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EXHIBIT 4.3
CONFORMED COPY
PARENT GUARANTEE AGREEMENT
dated as of
February 13, 1998
between
Tyco International Ltd.
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
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TABLE OF CONTENTS
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PAGE
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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...................................... 9
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............................................... 10
SECTION 3.04. Financial Information........................................ 10
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
ARTICLE 4
COVENANTS
SECTION 4.01. Information.................................................. 11
SECTION 4.02. Payment of Obligations....................................... 13
SECTION 4.03. Maintenance of Property; Insurance........................... 13
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SECTION 4.04. Conduct of Business and Maintenance of Existence............. 13
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.................. 17
SECTION 4.10. Transactions with Affiliates................................. 18
SECTION 4.11. Restricted Payments.......................................... 19
SECTION 4.12. Prepayment of Existing Agreements............................ 19
ARTICLE 5
DEFAULTS
SECTION 5.01. Guarantor Events of Defaults................................. 20
SECTION 5.02. Notice of Default............................................ 22
ARTICLE 6
TAXES
SECTION 6.01. Withholding Taxes............................................ 22
SECTION 6.02. Certain Other Taxes.......................................... 23
SECTION 6.03. Reimbursement of Taxes Paid by a Bank........................ 23
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Notices...................................................... 23
SECTION 7.02. No Waivers................................................... 23
SECTION 7.03. Expenses; Indemnification.................................... 24
SECTION 7.04. Judicial Proceedings......................................... 24
SECTION 7.05. Judgment Currency............................................ 25
SECTION 7.06. Amendments and Waivers....................................... 26
SECTION 7.07. Successors and Assigns....................................... 26
SECTION 7.08. GOVERNING LAW................................................ 26
SECTION 7.09. Counterparts................................................. 26
SECTION 7.10. No Seal...................................................... 26
SECTION 7.11. WAIVER OF JURY TRIAL......................................... 26
SECTION 7.12. Amendment of Existing Parent Guarantee Agreement............. 26
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PARENT GUARANTEE AGREEMENT
AGREEMENT dated as of February 13, 1998 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:
"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 either of
the Credit Agreements.
"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.
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"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, at any time, the Person who at such time is the
Borrower under 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 INCOME" means, for any fiscal period, the
consolidated net income of the Guarantor and its Consolidated Subsidiaries for
such period, determined on a consolidated basis after eliminating therefrom all
Extraordinary Gains and Losses. "EXTRAORDINARY GAINS AND LOSSES" means and
includes, for any fiscal period, all extraordinary gains and losses and all
other material non-recurring non-cash items of the Guarantor and its
Consolidated Subsidiaries for such period, determined on a consolidated basis
and, in addition, includes, without limitation, gains or losses from the
discontinuance of operations and gains or losses of the Guarantor and its
Consolidated Subsidiaries for such period resulting from the sale, conversion or
other disposition of material assets of the Guarantor or any Consolidated
Subsidiary other than in the ordinary course of business.
"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.
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"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 364-Day Credit Agreement dated as of
February 13, 1998 among the Borrower, the Banks listed on the signature pages
thereof and the Agent and (ii) the Extendible 364-Day Credit Agreement dated as
of February 13, 1998 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;
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(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 and
each Subsidiary Guarantee, Promissory Note and New Borrower Agreement (each as
defined in either 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 Tyco International Ltd., a Bermuda company, and its
successors.
"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.
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"GUARANTOR EVENT OF DEFAULT" has the meaning set forth in Section 5.01.
"GUARANTOR'S 1997 FORM 10-K" means the Guarantor's transition report on
Form 10-K for the nine months ended September 30, 1997, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"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.
"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.
"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.
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"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.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Guarantor's capital stock (except to the extent such dividends
and distributions are payable in shares of its capital stock or Stock
Equivalents) or (ii) any payment (except to the extent payable in shares of the
Guarantor's capital stock or Stock Equivalents) on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Guarantor's
capital stock or (b) any option, warrant or other right to acquire shares of the
Guarantor's capital stock.
"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.
"STOCK EQUIVALENTS" means, with respect to any Person, options,
warrants, calls or other rights entered into or issued by such Person to acquire
any capital stock or equity securities of, or other ownership interests in, or
securities convertible into or exchangeable for, capital stock or equity
securities of, or other ownership interests in, such Person.
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"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.
"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, shall survive the New Borrowing
Date (as defined in either Credit Agreement), shall be applicable to Tyco
Luxembourg (as defined in either Credit
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Agreement) as the Borrower under the Credit Agreements 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;
(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 either 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 either 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
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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.
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 either
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.
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SECTION 3.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Guarantor.
SECTION 3.04. Financial Information.
(a) The consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of September 30, 1997 and the related consolidated
statements of income, of shareholders' equity and of cash flows for the
nine-month period then ended, reported on by Coopers & Xxxxxxx and set forth in
the Guarantor's 1997 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 Guarantor and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such period.
(b) Since September 30, 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
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.
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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.
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 and consolidating balance
sheets of the Guarantor and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated and
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consolidating 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, such consolidated statements to be
reported on by Coopers & Xxxxxxx or other independent public accountants of
internationally 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 and consolidating balance sheets of the Guarantor and its
Consolidated Subsidiaries as of the end of such quarter, the related
consolidated statements of income for such quarter, and the related consolidated
statements of income and of cash flow and consolidating statements of income 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 (in the case of
consolidated statements of income) and for 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, 4.08 and 4.11 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 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;
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(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 (as defined in either Credit Agreement) by any Rating Agency
(as defined in either Credit Agreement), 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 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 not engage in any business other than the holding of stock
and other investments in its
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Subsidiaries and activities reasonably related thereto, (b) will cause each
Subsidiary to engage in business of the same general type as now conducted by
the Guarantor's Subsidiaries and reasonably related extensions thereof, and (c)
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 (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) 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 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
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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
(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
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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 (x) prior
to March 31, 1999, 62% and (y) on and after March 31, 1999, 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 Effective Date (as defined in
either Credit Agreement) securing Debt outstanding on the Effective 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 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;
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(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) $300,000,000 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 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
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(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 Restricted Payments (including, for this
purpose, transactions expressly excluded from the definition of a Restricted
Payment) permitted by Section 4.11, (b) making sales to or purchases from any
Affiliate and, in 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, (c) making payments of principal, interest and premium
on any Debt of the Guarantor or such Subsidiary held by an
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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, (d) 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, (e) paying or granting reasonable
compensation and benefits to any director, officer, employee or agent of the
Guarantor or any Subsidiary, (f) paying reasonable legal fees and expenses to a
law firm of which an Affiliate is a member or (g) engaging in any Affiliate
Transaction not otherwise addressed in subsections (a) - (f) 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.
SECTION 4.11. Restricted Payments. Neither the Guarantor nor any
Subsidiary will declare or make any Restricted Payment unless, after giving
effect thereto, the aggregate of all Restricted Payments declared or made
subsequent to the date hereof does not exceed an amount equal to the sum of (a)
$1,250,000,000 plus (b) 50% of Consolidated Net Income (or minus 100% of
Consolidated Net Income, in the event of a net loss for such period) for the
period from October 1, 1997 through the end of the then most recently ended
fiscal quarter of the Guarantor (treated for this purpose as a single accounting
period), plus (c) the aggregate cash proceeds (net of underwriting commissions)
received by the Guarantor (other than from a Subsidiary) from the issuance or
sale after September 30, 1997 of capital stock or Stock Equivalents of the
Guarantor (other than the proceeds of any capital stock or Stock Equivalent
which by its terms is subject to redemption otherwise than at the sole option of
the Guarantor). Nothing in this Section 4.11 shall prohibit the payment of any
dividend or distribution within 60 days after the declaration thereof if such
declaration was not prohibited by this Section 4.11.
SECTION 4.12. Prepayment of Existing Agreements. Promptly and in any
event within five Euro-Dollar Business Days (as defined in either Credit
Agreement) of the receipt by the Guarantor or any of its Consolidated
Subsidiaries of net cash proceeds from the issuance of long-term debt securities
or equity securities in the capital markets, the Guarantor will cause Tyco US
(as defined in either Credit Agreement) to prepay loans outstanding under the
Existing Agreements (as defined in either Credit Agreement) in an aggregate
amount equal to the largest multiple of $1,000,000 which does not exceed the
amount of such net cash proceeds, and simultaneously with such prepayment to
reduce the commitments under the Existing Agreements by an equal amount.
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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, 4.11 or 4.12;
(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 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;
(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;
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(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 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
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day of any period of twelve consecutive calendar months, 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;
(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; or
(l) the Guarantor shall have any Significant Subsidiary other than (i)
Tyco Luxembourg, (ii) a Subsidiary of Tyco Luxembourg or (iii) for a period not
to exceed six months from the date of the initial acquisition thereof, any other
Significant Subsidiary.
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.
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.
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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.
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.
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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 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.
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(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 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
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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.
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.
SECTION 7.12. Amendment of Existing Parent Guarantee Agreement. The
Guarantor hereby agrees to the amendments specified in Section 3.02(c) of each
of the Credit Agreements.
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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: /s/
--------------------------------
Name:
Title: Executive Vice President
Xxxxxxx Building
00 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx XX00
Xxxxxxx
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/
--------------------------------
Name:
Title:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention:
Telex number: 177615
Facsimile number: 000-000-0000
