EXHIBIT 10
GUARANTOR INDEMNIFICATION AGREEMENT
This Guarantor Indemnification Agreement ("AGREEMENT") dated as of
December 20, 2000, is made by and among TYCO INTERNATIONAL GROUP S.A. (the
"GUARANTOR"), a company incorporated under the laws of Luxembourg; FiberCore,
Inc. (the "BORROWER"), a company incorporated under the laws of Nevada; and the
Managing Shareholders, as defined herein.
WITNESSETH
WHEREAS, the Borrower wishes to obtain a revolving line of credit in
the maximum principal amount of $10,000,000 (the "REVOLVING CREDIT LOAN") from
Fleet National Bank, a national banking association (the "BANK") pursuant to the
terms of Loan Agreement dated December 20, 2000 (the "CREDIT AGREEMENT"); and
WHEREAS, the Guarantor is an affiliate of TYCO INTERNATIONAL LTD.
("TYCO"), a company organized under the laws of Bermuda, which currently
controls approximately 21.69% of the Borrower's common stock; and
WHEREAS, the Bank requires, as a condition of making the Revolving
Credit Loan, that a financially responsible party guarantee all indebtedness and
other obligations owing by the Borrower to the Bank with respect to the
Revolving Credit Loan pursuant to the Credit Agreement; and
WHEREAS the Guarantor is willing to guarantee the Revolving Credit Loan
on the terms set forth in the form of guaranty attached hereto as Exhibit A (the
"GUARANTY") provided that, in consideration of providing the Guaranty, the
Guarantor is granted the rights and remedies set forth in this Agreement; and
WHEREAS, in order to induce the Guarantor to guarantee the Revolving
Credit Loan, the Borrower and the Managing Shareholders are willing to grant the
Guarantor the rights and remedies, and to undertake the obligations, set forth
in this Agreement.
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NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, that parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this agreement, the following terms shall have the meanings
specified below unless the context otherwise requires. All other capitalized
terms used in this Agreement that are defined in the Credit Agreement or the
Guaranty (except as herein otherwise expressly provided or unless the context
otherwise requires) shall have the meanings assigned to such terms in the Credit
Agreement or in the Guaranty as in force on the Effective Date.
1.1 APPLICABLE PERCENTAGE. The percentage specified in Section 2.2(b) or Section
2.3(b), as applicable.
1.2 APPLICABLE RATE: A floating annual rate of interest equal to One-Month
LIBOR, as in effect from time to time, plus (a) so long as no Event of Default
has occurred and is continuing, 450 basis points or (b) upon the occurrence and
during the continuation of an Event of Default, 850 basis points. The Applicable
Rate shall be applied on the basis of a 360-day year for the actual number of
days an amount remains outstanding hereunder. Interest shall be compounded daily
until it has been paid in full.
1.3 BUSINESS DAY: Each day other than Saturday, Sunday, or any other day on
which banking institutions are authorized or required by law, executive order or
governmental decree to be closed in Luxembourg, New York or Massachusetts.
1.4 COMMON STOCK: Newly issued shares of the Borrower's common stock, par value
$.001 per share, which are validly issued, free and clear of all liens, claims,
encumbrances, preemptive rights and other restrictions, other than restrictions
imposed by applicable securities laws.
1.5 DUE DATE: Each January 1, April 1, July 1 and October 1 that occurs on or
after the Effective Date and while the Guaranty remains in effect; provided,
however, that if a given Due Date is scheduled to occur on a day that is not a
Business Day, such Due Date shall occur on the next succeeding Business Day.
1.6 EFFECTIVE DATE: As defined in Section 9.1.
1.7 EXPENSES: All present and future expenses reasonably incurred by or on
behalf of the Guarantor in connection with this Agreement or the Guaranty and
any amendment, supplement or other modification or waiver related hereto, or
thereto, whether incurred heretofore or hereafter, which expenses shall include,
without limitation, reasonable attorneys' fees, disbursements and expenses; all
costs and expenses incurred by the Guarantor in opening bank
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accounts and receiving and transferring funds; and reasonable fees and expenses
of accountants, appraisers or other experts or advisors retained by the
Guarantor.
1.8 MANAGING SHAREHOLDERS: Xxxx X. Xxxxxx, Xxxxxxx Xx Xxxx, Xxxxxx Xxxxxxxx and
each other officer or director of the Borrower who becomes a party to this
Agreement pursuant to Section 3.8.
1.9 MATERIAL ADVERSE CHANGE: A material adverse change in the business,
prospects, operations, assets, liabilities or condition (financial or otherwise)
of the Borrower and the Subsidiaries, taken as a whole.
1.10 MATERIAL ADVERSE EFFECT: Either (i) a material adverse effect on the
business of the Borrower and the Subsidiaries, taken as a whole, (ii) a material
adverse effect on the Borrower's ability to perform its obligations under this
Agreement, the Credit Agreement or any of the Loan Documents to which it is a
party, or (iii) an event or development that, in the reasonable judgment of the
Guarantor, is reasonably likely to cause the effects specified in (i) or (ii).
1.11 ONE-MONTH LIBOR: With respect to any day, the One-Month London Interbank
Offered Rate (LIBOR) for U.S. Dollar borrowings, as determined by the British
Bankers' Association on the Due Date and as reported by Bloomberg Financial
Markets Service.
1.12 SERIES A DESIGNATIONS: The Designation of Rights, Privileges and
Preferences of Series A Preferred Stock, adopted by resolution of the Borrower's
Board of Directors on December 19, 2000.
1.13 SERIES A DIRECTOR: A Director designated by the Guarantor pursuant to the
terms of the Series A Designations.
1.14 SERIES A PREFERRED STOCK: Shares of the Borrower's Series A Preferred Stock
having the rights, privileges and preferences set forth in Exhibit B hereto.
1.15 SUBSIDIARIES: As defined in Section 3.9.
1.16 WEIGHTED AVERAGE DAILY TRADING PRICE: For any date, the average (weighted
to take account of the number of shares traded) of the selling prices of the
Borrower's common shares for the ten trading days immediately preceding such
date, as reported by Bloomberg Financial Markets Service.
ARTICLE II
GUARANTY; REIMBURSEMENT; FACILITY FEES; EXPENSES
2.1 GUARANTY: At closing of the Revolving Credit Loan on the terms contemplated
by the Credit Agreement, as previously presented to and approved by the
Guarantor, subject to
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satisfaction of the conditions in Section 9.2, the Guarantor shall execute and
deliver the Guaranty to the Bank.
2.2 REIMBURSEMENT OF PAYMENTS MADE UNDER GUARANTY: In the event that the
Guarantor makes a payment to the Bank pursuant to the Guaranty (each a "GUARANTY
PAYMENT"), the Guarantor will give written notice to the Borrower specifying the
date and the amount of such Guaranty Payment (each a "REIMBURSEMENT NOTICE").
Upon issuance of the Reimbursement Notice, and to the extent not prohibited
under the Guaranty, the Guarantor shall assume and be subrogated to all rights
of the Bank under the Revolving Credit Loan. The Borrower shall reimburse the
Guarantor in full for each and every Guaranty Payment and shall also pay the
Guarantor interest at the Applicable Rate on the outstanding balance of each
Guaranty Payment from the day it is made through the day immediately preceding
the day on which the Guarantor is reimbursed as provided herein. Reimbursement
shall be made as specified in Section 2.2(a) or 2.2(b) below. Upon such
reimbursement and payment of all interest and Expenses payable under Article II,
the Borrower shall be fully discharged from all liability to the Guarantor with
respect to such Guaranty Payment.
(a) REIMBURSEMENT IN CASH. Unless otherwise specified by the Guarantor
in the Reimbursement Notice, reimbursement of a Guaranty Payment and all
interest accrued thereon shall be made in immediately available funds
denominated in U.S. Dollars within ten (10) Business Days after the Guarantor
gives the Reimbursement Notice.
(b) REIMBURSEMENT IN COMMON STOCK. If and to the extent so specified by
the Guarantor in the Reimbursement Notice, reimbursement of a Guaranty Payment
and all interest accrued thereon shall be made in the form of Common Stock
issued in the name of the Guarantor or its designee(s). The number of shares of
Common Stock to be issued for purposes of such reimbursement shall be calculated
as specified in Section 2.4, with the Applicable Percentage being 80%. Such
shares of Common Stock shall be issued by the Borrower within fifteen (15)
Business Days after the Guarantor gives the Reimbursement Notice.
2.3 GUARANTY FEES: On each Due Date, the Borrower shall pay to the Guarantor a
Guarantee facility fee (the "FEE") equal to 0.4% of the maximum principal
amount, including both amounts outstanding and amounts available to be drawn by
the Borrower, of the Revolving Credit Loan as of such Due Date.
(a) Unless otherwise specified by the Guarantor in a written
notice given to the Borrower before the Due Date, the Fee
shall be paid in immediately available funds denominated in
U.S. Dollars.
(b) If and to the extent so specified by the Guarantor in a
written notice given to the Borrower before the Due Date, the
Fee shall be paid in the form of Common Stock issued in the
name of the Guarantor or its designee(s). The number of shares
of Common Stock to be issued for purposes of such payment
shall be calculated as specified in Section 2.4, with the
Applicable Percentage being 90%. Such shares of Common Stock
shall be issued by the Borrower within fifteen (15) Business
Days after the Due Date.
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2.4 CALCULATION OF NUMBER OF SHARES: When a payment or reimbursement hereunder
is required to be made in the form of Common Stock, the number of shares of
Common Stock to be issued with respect to such payment or reimbursement shall be
calculated as follows as of the date on which such shares are required to be
issued:
Number = ($ Amount) / (AP x WADTP)
Where:
o Number = Number of shares of Common Stock to be issued,
rounded to the nearest whole share;
o $ Amount = The U.S. Dollar amount to be paid or reimbursed in
Common Stock;
o AP = The Applicable Percentage; and
o WADTP = The Weighted Average Daily Trading Price
EXAMPLE 1: Assuming the maximum principal amount of the Revolving
Credit Loan is $10,000,000 on August 1 of 2001, the amount of the Fee
will be $40,000. Assuming the Weighted Average Daily Trading Price for
the ten trading days ending July 31 is $5.00 per share, the Guarantor
will have the option of receiving the Fee (i) entirely in cash, (ii) in
the form of 8,889 shares of Common Stock in lieu of a cash payment, or
(ii) in the form of a combination of cash and Common Stock.
EXAMPLE 2: Assuming the Guarantor has made a $10,000,000 Guaranty
Payment on Day One, One-Month LIBOR remains constant at 8.00%, and (if
the Guarantor elects to receive reimbursement of part or all of the
Guaranty Payment in Common Shares) the Weighted Average Daily Trading
Price for the ten trading days preceding the date of reimbursement of
the Guaranty Payment is $5.00 per share, the Guarantor will have the
option of receiving (i) a cash payment of $10,000,000 plus interest
calculated at the annual rate of 12.5%, which interest is equal to
$3,472.22 for Day Two, (ii) 2,500,000 shares of Common Stock in
reimbursement of the $10,000,000 Guaranty Payment plus additional
shares of Common Stock in reimbursement of accrued interest, which is
equal to 868 shares for the interest accrued on Day Two, or (iii) a
combination thereof.
2.5 REIMBURSEMENT OF EXPENSES: On the Effective Date, the Borrower shall
reimburse the Guarantor in immediately available U.S. Dollars for all Expenses
incurred by the Guarantor on or prior to such date, not to exceed $40,000. The
Borrower shall promptly reimburse the Guarantor for all Expenses incurred by the
Guarantor after the Effective Date within thirty (30) days of the Borrower's
receipt of invoices therefor.
2.6 INTEREST ON LATE PAYMENTS: Fees, Expenses and other amounts that are not
paid when due under this Agreement shall accrue interest at the Applicable Rate
from the date due through the
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day immediately preceding the day on which they are paid. All such interest
shall be payable in immediately available U.S. Dollars on demand by the
Guarantor.
2.7 APPLICATION OF PAYMENTS. All payments received from the Borrower will be
applied first to reimbursement of the Guarantor's Expenses, second to the
payment of interest, and third to payment of other amounts owed to the Guarantor
hereunder.
2.8. REQUEST FOR SUPPLEMENTAL GUARANTY. Provided the Borrower is not then in
default under this Agreement, the Borrower may request the Guarantor to
guarantee up to $15 million principal amount of loans to the Borrower in
addition to the Revolving Credit Loan. In connection with any such request, the
Borrower shall make available all information reasonably requested by the
Guarantor for the purpose of evaluating such request. The Guarantor agrees to
consider any such request in light of the information provided by the Borrower,
but the Guarantor shall have no obligation to provide any such supplemental
guaranty.
2.9. ISSUANCE OF SERIES A PREFERRED STOCK. As a further inducement to and in
consideration for the Guarantor's execution and delivery of the Guaranty, the
Borrower shall issue to the Guarantor, contemporaneously with the closing of the
Revolving Credit Loan, one (1) share of the Borrower's Series A Preferred Stock,
which shall be duly authorized, validly issued, fully paid, non-assessable and
free and clear of any and all liens, claims, encumbrances and preemptive rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower hereby represents and warrants to the Guarantor as
follows:
3.1 ORGANIZATION. The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and has the corporate
power and authority and all necessary governmental licenses, permits,
authorizations and approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted or presently proposed to be
conducted. The Borrower is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary.
3.2 AUTHORITY. The Borrower has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by the Borrower and the consummation
by the Borrower of the transactions contemplated hereby have been duly
authorized by the Borrower's Board of Directors, and no other corporate
proceedings on the part of the Borrower are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been duly
and validly executed by the Borrower and (assuming this Agreement constitutes a
valid and binding obligation of the Guarantor and the Managing Shareholders)
constitutes a valid and binding agreement of the Borrower, enforceable against
the Borrower in accordance with its terms,
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subject to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time in effect and
to general equitable principles.
3.3 CONSENTS AND APPROVALS. No filing with, and no permit, authorization,
license, consent or approval of, any governmental entity is necessary for the
execution, delivery and performance of this Agreement by the Borrower and the
consummation of the transactions contemplated by this Agreement.
3.4 NO CONFLICT OR VIOLATION. Neither the execution, delivery or performance of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (a) conflict with or result in any breach of any provisions of the
certificate of incorporation or bylaws of the Borrower, (b) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension, revocation or
modification) under, any of the terms, conditions or provisions of any note,
credit agreement, bond, mortgage, deed of trust, security interest, indenture,
lease, license, contract, agreement, plan or other instrument or obligation to
which Borrower is a party or by which it, or any of its properties or assets,
may be bound or affected, or (c) violate any judgment, order, writ, injunction,
decree, statute, law, ordinance, rule or regulation applicable to Borrower or
any of its properties or assets, except, in the case of clauses (b) and (c), for
such violations, breaches, defaults or rights as to which requisite waivers or
consents have been obtained.
3.5 CAPITALIZATION. The authorized capital stock of the Borrower consists of
100,000,000 shares of common stock (of which 56,250,030 were outstanding as of
December 15, 2000) and 10,000,000 shares of preferred stock (of which none are
outstanding as of the date of this Agreement).
3.6 NO MATERIAL ADVERSE CHANGE. No Material Adverse Change or Material Adverse
Effect has occurred since the date of the Borrower's most recent consolidated
quarterly financial statements filed with the Securities Exchange Commission
(the "SEC").
3.7 NO INCREASE IN DEBT. The aggregate amount of the Borrower's outstanding
consolidated debt (including all amounts required by generally accepted
accounting principles ("GAAP") to be treated as debt) does not exceed the
aggregate amount of debt reflected on the Borrower's most recent consolidated
balance sheet filed with the SEC.
3.8 MANAGING SHAREHOLDERS. Except for the Managing Shareholders, no officer or
other employee of the Borrower holds more than 1% of the Borrower's outstanding
common stock.
3.9 SUBSIDIARIES. Schedule 3.9 sets forth a complete list of all corporations or
other entities of which the Borrower, directly or indirectly, has the voting
power to elect a majority of the board of directors or other managers of such
corporations or other entities (the "Subsidiaries") together with, for each
Subsidiary, the jurisdiction of its incorporation or organization and the
percentage of each class of shares or other equity interests owned directly or
indirectly by the Borrower.
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3.10 SUBSIDIARY ORGANIZATION. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has the corporate power and authority and, except with respect
to certain governmental licenses, permits, authorizations and approvals
associated with Xtal FiberCore Brasil ("Xtal") that are in the process of being
obtained and with respect to which Xtal is entitled to be indemnified for losses
arising from the failure to so obtain by June 20, 2001, has all necessary
governmental licenses, permits, authorizations and approvals to own, lease and
operate its properties and to carry on its business as it is now being conducted
or presently proposed to be conducted. Each Subsidiary is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary.
ARTICLE IV
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as this Agreement
remains in effect, the Borrower shall, and with respect to the covenants in
Sections 4.4, 4.5 and 4.6, shall cause each of the Subsidiaries to:
4.1 CREDIT AGREEMENT PAYMENTS: On or before the applicable due date, make all
payments due to the Bank under the Credit Agreement.
4.2 NOTICE OF PROCEEDINGS OR ADVERSE CHANGE: Give notice to the Guarantor, as
soon as possible and in any event within two (2) Business Days after a
responsible officer of the Borrower has any knowledge of:
(a) the occurrence of any Default or Event of Default under the
Credit Agreement or this Agreement; or
(b) any litigation or proceeding that is pending or threatened
against the Borrower or any of the Subsidiaries in which the
portion of the total claim that is not covered by insurance
exceeds $2,500,000; in which injunctive or similar relief is
sought; or which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect.
4.3 CORRESPONDENCE, NOTICES AND FINANCIAL STATEMENTS EXCHANGED WITH THE BANK:
Immediately furnish, or cause to be furnished, to the Guarantor (a) copies of
all correspondence, notices, material information and financial statements
provided by or on behalf of the Borrower to the Bank (whether or not required
under the Credit Agreement); (b) copies of all correspondence and notices
provided to the Borrower by the Bank under the Credit Agreement; and (c) a
certificate, issued on each Due Date and signed by the Borrower's Chief
Financial Officer, stating that the Borrower is in complete compliance with this
Agreement, the Credit
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Agreement, and all related agreements or amendments between the Borrower and the
Guarantor or the Borrower and the Bank.
4.4 VISITATION AND INSPECTION RIGHTS: Permit the Guarantor to inspect, and to
discuss with the Borrower's or Subsidiary's officers, agents and auditors, the
affairs, finances, and accounts of the Borrower or Subsidiary and the Borrower's
or Subsidiary's books and records, and to make abstracts or reproductions
thereof and to duplicate, reduce to hard copy or otherwise use any and all
computer or electronically stored information or data (provided that, in all
circumstances, all information obtained by the Guarantor shall be treated as
confidential and disclosed only, if necessary, to the Guarantor's auditors,
counsel and others agents and regulatory authorities), in each case, (i) during
normal business hours, (ii) upon reasonable notice, and (iii) at the expense of
the Borrower, and at the same time as the Guarantor and its affiliates may
discuss with the Borrower's or Subsidiary's officers, agents and auditors its
affairs, finances, and accounts.
4.5 PRESERVATION OF EXISTENCE; COMPLIANCE WITH LAW:
(a) Do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its corporate existence, and
its rights, licenses, permits and franchises that are material
or necessary for the conduct of its business; and
(b) Comply with all applicable laws, rules, regulations and
orders, whether now in effect or hereafter enacted or
promulgated by any applicable Governmental Authority.
4.6 TAXES, ETC.: Pay and discharge or cause to be paid and discharged when due,
or adequately reserve for the payment of, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income and profits or
upon any of its property, real, personal or mixed or upon any part thereof, as
well as any other lawful claims that, if unpaid, might become a Lien upon such
properties or any part thereof.
4.7 BOARD OF DIRECTORS: Permit at least one Series A Director to serve as a
member of the Borrower's Board of Directors at all times.
4.8 ADDITIONAL PARTIES: Within fifteen (15) Business Days after the first day on
which an officer of the Borrower becomes the holder of more than 1% of the
Borrower's common stock, cause each such officer to execute and become a party
to this Agreement as a Managing Shareholder.
4.9 REPORTS REGARDING STATUS OF XTAL LICENSEs: On each Due Date, and on any
other date within ten (10) Business Days after receiving a request from the
Guarantor for such information, provide a written report to the Guarantor as to
the status of efforts to obtain the licenses, permits, authorizations and
approvals for Xtal that are referred to in Section 3.10 and, if applicable, the
status and amounts of any indemnity claims that have been asserted as a result
of any failure to obtain such licenses, permits, authorizations and approvals.
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4.10 FURTHER ASSURANCES: Execute and deliver to the Guarantor all further
documents, agreements and instruments, and take all further action that may be
required under applicable law, or that the Guarantor may reasonably request, in
order to effectuate the transactions contemplated by the Agreement.
ARTICLE V
NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as this Agreement
remains in effect, the Borrower shall not, and, with respect to the covenants in
Sections 5.1, 5.2, 5.3 and 5.5, shall cause each of the Subsidiaries not to,
directly or indirectly, without the prior written consent of the Guarantor:
5.1 FUNDAMENTAL CHANGES: Amend its articles of incorporation, bylaws or other
organizational documents, except as contemplated by this Agreement; dissolve,
liquidate, merge, consolidate or otherwise alter or modify its corporate name,
mailing address, principal place of business, structure, status or existence;
enter into or engage in any operation or activity materially different from that
presently conducted by it, or significantly change the scope of its business
operations.
5.2 ILLEGAL ACTIVITIES: Engage in any conduct or activity that violates any
applicable law.
5.3 INDEBTEDNESS: Create, assume, incur or permit to exist at any time (a) any
indebtedness for borrowed money other than (i) indebtedness to the Bank under
the Credit Agreement, (ii) indebtedness incurred in accordance with a capital
expenditure program and associated financing strategy approved in advance by the
Borrower's Board of Directors with the affirmative vote of at least one Series A
Director, (iii) indebtedness in existence on the Effective Date and disclosed in
the Credit Agreement, (iv) trade indebtedness incurred in the ordinary course of
business, (v) indebtedness secured by liens in existence on the Effective Date
and disclosed in the Credit Agreement, or (vi) purchase money indebtedness not
to exceed $100,000 per year; or (b) any lien or similar encumbrance on (i) any
property of the Borrower other than liens in favor of the Bank securing
repayment of the Revolving Credit Loan, or (ii) any property of a Subsidiary
other than liens securing indebtedness permitted by clause (a)(ii), (a)(iii),
(a)(v) or (a)(vi) of this Section 5.3.
5.4 SUBORDINATION: Issue or cause to be issued any debt that is or would be
senior to the indebtedness to the Guarantor other than indebtedness to the Bank
pursuant to the Credit Agreement.
5.5 DISPOSAL OF ASSETS: Sell, assign, transfer, exchange, or otherwise dispose
of, in a single transaction or a series of related transactions, 25% or more of
the Borrower's consolidated tangible assets, as defined by GAAP, unless all net
proceeds of each such transaction are applied within ten (10) Business Days
after the date of receipt to reduce permanently the maximum principal amount of
the Revolving Credit Loan.
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5.6 DIVIDENDS: Declare or pay any dividend (other than dividends payable solely
in common stock of the Borrower having voting rights equivalent to the shares on
which the dividends are paid, or in options, warrants or other rights to
purchase such common stock of the Borrower) on any shares of any class of
capital stock of the Borrower or any warrants or options to purchase any such
capital stock.
5.7 STOCK VOTING RIGHTS: Create a class of common or preferred stock with voting
rights different from or superior to those of the Common Stock or modify the
voting rights of an existing class of common or preferred stock.
5.8 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT INSTRUMENTS AND
OTHER MATERIAL AGREEMENTS: Make any optional payment, prepayment, repurchase or
redemption of any debt for borrowed money, other than debt under the Credit
Agreement; debt owed to the Guarantor; or, if approved in advance by the
Borrower's Board of Directors with the affirmative vote of at least one Series A
Director, debt owed to Crescent International, Ltd.
5.9 LIMITATION ON BORROWER GUARANTEE OBLIGATIONS: Create, incur, assume, or
allow to exist any Borrower Guarantee Obligation (as defined below), except:
(a) Borrower Guarantee Obligations in existence on the Effective
Date that are disclosed in the Credit Agreement;
(b) Borrower Guarantee Obligations with respect to indebtedness of
Subsidiaries that is permitted by Section 5.3; and
(c) Borrower Guarantee Obligations for performance, appeal,
judgment, replevin and similar bonds, or suretyship
arrangements, all arising in the ordinary course of business;
or other Borrower Guarantee Obligations that arise in the
ordinary course of business.
A BORROWER GUARANTEE OBLIGATION is the obligation of the Borrower to
pay, perform or otherwise discharge a debt or other obligation of another if the
person primarily liable fails to pay, perform or otherwise discharge such debt
or obligation.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE MANAGING SHAREHOLDERS
6.1 REPRESENTATIONS AND WARRANTIES: Each of the Managing Shareholders hereby
represents and warrants to the Guarantor as follows:
(a) AUTHORITY. Such Managing Shareholder has the power and
authority to enter into this Agreement and to carry out his
obligations hereunder. This Agreement has been duly and
validly executed by such Managing Shareholder and (assuming
this
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Agreement constitutes a valid and binding obligation of the
Guarantor, the Borrower and the other Managing Shareholders)
constitutes a valid and binding agreement of such Managing
Shareholder, enforceable against him in accordance with its
terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general
equitable principles.
(b) NO CONFLICT OR VIOLATION. Neither the execution, delivery or
performance of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) result in a
violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension, revocation or
modification) under, any of the terms, conditions or
provisions of any note, credit agreement, bond, mortgage, deed
of trust, security interest, indenture, lease, license,
contract, agreement, plan or other instrument or obligation to
which such Managing Shareholder is a party or by which he or
any of his properties or assets may be bound or affected, or
(b) violate any judgment, order, writ, injunction, decree,
statute, law, ordinance, rule or regulation applicable to such
Managing Shareholder or any of his properties or assets,
except for such violations, breaches, defaults or rights as to
which requisite waivers or consents have been obtained.
6.2 RESTRICTION ON SALE OF SHARES: So long as this Agreement remains in effect,
and unless otherwise consented to in writing by the Guarantor, no Managing
Shareholder shall sell, transfer, grant, pledge, hypothecate, or otherwise
dispose of or encumber any interest in, or the right to vote (collectively,
"Sell"), any shares of the Borrower's stock; PROVIDED, HOWEVER, that each
Managing Shareholder may Sell, (a) in the twelve-month period ending on the
first anniversary of the Effective Date, not more than the greater of (i)
500,000 shares of the Borrower's common stock or (ii) ten percent (10%) of the
total number of shares of the Borrower's common stock that, at any time during
such twelve-month period, such Managing Shareholder either (A) owned or (B) had
the right to acquire through the exercise of vested options or then-exercisable
warrants or conversion rights but did not acquire during such subsequent
twelve-month period; and (b) in any subsequent twelve-month period, not more
than ten percent (10%) of the total number of shares of the Borrower's common
stock that, at any time during such subsequent twelve-month period, such
Managing Shareholder either (i) owned or (ii) had the right to acquire through
the exercise of vested options or then-exercisable warrants or conversion rights
but did not acquire during such subsequent twelve-month period.
6.3. TERMINATION OF MANAGING SHAREHOLDER STATUS. A Managing Shareholder shall
cease to be a party to and be bound by the provisions of this Agreement as of
the first day upon which such Managing Shareholder is neither (i) an officer or
employee of, nor (ii) a consultant providing management services or exercising
significant decision-making authority with respect to, the Borrower or any of
the Subsidiaries or their respective businesses.
13
ARTICLE VII
EVENTS OF DEFAULT
Each of the following events or circumstances shall constitute an "EVENT OF
DEFAULT." An Event of Default hereunder shall be deemed to be continuing unless
and until waived in writing by the Guarantor.
7.1 The failure of the Borrower to make any payment or issue any shares of
Common Stock when due, as provided in Article II of this Agreement.
7.2 The failure of the Borrower to perform, comply with or observe in any
material respect any of the covenants specified in Article V of this Agreement.
7.3 The failure of any of the Managing Shareholders to perform, comply with or
observe in any material respect any of the covenants in Article VI of this
Agreement.
7.4 The failure of the Borrower to perform, comply with or observe any other
term, covenant or agreement applicable to the Borrower contained in this
Agreement unless such failure is cured within 20 days after notice thereof by
the Guarantor.
7.5 Any material breach of a representation or warranty made by the Borrower or
a Managing Shareholder in this Agreement.
7.6 Any of the following events shall occur:
(a) The Borrower or any of the Subsidiaries shall admit its
inability to pay its debts as they mature or shall make an
assignment for the benefit of itself or any of its creditors;
(b) Proceedings in bankruptcy or for reorganization of the
Borrower or any of the Subsidiaries, or for the readjustment
of its debts under the Bankruptcy Code, as amended, or any
part thereof, or under any other laws, whether state or
federal, for the relief of debtors, now or hereafter existing,
shall be commenced against or by the Borrower or any of the
Subsidiaries and, except with respect to any such proceedings
instituted by the Borrower or any of the Subsidiaries, shall
not be discharged within sixty (60) days of their
commencement; or
(c) A receiver or trustee shall be appointed for the Borrower of
any of the Subsidiaries or for any substantial part of its
assets, or any proceedings shall be instituted for the
dissolution or the full or partial liquidation of the Borrower
or any of the Subsidiaries, and except with respect to any
such appointment requested or proceedings instituted by the
Borrower or any of the Subsidiaries, such receiver or trustee
or proceedings shall not be discharged within sixty (60) days
of their appointment or commencement; or
14
(d) The Borrower or any of the Subsidiaries shall discontinue
business or materially change the nature of its business.
7.7 Indebtedness of the Borrower or any of the Subsidiaries for borrowed money
in an outstanding principal amount of $2,500,000 or more shall be accelerated by
the lender as a result of the occurrence of an event of default under the terms
of the documents evidencing or securing such indebtedness.
ARTICLE VIII
REMEDIES FOR AN EVENT OF DEFAULT
8.1 CONTROL OF BOARD. Upon the occurrence and during the continuation of an
Event of Default, the Guarantor shall have the right, but not the obligation, as
holder of the Series A Preferred Stock, to designate additional Series A
Directors to be added to the Borrower's Board of Directors pursuant to the terms
of the Series A Designations. If the Guarantor elects to exercise such right, it
shall do so by delivering written notice (a "DESIGNATION NOTICE") to the
Borrower specifying the names of the individuals to be appointed as additional
Series A Directors.
(a) The appointments of the additional Series A Directors shall
become effective immediately upon delivery of the Designation
Notice.
(b) Within one day after the Guarantor delivers a Designation
Notice, the Borrower's chief executive officer shall call and
give written notice to all directors, including all Series A
Directors, of a special meeting of the Borrower's Board of
Directors (which may be by telephone) to occur no later than
two days after the date of such notice. The notice shall
specify the place, date and time of the special meeting and
shall be delivered by hand, by overnight courier or by
facsimile. If the Borrower's chief executive officer fails to
call and give notice of such meeting within the time specified
by this subsection, such special meeting may be called and
notice may be given by the Series A Directors.
8.2 ACCELERATION. Upon the occurrence of an Event of Default specified in
Section 7.6, and without any action by the Guarantor, (a) all amounts owed to
the Guarantor under this Agreement shall immediately become due and payable in
full, and (b) any right the Borrower may have to satisfy such obligations by
issuing Common Stock shall immediately terminate.
8.3 REMEDIES CUMULATIVE. The remedies provided for in this Article VIII are
cumulative and are not exclusive of any other remedies provided by law.
ARTICLE IX
EFFECTIVE DATE; CONDITIONS PRECEDENT; TERMINATION
15
9.1 EFFECTIVE DATE. This Agreement shall become effective on the date (the
"EFFECTIVE DATE") that is the later of (a) the date of this Agreement or (b) the
first day on which the Guaranty has been executed by the Guarantor and delivered
to the Bank; provided, however, that if the Effective Date has not occurred by
December 20, 2000 this Agreement shall be null and void and no party shall have
any further rights or obligations hereunder.
9.2 CONDITIONS PRECEDENT. The obligation of the Guarantor to execute the
Guaranty and deliver it to the Bank is conditioned upon satisfaction of each of
the following conditions at or before closing of the Revolving Credit Loan:
(a) This Agreement shall have been executed and delivered by the
Borrower and each of the Managing Shareholders;
(b) The terms of the Revolving Credit Loan, the Credit Agreement,
and each other loan document shall be acceptable to the
Guarantor;
(c) The Guaranty shall be substantially in the form attached
hereto as Exhibit A;
(d) The Borrower's Bylaws shall have been amended as set forth in
Exhibit C;
(e) The Borrower's Board of Directors shall have adopted a
resolution designating the rights, privileges and preferences
of the Series A Preferred Stock, which shall be substantially
in the form attached hereto as Exhibit B, and a certificate of
designations setting forth such rights, privileges and
preferences shall have been duly filed with the Secretary of
State of Nevada.
(f) The Series A Preferred Stock shall have been duly issued to
the Guarantor, free and clear of all liens, claims and
encumbrances, and the Guarantor shall have received a
certificate evidencing its ownership of such Series A
Preferred Stock.
(g) The Guarantor shall have received each of the following, in
form and substance reasonably acceptable to counsel for the
Guarantor:
(i) Copies of the Borrower's certificate or articles of
incorporation and the certificate of designation of
rights, privileges and preferences of the Series A
Preferred Stock, each certified by the Secretary of
State of Nevada;
(ii) A copy of the Borrower's amended bylaws, certified by
the Secretary of the Borrower;
(iii) A certified copy of a resolution of the Borrower's
Board of Directors evidencing approval of this
Agreement and the transactions contemplated hereby;
16
(iv) An incumbency certificate identifying each of the
Borrower's directors and executive officers and
including specimen signatures of the officers
executing this Agreement;
(v) The opinion of Cadwalader, Xxxxxxxxxx & Xxxx, counsel
to the Borrower, in substantially the form attached
hereto as Exhibit D; and
(vi) The opinion of Lionel, Xxxxxx & Xxxxxxx, Nevada
counsel to the Borrower, in substantially the form
attached hereto as Exhibit E.
9.3 TERM AND TERMINATION. This Agreement and all covenants, agreements,
representations and warranties herein shall survive the closing of the Revolving
Credit Loan and continue in full force and effect from the Effective Date until
BOTH (a) the Guaranty has been terminated pursuant to Section 8(a) thereof AND
(b) all obligations of the Borrower under Article II of this Agreement have been
fully and indefeasibly performed. Notwithstanding any termination of this
Agreement pursuant to the immediately preceding sentence, this Agreement shall
be reinstated, and the Borrower shall immediately reissue the Series A Preferred
Stock to the Guarantor if such stock is not then outstanding, if at any time
EITHER (i) the Guaranty is reinstated pursuant to Section 8 thereof, OR (ii) any
payment made to or value received by the Guarantor hereunder is rescinded or
must otherwise be returned by the Guarantor upon the insolvency, bankruptcy or
reorganization or the Borrower, or otherwise, all as though such payment had not
been made or value received.
ARTICLE X
MISCELLANEOUS
10.1 ENTIRE AGREEMENT. This Agreement (including the Exhibits hereto)
constitutes the entire agreement of the parties hereto and supersedes any and
all prior or contemporaneous agreements, written or oral, as to the matters
contained herein.
10.2 AMENDMENTS, WAIVERS. No amendment of this Agreement shall be effective
unless the same is in writing and signed by the Guarantor and the Borrower. No
waiver of any provision of this Agreement shall be effective unless the same is
in writing and signed by the waiving party. The Guarantor's failure to insist
upon the strict performance of any term, condition or other provision of this
Agreement, or to exercise any right or remedy hereunder, shall not constitute a
waiver by the Guarantor of any such term, condition or other provision or Event
of Default in connection therewith, nor shall a single or partial exercise of
any such right or remedy preclude any other or future exercise, or the exercise
of any other right or remedy; and any waiver of any such term, condition or
other provision or of any such Event of Default shall not affect or alter this
Agreement, and each and every term, condition and other provision of this
Agreement shall, in such event, continue in full force and effect and shall be
operative with respect to any other then existing or subsequent Event of Default
in connection therewith.
10.3 SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Neither the Borrower
17
nor any of the Managing Shareholders shall have the right to assign all or any
part of this Agreement or any interest herein without the prior written consent
of the Guarantor. The Guarantor may assign this Agreement without the consent of
the Borrower or the Managing Shareholders to any affiliate of the Guarantor or
to any purchaser of the entire equity interest of Tyco, or Tyco's affiliates, in
the Borrower.
10.4 GOVERNING LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK without regard to the conflict-of-laws
principles thereof (other than Section 5-1401 of the General Obligations Law of
the State of New York).
10.5 SUBMISSION TO JURISDICTION; WAIVERS: Each party hereto hereby irrevocably
and unconditionally
a. submits itself and its property in any legal action or
proceeding relating to this Agreement, any amendments to this
Agreement, or for recognition enforcement of any judgment in
respect thereof, to the exclusive general jurisdiction of the
courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and
appellate courts from either thereof; and
b. appoints CT Corporation as its agent for service of process in
the state of New York.
10.6 NOTICES: All Notices, communications and distributions hereunder shall be
given or made to the intended recipient at the address specified below, or at
such other address as the addressee may hereafter specify for the purpose by
written notice to the other party hereto. Such Notices and other communications
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing and may be delivered by
hand, by overnight courier, by facsimile, or by first-class mail (return receipt
requested). All such Notices and other communications shall be deemed to have
been duly given (a) if delivered by hand, overnight courier or first-class mail
(return receipt requested), on the date of delivery; and (b) if transmitted by
facsimile (with receipt confirmed by machine), on the date of transmission if
the same is a Business Day or, if not a Business Day, on the first Business Day
after the date of transmission.
To the Guarantor:
Tyco International Group S.A.
0, xxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Attention: Xxxxxxx X. Xxxxx
Telecopier: (011-352) 464-350
With copies to:
18
Tyco International (US) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attn: Chief Corporate Counsel
Fax: (000) 000-0000
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telecopier: (000) 000-0000
To the Borrower:
FiberCore, Inc.
000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000 0000
With a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
To Xxxx X. Xxxxxx
c/o FiberCore, Inc.
000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000 0000
To Xxxxxxx Xx Xxxx
c/o FiberCore, Inc.
000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000 0000
To Xxxxxx Xxxxxxxx
c/o FiberCore, Inc.
000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
19
Telecopier: (000) 000 0000
10.7 SEVERABILITY: In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.8 SECTION HEADINGS: The Article and Section headings in this Agreement are
inserted for convenience of reference only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
10.9 COUNTERPARTS: This Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
10.10 SPECIFIC PERFORMANCE: The Parties each acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to preliminary relief to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy that they may be entitled to by law or
equity.
20
IN WITNESS WHEREOF, the parties have executed, or caused their duly authorized
representatives to execute, this Agreement as of the date first above written.
TYCO INTERNATIONAL GROUP S.A.
By: /s/ XXXXXXX X. XXXXX
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
FIBERCORE, INC.
By:
/s/ XXXX X. XXXXXX
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman, President and CEO
/s/ XXXXXXX XX XXXX
----------------------------------
Name: Xxxxxxx Xx Xxxx
Title: Secretary and Director
/s/ XXXXXX XXXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer and Director
EXHIBITS:
A. Form of Guaranty
B. Terms of Series A Preferred Stock
C. Amendments to Bylaws
D. Form of Opinion of Cadwalader, Xxxxxxxxxx & Xxxx (omitted)
E. Form of Opinion of Lionel, Xxxxxx & Xxxxxxx (omitted)
EXHIBIT A
LIMITED GUARANTY
LIMITED GUARANTY (the "Guaranty"), dated as of December 20, 2000 (the
"EFFECTIVE DATE"), by Tyco International Group S.A., a company incorporated
under the laws of Luxembourg (the "GUARANTOR"), in favor of Fleet National Bank,
a national banking association, and its foreign branches (the "BANK"), in
consideration of the Bank providing certain credit facilities as specified in
Section 1 below (the "FINANCIAL ACCOMMODATION") to Fibercore, Inc., (the
"DEBTOR"), a corporation that is partially owned by an affiliate of the
Guarantor.
WHEREAS, in order to induce the Bank to provide the credit facilities
to the Debtor under the Financial Accommodation, the Guarantor has agreed,
subject to the limitations set forth in Section 3 below, to guarantee all
indebtedness and other obligations owing by the Debtor to the Bank pursuant to
the Financial Accommodation;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Guarantor agrees as follows:
1. FINANCIAL ACCOMMODATION. As used herein, the term "Financial
Accommodation" means the credit facility in the maximum principal amount of
$10,000,000.00 extended by the Bank to the Debtor pursuant to that certain Loan
Agreement dated as of December 20, 2000 (the "CREDIT AGREEMENT") and the
revolving credit note and other agreements referred to therein or relating
thereto, (together, the "LOAN DOCUMENTS"), as the same may be amended from time
to time, but does not include any loan or other form of credit extended by the
Bank to the Debtor other than under the Loan Documents.
2. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees
to the Bank, subject to the limitations set forth in Section 3 below, the due
and punctual payment of all funds owed by the Debtor to the Bank pursuant to and
in accordance with the terms and conditions of the Loan Documents (the
"OBLIGATIONS") and agrees to pay the Obligations to the Bank on first written
demand therefor, in accordance with Section 12 below, without any withholding,
deduction or setoff for any reason or on any accounts whatsoever; PROVIDED that
the Bank shall not demand any of the Obligations until there has been default by
the Debtor on such Obligations and notice of such default has been received by
the Debtor and the Guarantor and any applicable time or grace periods have
expired. Except for the notice and time or grace periods requirements set forth
in the immediately preceding sentence, such Guaranty is in no way conditional
upon any requirement that the Bank first attempt to collect any of the
Obligations from the Debtor or resort to any security or other means of
obtaining payment of the Obligations. Subject to the limitations set forth in
Section 3 below, payments by the Guarantor hereunder may be required by the Bank
on any number of occasions.
3. GUARANTY LIMITATIONS. Notwithstanding anything to the contrary
contained or implied in this Guaranty, the aggregate actual and contingent
liability of the Guarantor under this Guaranty shall be limited to a maximum
principal amount of USD $10,000,000 (Ten Million U.S. Dollars) plus interest,
costs and charges upon this maximum principal amount, in accordance with the
terms and conditions of the Loan Documents, without any withholding, deduction
or set off for any reason or account whatsoever. In no event shall the Guarantor
be liable under this Guaranty for any amounts advanced by the Bank on or after
the date on which the Bank first demands payment by the Guarantor (the "Demand
Date"). The limitation in the immediately preceding sentence shall not apply to
(i) advances made on or after the Demand Date to fund payment of letters of
credit issued before such Demand Date under the Credit Agreement for the account
of the Debtor or (ii) interest, fees, costs and other expenses that accrue on or
after the Demand Date under the terms of the Loan Documents on (x) advances made
before the Demand Date or (y) advances made after the Demand Date to fund
payment of letters of credit issued before the Demand Date.
4. WAIVERS BY GUARANTOR. The Guarantor (i) agrees that the Obligations
will be paid and performed strictly in accordance with their respective terms
regardless of any law, or any regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Bank with
respect thereto, and (ii) except as specifically provided herein, waives
presentment, demand, protest, notice of acceptance, notice of Obligations
incurred and all other notices of any kind, all defenses that may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Debtor, and all suretyship defenses generally. Without limiting the generality
of the foregoing, the Guarantor agrees to the provisions of any instrument
evidencing, securing or otherwise executed by the Debtor in connection with the
Financial Accommodation or any Obligation and, except as specifically provided
herein, the Guarantor agrees that the Obligations of the Guarantor hereunder
shall not be released or discharged, in whole or in part, or otherwise affected
by (i) the failure of the Bank to assert any claim or demand or to enforce any
right or remedy against the Debtor; (ii) any extensions or renewals of the
Financial Accommodation or any Obligation; (iii) any rescissions, waivers,
amendments or modifications of any of the terms or provisions of any agreement
evidencing, securing or otherwise executed in connection with the Financial
Accommodation or any Obligation; (iv) the substitution or release of the Debtor
or any other person primarily or secondarily liable for any Obligation (other
than as a result of the payment of all the Obligations in accordance with the
terms and conditions under which the Financial Accommodation was provided); (v)
the adequacy of any rights the Bank may have against any collateral or other
means of obtaining repayment of the Obligations; (vi) the impairment of any
collateral securing the Obligations, including the failure to perfect or
preserve any rights the Bank might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(vii) any other act or omission that might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST DEBTOR. If for any reason
the Debtor has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become unrecoverable
from the Debtor
2
by operation of law or for any other reason, including any declaration by any
court of law or equity that any of the Obligations are void or unenforceable,
this Guaranty shall nevertheless be binding on the Guarantor to the same extent
as if the Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of the
Obligations is stayed upon the insolvency, bankruptcy or reorganization of the
Debtor, or for any other reason, all such amounts otherwise subject to
acceleration in accordance with the terms and conditions under which the
Financial Accommodation was provided shall be immediately due and payable by the
Guarantor.
6. WITHHHOLDING, ETC. In the event that the Guarantor is required by
statute or law to make any withholding, deduction or setoff in respect of any
payment made or to be made by the Guarantor hereunder, the Guarantor will, in
addition to such amount, also pay to the Bank such sum as may be necessary to
give the Bank such sum as it would have been entitled to under the terms of this
Guaranty but for such withholding, deduction or setoff.
7. SUBROGATION. The Guarantor shall be subrogated to all rights of the
Bank against the Debtor in respect of amounts paid by the Guarantor pursuant to
the provisions of this Guaranty; PROVIDED HOWEVER that the Guarantor shall not
be entitled to enforce or to receive any payments arising out of, or based upon,
such right of subrogation until all of the Obligations shall have been paid and
discharged in full.
8. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the earlier of (a) payment in full of all principal, interest,
fees or other amounts then owing under the Credit Agreement and the other Loan
Documents, and (b) receipt by Bank of written notice of the Guarantor's
intention to discontinue this Guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Obligations. No
notice provided in clause (b) shall be effective unless received and
acknowledged by an officer of the Bank at its head office or at the branch of
the Bank where this Guaranty is given. No such notice under clause (b) shall
affect any rights of the Bank or of any affiliate hereunder including, without
limitation, the rights set forth in Sections 4 and 7, with respect to
Obligations incurred prior to the receipt of such notice or Obligations incurred
pursuant to any contract or commitment in existence prior to such receipt, and
all checks, drafts, notes, instruments (negotiable or otherwise) and writings
made by or for the account of the Debtor and drawn on the Bank or any of its
agents purporting to be dated on or before the date of receipt of such notice,
although presented to and paid or accepted by the Bank after that date, shall
form part of the Obligations. This Guaranty shall continue to be effective or be
reinstated, notwithstanding any such notice, if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by the Bank upon the insolvency, bankruptcy or reorganization of the
Debtor, or otherwise, all as though such payment had not been made or value
received.
9. RELEASE. Upon delivery to the Bank of a standby letter of credit
drawn on a United States bank with at least $75,000,000,000.00 in assets and a
long term unsecured credit rating of AA or higher by Standard & Poor's Rating
Group or Aa2 or higher by Xxxxx'x Investor's Service, Inc., such letter of
credit to be in an amount equal to 110% of the maximum amount of the then
available Financial Accommodation, the Bank shall release the
3
Guarantor from all obligations under this Guaranty, whereupon this Guaranty
shall automatically become void and of no further effect. Nothing in this
Section 9 is intended or shall be construed to limit the Bank's right, in its
sole discretion, to release this Guaranty under any other circumstances it deems
appropriate. Once this Guaranty has been released, pursuant to this Section 9,
by the Bank, it cannot be reinstated pursuant to Section 8.
10. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Bank. No failure
on the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
11. GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to the
conflict-of-laws principles thereof.
12. NOTICES: All Notices, communications and distributions hereunder
shall be given or made to the intended recipient at the address specified below,
or at such other address as the addressee may hereafter specify for the purpose
by written notice to the other party hereto. Such Notices and other
communications (including, without limitation, any modifications of, or waivers
or consents under, this Agreement) shall be given or made in writing and may be
delivered by hand, by overnight courier, by facsimile, or by first-class mail
(return receipt requested). All such Notices and other communications shall be
deemed to have been duly given (a) if delivered by hand, overnight courier or
first-class mail (return receipt requested), on the date of delivery; and (b) if
transmitted by facsimile (with receipt confirmed by machine), on the date of
transmission if the same is a Business Day or, if not a Business Day, on the
first Business Day after the date of transmission. For the purposes of this
Guaranty, a Business Day is any day other than a Saturday, Sunday or any other
day on which banking institutions are authorized or required by law, executive
order or governmental decree to be closed in Luxembourg, New York or
Massachusetts.
To the Guarantor:
Tyco International Group S.A.
0, xxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Attention: Xxxxxxx X. Xxxxx
Telecopier: (011-352) 464-350
With copies to:
Tyco International (US) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attn: Chief Corporate Counsel
4
Fax: (000) 000-0000
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telecopier: (000) 000-0000
To the Bank:
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Senior Commercial Loan Officer/Massachusetts
With copies to:
Fleet National Bank
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Senior Commercial Loan Officer
and
Bowditch & Xxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx III, Esquire
13. JURY TRIAL WAIVER. THE GUARANTOR AND THE BANK (BY ACCEPTANCE OF
THIS GUARANTY) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER FINANCING INSTRUMENTS
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY RELATED HERETO, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE BANK RELATING TO THE
ADMINISTRATION OF THIS GUARANTY AND THE OBLIGATIONS GUARANTEED HEREBY OR
ENFORCEMENT OF THE FINANCING INSTRUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK
TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE GUARANTOR
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
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DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE
GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS GUARANTY AND FURNISH FINANCIAL
ACCOMMODATIONS TO THE CUSTOMER.
14. ENTIRE AGREEMENT. This Guaranty constitutes the entire agreement of
the Guarantor with respect to the matters set forth herein.
15. REMEDIES CUMULATIVE. The rights and remedies herein provided are
cumulative and not exclusive of any remedies provided by law or any other
agreement, and this Guaranty shall be in addition to any other guaranty of the
Obligations.
16. SEVERABILITY. The invalidity or unenforceability of any one or more
clauses of this Guaranty shall not affect the validity or enforceability of its
remaining provisions.
17. HEADINGS. The captions herein are for the ease of reference only
and shall not affect the meaning of the provisions hereof.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered by its duly authorized officer as of the date first above
written.
The Guarantor:
TYCO INTERNATIONAL GROUP S.A.
By: /s/ XXXXXXX X. XXXXX
------------------------
Xxxxxxx X. Xxxxx
Managing Director
AGREED TO AND ACCEPTED:
FLEET NATIONAL BANK
By: /s/ XXXXX XXXXXX XX
------------------------
Xxxxx Xxxxxx XX
Vice President
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EXHIBIT C
AMENDMENTS TO BYLAWS OF FIBERCORE, INC.
Article II, Sections 1, 2 and 4 of the Bylaws of FiberCore, Inc. shall
be amended and restated in their entirety as follows:
SECTION 1. NUMBER AND TERM OF OFFICE
The number of members of the Corporation's Board of Directors
("Directors") who shall constitute the whole board shall be such number
as the Board of Directors ("Board") shall at the time have designated,
except that (i) such number shall be not less than three (3) and not
more than fifteen (15), and (ii) no more than six (6) Directors who are
not Series A Directors (defined below) may serve on the Board at any
given time, unless an additional independent Director is required to be
a member of the Board for purposes of compliance with NASDAQ listing
standards, in which case the number of Directors who are not Series A
Directors shall not exceed seven (7).
The number, manner of appointment, classification,
replacement, nomination and election, and certain other matters
pertaining to Series A Directors (as defined in the Designation of
Rights, Privileges and Preferences of Series A Preferred Stock adopted
by resolution of the Board on December 18, 2000, as amended in
accordance with the terms thereof ("SERIES A STOCK TERMS")) shall be
governed by the Series A Stock Terms. To the extent the Series A Stock
Terms conflict with these Bylaws, the Series A Stock Terms shall
control.
So long as that certain Guarantor Indemnification Agreement
dated as of December 20, 2000 by and among the Corporation and Tyco
International Group, S.A., a company incorporated under the laws of
Luxembourg, and the Managing Shareholders named therein
("Indemnification Agreement") is in effect: (a) the Board shall include
at least one Series A Director; and (b) Board nominations for
non-Series A Directors shall be made by existing non-Series A
Directors.
Notwithstanding the provisions of the first paragraph of this
Section 1, upon the occurrence of an Event of Default under the
Indemnification Agreement and delivery to the Corporation by the holder
of the Corporation's Series A Preferred Stock ("Series A Holder") of
notice of exercise of the right of the Series A Holder under the Series
A Stock Terms to cause an increase in the size of the Board and the
number of Series A Directors, the size of the Board shall be
automatically increased and additional Series A Directors shall be
elected such that, following such increase and elections, the Series A
Directors constitute a majority of the Board.
The Corporation shall maintain a classified and staggered
Board, with each Director serving for a term of three years, except for
the first election after the creation of a classified and staggered
Board. At such first election, there shall be three classes of
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Directors (Class I, Class II and Class III). Class I Directors shall be
elected to an initial one year term. Class II Directors shall be
elected to an initial two year term and Class III Directors shall be
elected to an initial three year term. Following their initial terms,
each class of Directors shall thereafter be elected to three year
terms. Each class of Directors shall be divided as evenly as possible.
To the extent the number of Directors is not evenly divided among the
three classes, the extra Director shall first be placed in Class III,
and the next extra Director, if applicable, shall be placed in Class
II.
Any decrease in the number of Directors shall not become
effective until the expiration of the term of the Directors then in
office unless, at the time of such decrease, there shall be vacancies
on the board which are being eliminated by the decrease.
The Board shall have a Chairman of the Board, who shall
preside at all meetings of the Board and the Stockholders at which such
person is present. The Chairman of the Board shall make all final
rulings on procedure at meetings of the Board of Stockholders. The
Chairman of the Board shall have and perform such other duties as from
time to time may be assigned to him by the Board.
SECTION 2. VACANCIES
If the office of any Director becomes vacant by reason of
death, resignation, disqualification, removal, expansion of the Board
or other causes, a successor may be elected for the unexpired term and
until his or her successor is elected and qualified: (i) if such
vacancy is of a seat held or to be held by a Series A Director, by a
majority of the Series A Directors remaining in office, even if they
constitute less than a quorum; and (ii) if such vacancy is of a seat
held or to be held by a Director other than a Series A Director, by a
majority of the Directors other than Series A Directors remaining in
office, even if they constitute less than a quorum. Notwithstanding the
foregoing, in the event all positions of a given class of Directors are
vacant, the Series A Holder will fill vacancies of Series A Directors
and holders of all other classes of the Corporation's capital stock
entitled to vote for Directors will fill vacancies occurring among
Directors other than Series A Directors.
SECTION 4. SPECIAL MEETINGS
Special meetings of the Board may be called by one-third of
the Directors then in office (rounded up to the nearest whole number)
or by the chief executive officer and shall be held at such place, on
such date and at such time as they or he or she shall fix. Series A
Directors shall be considered to be in office from the time a
Designation Notice (as defined in the Series A Stock Terms) is
delivered to the Corporation. Written notice of the place, date, and
time of each such special meeting shall be given to each Director by
hand delivery, overnight courier, or facsimile (with receipt confirmed
by the receiving machine) at least 24 hours before the meeting, unless
such notice is waived by a Director who would otherwise receive it.
Unless otherwise indicated in the notice thereof, any and all business
may be transacted at a special meeting.
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Article IX of the Bylaws of FiberCore, Inc. shall be amended and
restated in its entirety as follows:
ARTICLE IX - AMENDMENTS
Amendments to these Bylaws may be made, to the extent
permitted by applicable law, by a majority of the Directors holding
office and present at a meeting at which a quorum is present or by a
majority vote of the stockholders entitled to vote at any annual
stockholders' meeting or at any special stockholders' meeting when the
proposed amendment has been set out in the notice of such meeting.
Notwithstanding the foregoing: (i) no amendment adopted by
the Directors that would adversely affect the rights, preferences,
privileges or voting power of the Series A Holder shall become
effective unless one Series A Director is a member of the Board and
such amendment is approved unanimously by each and every member of the
Board then in office or, such amendment is approved by the
Corporation's shareholders, including the Series A Holder, voting as a
separate class; (ii) no amendment adopted by the shareholders that
would adversely affect the rights, preferences, privileges or voting
power of the Series A Holder shall become effective unless the same
shall have been approved by the Series A Holder, voting as a separate
class; and (iii) no amendment to subsection (b) of the third paragraph
of Article II, Section I of these bylaws shall become effective unless
approved unanimously by each and every member of the Board then in
office or by holders of a majority of the Corporation's shares entitled
to vote thereon.
