This letter agreement, dated as of July 16, 1997, is entered into among
Western Resources, Inc., a Kansas corporation ("Western Resources"), Westar
Capital, Inc., a Kansas corporation and a wholly-owned subsidiary of Western
Resources ("Westar"), and Tyco International Ltd. (formerly ADT Limited), a
company incorporated under the laws of Bermuda ("ADT" or "New Tyco").
RECITALS:
WHEREAS, on March 17, 1997, Western Resources and Westar commenced an
offer to exchange ADT common shares ("Shares") for shares of Western Resources
common stock and cash (the "Exchange Offer");
WHEREAS, ADT and Tyco International Ltd., a Massachusetts corporation
(now Tyco International (US) Inc.; "Old Tyco") entered into an Agreement and
Plan of Merger by and among ADT, a wholly-owned subsidiary of ADT, and Old Tyco,
dated March 17, 1997, pursuant to which such wholly-owned subsidiary of ADT was
merged with and into Old Tyco (the "ADT/Tyco Merger") on July 2, 1997;
WHEREAS, Western Resources and Westar withdrew the Exchange Offer at or
about the time of the ADT/Tyco Merger;
WHEREAS, as of the date of the ADT/Tyco Merger, Western Resources was
the beneficial owner of 38,287,111 Shares (prior to a reverse split of the
Shares effected in connection with the ADT/Tyco Merger);
WHEREAS, Western Resources by virtue of its Share ownership was not
able to prevent the approval by ADT shareholders of actions necessary to
complete the ADT/Tyco Merger;
WHEREAS, Western Resources has entered into an Agreement and Plan of
Merger between Western Resources and Kansas City Power & Light Company, a
Missouri corporation ("KCPL"), dated as of February 7, 1997 (the "KCPL
Agreement");
WHEREAS, Western Resources and Westar have not been provided with any
material non-public information by Old Tyco or ADT; and
WHEREAS, the parties hereto wish to make certain agreements as set
forth below:
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
set forth, the parties hereto agree as follows:
1. Western will promptly return or cause to be returned any shareholder
list (including any copies thereof and any notes, memoranda or analyses relating
thereto) of
ADT that it or any of its affiliates has heretofore received or made and shall
make no request for a shareholder list of New Tyco for three years following
execution of this letter agreement. For such period of three years, Western
Resources will not make any demand on New Tyco pursuant to applicable Bermuda
law related to corporate books and records (to the extent it may otherwise be
entitled to do so by law).
2. New Tyco shall, and shall cause its affiliates to, cease and desist
from all frustrating acts (it being understood that New Tyco shall in no way be
restricted from selling shares of Western Resources or KCPL common stock or
compelled to take any action with respect to the voting of such shares),
including any communications with Western Resources or KCPL shareholders, in
connection with the transactions and shareholder approvals contemplated by the
KCPL Agreement. New Tyco will promptly return or cause to be returned any
shareholder list (including any copies thereof and any notes, memoranda or
analyses related thereto) of Western Resources and KCPL that it or any of its
affiliates has heretofore received or made and shall make no request for a
shareholder list of Western Resources or KCPL for three years following the
execution of this letter agreement. For such period of three years, neither New
Tyco nor any of its subsidiaries will make any demand on Western Resources or on
KCPL pursuant to applicable state law related to corporate books and records nor
shall it purchase any shares of common stock of either Western Resources or
KCPL.
3. The parties hereto will promptly take action to dismiss (and, in the
case of Section 3(ii) below, withdraw) the following litigation (the
"Litigation") with prejudice, with each side to bear its own costs, including
attorneys fees:
(i) Westar Capital Inc. v. ADT Ltd. et al., Xx. 00 Xxx. 0000 (X.X.
Xxx.) (Xxxxx, X.) (filed Dec. 27, 1996);
(ii) In the Matter of ADT Limited and in the Matter of Section 111 of
the Companies Xxx 0000 and in the Matter of the Petition of Westar
Capital, Inc., 1997: Xx. 000, Xxx. Xx. Xxxxxxx (filed April 16,
1997);
(iii) ADT Investments Inc. v. Western Resources, Inc., Case Xx. 00 XX
000 (Xxxxxxxx Court of Kansas, Shawnee County);
(iv) ADT Investments II, Inc. v. Kansas City Power & Light Company,
Case No. CV 97-11049 (Circuit Court, Xxxxxxx County, Missouri);
(v) ADT Investments Inc. v. Western Resources, Inc., Case Xx. 00
XX 000 (Xxxxxxxx Court of Kansas, Shawnee County); and
(vi) ADT Investments II, Inc. v. Kansas City Power & Light Company,
Case No. CV 97-16535 (Circuit Court, Xxxxxxx County, Missouri).
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4. New Tyco will grant to Western Resources and Westar registration
rights, with respect to the Shares currently owned by Westar, as follows (and
including the provisions detailed in Annex A hereto):
(i) as soon as reasonably practicable following the date hereof (and
in no event later than five (5) business days after such date),
New Tyco will file a registration statement relating to the
distribution of the Shares currently owned by Westar, and New Tyco
will use its reasonable best efforts to cause such registration
statement to be declared effective as soon as practicable after
filing;
(ii) to the extent that a distribution under the registration statement
is an underwritten offering, each underwriter shall be mutually
acceptable to New Tyco and Western Resources, but New Tyco will
have no right to select or approve any investment banking firm to
act on behalf of Western Resources in respect of any block trade;
(iii) the total number of block trades and underwritten offerings to
which Western Resources shall be entitled under Sections 4(i) and
4(ii) hereof shall not exceed three (3) in the aggregate;
(iv) each of New Tyco, Western Resources and Westar will bear its own
costs in connection with such registrations; in that regard, New
Tyco will pay all issuer costs incurred in connection with such
registration, including without limitation all costs associated
with the printing and dissemination of the necessary
documentation, and Western Resources will pay all underwriting
commissions and the registration fee applicable to Shares to be
sold by Westar in connection therewith;
(v) New Tyco will use its best efforts to cooperate in a marketing
effort, including participation in a "road show" with appropriate
senior management, to assist Western Resources and Westar in
selling Shares in an underwritten offering under the registration
statement; and
(vi) if New Tyco shall cease to have an obligation to maintain the
registration of or to register the Shares, either because the
total number of block trades and underwritten offerings has
theretofore exceeded three or because the Shares have ceased to be
Registrable Securities (as defined in Annex A), New Tyco will
assist Western Resources in its disposition of the Shares by
participating in presentations to investors and furnishing them
with public information, all at reasonable times and in a manner
that does not unreasonably impose on the senior management of
Tyco.
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5. Western, for itself and all Persons that now or may hereafter be
controlled by Western, each of its and their assigns and successors and any
Person or entity claiming through any of them (the "Western Releasing Parties"),
hereby absolutely, fully and forever releases, waives, relinquishes and
discharges each of New Tyco, Old Tyco, any Person now or hereafter controlled by
New Tyco, each of their current and former directors, officers, employees,
attorneys, advisors and investment bankers, and their respective successors and
assigns (the "Released Tyco Parties") from any and all Claims which any of the
Western Releasing Parties may have against the Released Tyco Parties, whether
known or unknown, (i) arising on account of or in any way relating to the
Exchange Offer or the ADT/Tyco Merger or (ii) arising through the date of this
Agreement by reason of its rights as a shareholder of New Tyco, including,
without limitation, all Claims raised or that could have been raised in the
Litigation; provided, however, that such Claims shall not include any claim to
enforce the provisions of this Agreement, including Annex A.
New Tyco, for itself and all Persons that now or may hereafter be
controlled by New Tyco, each of its and their assigns and successors and any
Person or entity claiming through any of them (the "Tyco Releasing Parties"),
hereby absolutely, fully and forever releases, waives, relinquishes and
discharges each of Western, Westar, Kansas City Power and Light Company
("KCPL"), any Person now or hereafter controlled by Western or KCPL, each of
their current and former directors, officers, employees, attorneys, advisors and
investment bankers, and their respective successors and assigns (the "Released
Western Parties") from any and all Claims which any of the Tyco Releasing
Parties may have against the Released Western Parties, whether known or unknown,
(i) arising on account of or in any way relating to the Exchange Offer or the
ADT/Tyco Merger or (ii) arising through the date of this Agreement by reason of
its rights as a shareholder of Western or KCPL, including, without limitation,
all Claims raised or that could have been raised in the Litigation; provided,
however, that such Claims shall not include any claim to enforce the provisions
of this Agreement, including Annex A.
As used in this paragraph, the term "Claim" means any causes of action,
suits, damages, debts, liabilities, demands, rights, obligations, costs,
expenses, losses, attorneys' fees, liens and indemnities, whether based on
contract, tort, statute or any other legal or equitable theory of recovery.
6. This letter agreement may be executed in one or more counterparts,
each of which when executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
7. This agreement shall in all respects be interpreted, enforced,
governed and construed by and under the laws of the State of New York. Any
controversy arising under or relating to this agreement shall be exclusively
determined by the United States District Court for the Southern District of New
York, and the parties hereby consent, solely with respect to the matters
contemplated by this Agreement, to personal jurisdiction in the United States
District Court for the Southern District of New York and agree not to present
any such controversy to any other court or forum.
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8. The parties hereto agree that any breach of the provisions of this
agreement would irreparably injure the other parties hereto and that money
damages would be an inadequate remedy therefor. Accordingly, each party hereto
shall be entitled to one or more injunctions enjoining any such breach and
requiring specific performance of this agreement and consent to the entry
thereof, in addition to any other remedy to which that party is entitled at law
or in equity.
9. This agreement is for settlement purposes only and will not be used
by the parties hereto in any litigation, other than litigation arising out of
this agreement.
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IN WITNESS WHEREOF, the parties have executed or caused this letter
agreement to be executed as of the date first written above.
TYCO INTERNATIONAL LTD.
(formerly ADT Limited)
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
Chief Financial Officer
WESTAR CAPITAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
WESTERN RESOURCES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President
and General Counsel
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