EXHIBIT 10.21
ADT LIMITED
GUARANTEE
in respect of a Pound Sterling90,000,000
facility made available to ADT Finance Plc
Xxxxxxxx Chance
London
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................. 1
1.1. Certain Terms............................................... 1
1.2. Interpretation.............................................. 18
1.3. Facility Agreement Definitions.............................. 18
ARTICLE II
GUARANTEE PROVISIONS......................... 18
2.1. Guarantee................................................... 18
2.2. Continuing Security and Preservation of Rights.............. 19
2.3. Settlement Conditional...................................... 20
2.4. Deferral of ADT Limited's Rights............................ 20
2.5. [Intentionally Omitted]..................................... 21
2.6. Successors, Transferees and Assigns......................... 21
2.7. Payments Free and Clear of Taxes, etc....................... 21
2.8. Judgment.................................................... 22
2.9. Consent to Jurisdiction; Waiver of Immunities............... 23
ARTICLE III
REPRESENTATIONS AND WARRANTIES.................... 24
3.1. Organisation, etc........................................... 24
3.2. Due Authorisation, Non-Contravention, etc................... 24
3.3. Government Approval, Regulation, etc........................ 24
3.4. Xxxxxxxx, etc............................................... 25
3.5. Financial Information....................................... 25
3.6. No Material Adverse Change.................................. 25
3.7. Litigation.................................................. 25
3.8. Ownership of Properties..................................... 25
3.9. Taxes....................................................... 25
3.10. Pension and Welfare Plans................................... 25
3.11. Environmental Warranties.................................... 26
3.12. Regulations G, U and X...................................... 27
3.13. No Defaults................................................. 27
3.14. Delivery of Organisational Chart............................ 27
3.15. Restricted Payment Basket Amount............................ 27
3.16. Guarantee Ranks Pari Passu.................................. 27
3.17. Seniority of the Obligations................................ 27
ARTICLE IV
COVENANTS, ETC............................ 28
4.1. Affirmative Covenants....................................... 28
4.1.1. Compliance with Laws, etc................................... 28
4.1.2. Maintenance of Properties................................... 28
4.1.3. Insurance................................................... 28
4.1.4. Books and Records........................................... 28
4.1.5. Environmental Covenant...................................... 29
4.1.6. Guarantee Supplements....................................... 29
4.1.7. Financial Information....................................... 32
4.2. Negative Covenants.......................................... 33
4.2.1. Business Activities......................................... 33
4.2.2. Indebtedness................................................ 34
4.2.3. Encumbrances................................................ 36
4.2.4. Financial Condition......................................... 37
4.2.5. Investments................................................. 38
4.2.6. Restricted Payments, etc.................................... 40
4.2.7. Capital Expenditures, etc................................... 43
4.2.8. [Intentionally Omitted.].................................... 43
4.2.9. Consolidation, Xxxxxx, etc.................................. 43
4.2.10. Asset Dispositions, etc..................................... 44
4.2.11. Modification of Certain Documents........................... 45
4.2.12. Transactions with Affiliates................................ 45
4.2.13. Negative Pledges, Restrictive Agreements, etc............... 45
4.2.14. Accounting Changes.......................................... 46
4.2.15. Ability to Amend; Restrictive Agreements.................... 46
4.2.16. [Intentionally Omitted.].................................... 47
4.2.17. Activities of Certain Subsidiaries.......................... 47
4.2.18. [Intentionally Omitted.].................................... 47
4.2.19. [Intentionally Omitted.].................................... 47
4.2.20. Any Action.................................................. 47
ARTICLE V
MISCELLANEOUS PROVISIONS...................... 47
5.1. Finance Document............................................ 47
5.2. Binding on Successors, Transferees and Assigns; Assignment.. 47
5.3. Amendments, etc............................................. 47
5.4. Addresses for Notices....................................... 48
5.5. No Waiver; Remedies......................................... 48
5.6. Captions.................................................... 48
5.7. Setoff...................................................... 48
5.8. Independence of Covenants................................... 48
5.9. Severability................................................ 48
5.10. Governing Law............................................... 48
THIS GUARANTEE (this "Guarantee"), dated as of 25 March 1997, made by ADT
LIMITED, a company organized under the laws of Bermuda ("ADT Limited"), in
favour of each of the Beneficiaries (as defined below),
WITNESSETH as follows:-
WHEREAS
(A) Pursuant to a Facility Agreement, dated as of 17 March 1997 (together
with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Facility Agreement"), among ADT Finance
plc (the "Borrower"), ADT (UK) Holdings plc and others as guarantors,
the financial institutions as are or may become parties thereto
(collectively, the "Banks"), The Bank of Nova Scotia as arranger and
agent (the "Agent"), for the Banks, the Banks have agreed to make
available to the Borrower the Facilities; and
(B) As a condition precedent to the making available of the Facilities under
the Facility Agreement, ADT Limited is required to execute and deliver
this Guarantee;
NOW, ADT Limited agrees, for the benefit of each of the Beneficiaries, as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms when used in this Guarantee,
including its preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):
"5 3/4% Preference Shares" means the 5 3/4% Convertible Cumulative Redeemable
Preference Shares, par value $1.00 per share, of ADT Limited.
"6% Preference Shares" means the 6% Convertible Cumulative Redeemable
Preference Shares 2002, par value $1.00 per share, of ADT Limited.
"ADT Finance Inc." means ADT Finance Inc., a Canadian corporation.
"ADT Limited" is defined in the preamble.
"Affiliate" of any person means any other person which, directly or
indirectly, controls, is controlled by or is under common control with such
person (excluding any trustee under or any committee with responsibility for
administering, any Plan). A person shall be deemed to "control" another
person if such person possesses, directly or indirectly power:
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies of
such other person whether by contract or otherwise.
"Agent" is defined in the first recital and includes each other person which
may be appointed as any successor agent pursuant to the Facility Agreement.
"Annual Limit" is defined in subclause (a)(i) of the definition of "Permitted
Business Acquisition" in Section 1.1.
"ASH Acquisition" means the acquisition of the entire Capital Stock of
Automated Security (Holdings) PLC.
"ASH Acquisition Date" means September 6, 1996.
"ASH Group" means Automated Security (Holdings) PLC and each of its
subsidiaries at the ASH Acquisition Date.
"ASH Transaction" means, collectively, (i) the acquisition by ADT Limited on
the ASH Acquisition Date of the entire Capital Stock of Automated Security
(Holdings) plc pursuant to a stock-for-stock exchange in which the
stockholders of Automated Security (Holdings) plc received Common Shares and
(ii) in connection with such acquisition, (A) the repayment of certain
Indebtedness of Automated Security (Holdings) plc and its subsidiaries and (B)
the guaranty by ADT Limited of certain Indebtedness of Automated Security
(Holdings) plc and its subsidiaries in an aggregate principal amount not
exceeding $70,000,000, which Indebtedness remained outstanding following such
acquisition, and the assumption by ADT Limited of certain obligations to
deliver Common Shares upon the conversion of such Indebtedness.
"Asset Sale" is defined in Section 4.2.10.
"Banks" is defined in the first recital.
"Beneficiaries" means, as the context may require, any Bank, or the Agent and
each of their respective successors, transferees and assigns.
"Borrower" is defined in the first recital.
"Business Acquisition" means the acquisition, by purchase or otherwise, of all
or substantially all of the assets (or any part of the assets constituting all
or substantially all of a business or line of business) of any person, whether
such acquisition is direct or indirect, including through the acquisition of
the business of, or Capital Stock of, such person.
"Capital Expenditures" means, with respect to any person for any period, the
sum (without duplication) of
(a) the excess of (i) the aggregate amount of all expenditures of such
person and its subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be
classified as capital expenditures, over (ii) the aggregate amount
of net cash proceeds of Excluded Dispositions received by ADT
Limited or any subsidiary of ADT Limited during such period;
plus
(b) the aggregate amount of all Capitalised Lease Liabilities of such
person incurred during such period.
Provided that in the case of ADT Limited, to the extent that Capital
Expenditures of ADT Limited includes any Capital Expenditure made by the
ASH Group during the Pre-Acquisition Period, such Capital Expenditure of
the ASH Group shall not be included.
"Capitalised Lease Liabilities" means, with respect to any person, all
monetary obligations of such person or any of its subsidiaries under any
leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalised leases, and for the purposes of this Guarantee and
each other Finance Document, the amount of such obligations shall be the
capitalised amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, with a maturity of 180 days or less,
issued or directly and fully guaranteed by the United States
Government;
(b) commercial paper, with a maturity of 180 days or less, which is
issued by
(i) a corporation (other than an Affiliate of any Obligor)
organised under the laws of any state of the United
States or of the District of Columbia and rated A-1 or
better by Standard & Poor's or P-1 or better by
Xxxxx'x or
(ii) any Bank (or its holding company);
(c) any certificate of deposit or banker's acceptance, with a maturity
of 180 days or less, which is issued by either
(i) a commercial banking institution that is organised
under the laws of Canada, is a member of the Federal
Reserve System or is subject to regulation by the
F.R.S. Board, and has a combined capital and surplus
and undivided profits of not less than $500,000,000
(or the equivalent thereof in other currencies) and
(x) whose short term obligations are rated, at the
time as of which any such investment is made, A-1 or
better by Standard & Poor's or P-1 or better by
Xxxxx'x or (y) whose debt is rated, at the time as of
which any investment therein is made, A or better by
Standard & Poor's or A or better by Xxxxx'x, or
(ii) any Bank; or
(d) any money market deposit accounts issued or offered by any
commercial banking institution of the stature referred to in
clause (c)(i).
"Cash Flow" means, with respect to any person for any applicable period, the
excess of
(a) EBITDA of such person and its subsidiaries for such period;
over
(b) the sum for such period of
(i) all taxes computed on the basis of income (whether
local, foreign or otherwise), to the extent paid in
cash by such person and its subsidiaries on a
consolidated basis during such period;
plus
(ii) Capital Expenditures (other than Capital Expenditures
incurred in respect of any Business Acquisition
permitted under Section 4.2.5 or 4.2.9) of such person
and its subsidiaries paid by such person and its
subsidiaries during such period.
Provided that in the case of ADT Limited, to the extent that the Cash
Flow of ADT Limited includes Cash Flow of the ASH Group for the
Pre-Acquisition Period, such Cash Flow of the ASH Group shall not be
included.
"Cash Flow Coverage Ratio" means, with respect to any person at the end of any
Financial Quarter, the ratio computed for the period of four consecutive
Financial Quarters ending on the close of such Financial Quarter of
(a) Cash Flow of such person and its subsidiaries for such period
plus, to the extent deducted in determining such Cash Flow,
Capital Expenditures of such person and its subsidiaries paid by
such person and its subsidiaries during such period with Equity
Proceeds, so long as the Compliance Certificate delivered in
connection with the Financial Quarter in which such Capital
Expenditures were paid (or, for any such Financial Quarter ending
prior to the date hereof, the compliance certificate relating
thereto, which was delivered pursuant to the guarantee given by
ADT Limited in connection with either the US$300 million Credit
Facility or the US$200 million Credit Facility) indicated that
such Capital Expenditures were paid with Equity Proceeds and that
the aggregate amount of such Capital Expenditures did not exceed
the Equity Proceeds Amount (as determined immediately prior to the
making of such Capital Expenditures);
to
(b) Interest Expense of such person and its subsidiaries for such
period.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
modified from time to time.
"Common Shares" means the shares of common stock, par value $0.10 per share,
of ADT Limited.
"Compliance Certificate" means a certificate substantially in the form of the
Exhibit hereto.
"Controlled Group" means all members of a controlled group of corporations and
all members of a controlled group of traders or businesses (whether or not
incorporated) under common control which, together with ADT Limited, are
treated as a single employer under section 414(b) or 414(c) of the Code or
section 4001 of ERISA.
"Debt" means, with respect to any person, the sum (without duplication) of (i)
the outstanding and stated principal amount (or, in the case of Redeemable
Capital Stock, the liquidation preference) of the Indebtedness of such person
of the nature referred to in clauses (a), (b) (other than obligations relative
to letters of credit in support of trade obligations with an aggregate face
amount not exceeding $250,000 at any time outstanding), (c) and (g) of the
definition of "Indebtedness" and (ii) any Contingent Liabilities of such
person in respect of any type of Indebtedness described in the preceding
clause (i); provided that the amount of any Debt that is issued at a price
that is less than the stated principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with GAAP.
"Debt to Total Capitalisation Ratio" means, with respect to any person, the
ratio of:
(a) Debt of such person and its subsidiaries determined on a
consolidated basis;
to
(b) Total Capitalisation of such person.
"Dividended Note" means (i) the promissory note of ADT Security Services,
Inc., payable to ADT Operations, Inc. in the principal amount of
$432,214,964.80, which note was distributed by ADT Operations, Inc. to
Holdings Inc. on 31 December 1996, in the form of an assignment thereof,
together with (ii) the Subordination Agreement dated as of 9 January 1997,
among ADT Security Services, Inc., ADT Group plc (an indirect assignee of the
rights of Holdings Inc. under the Dividended Note) and The Bank of Nova Scotia
as the agent under the US$200 million Credit Facility.
"EBITDA" means, with respect to any person for any applicable period, Net
Income for such person and its subsidiaries for such period (excluding
therefrom (x) the effect of any extraordinary or other non-recurring gain
outside the ordinary course of business and (y) any write-up in the value of
any asset) plus, to the extent deducted in determining such Net Income for
such period, the aggregate amount of (i) Interest Expense, (ii) taxes computed
on the basis of income (whether local, foreign or otherwise), (iii) the
aggregate amount of depletion, depreciation and amortisation of tangible and
intangible assets, including amortisation of debt issuance cost and other
financing expenses incurred (A) prior to the Closing Date or (B) in connection
with entering into this Guarantee and the other Finance Documents and (iv)
without duplication, any write-off of the costs and expenses referred to in
the preceding clause (iii).
Provided that in the case of ADT Limited, to the extent that EBITDA of ADT
Limited includes EBITDA of the ASH Group for the Pre-Acquisition Period, such
EBITDA of the ASH Group shall not be included.
"Environmental Laws" means all applicable federal laws, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public
health and safety and protection of the environment.
"Equity Proceeds" means the cash proceeds referred to in clause (a) of the
definition of "Equity Proceeds Amount".
"Equity Proceeds Amount" means, with respect to any proposed Permitted
Business Acquisition in excess of the Annual Limit or any addition to Cash
Flow in respect of Capital Expenditures in connection with the computation of
the Cash Flow Coverage Ratio of ADT Limited,
(a) an amount equal to
(i) the aggregate net cash proceeds received by ADT Limited
after the Indenture Effective Date from the issuance or sale
(other than to a subsidiary of ADT Limited) of shares of its
Capital Stock (other than Redeemable Capital Stock) or
warrants, options or rights to purchase such shares of
Capital Stock (other than Redeemable Capital Stock),
plus
(ii) the aggregate net cash proceeds received by ADT Limited
after the Indenture Effective Date (other than from ADT
Operations, Inc. or any other subsidiary of ADT Limited)
upon the exercise of options, warrants or rights to purchase
shares of Capital Stock of ADT Limited (other than
Redeemable Capital Stock),
plus
(iii) the aggregate net cash proceeds received by ADT Limited
after 9 January 1997 from the issuance or sale (other than
to ADT Operations, Inc. or any other subsidiary of ADT
Limited) of debt securities or Redeemable Capital Stock that
have been converted into or exchanged for Capital Stock of
ADT Limited (other than Redeemable Capital Stock), together
with the aggregate cash received by ADT Limited at the time
of such conversion or exchange,
as decreased from time to time by
(b) (i) the amount of each Restricted Payment (as defined under the
Senior Note Indenture) made after ADT Limited shall have
received the cash proceeds referred to in the preceding
clause (a) which, pursuant to the terms of the Senior Note
Indenture, decreases the Restricted Payment Basket Amount;
provided that any such decrease to the Equity Proceeds
Amount shall not result in the Equity Proceeds Amount being
less than zero,
(ii) the amount expended after 23 August 1995 on Permitted
Business Acquisitions (other than the ASH Transaction to the
extent the aggregate consideration therefor did not exceed
$425,000,000) in excess of the Annual Limit (or, during the
effectiveness of the US$300 million Credit Facility, the
applicable Annual Limits (as defined under the US$300
million Credit Facility)), and
(iii) the amount of Capital Expenditures made after 23 August
1995 with the cash proceeds referred to in the preceding
clause (a) and designated as such pursuant to the Compliance
Certificate (including any compliance certificate delivered
under the guarantees given by ADT Limited in connection with
the US$300 million Credit Facility or the US$200 million
Credit Facility) delivered in connection with the Financial
Quarter in which such Capital Expenditures were paid.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References to
sections of ERISA also refer to any successor sections.
"Exchangeable Preference Shares" means the Exchangeable Cumulative Redeemable
Preference Shares 2005, par value $1.00 per share, of ADT Limited.
"Excluded Disposition" means any Asset Sale (a) of (i) motor vehicles
purchased by ADT Limited or any subsidiary of ADT Limited for use in the
ordinary course of its business (and not for purposes of resale) and (ii) real
estate that was previously used in the operations of any auto auction site,
which operations have not produced any revenue in the 12 months prior to such
transfer, or that was originally acquired in connection with the development
or proposed development of any auto auction site or real estate consisting of
any portion of any auto auction site that is not used in connection with the
operations of such auto auction site (in each case, "Auction Real Estate") to
the extent that, after giving effect to such transfers, the aggregate Fair
Market Value of all such Auction Real Estate transferred in any Financial Year
does not exceed $10,000,000 in the aggregate and (b) the proceeds of which are
within 12 months (or, in the case of Auction Real Estate, 18 months) after
such Asset Sale invested in assets and properties to replace the assets and
properties that were the subject of such Asset Sale or in assets and
properties that will be used in the Core Businesses.
"Facility Agreement" is defined in the first recital.
"Fair Market Value" means, with respect to any asset, the sale value that
would be obtained in an arm's-length transaction between an informed and
willing seller under no compulsion to sell and an informed and willing buyer.
"Foreign Subsidiary" means a subsidiary of ADT Limited that is organised and
existing under the laws of a jurisdiction other than the United States (or any
state thereof or the District of Columbia).
"F.R.S. Board" means the Board of Governors of the Federal Reserve System or
any successor thereto.
"GAAP" means generally accepted accounting principles in the United States of
America from time to time consistently applied on a basis consistent with the
audited financial statements of ADT Limited or its relevant subsidiary.
"Guarantor Assets" means, in respect of each Guarantor which became a
Guarantor pursuant to the provisions of Section 4.1.6, an amount equal to the
aggregate of:
(i) the amount of cash received by such Guarantor in respect of the
transaction which resulted in such Guarantor being required to be
a Guarantor pursuant to Section 4.1.6 (whether in respect of an
Investment made by any member of the Group in it and/or such
Guarantor incurring Indebtedness from any member of the Group); and
(ii) 100% of the fair market value of any asset received by such
Guarantor as part of the transaction which resulted in such
Guarantor being required to be a Guarantor pursuant to Section
4.1.6 less the amount of cash paid or the fair market value of any
assets transferred by such Guarantor to the relevant disposing
entity in consideration therefor
Provided that in any calculation of the aggregate of (a) the consolidated
assets of the Group Obligors or, as the case may be, the Group and (b) the
Guarantor Assets, no item shall be taken into account more than once (by way
of illustration only, for example, if the Guarantor referred to in
sub-paragraph (i) above incurred Indebtedness from a member of the Group then
to the extent that such Indebtedness appears as an asset in the balance sheet
of such member of the Group, the amount referred to in sub-paragraph (i) above
shall be disregarded in such calculation).
"Hazardous Materials" means:
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act,;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.
"High Quality Investment" means, at any time:
(a) any certificate of deposit or bankers acceptance, with a maturity
of 180 days or less, which is issued by a commercial banking
institution that is organised under the laws of a country that is
a member of the Organisation for Economic Cooperation and
Development, or any political subdivision thereof, and has a
combined capital and surplus and undivided profits of not less
than $500,000,000 (or the equivalent thereof in other currencies)
and (i) whose short term obligations have a rating, at the time
any such Investment is made, of P-1 or better by Moody's or A-1 or
better by Standard & Poor's, (ii) whose debt is rated, at the time
any such Investment is made, A or better by Moody's or A or better
by Standard & Poor's or (iii) whose short term obligations or debt
is not so rated, so long as (A) such commercial banking
institution is (1) organised under the laws of a jurisdiction
other than the United Kingdom, the Channel Islands, Canada or the
United States (or any state thereof or the District of Columbia)
and (2) organised under the laws of the same jurisdiction as the
jurisdiction of incorporation of the subsidiary of ADT Limited
making such Investment and (B) such Investment is made for
ordinary course of business cash management purposes of such
subsidiary;
(b) any deposit accounts issued or offered by any commercial banking
institution of the stature referred to in the preceding clause
(a);
(c) any floating rate note issued by a financial institution or
corporation (other than an Affiliate of ADT Limited or any other
subsidiary of ADT Limited) organised and existing under the laws
of a country that is a member of the Organisation for Economic
Cooperation and Development, or any political subdivision thereof,
whose debt is rated, at the time any such Investment is made, A or
better by Moody's or A or better by Standard & Poor's;
(d) any medium term note, maturing not more than one year after the
date of the acquisition thereof, issued by a corporation (other
than an Affiliate of ADT Limited or any subsidiary of ADT Limited)
organised and existing under the laws of a country that is a
member of the Organisation for Economic Cooperation and
Development, or any political subdivision thereof, and with a
rating, as at the time such Investment is made, of A or better by
Moody's or A or better by Standard & Poor's;
(e) any debt instrument, maturing not more than one year after the
date of the acquisition thereof, issued by an entity (other than
an Affiliate of ADT Limited or any subsidiary of ADT Limited)
organised and existing under the laws of a country that is a
member of the Organisation for Economic Cooperation and
Development, or any political subdivision thereof, which is
secured by or represents an interest in a pool of mortgage
loans, credit card receivables or motor vehicle loans and with
a rating, as at the time such Investment is made, of A or
better by Moody's or A or better by Standard & Poor's; or
(f) any bond, maturing not more than one year after the date of the
acquisition thereof, issued by a corporation (other than an
Affiliate of ADT Limited or any subsidiary of ADT Limited)
organised and existing under the laws of a country that is a
member of the Organisation for Economic Cooperation and
Development, or any political subdivision thereof, and with a
rating, as at the time such Investment is made, of A or better
by Moody's or A or better by Standard & Poor's;
provided, however, that any such note, debt instrument or bond referred
to in the preceding clauses (c) through (f) is listed or admitted to
trading on a public exchange or reported on an over-the-counter market
or quotations system (whether within or outside the United States).
"Holdings Inc." means ADT Holdings, Inc., a Delaware corporation.
"Indebtedness" of any person means, without duplication, indebtedness in
respect of:
(a) all obligations of such person for borrowed money and all
obligations of such person evidenced by bonds, debentures, notes
or other similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such person;
(c) all obligations of such person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as
Capitalised Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be included
as liabilities on the liability side of the balance sheet of such
person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such person under all Hedging Arrangements;
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such person to pay the deferred purchase price
of property or services, and indebtedness (excluding prepaid
interest thereon) secured by an encumbrance on property owned or
being purchased by such person (including indebtedness arising
under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such
person or is limited in recourse;
(g) all obligations of such person relative to Redeemable Capital
Stock of such person (including accrued and unpaid dividends); and
(h) all Contingent Liabilities of such person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any person shall
include the Indebtedness of any partnership or joint venture in which such
person is a general partner or a joint venturer.
"Indenture Effective Date" means 4 August 1993.
"Interest Expense" means, with respect to any person and its subsidiaries for
any applicable period, the sum of
(a) the aggregate consolidated gross interest expense of such person
and its subsidiaries for such period, as determined in accordance
with GAAP, including (i) facility fees paid or owed hereunder or
under the Facility Agreement, (ii) all other fees paid or owed
with respect to the issuance or maintenance of Contingent
Liabilities (including letters of credit), which, in accordance
with GAAP, would be included as interest expense, (iii) net costs
or benefits under Hedging Arrangements relating to Debt and (iv)
the portion of any payments made in respect of Capitalised Lease
Liabilities of such person and its subsidiaries allocable to
interest expense, but excluding the amortization or write-off of
debt issuance costs and other financing expenses incurred prior to
the Closing Date or in connection with the entering into of this
Guarantee and the other Finance Documents;
plus
(b) with respect to ADT Limited, dividends on the Preference Shares
during such period.
Provided that, in the case of ADT Limited, to the extent that the Interest
Expense of ADT Limited includes Interest Expense of the ASH Group for the
Pre-Acquisition Period, such Interest Expense of the ASH Group shall not be
included.
"Intermediate Parent Company" means any company (other than ADT Limited) in
respect of which the Parent is a subsidiary.
"Investment" means, relative to any person,
(a) any loan or advance made by such person to any other person;
(b) any Contingent Liability of such person with respect to any
indebtedness, obligation or other liability of any other person;
and
(c) any ownership or similar interest held by such person in any other
person, including any Minority Interest.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the Fair Market Value of such property.
"XXXXx" means the Liquid Yield Option Notes due 2010 of ADT Operations, Inc
issued pursuant to the XXXXx Indenture and subordinated by its terms to the US
Credit Facility Obligations and the Indebtedness in respect of the Senior
Notes and the Senior Subordinated Notes (as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time).
"XXXXx Guarantee" means the subordinated guarantee of ADT Limited set forth in
the guarantee provisions of the XXXXx Indenture.
"XXXXx Indenture" means the indenture dated as of 1 July, 1995 among ADT
Operations, Inc., ADT Limited and Bank of Montreal Trust Company as trustee
(as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time).
"Material Related Party" means each Obligor and each subsidiary of ADT Limited
that would satisfy the threshold set forth in clause (b) or (c) of the
definition of "Material Subsidiary" (whether or not organized and existing in
the United States (or any state thereof or the District of Columbia)).
"Material Subsidiary" means each subsidiary of ADT Limited organised and
existing under the laws of the United States (or any state thereof or the
District of Columbia), that
(a) [intentionally omitted];
(b) accounted for at least 5% of the consolidated gross revenues of
ADT Limited and its subsidiaries for the most recently completed
Financial Quarter with respect to which, pursuant to Section
4.1.7, financial statements have been, or are required to have
been, delivered by ADT Limited on or before the date as of which
any such determination is made, as reflected in such financial
statements; or
(c) has assets which represent at least 5% of the consolidated gross
assets of ADT Limited and its subsidiaries as of the last day of
the most recently completed Financial Quarter with respect to
which, pursuant to Section 4.1.7, financial statements have been,
or are required to have been, delivered by ADT Limited on or
before the date as of which any such determination is made, as
reflected in such financial statements.
"Minority Interest" means any equity or other beneficial ownership interest,
whether in the form of Capital Stock or otherwise, held directly or indirectly
by any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) in another person and, as a result of which, such person
or group, as the case may be, does not "control" (as such term is used in
connection with clause (b) of the definition of "Affiliate") such other person.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means with respect to any person and its subsidiaries for any
applicable period, the aggregate of all amounts which, in accordance with
GAAP, would be included as net income (or net loss) on a consolidated
statement of income of such person and its subsidiaries for such period
provided that, in the case of ADT Limited, to the extent that the Net Income
of ADT Limited includes Net Income of the ASH Group for the Pre-Acquisition
Period, such Net Income of the ASH Group shall not be included.
"Non-Voting Exchangeable Shares" means the Non-Voting Exchangeable Shares,
Series A, of ADT Finance Inc., a Canadian corporation.
"Pension Plan" means a "pension plan", as such term is defined in section 3(2)
of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which ADT Limited or
any corporation, trade or business that is, along with ADT Limited a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the remaining of section 4063 of
ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Permitted Auction Business Sale" means an Asset Sale consisting of the sale
of the Capital Stock of any subsidiary of ADT Operations, Inc. which is
primarily engaged, directly or through its direct or indirect subsidiaries, in
the business of auctioning or otherwise distributing vehicles in the United
States held on a consignment or similar basis or the sale of assets (other
than Capital Stock) which are and have been used in such business, to the
extent (i) such Asset Sale is for not less than the Fair Market Value of the
assets (including Capital Stock) sold (as determined in good faith by the
Board of Directors of ADT Limited or a committee thereof, whose
determination shall be evidenced by certified written resolution of such
Board or such committee) and the consideration received by ADT Operations,
Inc. or the relevant subsidiary in respect of such Asset Sale consists of
at least 75% cash (including any cash proceeds received from the sale of
securities received in such Asset Sale, provided that at the time of such
Asset Sale, ADT Operations, Inc. or the relevant subsidiary has entered
into a legally binding agreement for the sale of such securities and such
securities are sold within sixty days of such Asset Sale), or Cash
Equivalent Investments, and (ii) such Asset Sale does not include assets
primarily used in a Core Business other than the distributing of vehicles
in the United States held on a consignment or similar basis unless the sale
or other transfer of such assets in a separate transaction would be
permitted hereunder (it being acknowledged by the parties hereto that if
such transaction would not otherwise be permitted unless within a "basket"
amount, such as the amount set forth in clause (d) of Section 4.2.10, the
amount of such transaction shall be applied against each such basket).
"Permitted Business Acquisition" means any Business Acquisition of a Core
Business, exclusive, however, of (i) acquisitions of Minority Interests and
(ii) acquisitions of Capital Stock in any Related Business, so long as
(a) the aggregate amount of expenditures of ADT Limited and its
subsidiaries in respect of such Business Acquisition (such amount,
the "Subject Amount"), when added to the aggregate amount of all
expenditures of ADT Limited and its subsidiaries in respect of
Business Acquisitions during the Financial Year in which such
Subject Amount would be expended, does not exceed the sum of (i)
$130,000,000 (the "Annual Limit") and (ii) the Equity Proceeds
Amount, as determined immediately prior to the making of such
expenditure, and
(b) in the event the Subject Amount (which amount shall include, in
the event such Business Acquisition is to be consummated in a
series of related transactions, the aggregate amount of all
expenditures of ADT Limited and its subsidiaries in respect of
such related transactions) would exceed $50,000,000, the Agent
shall have received a certificate executed by the chief financial
authorized officer of ADT Limited certifying and, if reasonably
requested by the Agent, showing (in reasonable detail and with
appropriate calculations and computations in all respects
reasonably satisfactory to the Agent) that on a historical pro
forma basis (after giving effect to such Business Acquisition and
all transactions related thereto (including all Indebtedness that
would be assumed or incurred as a result of such acquisition) and
all Business Acquisitions consummated prior thereto during the
applicable periods thereunder) as of the last day of the most
recently completed Financial Quarter with respect to which,
pursuant to Clause 16.1 or 16.2 of the Facility Agreement,
financial statements have been, or are required to have been,
delivered by the Parent, ADT Limited and the Borrower would be in
compliance with Section 4.2.4 and Clause 17 of the Facility
Agreement as of the last day of such Financial Quarter.
"Permitted Existing Business Activities" means as provided in Annex 1 to this
Guarantee.
"Permitted Strategic Holder" means any person (other than an Affiliate of ADT
Limited) whose purchase of Voting Stock is in the best interest of the
subsidiary whose Voting Stock is being purchased (as determined in good faith
by the Board of Directors of ADT Limited or a committee thereof, whose
determination shall be conclusive and evidenced by a certified written
resolution of such Board or committee).
"Permitted Strategic Sale" means a sale by any subsidiary of ADT Limited of
Voting Stock of any subsidiary (other than any Obligor or an Intermediate
Parent Company) to any Permitted Strategic Holder; provided, however, that (a)
after giving effect to such transaction, the aggregate percentage of the
Voting Stock of such subsidiary so sold shall not exceed 19% (or, in the case
of any subsidiary of an Intermediate Parent Company that is required to file a
consolidated tax return under United States Federal tax laws and regulations,
such lesser percentage as will not cause such subsidiary to become an
unconsolidated subsidiary under such laws and regulations) of all Voting Stock
of such subsidiary outstanding immediately after such sale and (b) the
consideration received in such sale (i) shall be 100% cash (including any cash
proceeds received from the sale of securities received in such Permitted
Strategic Sale, provided that at the time of such Permitted Strategic Sale,
ADT Limited or the relevant subsidiary has entered into a legally binding
agreement for the sale of such securities and such securities are sold within
60 days of such Permitted Strategic Sale) and (ii) shall be not less than the
Fair Market Value of the Voting Stock sold (as determined in good faith by the
Board of Directors of ADT Limited or a committee thereof, whose determination
shall be conclusive and evidenced by a certified written resolution of such
Board or committee).
"Plan" means any Pension Plan or Welfare Plan.
"Preference Shares" means the 5 3/4% Preference Shares and the 6% Preference
Shares.
"Pre-Acquisition Period" means the period prior to the ASH Acquisition Date.
"Process Agent" is the person identified in clause (d) of Section 2.9.
"Redeemable Capital Stock" means Capital Stock of ADT Limited or any other
subsidiary of ADT Limited that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or otherwise, (i) is or
upon the happening of an event or passage of time would be required to be
redeemed (for consideration other than shares of common stock of ADT Limited)
on or prior to 31 March 2003, (ii) is redeemable at the option of the holder
thereof (for consideration other than shares of common stock of ADT Limited)
at any time prior to such date or (iii) is convertible into or exchangeable
for debt securities of ADT Limited or any of its subsidiaries at any time
prior to such anniversary.
"Release" means a "release" as such term is defined in CERCLA.
"Relevant ADT Group Member" means any member of the ADT Group:
(a) (i) which after 31 December 1996 has incurred, and at the
relevant time has outstanding, any Indebtedness from any
member of the Group or a Guarantor;
(ii) in which any member of the Group or a Guarantor has made any
Investment after 31 December 1996; or
(iii) which has received any asset (or interest therein) from any
member of the Group or a Guarantor after 31 December 1996
other than against payment in cash of the fair market value
thereof or by a transfer of assets whose fair market value
is at least equal to that of the asset (or interest therein)
so received;
(b) which is not a Guarantor;
(c) which is not ADT Operations, Inc. or a subsidiary of ADT
Operations, Inc. or a subsidiary of ADT Limited which conducts the
major portion of its business in the United States or
substantially all of the assets of which are located in the United
States; and
(d) which is not a member of the Group.
"Resource Conservation and Recovery Act" means the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq, as in effect from time to time.
"Restricted Distribution" is defined in Section 4.2.6(a).
"Restricted Payment Basket Amount" means, at any date, the amount available on
such date under clause (C) of Section 1012(a) of the Senior Note Indenture for
the making of Restricted Payments (as defined thereunder).
"Senior Note Guarantees" means the guarantees of ADT Limited and certain of
its subsidiaries set forth in the guarantee provisions of the Senior Note
Indenture and any additional guarantee of the Senior Notes executed pursuant
to the "Limitation on Issuances of Guarantees of Indebtedness and of
Incurrence of Indebtedness of Certain Restricted Subsidiaries" and the
"Limitation on Liens" covenants of the Senior Note Indenture.
"Senior Note Indenture" means the indenture dated 4 August, 1993 among ADT
Operations, Inc., the guarantors named therein and The Chase Manhattan Bank
(National Association) as trustee (as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time).
"Senior Notes" means the 8 1/4% Senior Notes due 2000 of ADT Operations, Inc.
issued pursuant to the Senior Note Indenture (as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time).
"Senior Subordinated Note Guarantees" means the subordinated guarantee of ADT
Limited set forth in the guarantee provisions of the Senior Subordinated Note
Indenture and any additional guarantee of the Senior Subordinated Notes
executed pursuant to the "Limitation on Liens" and the "Limitation on
Issuances of Guarantees of Indebtedness" covenants of the Senior Subordinated
Note Indenture.
"Senior Subordinated Note Indenture" means the indenture dated 4 August 1993
among ADT Operations, Inc. the guarantors named therein and Nations Bank of
Georgia, National Association, as trustee (as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time).
"Senior Subordinated Notes" means the 9 1/4% Senior Subordinated Notes due
2003 of ADT Operations, Inc. issued pursuant to the Senior Subordinated Note
Indenture (as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time).
"Standard & Poor's" means Standard & Poor's Ratings Group.
"Stockholders' Equity" means, with respect to any person at any date, on a
consolidated basis for such person and its subsidiaries, the excess of:
(a) (i) in the case of ADT Limited, the sum of common stock taken at
par value, share premium, contributed surplus, Non-Voting
Exchangeable Shares and retained earnings (or accumulated deficit)
of ADT Limited at such date or (ii) in the case of any other
person, the sum of common stock taken at par value, capital
surplus and retained earnings (or accumulated deficit) of such
person at such date;
over
(b) treasury stock of such person and, to the extent included in
clause (a) above, minority interests in subsidiaries of such
person at such date,
provided that, in the case of ADT Limited, to the extent that the Stockholders
Equity of ADT Limited includes retained earnings of the ASH Group as of the
ASH Acquisition Date (whether or not included in the determination of
"retained earnings" or its equivalent under UK GAAP) such retained earnings
shall not be included.
"Subordinated Debt" means all Indebtedness in respect of the Senior
Subordinated Notes, the Senior Subordinated Note Guarantees, the XXXXx, the
XXXXx Guarantee and all other Indebtedness of ADT Limited or any other
subsidiary of ADT Limited for money borrowed which is subordinated in right
of payment to the payment of the US Credit Facility Obligations.
"Subordinated Intercompany Debt" means unsecured Indebtedness (a) subordinated
to the US Credit Facility Obligations and (b) the terms of which (including
interest rate) are not more burdensome to the obligor or obligors thereunder
than those terms generally available from independent third parties to
obligors similarly situated as such obligor or obligors.
"Total Capitalisation" means, with respect to any person on any date, the sum
of
(a) Debt of such person and its subsidiaries at such date, determined
on a consolidated basis,
plus
(b) Stockholders' Equity of such person at such date.
"US Credit Facility Obligations" means all obligations (monetary or otherwise)
of ADT Operations, Inc. and each other Obligor (as defined in the US$200
million Credit Facility) arising under or in connection with the Loan
Documents and each Hedging Arrangement (both as defined in the US$200 million
Credit Facility).
"US$200 million Credit Facility" means a credit agreement dated 9 January 1997
between ADT Operations, Inc. as borrower and the Lenders as defined therein
which replaced the US$300 million Credit Facility including, any amendment,
amendment and restatement, refinancing, extension, renewal or replacement
thereof, to the extent any increase to the principal amount thereof does not
exceed US$500,000,000.
"US$300 million Credit Facility" means a credit agreement dated 23 August 1995
between ADT Operations, Inc. as borrower and the Lenders as defined therein,
replaced by the US$200 million Credit Facility.
"Voting Stock" means, with respect to any person, Capital Stock in respect of
the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers, trustees or other similar governing body of such
person (irrespective of whether or not at the time the Capital Stock of any
other class or classes shall have or might have voting power by reason of the
occurrence of any contingency).
"Welfare Plan" means a "welfare plan", as such term is defined in Section 3(1)
of ERISA.
"Wholly Owned Subsidiary" means
(a) with respect to any person, a subsidiary all the Capital Stock
(other than directors' qualifying shares that are required under
applicable law) of which is owned by such person or another Wholly
Owned Subsidiary of such person, and
(b) with respect to ADT Limited or any other direct or indirect parent
of ADT Finance Inc.,
(i) ADT Finance Inc., if and only if and for so long as,
the Capital Stock of ADT Finance Inc. consists
entirely of (A) Voting Stock, 100% of which is owned
directly or indirectly by ADT Limited, and (B) its
Non-Voting Exchangeable Shares, or
(ii) any successor corporation of ADT Finance Inc.
incorporated under the laws of Canada; provided that
the Capital Stock of such successor shall consist
entirely of (A) Voting Stock, 100% of which is owned
directly or indirectly by ADT Limited, and (B)
publicly-held, non-voting preferred stock (whether now
outstanding or from time to time issued) (1) in
respect of which dividends are payable only when a
dividend is payable by ADT Limited in respect of its
common stock, (2) that is convertible, exchangeable or
redeemable only for common stock of ADT Limited, (3)
that will entitle the holder thereof to participate in
any liquidation, dissolution or winding up of such
successor of ADT Finance Inc., whether voluntary or
involuntary, or any other distribution of assets of
such successor of ADT Finance Inc. among its
stockholders for the purpose of winding up its
affairs, to no greater extent than the extent to which
the holders of the Non-Voting Exchangeable Shares
would currently so participate and (4) the other terms
of which are not adverse to the Banks.
SECTION 1.2. Interpretation Any reference in this Guarantee, unless the
context otherwise requires, to :
the "assets" of any person shall be construed as a reference to the whole or
any part of its business, undertakings, property, accounts, receivables,
goodwill and shareholdings whether now or hereafter acquired and any other
assets whatsoever.
"subsidiary" means with respect to any person, (i) any corporation of which
more than 50% of the outstanding Voting Stock is at the time directly or
indirectly owned by such person or (ii) any partnership, joint venture or
other entity as to which such person, directly or indirectly, owns more than a
50% ownership, equity or similar interest or has the power to direct or cause
the direction of management and policies, or the power to elect the managing
general partner (or the equivalent), of such partnership, joint venture or
other entity, as the case may be.
SECTION 1.3. Facility Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, capitalised terms used in this Guarantee,
including its preamble and recitals, have the meanings provided in the
Facility Agreement.
ARTICLE II
GUARANTEE PROVISIONS
SECTION 2.1. Guarantee. In consideration of the Beneficiaries entering into
the Facility Agreement ADT Limited hereby:
(a) guarantees to the Agent as agent for the Banks the due and
punctual observance and performance by the Borrower of its
obligations under the Facility Agreement and promises to pay to
the Agent as agent for the Banks from time to time on demand all
sums from time to time due and payable (but unpaid) by the
Borrower under the Facility Agreement; and
(b) agrees as a primary obligation to indemnify the Agent as agent for
the Banks from time to time on demand from and against any loss
incurred by any of the Beneficiaries as a result of any of the
obligations of the Borrower under the Facility Agreement being or
becoming void, voidable, unenforceable or ineffective for any
reason whatsoever, whether or not known to the relevant
Beneficiaries, the amount of such loss being the amount which the
relevant Beneficiaries would otherwise have been but are not
entitled to recover from the Borrower or any other Obligor.
The Agent shall not be obliged before exercising any of the rights, powers or
remedies conferred upon it in respect of ADT Limited hereby or by law:
(i) to make any demand of the Borrower;
(ii) to take any action or obtain judgment in any court against the
Borrower or any other Obligor;
(iii) to make or file any claim or proof in a winding-up or dissolution
of the Borrower or any other Obligor; or
(iv) to enforce or seek to enforce any security taken in respect of any
of the obligations of the Borrower or any other Obligor under the
Facility Agreement;
save that notice of non-payment shall first be given to the Borrower
provided that if no such notice is given to the Borrower prior to the
exercise of such rights, powers or remedies, that does not preclude the
Agent giving notice to the Borrower and thereafter exercising such
rights, powers or remedies.
SECTION 2.2. Continuing Security and Preservation of Rights. The obligations
of ADT Limited herein contained shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing whatsoever,
and in particular but without limitation, shall not be considered satisfied by
any intermediate payment or satisfaction of all or any of the obligations of
any of the Obligors under the Facility Agreement and shall continue in full
force and effect until final payment in full of all amounts owing by the
Obligors thereunder and total satisfaction of all the Borrower's actual and
contingent obligations thereunder.
The obligations of ADT Limited herein contained shall be in addition to and
independent of every other security which the Agent as agent for the Banks may
at any time hold in respect of any of any Obligor's obligations under the
Facility Agreement.
Neither the obligations of ADT Limited herein contained nor the rights, powers
and remedies conferred in respect of ADT Limited upon the Beneficiaries by the
Facility Agreement or by law shall be discharged, impaired or otherwise
affected by:
(i) the winding-up, dissolution, administration or reorganisation of
any Obligor or any change in its status, function, control or
ownership;
(ii) any of the obligations of any Obligor under the Facility Agreement
or under any other security relating to the Facility Agreement
being or becoming illegal, invalid, unenforceable or ineffective
in any respect;
(iii) time or other indulgence being granted or agreed to be granted to
any Obligor in respect of its obligations under the Facility
Agreement or under any such other security;
(iv) any amendment to, or any variation, waiver or release of any
obligation of any Obligor (other than, in respect of any
amendment, variation, waiver or release of the obligations of ADT
Limited agreed or consented to in accordance with the provisions
of the Finance Documents, to the extent of such amendment,
variation, waiver or release) under the Facility Agreement or
under any such other security;
(v) any failure to take, or fully to take, any security contemplated
by the Facility Agreement or otherwise agreed to be taken in
respect of any Obligor's obligations under the Facility Agreement;
(vi) any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of any such security
or taken in respect of any Obligor's obligations under the
Facility Agreement; or
(vii) any other act, event or omission which, but for this Section 2.2,
might operate to discharge, impair or otherwise affect any of the
obligations of ADT Limited herein contained or any of the rights,
powers or remedies conferred upon the Beneficiaries by the
Facility Agreement or by law.
SECTION 2.3. Settlement Conditional. Any settlement or discharge between ADT
Limited and any of the Beneficiaries shall be conditional upon no security or
payment to any of the Beneficiaries by the Borrower, any Obligor or ADT
Limited or any other person on behalf of the Borrower, any Obligor or ADT
Limited being avoided or reduced by virtue of any provisions or enactments
relating to bankruptcy, insolvency, liquidation or similar laws of general
application for the time being in force and, if any such security or payment
is so avoided or reduced, the Beneficiaries shall each be entitled to recover
the value or amount of such security or payment from ADT Limited subsequently
as if such settlement or discharge had not occurred.
SECTION 2.4. Deferral of ADT Limited's Rights. ADT Limited agrees that, so
long as any amounts are or may be owed by any of the Obligors under the
Facility Agreement or any of the Obligors is under any actual or contingent
obligations under the Facility Agreement, ADT Limited shall not exercise any
rights which ADT Limited may at any time have by reason of performance by it
of its obligations hereunder:
(i) to be indemnified by the Borrower;
(ii) to claim any contribution from any other guarantor of the
Borrower's obligations under the Facility Agreement; and/or
(iii) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Beneficiaries under
the Facility Agreement or of any other security taken pursuant to,
or in connection with, the Facility Agreement by the
Beneficiaries,
Provided that the restrictions contained in (i) and (ii) above shall only
apply after the occurrence of an Event of Default but shall apply irrespective
of when the claim for contribution or indemnification under this Section 2.4
arose.
SECTION 2.5. [Intentionally Omitted]
SECTION 2.6. Successors, Transferees and Assigns. This Guarantee shall:
(a) be binding upon ADT Limited, and its successors, transferees and
assigns; and
(b) inure to the benefit of and be enforceable by the Agent and each
other Beneficiary.
Without limiting the generality of clause (b), any Bank may assign or
otherwise transfer (in whole or in part) all or any of its rights or benefits
under any Finance Document (including this Guarantee) to any other person or
entity, and such other person or entity shall thereupon become vested with all
such rights and benefits, subject, however, to the provisions of the Facility
Agreement.
SECTION 2.7. Payments Free and Clear of Taxes, etc.
(a) Tax Gross-up All payments to be made by ADT Limited to any person
hereunder shall be made free and clear of and without deduction
for or on account of tax unless ADT Limited is required to make
such a payment subject to the deduction or withholding of tax (not
being a tax imposed on and/or calculated by reference to the net
income paid to and received by such person by the jurisdiction in
which it is incorporated or in which its Facility Office (if any)
or other relevant office is located), in which case the sum
payable by ADT Limited in respect of which such deduction or
withholding is required to be made shall be increased to the
extent necessary to ensure that, after the making of the
required deduction or withholding, such person receives and
retains (free from any liability in respect of any such
deduction or withholding) a net sum equal to the sum which it
would have received and so retained had no such deduction or
withholding been made or required to be made.
(b) Tax Indemnity Without prejudice to the provision of paragraph (a)
above, if any person or the Agent on its behalf is required to
make any payment on account of tax (not being a tax imposed on and
calculated by reference to the net income paid to and received by
its Facility Office by the jurisdiction in which it is
incorporated or in which its Facility Office is located) or
otherwise on or in relation to any sum received or receivable
hereunder by such person or the Agent on its behalf (including any
sum received or receivable under this Section 2.7) or any
liability in respect of any such payment is asserted, imposed,
levied or assessed against such person or the Agent on its behalf,
ADT Limited shall, upon demand of the Agent, promptly indemnify
such person against such payment or liability, together with any
interest, penalties, costs and expenses payable or incurred in
connection therewith.
(c) Claims by Banks A Bank intending to make a claim pursuant to
paragraph (b) above shall notify the Agent of the event by reason
of which it is entitled to do so, whereupon the Agent shall notify
ADT Limited thereof Provided that (i) nothing herein shall
require such Bank to disclose any confidential information
relating to the organisation of its affairs and (ii) if a Bank
notifies the Agent of a claim under Section 2.7(b) after the date
falling 60 days after the date on which such Bank receives its
audited annual accounts such Bank shall not be entitled to claim
indemnification for any event or occurrence which occurred during
the financial year to which such audited annual accounts relate.
(d) Notification of Requirement to Deduct Tax If, at any time ADT
Limited is required by law to make any deduction or withholding
from any sum payable by it hereunder (or if thereafter there is
any change in the rates at which or the manner in which such
deductions or withholdings are calculated), ADT Limited shall
promptly notify the Agent.
(e) Evidence of Payment of Tax If ADT Limited makes any payment
hereunder in respect of which it is required to make any deduction
or withholding, it shall pay the full amount required to be
deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and
shall deliver to the Agent for each relevant Bank, within thirty
days after it has made such payment to the applicable authority
(or, if later, within 10 business days of receipt), an original
receipt (or a certified copy thereof) issued by such authority
evidencing the payment to such authority of all amounts so
required to be deducted or withheld in respect of that Bank's
share of such payment.
SECTION 2.8. Judgment. ADT Limited xxxxxx agrees that to the fullest extent
permitted by applicable law:
(a) if, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in sterling into another
currency, ADT Limited agrees that the rate of exchange used shall
be that at which in accordance with normal banking procedures the
Agent could purchase Sterling with such other currency on the
business day preceding that on which final judgment is given; and
(b) the obligation of ADT Limited in respect of any sum due from it to
any Beneficiary hereunder shall, notwithstanding any judgment in a
currency other than Sterling, be discharged only to the extent
that on the business day following receipt by such Beneficiary, as
the case may be, of any sum adjudged to be so due in such other
currency such Beneficiary may, in accordance with normal banking
procedures, purchase sterling with such other currency; in the
event that the sterling so purchased are less than the sum
originally due to such Beneficiary in sterling, ADT Limited, as
a separate obligation and notwithstanding any such judgment,
hereby indemnifies and holds harmless such Beneficiary against
such loss, and if the sterling so purchased exceeds the sum
originally due to such Beneficiary in sterling, such Beneficiary
shall remit to ADT Limited such excess.
SECTION 2.9. Consent to Jurisdiction; Waiver of Immunities.
(a) English Courts - Each of the parties hereto irrevocably agrees for
the benefit of each of the Beneficiaries that the courts of
England shall have jurisdiction to hear and determine any suit,
action or proceedings, and to settle any disputes, which may arise
out of or in connection with this Guarantee (respectively
"Proceedings" and "Disputes") and, for such purposes, irrevocably
submits to the non-exclusive jurisdiction of such courts.
(b) Appropriate Forum - ADT Limited irrevocably waives any objection
which it might now or hereafter have to the courts referred to in
paragraph (a) above being nominated as the forum to hear
and determine any Proceedings and to settle any Disputes and
agrees not to claim that any such court is not a convenient or
appropriate forum.
(c) Service of Process - ADT Limited agrees that the process by which
any Proceedings are begun may be served on it by being delivered
in connection with any Proceedings in England, to ADT Finance plc
at 00/00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx XX00 0XX or other
its registered office for the time being. If the appointment of
the person mentioned in this paragraph (c) ceases to be effective
in respect of ADT Limited, ADT Limited shall immediately appoint a
further person in England to accept service of process on its
behalf in England and, failing such appointment within 15 days,
the Agent shall be entitled to appoint such a person by notice to
ADT Limited. Nothing contained herein shall affect the right to
serve process in any other manner permitted by law.
(d) Non-exclusive Submission - The submission to the jurisdiction of
the courts referred to in paragraph (a) above shall not
(and shall not be construed so as to) limit the right of the
Beneficiaries or any of them to take Proceedings against ADT
Limited in any other court of competent jurisdiction nor shall the
taking of Proceedings in any one or more jurisdictions preclude
the taking of Proceedings in any other jurisdiction (whether
concurrently or not) if and to the extent permitted by applicable
law.
(e) Waiver of Immunity - To the extent that ADT Limited may in any
jurisdiction claim for itself or its assets immunity from suit,
execution, attachment (whether in aid of execution, before
judgment or otherwise) or other legal process and to the extent
that in any such jurisdiction there may be attributed to itself or
its assets such immunity (whether or not claimed), ADT Limited
hereby irrevocably agrees not to claim and hereby irrevocably
waives such immunity in respect of its obligations under this
Guarantee to the full extent permitted by the laws of such
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
ADT Limited hereby represents and warrants to each Beneficiary as set forth in
this Article III.
SECTION 3.1. Organisation, etc. Each of ADT Limited and its subsidiaries
that is an Obligor or a Material Related Party is a company or corporation, as
the case may be, duly organised and validly existing and, to the extent
applicable, in good standing under the laws of the jurisdiction of its
organisation, is duly qualified to do business and is, to the extent
applicable, in good standing as a foreign corporation in each jurisdiction
where the nature of its business requires such qualification and where the
failure to so qualify or be in good standing would reasonably be expected to
have a material adverse effect on the business, results of operations,
financial condition or prospects of ADT Limited and its subsidiaries taken as
a whole. Each of ADT Limited and its subsidiaries that is an Obligor or a
Material Related Party has full power and authority and holds all requisite
governmental licenses, permits and other approvals (i) to own and hold under
lease its property and to conduct its business substantially as currently
conducted by it, except where failure to hold such licenses, permits and other
approvals would not reasonably be expected to have a material adverse effect
on the business, results of operations, financial condition or prospects of
ADT Limited and its subsidiaries taken as a whole and (ii) to enter into and
perform its obligations under each Finance Document, if any, to which it is a
party.
SECTION 3.2. Due Authorisation, Non-Contravention, etc. The execution,
delivery and performance by ADT Limited of this Guarantee and each other
Finance Document executed or to be executed by it, and the execution, delivery
and performance by each other Obligor of each Finance Document executed or to
be executed by it, are within ADT Limited's and each such Obligor's corporate
powers, have been duly authorised by all necessary corporate action, and do
not
(a) contravene ADT Limited's or any such Xxxxxxx's constitutive
documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting ADT
Limited or any such Obligor (including the Companies Act 1981 of
Bermuda) in any manner that could reasonably be expected (i) to
have a material adverse effect on the business, results of
operations, financial condition or prospects of ADT Limited and
its subsidiaries taken as a whole, (ii) to impair the ability of
any Bank or the Agent to enforce any of the obligations of ADT
Limited or any other Obligor hereunder or under any other of the
Finance Documents or (iii) to subject any Bank or the Agent to any
liability; or
(c) result in, or require the creation or imposition of, any
encumbrance on any of ADT Limited's or any Obligor's properties.
SECTION 3.3. Government Approval, Regulation, etc. No authorisation or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other person is required for the due
execution, delivery or performance by ADT Limited or any other Obligor of this
Guarantee or any other Finance Document to which it is a party.
SECTION 3.4. Validity, etc. This Guarantee constitutes, and each other
Finance Document executed by ADT Limited will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of ADT
Limited enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganisation, moratorium or similar laws
from time to time in effect affecting creditors' rights generally and to
general principles of equity.
SECTION 3.5. Financial Information. The audited financial statements of ADT
Limited for is financial year ended 31 December 1995 and all financial
statements of ADT Limited furnished pursuant to Section 4.1.7(a) and (b) have,
in each case, been prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of ADT Limited, as at the
dates thereof, and the results of its operations for the periods then ended.
SECTION 3.6. No Material Adverse Change. Since 31 December, 1995, there has
been no material adverse change in the business, results of operations,
financial condition or prospects of ADT Limited and its subsidiaries taken as
a whole.
SECTION 3.7. Litigation. There is no pending or, to the knowledge of ADT
Limited, threatened litigation, action, proceeding, or labour controversy
affecting ADT Limited or any of its subsidiaries, or any of their respective
properties, businesses, assets or revenues, which could reasonably be expected
to materially adversely affect the financial condition, results of operations,
business or prospects of ADT Limited and its subsidiaries, taken as a whole
(provided that no representation is being made with respect to the effect on
such financial condition, results of operations, business or prospects of any
litigation, action or proceeding described in the first two paragraphs under
the caption "Certain Litigation Against the Company" in the Preliminary Proxy
Statement of ADT Limited filed with the Securities and Exchange Commission on
8 January 1997, provided to The Bank of Nova Scotia as the agent under the
US$200 million Credit Facility prior to 9 January 1997, including any
amendment to the complaint referred to therein provided to The Bank of Nova
Scotia as the agent under the US$200 million Credit Facility prior to 9
January 1997 relating to the scheduling of the special meeting of ADT
Limited's shareholders referred to in any such amendment), or which purports
to affect the legality, validity or enforceability of this Guarantee, or any
other Finance Document.
SECTION 3.8. Ownership of Properties. ADT Limited and each of its
subsidiaries owns good and marketable title to, or valid leases of, all of its
material properties and material assets necessary to conduct its business
substantially as currently conducted by it.
SECTION 3.9. Taxes. ADT Limited and each of its subsidiaries has filed all
material tax returns and reports required by law to have been filed by it and
has paid when due all material taxes and governmental charges thereby shown to
be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION 3.10. Pension and Welfare Plans. During the twelve-consecutive-month
period prior to the date of the execution and delivery of the Facility
Agreement and prior to the date of any Advance thereunder, no steps have been
taken to terminate any Pension Plan which termination could result in the
incurrence by ADT Limited or any member of the Controlled Group of any
material liability, and no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to an encumbrance under section
302(f) of ERISA. No condition exists or event or transaction has occurred
with respect to any Pension Plan which might result in the incurrence by
ADT Limited or any member of the Controlled Group of any material
liability, fine or penalty. Except as disclosed to the Agent prior to the
date hereof, neither ADT Limited nor any member of the Controlled Group has
any material contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for continuation
coverage described in Part 6 of Title I of ERISA.
SECTION 3.11. Environmental Warranties.
(a) All facilities and property (including underlying groundwater)
owned or leased by ADT Limited or any of its subsidiaries have
been, and continue to be, owned or leased by ADT Limited and its
subsidiaries in material compliance with all Environmental Laws;
(b) There have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for
information received by ADT Limited or any of its
subsidiaries with respect to any alleged violation of
any Environmental Law, which could reasonably be
expected to have a material adverse effect on the
business, results of operations, financial condition
or prospects of ADT Limited and its subsidiaries taken
as a whole, or
(ii) complaints, notices or inquiries to ADT Limited or
any of its subsidiaries regarding potential liability
under any Environmental Law, which could reasonably be
expected to have a material adverse effect on the
business, results of operations, financial
condition or prospects of ADT Limited and its
subsidiaries taken as a whole;
(c) ADT Limited and its subsidiaries have been issued and are in
compliance with all permits, certificates, approvals, licenses and
other authorisations relating to environmental matters and
necessary for their businesses, except where the failure to have
been issued any such permit, certificate, approval, license or
other authorisation or to have complied with any of the foregoing
would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the business, results of
operations, financial condition or prospects of ADT Limited and
its subsidiaries taken as a whole;
(d) Neither ADT Limited nor any subsidiary of ADT Limited has directly
transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on any
similar list or which is the subject of federal, state or local
enforcement actions or other investigations which is reasonably
likely to lead to material claims against ADT Limited or such
subsidiary thereof for any remedial work, damage to natural
resources or personal injury, including claims under CERCLA; and
(e) No conditions exist at, on or under any property now owned or
leased (or, to the best knowledge of ADT Limited and its
subsidiaries after due inquiry, any property previously owned or
leased) by ADT Limited or any subsidiary of ADT Limited which
would give rise to liability under any Environmental Law or for
personal injury or property or other damage, which liability could
reasonably be expected to have a material adverse effect on the
business, results of operations, financial condition or prospects
of ADT Limited and its subsidiaries taken as a whole.
SECTION 3.12. Regulations G, U and X. Neither ADT Limited nor any subsidiary
of ADT Limited is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock, and no proceeds of any Loans will be
used for a purpose which violates, or would be inconsistent with, F.R.S. Board
Regulation G, U or X. Terms for which meanings are provided in F.R.S. Board
Regulation G, U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
SECTION 3.13. No Defaults. Neither ADT Limited nor any subsidiary of ADT
Limited is in violation of, or in default under, any term or provision of its
constitutive documents or any contract, agreement, indenture, instrument, law,
governmental regulation or court decree or order applicable to it, such that
such violations or defaults in the aggregate would reasonably be expected to
have a material adverse effect on the business, results of operations,
financial condition or prospects of ADT Limited and its subsidiaries, taken as
a whole.
SECTION 3.14. Delivery of Organisational Chart. The Agent has been furnished
on or prior to drawdown under the Facility Agreement a detailed organisational
chart of ADT Limited and all its subsidiaries (other than those that do not
conduct any business activities and that do not have assets with a Fair Market
Value in excess of $10,000), certified by the chief financial authorised
officer of ADT Limited.
SECTION 3.15. Restricted Payment Basket Amount. As of 31 December 1996, the
Restricted Payment Basket Amount was not greater than $140,000,000.
SECTION 3.16. Guarantee Ranks Pari Passu. The obligations of ADT Limited
under this Guarantee rank at least pari passu with its obligations under any
other unsecured, unsubordinated guarantees granted by it in respect of the
Indebtedness of any member of the ADT Group (the "other guarantees") and all
Indebtedness of ADT Limited which is subordinated to claims under any of the
other guarantees is subordinated, to the same extent, to claims under this
Guarantee.
SECTION 3.17. Seniority of the Obligations. The obligations of ADT Limited
under the Guarantee are senior to all Indebtedness of ADT Limited in respect
of the Senior Subordinated Note Guarantee and the XXXXx Guarantee, and
constitute, and are entitled to the benefits of being, (i) "Guarantor Senior
Indebtedness", as such term is defined in the Senior Subordinated Note
Indenture, and (ii) "Guarantor Senior Indebtedness", as such term is defined
in the XXXXx Indenture.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Affirmative Covenants. ADT Limited covenants and agrees that,
so long as any amount is outstanding (actually or contingently) hereunder, ADT
Limited will, unless an Instructing Group shall otherwise consent in writing,
perform and observe the obligations set forth in this Section.
SECTION 4.1.1. Compliance with Laws, etc. ADT Limited will, and will cause
each of its subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation):
(a) except to the extent permitted under Section 4.2.9, the
maintenance and preservation by ADT Limited and each of its
subsidiaries that is an Obligor or a Material Related Party of its
corporate existence and qualification as a foreign corporation in
each jurisdiction where the nature of its business or the location
of its assets requires it to be so qualified, except to the extent
the failure to maintain and preserve its corporate existence or to
be so qualified could not reasonably be expected to have a
material adverse effect on the business, results of operations,
financial condition or prospects of ADT Limited and its
subsidiaries taken as a whole (it being acknowledged that the
failure of ADT Limited or the Borrower to maintain and preserve
its corporate existence (except as permitted under Section
4.2.9) shall be deemed to have such a material adverse effect);
and
(b) the payment, before the same become delinquent, of all material
taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 4.1.2. Maintenance of Properties. ADT Limited will, and will cause
each of its subsidiaries to, maintain, preserve, protect and keep its material
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless ADT Limited
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 4.1.3. Insurance. ADT Limited will, and will cause each of its
subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business (including
business interruption insurance) against such casualties and contingencies and
of such types and in such amounts as is customary in the case of similar
businesses and will, upon request of the Agent, furnish to the Agent for the
Banks at reasonable intervals a certificate of an authorised officer of ADT
Limited setting forth the nature and extent of all insurance maintained by ADT
Limited and its subsidiaries in accordance with this Section.
SECTION 4.1.4. Books and Records. ADT Limited will, and will cause each of
its subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and permit the Agent or its duly
authorised representatives, at reasonable times and intervals (but not more
often than once per Financial Quarter, unless an Event of Default shall have
occurred and be continuing unwaived (in which case, and during such period,
each Bank shall have the rights of the Agent under this Section)) to visit all
of its offices, to discuss its financial matters with its officers and
independent public accountant (provided a representative of ADT Limited or
such subsidiary is given prior notice of, and the opportunity to be present
during, such discussion) and, subject to appropriate agreements of
confidentiality and to any restrictions imposed under applicable law
(including regulations promulgated by the United States Department of
Defense), to examine any of its books or other corporate records. ADT Limited
shall pay any fees of such independent public accountant incurred in
connection with the Agent's or any Bank's exercise of its rights pursuant to
this Section. In addition, ADT Limited shall pay the reasonable out-of-pocket
expenses arising from the Agent's visit to the offices of ADT Limited or any
of its subsidiaries in connection with the exercise of its rights pursuant to
this Section to the extent of one such visit per Financial Year.
SECTION 4.1.5. Environmental Covenant. ADT Limited will, and will cause each
of its subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, apply for and keep all
necessary permits, approvals, certificates, licenses and other
authorisations relating to environmental matters in effect where
the failure to so keep in effect could reasonably be expected to
have a material adverse effect on the business, results of
operations, financial condition or prospects of ADT Limited and
its subsidiaries taken as a whole and remain in material
compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws and in
a manner so as to minimize potential liability;
(b) immediately notify the Agent and provide copies upon receipt of
all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties or compliance with
Environmental Laws, which claims or other alleged conditions could
reasonably be expected to have a material adverse effect on the
business, results of operations, financial condition or prospects
of ADT Limited and its subsidiaries taken as a whole; and
(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with
this Section 4.1.5.
SECTION 4.1.6. Guarantee Supplements.
(a) If: (i) the aggregate amount of:
(x) all Indebtedness incurred by members of the ADT
Group (which are not members of the Group or
Guarantors) from any member of the Group or a
Guarantor since the date hereof;
(y) all Investments made by any member of the Group
or a Guarantor in any member of the ADT Group
(which is not a member of the Group or a
Guarantor) since the date hereof; and
(z) the fair market value of all assets received by
any member of the ADT Group (which is not a
member of the Group or a Guarantor) from any
member of the Group or a Guarantor since the
date hereof less the amount of cash paid or the
fair market value of any assets transferred by
such member of the ADT Group to the relevant
disposing entity in consideration therefor
has exceeded the greater of (1) Pound
Sterling102,500,000; and (2) 10% of the consolidated
gross assets of the Group as reflected in the balance
sheet most recently delivered pursuant to Clause 16.1
or, as the case may be, 16.2 of the Facility
Agreement; or
(ii) each of the consolidated gross assets (plus the
aggregate of the Guarantor Assets) and consolidated
gross revenues of the Group Obligors (plus the
aggregate of the gross revenues of any members of the
ADT Group which are not Group Obligors and which have
become Additional Guarantors in accordance with this
Section 4.1.6), immediately following the transaction
or arrangement which results in a member of the ADT
Group becoming a Relevant ADT Group Member and after
giving pro forma effect thereto, is (x) in the case
of consolidated gross assets, less than the greater of
90% of the consolidated gross assets of the Group at
the date hereof and 90% of the consolidated gross
assets of the Group (plus the aggregate of the
Guarantor Assets) as reflected in the balance sheet
most recently delivered pursuant to Clause 16.1 or, as
the case may be, 16.2 of the Facility Agreement or (y)
in the case of consolidated gross revenues, less than
the greater of 90% of the consolidated gross revenues
of the Group at the date hereof and 90% of the
consolidated gross revenues of the Group (plus the
aggregate of the gross revenues of any members of the
ADT Group which are not Group Obligors and which have
become Additional Guarantors in accordance with this
Section 4.1.6) as reflected in the profit and loss
statement most recently delivered pursuant to Clause
16.1 or, as the case may be, 16.2 of the Facility
Agreement,
ADT Limited will subject to section 4.1.6(b) and unless otherwise
agreed by the Agent, cause each member of the ADT Group which
becomes a Relevant ADT Group Member at such time or at any time
thereafter to enter into a guarantee of obligations under the
Finance Documents in such form, together with such supporting
documentation, (including, without limitation, constitutive
documentation, corporate authorities, approvals and legal
opinions) as the Agent may reasonably specify, such guarantee to
be entered into no later than 60 days after the end of the then
current Financial Quarter.
(b) If a member of the ADT Group has become a Relevant ADT Group
Member (the "Potential Guarantor") as a result of a transaction or
arrangement (the "Relevant Transaction") involving a Guarantor,
which is not a member of the Group (the "Existing Guarantor"),
then the Potential Guarantor will only be required to provide the
guarantee referred to in Section 4.1.6(a) if:
(i) at the time the Existing Guarantor became a Guarantor (or at
the time any subsequent Indebtedness was incurred by the
Existing Guarantor from any member of the Group or any other
Guarantor, or any subsequent Investment was made in the
Existing Guarantor by any member of the Group or any other
Guarantor, or the Existing Guarantor received any further
assets from any member of the Group or any other Guarantor)
it was intended that the Relevant Transaction would be
entered into; or
(ii) without prejudice to Section 4.1.6(b)(i), the Existing
Guarantor is ADT Limited and
(x) the aggregate of the cash received by ADT Limited by
incurring Indebtedness from and receiving Investments
in ADT Limited made by (plus the aggregate fair market
value of any assets transferred by members of the
Group to ADT Limited) members of the Group, in each
case, after the date hereof
exceeds
(y) the aggregate of the cash received by members of the
Group by way of repayment of Indebtedness by, by
incurring Indebtedness from and receiving Investments
in members of the Group made by (plus the aggregate
fair market value of any assets transferred by ADT
Limited to members of the Group) ADT Limited, in each
case, after the date hereof
by more than $20,000,000
(c) ADT Limited will ensure that at all times after the threshold
referred to in Section 4.1.6(a)(i) has been exceeded each
transaction or arrangement entered between any member of the Group
(or any Obligor) and any member of the ADT Group referred to in
paragraph (a) of the definition of "Relevant ADT Group Member"
which is not (or is not required under Section 4.1.6 to become) an
Obligor, is entered into on arm's length terms.
SECTION 4.1.7. Financial Information.
(a) Annual Statements ADT Limited will furnish, or will cause to be
furnished to the Agent for the Banks no later than the filing of
each 10-K of ADT Limited, but in no event later than 120 days
after the end of each Financial Year, copies of its audited
consolidated financial statements (including balance sheet, profit
and loss and cashflow statements) for such Financial Year, as of
the end of such Financial Year audited by and reported on (without
any Impermissible Qualification) as to fairness of presentation,
generally accepted accounting principles and consistency by
Xxxxxxx & Xxxxxxx or other independent accountants of
internationally recognised standing, together with a certificate
from such accountants stating whether, in making the examination
necessary for such report, such accountants have become aware of
any previously unnotified Event of Default or Potential Event of
Default (other than one relating to the Group or any member
thereof) that has occurred and is continuing unwaived.
(b) Quarterly Statements ADT Limited will furnish, or will cause to
be furnished, to the Agent for the Banks promptly and in any event
within 60 days after the end of each of the first three Financial
Quarters of each Financial Year, quarterly unaudited consolidated
financial statements (including balance sheet, profit and loss and
cashflow statements) as of the end of such Financial Quarter for
ADT Limited for such Financial Quarter and for the period
commencing at the end of the previous Financial Year and ending
with the end of such Financial Quarter, certified (subject to
normal year-end adjustments) as to the fairness of presentation,
generally accepted accounting principles and consistency by the
finance director of ADT Limited.
(c) Compliance Certificates ADT Limited will furnish, or will cause
to be furnished, to the Agent within ten business days of the
delivery of the financial statements required by paragraphs (a)
and (b) above a Compliance Certificate, executed by the finance
director or chief financial officer of ADT Limited, (i) showing
(in reasonable detail and with appropriate calculations and
computations calculations of the financial covenants set forth in
Section 4.2.4 and (ii) giving notice of any previously unnotified
Event of Default or Potential Event of Default (other than one
relating to the Group or any member thereof).
(d) Notice of Significant Events ADT Limited shall deliver, or will
cause to be delivered as soon as possible and in any event within
five business days after (i) any executive or financial officer of
ADT Limited obtains knowledge of the occurrence of any Event of
Default or Potential Event of Default (other than one relating to
the Group or any member thereof), a statement of the chief
financial authorised officer of ADT Limited setting forth details
of such Event of Default or Potential Event of Default and the
action which the relevant Obligor has taken and proposes to take
with respect thereto or (ii) (a) the occurrence of any material
adverse development with respect to any litigation, action,
proceeding or (b) the commencement of any labour controversy,
litigation, action, proceeding of the type described in Section
3.7, which, in each case, might reasonably be expected to have a
material adverse effect on the business, results of operations,
financial condition or prospects of ADT Limited and its
subsidiaries taken as a whole notice thereof describing in
reasonable detail such development or such labour controversy
litigation, action or proceeding.
(e) Other Financial Information ADT Limited shall:
(i) furnish, or cause to be furnished, promptly after the
sending or filing thereof, copies of all reports which it
sends to any class of its security holders generally, and
all reports and registration statements (other than the
exhibits thereto and any registration statements on Form
S-8 or its equivalent) which any member of the ADT Group
files with the Securities and Exchange Commission (or any
foreign equivalent) or any national securities exchange
including, without limitation, Form 10-Ks and 10-Qs for ADT
Limited;
(ii) from time to time on the request of the Agent, furnish or
cause to be furnished to the Agent such information about
the business and financial condition of ADT Limited (or any
of its subsidiaries) as the Agent may reasonably require.
(f) Requirements as to Financial Statements ADT Limited shall ensure
that:
(i) each set of financial statements delivered by it pursuant
to Section 4.1.7 (a) or (b) is prepared on the same basis
as was used in the preparation of its audited financial
statements for its financial year ended 31 December 1995
and in accordance with accounting principles generally
adopted in such audited financial statements for its
financial year ended 31 December 1995 and consistently
applied; and
(ii) each set of financial statements delivered by it pursuant
to Section 4.1.7 (a) or (b) is certified by a duly
authorised officer of ADT Limited as giving a true and fair
view of the financial condition of the ADT Group as at the
end of the period to which those financial statements
relate and of the results of the ADT Group's operations
during such period.
SECTION 4.2. Negative Covenants. ADT Limited covenants and agrees that, so
long as any amount is outstanding (actually or contingently hereunder), ADT
Limited will not, without the prior written consent of an Instructing Group,
do anything prohibited in this Section.
SECTION 4.2.1. Business Activities. ADT Limited will not, and will not
permit any of its subsidiaries to, engage in any business activity, except for
those activities conducted in respect of the Core Business and the Permitted
Existing Business Activities, and such activities as may be incidental or
related thereto; provided, however, that ADT Limited will not be in default in
the observance of this Section 4.2.1 if, as part of the acquisition of a Core
Business, ADT Limited or its applicable subsidiary acquires a business or
assets that would not constitute, or be included in, a Core Business, so long
as (i) the primary purpose of such acquisition was the acquisition of such
Core Business, which acquisition could not have been consummated on as
commercially attractive terms without the acquisition of such other business
or assets, (ii) not less than 70% of the assets acquired pursuant to such
acquisition related at the time of such acquisition to such Core Business,
(iii) ADT Limited or such applicable subsidiary is diligently pursuing the
sale of such other business or assets and (iv) such business or assets do not
have, and could not reasonably be expected to have, a material adverse effect
on the business, results of operations, financial condition or operations of
ADT Limited and its subsidiaries taken as a whole.
SECTION 4.2.2. Indebtedness. ADT Limited will not, and will not permit any
of its subsidiaries which are not members of the Group, to, create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of any obligations under any Finance
Document;
(b) Indebtedness in respect of the Senior Note Guarantees, the Senior
Subordinated Note Guarantees and the XXXXx Guarantee;
(c) Indebtedness existing as of 30 June, 1995; provided that such
Indebtedness having a principal amount in excess of $3,000,000 is
disclosed to the Agent prior to the date hereof;
(d) Indebtedness of ADT Canada, Inc., an Ontario corporation and a
wholly owned subsidiary of ADT Limited, incurred for working
capital purposes in an aggregate amount not to exceed at any time
outstanding Canadian $75,000,000 and guarantees thereof by ADT
Limited or any of its subsidiaries;
(e) obligations of ADT Limited or any of its subsidiaries pursuant to
Hedging Arrangements designed to protect ADT Limited or any of its
subsidiaries against fluctuations in interest rates in respect of
Indebtedness of ADT Limited or such subsidiary and not entered
into for purposes of speculation;
(f) obligations of ADT Limited or any of its subsidiaries pursuant to
Hedging Arrangements designed to protect ADT Limited or any of its
subsidiaries against fluctuations in currency values and entered
into in the ordinary course of business and not for purposes of
speculation;
(g) unsecured Indebtedness incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities in respect of obligations of persons other
than ADT Limited or any of its subsidiaries);
(h) Indebtedness in respect of Capitalised Lease Liabilities and
Indebtedness ("Capex Indebtedness") incurred to finance the
construction or acquisition of assets permitted to be acquired or
constructed pursuant to Section 4.2.7, to the extent a Capitalised
Lease Liability (assuming for the purposes of this clause only
that Capex Indebtedness constitutes a Capitalised Lease Liability)
could have been incurred under Section 4.2.7;
(i) Indebtedness of subsidiaries of ADT Limited owing to ADT Limited;
(j) Indebtedness of ADT Limited or of its subsidiaries owing to other
subsidiaries of ADT Limited;
(k) [intentionally omitted];
(l) [intentionally omitted];
(m) Indebtedness arising by reason of any indemnity for
misrepresentation or performance bond provided in respect of the
sale of any subsidiary of ADT Limited;
(n) Indebtedness in respect of surety bonds and performance bonds
provided in the ordinary course of business;
(o) Indebtedness which refinances Indebtedness permitted by clauses
(b), (c), (d) and (h) above; provided, however, that after giving
effect to such refinancing, (i) the principal amount of
outstanding Indebtedness is not increased, (ii) in the case of
clauses (b) and (c) above, neither the tenor nor the average life
thereof is reduced, (iii) the respective obligor or obligors shall
be the same on the refinancing Indebtedness as on the Indebtedness
being refinanced, (iv) the security for the refinancing
Indebtedness shall be the same as that for the Indebtedness being
refinanced (except to the extent that less security is granted to
holders of refinancing Indebtedness), (v) the holders of
refinancing Indebtedness are not afforded covenants, defaults,
rights or remedies more burdensome to the obligor or obligors than
those contained in the Indebtedness being refinanced and (vi) the
refinancing Indebtedness is subordinated to the same degree as the
Indebtedness being refinanced;
(p) Indebtedness in respect of the Preference Shares and Exchangeable
Preference Shares outstanding on the Closing Date;
(q) Indebtedness incurred by ADT Operations, Inc. (and certain of its
subsidiaries and other subsidiaries of ADT Limited as obligated
thereunder from time to time) under, by virtue of or in relation
to the US$200 million Credit Facility and, without duplication,
Contingent Liabilities of ADT Limited and various of the
subsidiaries of ADT Operations, Inc. and other subsidiaries of ADT
Limited in relation thereto (including and together with
Indebtedness under notes and other instruments issued thereunder
or relating thereto and Hedging Arrangements permitted thereby)
and Indebtedness incurred by one or more of such persons in
respect of any amendment, amendment and restatement,
refinancing, extension, renewal or replacement of any thereof
to the extent that the principal amount thereof does not exceed
US$500,000,000; and
(r) other Indebtedness of ADT Limited and its subsidiaries to the
extent that the amount of such Indebtedness outstanding at any
time, when added (without duplication) to the aggregate amount of
Indebtedness outstanding at such time under sub-paragraph (j) of
the definition of "Permitted Indebtedness" of the Facility
Agreement, does not exceed $75,000,000;
provided, however, that no Indebtedness otherwise permitted by sub-clause (r)
above shall be permitted if, after giving effect to the incurrence thereof,
any Event of Default shall have occurred and be continuing.
SECTION 4.2.3. Encumbrances. ADT Limited will not, and will not permit any
of its subsidiaries to, create, incur, assume or suffer to exist any
encumbrance upon any of its property, revenues or assets (including Capital
Stock of subsidiaries of ADT Limited), whether now owned or hereafter
acquired, except:
(a) encumbrances securing any obligation under any Finance Document;
(b) encumbrances granted prior to 23 August 1995 to secure
Indebtedness of the type permitted and described in clause (c) of
Section 4.2.2 and encumbrances securing refinancings thereof
permitted by clause (o) of Section 4.2.2 and sub-paragraph (i) of
the definition of "Permitted Indebtedness" of the Facility
Agreement respectively;
(c) encumbrances granted to secure Indebtedness of the type permitted
and described in clause (h) of Section 4.2.2 and sub-paragraph (f)
of the definition of "Permitted Indebtedness" of the Facility
Agreement and covering only those assets acquired with the
proceeds of such Indebtedness and encumbrances with respect to
such assets securing refinancings of such Indebtedness permitted
by clause (o) of Section 4.2.2, respectively;
(d) encumbrances for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books;
(e) encumbrances of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books;
(f) encumbrances incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory obligations, leases and
contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or
appeal bonds;
(g) judgment encumbrances (i) in an aggregate amount not in excess of
$15,000,000, (ii) as to which enforcement proceedings shall not
have commenced and there shall not have been a period of 30
consecutive days during which such judgment was not stayed or
(iii) the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies;
(h) encumbrances with respect to assets of a subsidiary of ADT Limited
(other than any member of the Group) granted to secure
Indebtedness owing to the Borrower or any other Obligor or any of
the Obligors under the US $200 million Credit Facility or under
any other Indebtedness described at clause (q) of Section 4.2.2;
(i) encumbrances with respect to assets of a subsidiary of ADT Limited
(other than any member of the Group) granted to secure
Indebtedness owing to ADT Limited or a wholly owned subsidiary of
ADT Limited;
(j) encumbrances (i) existing at the time that a person becomes a
subsidiary of ADT Limited in a transaction permitted hereunder or
(ii) assumed in connection with an acquisition of assets permitted
hereunder; provided, however, that any such encumbrance covers
only assets that were subject to such encumbrance prior to the
related transaction and was not created, assumed or incurred in
contemplation of such transaction;
(k) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the
business of ADT Limited or any of its subsidiaries and incurred in
the ordinary course of business;
(l) the encumbrance inherent in the right of any bank to set off
deposits against debts owed to such bank;
(m) encumbrances in favour of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(n) encumbrances arising by operation of law incurred in the ordinary
course of business and which encumbrances, singly or in the
aggregate, do not interfere in any material respect with the
business of ADT Limited or any of its subsidiaries;
(o) encumbrances created by ADT Operations, Inc. or any of its
subsidiaries to secure Indebtedness referred to in Section
4.2.2(q); and
(p) other encumbrances securing Indebtedness in an aggregate amount
not to exceed $15,000,000 at any time outstanding.
SECTION 4.2.4. Financial Condition. ADT Limited will not permit:
(a) its Stockholders' Equity to be at any time less than the
sum, at such time, of (i) $1,134,300,000 plus (ii) 50% of
the Net Income of ADT Limited for each Financial Year
commencing with the Financial Year ending 31 December 1995
(less, for each such Financial Year, cash dividends on
Preference Shares to the extent permitted hereunder) as
shall have been completed on or prior to such time (in each
case with no reduction for net losses, if any, for such
Financial Year);
(b) its Cash Flow Coverage Ratio, as at the end of any
Financial Quarter, to be less than 1.5 to 1.0;
(c) its Debt to Total Capitalisation Ratio, as at the end of
any Financial Quarter, to be greater than 0.5 to 1.0.
SECTION 4.2.5. Investments. ADT Limited will not, and will not permit any of
its subsidiaries to, make, incur, assume or suffer to exist any Investment in
any other person, except:
(a) (i) Investments existing on 30 June 1995 and disclosed to the
Agent prior to the date hereof and (ii) Investments acquired in
the ASH Transaction (including the sale of such Investments by ADT
Limited to ADT (UK) Holdings plc, the sale of certain of such
Investments by the ASH Group to ADT Operations, Inc. and its
subsidiaries and the sale by ADT Business Holdings, Inc. to
Sonitrol Management Corp. of all of the Capital Stock of
Mid-Atlantic Security, Inc., in each case prior to the date of the
US$200 million Credit Facility;
(b) Cash Equivalent Investments and High Quality Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 4.2.2 or Clause 18.2(ii) of the Facility
Agreement;
(d) without duplication, Investments permitted as Capital Expenditures
pursuant to Section 4.2.7;
(e) Investments by way of contributions to capital by ADT Limited or
any of its subsidiaries to any member of the ADT Group;
(f) loans or advances to, or guarantees on behalf of, employees of ADT
Limited or any of its subsidiaries made in the ordinary course of
business not to exceed at any time $500,000 per employee or
$5,000,000 in the aggregate for all such employees;
(g) Investments which are Permitted Business Acquisitions;
(h) accounts arising from sales of goods or services on trade credit
terms in the ordinary course of business of ADT Limited and its
subsidiaries;
(i) negotiable instruments held for collection, lease, utility and
other similar deposits, or stock, obligations or securities
received in settlement of debts owing to ADT Limited or any of its
subsidiaries as a result of a composition or readjustment of debt
or a reorganisation of any debtor or ADT Limited or any of its
subsidiaries or of foreclosure, perfection or enforcement of any
encumbrance, in each case as to debt that arose in the ordinary
course of business;
(j) Investments consisting of non-cash consideration received in the
sale or other disposition of assets or Capital Stock effected in
compliance with Section 4.2.10;
(k) (i) the exchange of Common Shares for Non-Voting Exchangeable
Shares (and payment of cash in lieu of fractional shares) pursuant
to the terms of Non-Voting Exchangeable Shares as in effect on the
Closing Date and (ii) the acquisition of Common Shares to the
extent (A) the acquisition of such Common Shares is not prohibited
by any provision of any Finance Document) and (B) the aggregate
number of Common Shares held by subsidiaries of ADT Limited does
not exceed at any time nine percent of the Voting Stock of ADT
Limited outstanding at such time;
(l) the obligation of ADT Limited to exchange Common Shares for XXXXx
(and payment of cash in lieu of fractional shares) pursuant to the
terms of the XXXXx Indenture in effect on the Closing Date;
(m) Investments in any wholly owned subsidiary of ADT Limited that
provides insurance in the ordinary course of business and on
reasonable terms solely to ADT Limited or any of its subsidiaries
for the purpose of insuring ADT Limited or such subsidiary against
liability that would not be covered by insurance policies required
to be maintained pursuant to Section 4.1.3 as a result of
reasonable and customary deductibles thereunder, to the extent
such Investments are necessary or appropriate to maintain such
insurance;
(n) advances or loans made in connection with Hedging Arrangements
permitted hereunder, under the Facility Agreement or the Loan
Documents (as defined in the US$200 million Credit Facility);
(o) other Investments of a type not otherwise permitted pursuant to
the immediately preceding clauses, including Investments in
Minority Interests and Related Businesses, to the extent the
aggregate amount of such Investments, when added (without
duplication) to the aggregate amount expended since the Closing
Date in connection with Business Acquisitions permitted under
clause (e) of Section 4.2.9, does not exceed at any one time
$25,000,000;
(p) Investments by ADT Operations, Inc. and its subsidiaries in the
Capital Stock of ADT Limited to the extent that (i) the aggregate
amount of Capital Stock of ADT Limited held by subsidiaries of ADT
Limited (including, without limitation, ADT Operations, Inc. and
its subsidiaries) does not exceed at any time nine per cent of the
Voting Stock of ADT Limited outstanding at such time and (ii) for
the avoidance of doubt, such Investment is not otherwise
prohibited hereunder, including pursuant to Section 4.2.; and
(q) in relation to ADT Group plc, the Dividended Note:
provided, however, that
(i) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" or "High Quality Investment", as the case may
be, may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such
requirements;
(ii) no Investment otherwise permitted by clause (g) shall be
permitted to be made if an Event of Default described in
Clauses 19.1, 19.3 (to the extent resulting from a default
in the observance of any obligation under Section 4.2.4)
19.6, 19.7, 19.8, 19.9 or 19.11 of the Facility Agreement,
shall have occurred and be continuing or would occur upon
giving effect thereto;
(iii) no Investment otherwise permitted by clause (o) shall be
permitted to be made if an Event of Default shall have
occurred and be continuing or would occur upon giving
effect thereto; and
(iv) without limiting any of the restrictions set forth in this
Section 4.2.5, no Investment shall be permitted to be made
if such Investment would not be permitted by the terms of
the Senior Note Indenture.
SECTION 4.2.6. Restricted Payments, etc. (a) ADT Limited will not, and will
not permit any of its subsidiaries to, directly or indirectly,
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of Capital Stock of ADT Limited (other than
dividends or distributions payable in shares of Capital Stock of
ADT Limited or in rights, warrants or options to purchase such
Capital Stock, but excluding dividends or distributions payable in
Redeemable Capital Stock or in options, warrants or other rights
to purchase Redeemable Capital Stock, provided that dividends on
Redeemable Capital Stock may be paid in shares of such Redeemable
Capital Stock),
(ii) purchase, redeem, retire or otherwise acquire for value, or make
any payment on account of the purchase, redemption, retirement or
other acquisition for value of, any Capital Stock of ADT Limited
or any warrants, rights or options to purchase or acquire any such
Capital Stock, or
(iii) declare or pay any dividend on, or make any distribution to
holders of, any Capital Stock of any subsidiary of ADT Limited
(other than (A) with respect to any such Capital Stock held by ADT
Limited or any of its Wholly Owned Subsidiaries or (B) with
respect to the Voting Stock of any subsidiary, made on a pro rata
basis, consistent with the ownership interests in such Voting
Stock, to the owners of such Voting Stock) or purchase, redeem or
otherwise acquire or retire for value, or make any payment on
account of the purchase, redemption, retirement or other
acquisition for value of, any outstanding Capital Stock of any
subsidiary of ADT Limited (other than any such Capital Stock held
by ADT Limited or any of its Wholly Owned Subsidiaries) or any
warrants, rights or options to purchase or acquire any such
outstanding Capital Stock
(such payments or any other actions described in (but not excluded
from) the foregoing clauses (i) through (iii) being herein
referred to as "Restricted Distributions"), unless such Restricted
Distribution would be permitted by the terms of the Senior Note
Indenture as in effect on 23 August 1995; provided, however, that
(x) no Restricted Distribution otherwise permitted pursuant to
this Section 4.2.6(a) (other than any exchange of shares of
the Capital Stock of BAA plc for Exchangeable Preference
Shares pursuant to the terms of the Bye-Laws of ADT Limited
as in effect on 23 August 1995, the payment of any
Restricted Distribution within 60 days after the date of
declaration thereof, if at such date of declaration such
declaration was permitted hereunder, and any exchange of
shares of Non-Voting Exchangeable Shares for Common Shares
in accordance with the terms of the Articles of
Incorporation of ADT Finance Inc. as in effect on 23 August
1995) shall be permitted if an Event of Default (including
a default in the observance by the Borrower of its
obligations under Clause 17.1 of the Facility Agreement)
shall have occurred and be continuing or would occur upon
giving effect to such Restricted Distribution; and
(y) no Restricted Distribution otherwise permitted pursuant to
this Section 4.2.6(a) shall be permitted if such Restricted
Distribution would, pursuant to the terms of the Senior
Note Indenture, decrease the Restricted Payment Basket
Amount to an amount which is less than the excess of (1)
the sum of (A) the aggregate amount expended on Permitted
Business Acquisitions (other than the ASH Transaction to
the extent the aggregate consideration therefor did not
exceed $425,000,000) after 23 August 1995 in excess of
applicable Annual Limits (or during the effectiveness of
the US$300 million Credit Facility, the applicable Annual
Limits (as defined under the US$300 million Credit
Facility), and (B) the aggregate amount of Capital
Expenditures made after 23 August 1995 with the cash
proceeds referred to in clause (a) of the definition of
Equity Proceeds Amount and designated as such pursuant to
the Compliance Certificate (including any compliance
certificate delivered under the guarantees given by ADT
Limited in connection with the US$300 million Credit
Facility or the US$200 million Credit Facility) delivered
in connection with the Financial Quarter in which such
Capital Expenditures were paid over (2) the portion (if
any) of such sum which resulted in a decrease of the
Restricted Payment Basket Amount.
(b) ADT Limited will not, and will not permit any of its subsidiaries
to, directly or indirectly,
(i) make any payment of interest on the Senior Notes or any
Subordinated Debt (other than Subordinated Debt originally
issued to ADT Limited or a wholly owned subsidiary of ADT
Limited (or otherwise acquired by ADT Limited or such
wholly owned subsidiary, to the extent that the
consideration paid by ADT Limited or a wholly owned
subsidiary resulted in a decrease of the Restricted Payment
Basket Amount) and held by ADT Limited or a wholly owned
subsidiary of ADT Limited) on any day other than the date
such payment is required to be made as set forth in the
Senior Notes, the Senior Note Indenture, the Senior
Subordinated Note Indenture, the XXXXx, the XXXXx Indenture
or the other documents and instruments memorializing such
Subordinated Debt, or which, in the case of any
Subordinated Debt (including Subordinated Debt held by ADT
Limited or a wholly owned subsidiary of ADT Limited), would
violate the subordination provisions thereof; or
(ii) make any payment or prepayment of principal of, or redeem,
purchase, repurchase or defease, the Senior Notes or any
Subordinated Debt (other than Subordinated Debt originally
issued to ADT Limited or a wholly owned subsidiary of ADT
Limited (or otherwise acquired by ADT Limited or such
wholly owned subsidiary, to the extent that the
consideration paid by ADT Limited or such wholly owned
subsidiary resulted in a decrease of the Restricted Payment
Basket Amount) and held by ADT Limited or a wholly owned
subsidiary of ADT Limited), except, prior to the occurrence
of a Permitted Auction Business Sale, Subordinated Debt in
respect of the Dividended Note) on any day other than the
date any such payment, prepayment, redemption or repurchase
is required to be made as set forth in Sections 1010 and
1016 of the Senior Note Indenture, in Sections 1010 and
1016 of the Senior Subordinated Note Indenture, Section
3.09 of the XXXXx Indenture or in the other documents and
instruments memorialising the Senior Notes or such
Subordinated Debt, or which, in the case of any
Subordinated Debt (including Subordinated Debt held by ADT
Limited or a Wholly Owned Subsidiary of ADT Limited), would
violate the subordination provisions thereof; provided,
however, that ADT Limited and its subsidiaries may, to the
extent the subordination provisions of the Senior
Subordinated Note Indenture, the XXXXx Indenture or any
other document or instrument memorialising Subordinated
Debt would not be violated thereby, make any payment or
prepayment of principal of, or redeem or repurchase the
Senior Notes or any Subordinated Debt if permitted by the
terms of the Senior Note Indenture; provided further,
however, that no payment, prepayment, redemption or
repurchase otherwise permitted pursuant to the immediately
preceding proviso shall be permitted if (x) an Event of
Default shall have occurred and be continuing or would
occur upon giving effect to such payment, prepayment,
redemption or repurchase or (y) such payment, prepayment,
redemption or repurchase would, pursuant to the terms of
the Senior Note Indenture, decrease the Restricted Payment
Basket Amount to an amount which is less than the excess of
(1) the sum of (A) the aggregate amount expended on
Permitted Business Acquisitions (other than the ASH
Transaction to the extent the aggregate consideration
therefor did not exceed $425,000,000) after 23 August 1995
in excess of the applicable Annual Limits (or, during the
effectiveness of the US$300 million Credit Facility, the
applicable Annual Limits (as defined under the US$300
million Credit Facility) and (B) the aggregate amount of
Capital Expenditures made after 23 August 1995 with the
cash proceeds referred to in clause (a) of the definition of
Equity Proceeds Amount and designated as such pursuant to
the Compliance Certificate (including any compliance
certificate delivered under the guarantees given by ADT
Limited in connection with the US$300 million Credit
Facility or the US$200 million Credit Facility) delivered in
connection with the Financial Quarter in which such Capital
Expenditures were paid over (2) the portion (if any) of
such aggregate amount which resulted in a decrease of the
Restricted Payment Basket Amount.
SECTION 4.2.7. Capital Expenditures, etc. ADT Limited will not, and will not
permit any of its subsidiaries to, make Capital Expenditures in any Financial
Year, except (i) Capital Expenditures in connection with conducting the Core
Businesses and (ii) Capital Expenditures incurred in respect of Business
Acquisitions permitted under Sections 4.2.5 and 4.2.9; provided, however, that
no Capitalised Lease Liabilities otherwise permitted to be incurred pursuant
to this Section shall be permitted to be incurred if the aggregate amount of
all such Capitalised Lease Liabilities incurred during any Financial Year
would exceed $30,000,000.
SECTION 4.2.8. [Intentionally Omitted.]
SECTION 4.2.9. Consolidation, Merger, etc. ADT Limited will not, and will
not permit any of its subsidiaries to, liquidate or dissolve, or amalgamate or
consolidate with, or merge into or with, any other person, or otherwise enter
into or consummate any Business Acquisition not constituting an Investment,
except
(a) any subsidiary of the Borrower may liquidate or dissolve
voluntarily into, and may merge with or into, the Borrower or any
wholly owned subsidiary of the Borrower, and any assets or Capital
Stock of any subsidiary of the Borrower may be purchased or
otherwise acquired by the Borrower or any wholly owned subsidiary
of the Borrower;
(b) any subsidiary of ADT Limited that is not a member of the Group
may liquidate or dissolve voluntarily into, and may merge with or
into, ADT Limited or any wholly owned subsidiary of ADT Limited,
and any assets or Capital Stock of any such subsidiary may be
purchased or otherwise acquired by ADT Limited or any wholly owned
subsidiary of ADT Limited;
(c) ADT Limited may (i) amalgamate with or merge with or into a
newly-formed corporation having no assets or liabilities, which
amalgamation or merger shall be solely for the purpose of
reincorporating ADT Limited under the laws of Canada or any
political subdivision thereof, the United Kingdom or any political
subdivision thereof or the United States of America, any state
thereof or the District of Columbia or (ii) continue,
redomesticate or otherwise become subject to the laws of a
jurisdiction other than Bermuda, to the same extent as if it had
been incorporated in such jurisdiction; provided, however, that in
the case of clauses (i) and (ii) above, (A) the surviving entity
shall be a corporation duly organised and validly existing under
the laws of Canada or any political subdivision thereof, the
United Kingdom or any political subdivision thereof or the United
States of America, any state thereof or the District of Columbia
and shall, in either case, expressly assume all the obligations of
ADT Limited hereunder and this Guarantee shall remain in full force
and effect; (B) immediately before and immediately after giving
effect to such transaction, no Event of Default shall have
occurred and be continuing; (C) immediately after giving effect to
such transaction, Stockholders' Equity of the surviving entity is
at least equal to the Stockholders' Equity of ADT Limited
immediately before such transaction less customary and reasonable
transaction costs; (D) each Guarantor, unless it is the other
party to the transactions described above, shall have confirmed
that its Guarantee shall remain in full force and effect; and (E)
the surviving entity shall have delivered, or caused to be
delivered, to the Banks an officers' certificate and an opinion of
counsel, each stating that this provision has been complied with
and that all conditions precedent herein provided for relating to
such transaction have been satisfied;
(d) ADT Limited or any subsidiary of ADT Limited may enter into or
consummate any Permitted Business Acquisition; and
(e) ADT Limited or any subsidiary of ADT Limited may enter into or
consummate any Business Acquisition of a Related Business to the
extent the aggregate amount of expenditures of ADT Limited and its
subsidiaries in respect of such Business Acquisition, when added
(without duplication) to (i) the aggregate amount of all
expenditures of ADT Limited and its subsidiaries in respect of
Business Acquisitions made pursuant to this clause (e) since the
Closing Date plus any such amounts incurred since 23 August 1995
and (ii) the aggregate amount of Investments outstanding under
clause (o) of Section 4.2.5, does not exceed $25,000,000.
SECTION 4.2.10. Asset Dispositions, etc. ADT Limited will not, and will not
permit any of its subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable,
Capital Stock of subsidiaries of ADT Limited and other Investments) to any
person (an "Asset Sale"), unless
(a) such Asset Sale is permitted by Section 4.2.9; or
(b) such Asset Sale is a Permitted Strategic Sale or Permitted Auction
Business Sale; or
(c) such Asset Sale is in the ordinary course of business; or
(d) (A) if such Asset Sale consists of the sale or transfer of the
Capital Stock of a subsidiary of ADT Limited, all but not less
than all of the Capital Stock of such subsidiary is so sold or
transferred, (B) such Asset Sale is for not less than the Fair
Market Value of the assets sold (as determined in good faith by
the Board of Directors of ADT Limited or a committee thereof,
whose determination shall be evidenced by a certified written
resolution of such Board or such committee) and the consideration
received by ADT Limited or the relevant subsidiary in respect of
such Asset Sale (other than in connection with a sale or
disposition of the Capital Stock of Nu-Swift plc held by ADT
Limited on 9 January 1997) consists of at least 75% cash
(including any cash proceeds received from the sale of securities
received in such Asset Sale, provided that at the time of such
Asset Sale, ADT Limited or the relevant subsidiary has entered
into a legally binding agreement for the sale of such securities
and such securities are sold within sixty days of such Asset
Sale), or Cash Equivalent Investments and (C) the net book value
of such assets, together with the net book value of all other
assets subject to an Asset Sale permitted under this clause (d)
since the Closing Date plus $10,100,000 does not exceed
$130,000,000; or
(e) without prejudice to the provisions of Section 4.1.6(a) such Asset
Sale is to another member of the ADT Group,
provided that in the case of the disposal of any Capital Stock of any Obligor
or any Intermediate Parent Company, clauses (a) to (e) of this Section 4.2.10.
shall not apply and such disposal shall only be made with the prior written
consent of an Instructing Group.
SECTION 4.2.11. Modification of Certain Documents. ADT Limited will not, and
will not permit any of its subsidiaries to, consent to any amendment,
supplement or other modification of any of the terms or provisions contained
in, or applicable to, the Senior Notes, any Subordinated Debt (including
Subordinated Debt in respect of the Dividended Note, but excluding other
Subordinated Intercompany Debt), or any document or instrument evidencing or
applicable thereto (including the Senior Note Indenture, the Senior
Subordinated Note Indenture and the XXXXx Indenture), other than any
amendment, supplement or other modification which extends the date or reduces
the amount of any required repayment or redemption or which does not adversely
affect any of the Beneficiaries.
SECTION 4.2.12. Transactions with Affiliates. ADT Limited will not, and will
not permit any of its subsidiaries to, enter into, or cause, suffer or permit
to exist any arrangement or contract with any of its other Affiliates unless
such arrangement or contract is fair and equitable to ADT Limited or such
subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent person in the position of ADT Limited or such
subsidiary with a person which is not one of its Affiliates; provided,
however, that the foregoing restriction subject to the provisions of Section
4.1.6(c) shall not apply to (i) any arrangement or contract between or among
Obligors; (ii) any arrangement or contract permitted between or among members
of the ADT Group which are not Obligors or (iii) any other arrangement
expressly permitted hereunder.
SECTION 4.2.13. Negative Pledges, Restrictive Agreements, etc. ADT Limited
will not, and will not permit any of its subsidiaries to, enter into any
agreement (excluding this Guarantee and any other Finance Document and the
US$200 million Credit Facility)
(a) prohibiting the creation or assumption of any encumbrance to
secure the obligations under the Finance Documents upon its
properties, revenues or assets, whether now owned or hereafter
acquired; or
(b) restricting the ability of any such subsidiary to make any
payments, directly or indirectly, to ADT Limited by way of
dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any
such subsidiary to make any payment, directly or indirectly, to
ADT Limited;
except
(i) any indenture or agreement governing Indebtedness permitted
by clause (b), (c) or (d) of Section 4.2.2 as in effect on
the date hereof, and any refinancings thereof permitted by
clause (o) of Section 4.2.2;
(ii) any agreement governing any Indebtedness permitted by
clause (h) of Section 4.2.2 or sub-paragraph (f) of the
definition of "Permitted Indebtedness" of the Facility
Agreement as to the assets financed with the proceeds of
such Indebtedness and any refinancings thereof permitted by
clause (o) of Section 4.2.2 or sub-paragraph (i) of the
definition of "Permitted Indebtedness" of the Facility
Agreement;
(iii) any customary encumbrance or restriction with respect to a
subsidiary of ADT Limited imposed pursuant to an agreement
entered into for a sale or disposition permitted hereunder
of all or substantially all of the Capital Stock or assets
of such subsidiary, so long as such encumbrance or
restriction, by its terms, terminates on the earlier of the
termination of such agreement or the consummation of such
agreement;
(iv) customary restrictions on transfers of property subject to
encumbrances permitted pursuant to Section 4.2.3;
(v) restrictions on transfers of property by reason of, or
existing under, (A) applicable law or (B) customary
non-assignment provisions of any agreement entered into by
any subsidiary in the ordinary course of business or any
lease governing a leasehold interest of any subsidiary
entered into in the ordinary course of business;
(vi) usual and customary restrictions pursuant to any agreement
relating to Indebtedness of any Foreign Subsidiary
permitted pursuant to Section 4.2.2 and incurred for
working capital purposes, which restrictions may include
requirements for the maintenance of net worth or other
balance sheet conditions, restrictions on mergers and
transfers of assets, restrictions on investments,
restrictions on transactions with affiliates and
requirements to maintain specified levels of cash flow or
cash flow coverage ratios; provided that such restrictions
are agreed to in good faith and, where applicable, based
upon reasonable assumptions; and
(vii) restrictions contained in Indebtedness (A) existing at the
time a person becomes a subsidiary of ADT Limited in a
transaction permitted hereunder or (B) assumed in
connection with an acquisition of assets permitted
hereunder; provided such Indebtedness was not incurred and
such restrictions were not created in contemplation of any
such transaction.
SECTION 4.2.14. Accounting Changes. ADT Limited will not, and will not
permit any of its subsidiaries to, change its Financial Year from twelve
consecutive calendar months ending on December 31. For the avoidance of doubt
ADT Limited will permit Automated Security (Holdings) plc and its subsidiaries
(as that term is defined in the Facility Agreement) to change its financial
year from twelve consecutive calendar months on 30 November to twelve
consecutive calendar months ending on 31 December except for the first period
after such change which period will be thirteen consecutive calendar months.
SECTION 4.2.15. Ability to Amend; Restrictive Agreements. ADT Limited will
not, and will not permit any of its subsidiaries to, enter into, or accept the
obligations under, any agreement (i) prohibiting (including, except with
respect to (x) any agreement governing Indebtedness permitted by clause (b) or
(c) of Section 4.2.2 or the definition of "Existing Indebtedness" in the
Facility Agreement, as in effect on the Closing Date, or (y) any agreement
governing Indebtedness permitted under clause (o) of Section 4.2.2 or sub-
paragraph (i) of the definition of "Permitted Indebtedness" of the Facility
Agreement that refinances Indebtedness referred to in the preceding clause
(x), subjecting to any condition) the ability of ADT Limited or any of its
subsidiaries to amend or otherwise modify this Guarantee or any other
Finance Documents or (ii) containing any provision that would contravene
any provision of any Finance Document.
SECTION 4.2.16. [Intentionally Omitted.]
SECTION 4.2.17. Activities of Certain Subsidiaries. ADT Limited will not
permit any of the Intermediate Parent Companies to engage in any business
activity or incur any obligation, except (i) the ownership of the Capital
Stock of their respective Subsidiaries, (ii) the making of payments under
intercompany Indebtedness owing to ADT Limited, (iii) the making of capital
contributions to their respective subsidiaries to the extent permitted under
Section 4.2.5 and (iv) the receipt of Distributions permitted under Section
4.2.6 and the receipt of proceeds from, or the receiving of payments under,
intercompany Indebtedness permitted by Section 4.2.2 and Clause 18.2(ii) of
the Facility Agreement, in each case to the extent such proceeds or payments
are concurrently used (A) to repay Indebtedness of such Intermediate Parent
Company owing to ADT Limited or (B) to make a loan, advance or distribution to
its parent (so long as such parent makes a loan, advance or distribution,
directly or indirectly, in the same amount to ADT Limited) or ADT Limited, to
the extent such loan, advance or distribution is permitted under Section 4.2.5
or 4.2.6, as applicable.
SECTION 4.2.18. [Intentionally Omitted.]
SECTION 4.2.19. [Intentionally Omitted.]
SECTION 4.2.20. Any Action. ADT Limited will not, and will not permit any of
its subsidiaries to, take or omit to take any action the taking or the
omission of which would result in the failure of the Borrower or any other
Obligor fully and properly to perform and observe all of its obligations under
the Facility Agreement or any other Finance Document to which it is a party.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Finance Document. This Guarantee is a Finance Document executed
pursuant to the Facility Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with
the terms and provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment. In
addition to, and not in limitation of, Section 2.6, this Guarantee shall be
binding upon ADT Limited and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by each Beneficiary and their
respective successors, transferees and assigns (to the fullest extent provided
pursuant to Section 2.6); provided, however, that ADT Limited may not assign
any of its obligations hereunder without the prior written consent of all
Banks.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision of
this Guarantee, nor consent to any departure by ADT Limited herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Agent and consented to by the applicable Banks under Clause 33 of the Facility
Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The Banks
shall consider requests for such waivers and consents in good faith and shall
act reasonably when deciding whether or not to grant their consent to such
requests.
SECTION 5.4. Addresses for Notices. All notices and other communications
hereunder to ADT Limited shall be in writing or by facsimile and mailed,
telegraphed, transmitted or delivered to it, addressed to it at the address
set forth below its signature hereto or at such other address as shall be
designated by ADT Limited in a written notice to the Agent at the address
specified in the Facility Agreement complying as to delivery with the terms of
this Section. Any notice, if mailed and properly addressed with postage
prepaid, return receipt requested, or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice if
transmitted by facsimile, shall be deemed given when transmitted upon receipt
of electronic confirmation of transmission.
SECTION 5.5. No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.2 and Section 2.4, no failure on the part of any Beneficiary to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 5.6. Captions. Section captions used in this Guarantee are for
convenience of reference only, and shall not affect the construction of this
Guarantee.
SECTION 5.7. Setoff. In addition to, and not in limitation of, any rights of
any Beneficiary under applicable law, each Beneficiary shall, upon the
occurrence of any Event of Default, to the fullest extent permitted under
applicable law, have the right to appropriate and apply to the payment of the
obligations of ADT Limited owing to it hereunder, whether or not then due, any
and all balances, credits, deposits, accounts or moneys of ADT Limited then or
thereafter maintained with such Beneficiary; provided, however, that any such
appropriation and application shall be subject to the provisions of Clause 25
of the Facility Agreement.
SECTION 5.8. Independence of Covenants. All covenants contained in this
Guarantee or any other Finance Document shall be given independent effect such
that, in the event a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of an Event
of Default if such action is taken or such condition exists.
SECTION 5.9. Severability. Wherever possible each provision of this
Guarantee shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guarantee shall be
prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Guarantee.
SECTION 5.10. Governing Law. This Guarantee shall be governed by and
construed in accordance with English law.
THE EXHIBIT
COMPLIANCE CERTIFICATE
ADT Limited
This Compliance Certificate is delivered pursuant to Clause (c) of
Section 4.1.7 of the Guarantee of ADT Limited, dated 25 March 1997 (the
"ADT Limited Guarantee")
Unless otherwise defined herein or the context otherwise requires, terms used
herein or in any of the Attachments hereto have the meanings provided in the
ADT Limited Guarantee and where not so defined, the facility agreement between
ADT Finance plc (the "Borrower"), ADT (UK) Holdings plc and others as
guarantors, various financial institutions (collectively, the "Banks") and The
Bank of Nova Scotia as Agent and Arranger for the Banks (the "Facility
Agreement").
This Compliance Certificate is delivered in connection with the
Financial Quarter commencing on [ ] and ending on [
] (such latter date being the "Computation Date"). ADT Limited
hereby certifies, represents and warrants that:
(a) Stockholders' Equity of ADT Limited
As of the Computation Date, the Stockholders' Equity of ADT Limited was
$[ ]. The minimum amount of Stockholders' Equity of ADT
Limited required by Clause (a) of Section 4.2.4 of the ADT Limited
Guarantee as of such date is $[ ].
(b) ADT Limited's Cash Flow Coverage Ratio
ADT Limited's Cash Flow Coverage Ratio for the four consecutive
Financial Quarters ending on the Computation Date was [ ] to 1.0,
as computed on Attachment 1 hereto. The minimum Cash Flow Coverage
Ratio of ADT Limited required by Clause (b) of Section 4.2.4 of the ADT
Limited Guarantee for such period is 1.5 to 1.0.
(c) ADT Limited's Debt to Total Capitalisation Ratio
As of the Computation Date, ADT Limited's Debt to Total Capitalisation
Ratio was [ ] to 1.0, as computed on Attachment 2 hereto. The maximum
Debt to Total Capitalisation Ratio of ADT Limited permitted by Xxxxxx
(c) of Section 4.2.4 of the ADT Limited Guarantee as of such date is 0.5
to 1.0.
(d) Event of Default or Potential Event of Default
As of the Computation Date, no Event of Default or Potential Event of
Default relating to the ADT Group (other than one relating to the Group
or any member thereof) has occurred or is continuing/*
As of the Computation Date, the following Event of Default or Potential
Event of Default relating to the ADT Group (other than one relating to
the Group or any member thereof) (for which no previous notification has
been given to the Agent) has occurred or is continuing*
[Insert details below]
IN WITNESS WHEREOF the undersigned has caused this Compliance
Certificate to be delivered by the finance director*/the chief financial
authorised officer* this [ ] day of [ ].
ADT LIMITED
By: ......................................
Title:
(* Delete as applicable)
ATTACHMENT 1
(to ___/ ___/ ___ Compliance
Certificate)
ADT LIMITED'S CASH FLOW COVERAGE RATIO
for the ________ Financial Quarter,
ending on _________________/ ____
(the "Computation Date")
I. ADT Limited's Cash Flow:
A. EBITDA (as defined in the ADT Limited Guarantee) of ADT
Limited and its subsidiaries for the period of four
consecutive Financial Quarters ending on the Computation
Date (such period, the "Calculation Period"): $___________
B. i) All taxes computed on the basis of income (whether
local, foreign or otherwise), to the extent paid in
cash by ADT Limited and its subsidiaries on a
consolidated basis during the Calculation Period: $___________
ii) Capital Expenditures (other than Capital Expenditures
incurred in respect of any Business Acquisition permitted
under Section 4.2.5 or 4.2.9 of the ADT Limited
Guarantee) of ADT Limited and its subsidiaries paid by
ADT Limited and its subsidiaries during the Calculation
Period: $___________
iii) The sum of Items I(B)(i) and I(B)(ii): $___________
C. CASH FLOW: The excess of Item (I(A) over Item I(B) (iii): $___________
D. CAPITAL EXPENDITURES OF ADT LIMITED AND ITS
SUBSIDIARIES PAID DURING THE CALCULATION
PERIOD WITH EQUITY PROCEEDS, TO THE EXTENT
INCLUDED IN ITEM I(B)(ii): $___________
E. ADJUSTED CASH FLOW: The sum of Item I(C) and Item I(D) $___________
II. ADT Limited's Cash Flow Coverage Ratio:
A. Adjusted Cash Flow of ADT Limited and its subsidiaries for
the Calculation Period (see Item I(E) above): $___________
B. Interest Expense (as defined in the ADT Limited Guarantee) of
ADT Limited and its subsidiaries for the Calculation Period: $___________
C. ADT LIMITED'S CASH FLOW COVERAGE RATIO:
The ratio of Item II(A) to Item II(B): ____ to 1.0
ATTACHMENT 2
(to ___/ ___/ ___ Compliance
Certificate)
ADT LIMITED'S DEBT TO TOTAL CAPITALISATION RATIO
for the ________ Financial Quarter,
ending on _________________/ ____
(the "Computation Date")
ADT Limited's Debt to Total Capitalisation Ratio:
A. As at the Computation Date, the aggregate amount of Debt
(as defined in the ADT Limited Guarantee) of ADT Limited
and its subsidiaries, determined on a consolidated basis: $___________
B. As at the Computation Date, Stockholders' Equity (as\
defined in the ADT Limited Guarantee) of ADT Limited. $___________
C. TOTAL CAPITALISATION: The sum of Items A and B: $___________
D. ADT LIMITED'S DEBT TO TOTAL
CAPITALISATION RATIO: The Ratio of Item A to Item C: _____ to 1.0
AS WITNESS the hand of the duly authorised representative of ADT
Limited hereto the day and year first before written
ADT LIMITED
By:
ANNEX 1
Permitted Existing Business Activities
AUCTION GROUP
Employee Mortgage Financing
Sale of Salvage Title Information
Operation of Restaurants/Snack Bars at Auction Sites
Auctioneering of Other Equipment and Goods
Sale of Service Contracts
Lease and Sub-lease of Real Property
Insurance Appraisal/Adjustment Services
Computer and Internet Related Services
SECURITY GROUP
Guarding Services
Mobile Patrol Services
Management of Correctional Institutions
Document Destruction
Armoured Vehicle Cash-in-Transit Services, Wage Packeting and Coin
Rolling
Reprographic and Photocopying Services
Store Detective Services
Sale and Lease of Professional Video Equipment and Supplies
Computer and Internet Related Services
OTHER
Human Resource and Management and Temporary Staff Consultancy Services
Electrical Contracting
