable law and
may be enforced in any federal or New York State court sitting in New York City
(or any other courts to the jurisdiction of which the Guarantor is or may be
subject) by a suit upon such judgment, provided that service of process is
effected upon it in one of the manners specified herein or as otherwise
permitted by law.
(b) Appointment of Agent for Service of Process. The Guarantor hereby
irrevocably designates and appoints CT Corporation System having an office on
the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its authorized
agent, to accept and acknowledge on its behalf, service or any and all process
which may be served in any suit, action or proceeding of the nature referred to
in subsection (a) above in any federal or New York State court sitting in New
York City. The Guarantor represents and warrants that such agent has agreed in
writing to accept such appointment and that a true copy of such designation and
acceptance has been delivered to the Agent. Such designation and appointment
shall be irrevocable until all principal and interest and all other amounts
payable hereunder shall have been paid in full in accordance with the provisions
hereof. If such agent shall cease so to act, the Guarantor covenants and agrees
to designate irrevocably and appoint without delay another such agent
satisfactory to the Agent and to deliver promptly to the Agent evidence in
writing of such other agent's acceptance of such appointment.
(c) Service of Process. The Guarantor hereby consents to process being
served in any suit, action, or proceeding of the nature referred to in
subsection (a) above in any federal or New York State court sitting in New York
City by service of process upon the agent of the Guarantor, as the case may be,
for service of process in such jurisdiction appointed as provided in subsection
(b) above; provided that, to the extent lawful and possible, written notice of
said service upon
24
29
such agent shall be mailed by registered airmail, postage prepaid, return
receipt requested, to the Guarantor at its address specified on the signature
pages hereof or to any other address of which the Guarantor shall have given
written notice to the Agent. The Guarantor irrevocably waives, to the fullest
extent permitted by law, all claim of error by reason of any such service and
agrees that such service shall be deemed in every respect effective service of
process upon the Guarantor in any such suit, action or proceeding and shall, to
the fullest extent permitted by law, be taken and held to be valid and personal
service upon and personal delivery to the Guarantor.
(d) No Limitation on Service or Suit. Nothing in this Section 7.04 shall
affect the right of the Agent or any Bank to serve process in any other manner
permitted by law or limit the right of the Agent or any Bank to bring proceeding
against the Guarantor in the courts of any jurisdiction or jurisdictions.
SECTION 7.05. Judgment Currency. If, under any applicable law and whether
pursuant to a judgment being made or registered against the Guarantor or for any
other reason, any payment under or in connection with this Agreement, is made or
satisfied in a currency (the "Other Currency") other than that in which the
relevant payment is due (the "Required Currency") then, to the extent that the
payment (when converted into the Required Currency at the rate of exchange on
the date of payment or, if it is not practicable for the party entitled thereto
(the "Payee") to purchase the Required Currency with the other Currency on the
date of payment, at the rate of exchange as soon thereafter as it is practicable
for it to do so) actually received by the Payee falls short of the amount due
under the terms of this Agreement, the Guarantor shall, to the extent permitted
by law, as a separate and independent obligation, indemnify and hold harmless
the Payee against the amount of such short-fall. For the purpose of this
Section, "rate of exchange" means the rate at which the Payee is able on the
relevant date to purchase the Required Currency with the Other Currency and
shall take into account any premium and other costs of exchange.
SECTION 7.06. Amendments and Waivers. Any provision of this Agreement or
the Promissory Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Guarantor and the Agent with the prior
written consent of the Required Banks under (and as defined in) each of the
Credit Agreements.
SECTION 7.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon the Guarantor and its successors and shall inure to the
benefit of the Agent and the Banks and their respective successors and assigns.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
25
30
SECTION 7.09. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 7.10. No Seal. As contemplated by the Bye-Laws of the Guarantor,
this Agreement shall not be required to be issued under the seal of the
Guarantor.
SECTION 7.11. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND THE AGENT
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
26
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TYCO INTERNATIONAL LTD.
By:
---------------------------------
Title: Executive Vice President
Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
XXXXXX XXXXXXXX TRUST COMPANY
OF NEW YORK, as Agent
By:
---------------------------------
Title:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention:
Telex number: 177615
Facsimile number: 000-000-0000
