EXECUTION COPY
GUARANTY
THIS GUARANTY, is made effective as of September 21, 1998, by Tyco
International Ltd., a Bermuda company with a principal place of business at
The Xxxxxxx Bldg., 00 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx XX 00 Xxxxxxx
("Tyco"), to (a) Bessemer Holdings, L.P., a Delaware limited partnership
("Bessemer"), (b) the other stockholders of Graphic Holdings, Inc., a New
York corporation (the "Company"), whose names appear on the signature pages
of the Stock Purchase Agreement dated as of September 21, 1998 (the
"Purchase Agreement"), among Bessemer, such other stockholders, the Company
and Tyco Group S.a.r.l., a Luxembourg corporation (the "Buyer"), (c) the
Other Sellers (as defined in the Purchase Agreement) (Bessemer, such other
stockholders and the Other Sellers referred to herein collectively as the
"Sellers"), (d) the holders of Preferred Shares (the "Preferred Shares
Holders") and (e) the holders of Options (such holders, the Preferred
Shares Holders and the Sellers are collectively referred to herein as the
"Stakeholders"), in each case with respect to the obligations of the Buyer
which is an indirect wholly-owned subsidiary of Tyco, with a principal
place of business at 0xx Xxxxx, 0, Xxxxxx Xxxxx Xxxxxx, X-0000 Xxxxxxxxxx.
Capitalized terms used, but not defined herein, shall have the meanings
specified in the Purchase Agreement.
W I T N E S S E T H: That
WHEREAS, the Company, the Principal Sellers and Buyer are parties to
the Purchase Agreement; and
WHEREAS, as an inducement to the Sellers to enter into the Purchase
Agreement and to perform their obligations thereunder, Tyco is entering
into this Guaranty.
NOW, THEREFORE, in consideration of the foregoing matters, and for
other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Tyco hereby agrees as follows:
ARTICLE I
1. Tyco hereby irrevocably and unconditionally guarantees to the
Stakeholders and any of their successors and assigns, the full and timely
payment and performance of all debts, obligations and liabilities of Buyer
to the Stakeholders arising pursuant to the Purchase Agreement and any
document executed incident thereto, now due or hereafter falling due if
Buyer fails to perform, pay or discharge such debts, obligations and
liabilities, together with all costs
of collection, compromise or enforcement, including, without limitation,
reasonable attorneys' fees incurred with respect to any such debts,
obligations or liabilities or with respect to this or any other guaranty of
any of them, or with respect to a proceeding under the United States
Bankruptcy Code or any other state or federal bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the rights of
creditors generally, or a trust mortgage, composition or assignment for the
benefit of creditors concerning Buyer or Tyco, together with interest on
all such costs of collection, compromise or enforcement from the date
arising (all of the foregoing, collectively, the "Obligations").
2. Tyco hereby agrees:
(a) that this Guaranty is irrevocable and shall not be impaired by any
modification, supplement, extension or amendment of the Purchase Agreement
or any of the Obligations, nor by any modification release or other
alteration of any of the Obligations hereby guaranteed or of any security
therefore, nor by any agreements or arrangements whatever with Buyer or
anyone else;
(b) that the liability of Tyco hereunder is primary, direct and
unconditional and not of collection only and may be enforced without
requiring the Stakeholders first to resort to any other right, remedy or
security, and does not require the Stakeholders to first make, pursue or
exhaust any demand, claim or remedy against the Buyer or any of its
affiliates or any other person or pursue any other remedy whatever;
(c) that Tyco shall not have any right of subrogation, reimbursement
or indemnity whatsoever, nor any right of recourse to security for any of
the Obligations, unless and until all of the Obligations have been fully
paid and performed;
(d) that if Buyer or Tyco should at any time become insolvent or make
a composition, trust mortgage or general assignment for the benefit of
creditors, or if a proceeding under the United States Bankruptcy Code or
any other state or federal bankruptcy, reorganization, receivership,
insolvency or other similar law affecting the rights of creditors generally
shall be filed or commenced by, against or in respect of Buyer or Tyco, any
and all obligations of Tyco shall immediately become due and payable
without notice which is expressly waived;
(e) that, if any payment or transfer to the Stakeholders which has
been credited against any Obligation under the Purchase Agreement, is
voided or rescinded or required to be returned by the Stakeholders, whether
or not in connection with any event or proceeding described in Section
2(d), this Guaranty shall continue in effect or be reinstated as though
such payment, transfer or recovery had not been made;
(f) that the Stakeholders' and/or the Company's books and records
showing the accounts among the Stakeholders, the Company and Buyer shall be
admissible in any action or proceeding;
(g) that this Guaranty shall be construed as an absolute and
independent, unconditional, present and continuing and unlimited obligation
of Tyco without regard to the regularity, validity or enforceability of the
Purchase Agreement or any of the Obligations, and without regard to whether
any Obligation is limited, modified, voided, released or discharged in any
proceeding under the United States Bankruptcy Code or any other state or
federal bankruptcy, reorganization, receivership, insolvency or other
similar law affecting the rights of creditors generally; and
(h) that nothing shall discharge or satisfy the liability of Tyco
hereunder except the full payment and performance of all of the
Obligations, and shall be reinstated, if at any time any payment of any of
the Obligations is rescinded or otherwise returned by any Stakeholder or
upon the insolvency, bankruptcy or reorganization of Buyer or any of its
affiliates, all as though such payment had not been made.
3. Tyco waives to the greatest extent permitted by the internal laws
of the State of New York without regard to the conflicts of law principles
of such State: notice of acceptance hereof; presentment and protest or
demand of any instrument, and notice thereof; notice of default or
dishonor; notice of foreclosure; notice of any modification, any
requirement for promptness, diligence and notice of acceptance, release or
other alteration of any of the Obligations or of any security therefor and
all other notices to which Tyco might otherwise be entitled. Tyco hereby
waives to the greatest extent permitted by the internal laws of the State
of New York without regard to the conflicts of law principles of such State
any provision of any statute or judicial decision otherwise applicable
hereto which restricts or in any way limits the rights of any obligee
against a guarantor or surety following a default or
failure of performance by an obligor with respect to whose obligations the
guarantee or surety is provided.
4. This Guaranty, all acts and transactions hereunder, and the rights
and obligations of the parties hereto shall be governed, construed and
interpreted according to the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such
State without regard to the conflicts of law principles of such State,
shall be binding upon the successors and assigns of Tyco, and shall issue
to the benefit of the Stakeholders' successors and assigns; provided,
however, that the obligations hereunder are personal to Tyco and may not be
assigned without the Stakeholders' prior written consent.
5. Notwithstanding anything to the contrary contained herein, Tyco
shall have the right to rely on any defense available to Buyer under the
Purchase Agreement or otherwise available to Buyer with respect to the
Purchase Agreement in satisfaction of this Guaranty; provided, however,
that Tyco will not exercise any rights which it may acquire by way of
subrogation under this Guaranty by any payment made hereunder or otherwise,
until all Obligations have been performed or paid in full.
ARTICLE II
Tyco represents and warrants to the Stakeholders as follows:
A. Corporate Organization. Tyco is a corporation duly organized,
validly existing and in good standing under the laws of Bermuda. Tyco has
the requisite corporate power and authority to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted and is duly licensed or qualified as
a foreign corporation in each domestic or foreign jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would
not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of Tyco and its subsidiaries,
taken as a whole, or on the ability of Tyco to guarantee all of the
Obligations contemplated herein.
B. Authority Relative to this Agreement. Tyco has the requisite
corporate power and authority to execute and deliver this Guaranty and to
guarantee all of the
Obligations contemplated herein. The execution and delivery by Tyco of this
Guaranty and the guarantee by Tyco of all of the Obligations contemplated
herein have been duly authorized by all necessary corporate action on the
part of Tyco, and no other corporate proceeding is necessary for the
execution and delivery of this Guaranty, the performance by Tyco of its
obligations hereunder, and the obligations of Tyco to guarantee all of the
Obligations contemplated herein. This Guaranty has been duly executed and
delivered by Tyco and constitutes a legal, valid and binding obligation of
Tyco, enforceable against Tyco in accordance with its terms.
C. Consents and Approvals; No Violations. No filing with, and no
permit, authorization, consent or approval of, any public body or authority
is necessary for the consummation by Tyco of the transactions contemplated
by this Guaranty. The execution and delivery of this Guaranty and the
guarantee of all of the Obligations contemplated herein will not (x)
conflict with or result in a breach of any of the provisions of the
Memorandum of Association or By-laws (or other incorporation documents) of
Tyco, (y) be subject to the making of the filings and the obtaining of the
governmental and other consents referred to herein, contravene in any
material respect any law, rule or regulation of any state, the United
States or any country or any order, writ, judgment, injunction, decree,
determination or award currently in effect that is binding upon Tyco or any
of its subsidiaries or any of their respective properties, or (z) violate
or result in a breach or result in the acceleration or termination of, or
the creation in any third party of the right to accelerate, terminate,
modify or cancel, any material indenture, contract, lease, sublease, loan
agreement, note or other material obligation or liability to which Tyco or
any of its affiliates is a party or is bound or to which any of the assets
of Tyco are subject.
D. Financial Capability. Tyco has sufficient funds to meet all of its
obligations hereunder and to guarantee all of the Obligations contemplated
herein.
ARTICLE III
A. Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent by prepaid telex, cable or telecopy or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier
service, and shall be deemed given when so delivered
by hand, telexed, cabled or telecopied, or if mailed, three days after
mailing (one business day in the case of express mail or overnight courier
service), as follows:
(a) if to Bessemer,
Bessemer Holdings, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X.X. Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.; and
(b) if to any other Stakeholder to,
Bessemer Holdings, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X.X. Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
(c) if to Tyco:
Tyco International Ltd.
The Xxxxxxx Xxxx.
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx XX 00 Bermuda
Attention: Chief Financial Officer
with a copy to:
Tyco International (U.S.) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
(B) Submission to Jurisdiction; Waiver of Jury Trial. Tyco hereto
irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court
of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of
any suit, action or other proceeding arising out of this Guaranty or any
transaction contemplated hereby. Tyco agrees to commence any action, suit
or proceeding relating hereto either in the United States District Court
for the Southern District of New York or if such suit, action or other
proceeding may not be brought in such court for jurisdictional reasons, in
the Supreme Court of the State of New York, New York County. Tyco further
agrees that service of any process, summons, notice or document by U.S.
registered mail to Tyco's address set forth above shall be effective
service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction in this
Section III(B). Tyco irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of
this Guaranty or the transactions contemplated hereby in (i) the Supreme
Court of the State of New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum. Each party agrees that a
final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner by law
or at equity. Tyco hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or related to this Guaranty or
the transactions contemplated hereby.
(C) Severability. If any provisions of this Guaranty shall be held to
be illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Guaranty. Such
provision shall be deemed to be modified to the extent necessary to render
it legal, valid and enforceable, and if no such modification shall render
it legal, valid and enforceable, then this Guaranty shall be construed as
if not containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.
This Guaranty has been duly executed as of the date first above
written.
TYCO INTERNATIONAL LTD.
By: /s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
Title: Executive Vice President
