EXHIBIT 10.17
[CONFORMED COPY]
U.S. $200,000,000
CREDIT AGREEMENT,
dated as of January 9, 1997,
among
ADT OPERATIONS, INC.,
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
THE BANK OF NOVA SCOTIA,
as the Agent for the Lenders
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.................................................. 1
1.2. Use of Defined Terms........................................... 37
1.3. Cross-References............................................... 37
1.4. Accounting and Financial Determinations........................ 37
ARTICLE II
COMMITMENTS, COMPETITIVE BID LOANS,
BORROWING PROCEDURES AND NOTES
2.1. Commitments.................................................... 38
2.1.1. Revolving Loan Commitment...................................... 38
2.1.2. Commitment to Issue Letters of Credit.......................... 38
2.1.3. Lenders Not Permitted or Required To Make Loans Under Certain
Circumstances.................................................. 38
2.1.4. Reduction of the Revolving Loan Commitment
Amount......................................................... 39
2.1.4.1. Voluntary Reduction............................................ 39
2.1.4.2. Mandatory Reduction............................................ 39
2.2. Borrowing Procedure for Revolving Loans........................ 40
2.3. Competitive Bid Loans.......................................... 40
2.3.1. Competitive Bid Loan Borrowing Request......................... 40
2.3.2. Invitation for Bid Loan Offers................................. 41
2.3.3. Submission and Contents of Bid Loan Offers..................... 41
2.3.4. Notice to Borrower............................................. 43
2.3.5. Competitive Bid Loan Acceptance................................ 43
2.3.6. Funding of Competitive Bid Loans............................... 45
2.4. Continuation and Conversion Elections.......................... 45
2.5. Funding........................................................ 46
2.6. Notes.......................................................... 46
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments..................................... 47
3.1.1. Voluntary Prepayments.......................................... 47
3.1.1.1. Revolving Loans................................................ 47
3.1.1.2. Competitive Bid Loans.......................................... 48
3.1.2. Mandatory Prepayments.......................................... 48
3.1.2.1. Mandatory Prepayment Upon Commitment Reduction................. 48
3.1.2.2. Acceleration of Scheduled Maturity............................. 49
3.2. Interest Provisions............................................ 49
3.2.1. Rates.......................................................... 49
3.2.2. Post-Maturity Rates............................................ 50
3.2.3. Payment Dates.................................................. 51
3.2.4. Interest Rate Determination.................................... 52
3.3. Fees........................................................... 52
3.3.1. Facility Fee................................................... 52
3.3.2. Letter of Credit Face Amount Fee............................... 53
3.3.3. Letter of Credit Issuer Fronting Fee........................... 53
3.3.4. Letter of Credit Administrative Expenses....................... 53
3.3.5. Other Fees..................................................... 53
ARTICLE IV
LETTERS OF CREDIT
4.1. Issuances and Extensions....................................... 54
4.2. Issuance Requests.............................................. 54
4.3. Expenses....................................................... 55
4.4. Participation By Lenders....................................... 55
4.5. Disbursements.................................................. 57
4.6. Repayment/Reimbursement........................................ 58
4.7. Deemed Disbursements and Cash Collateralization of Letters of
Credit......................................................... 58
4.8. Nature of Repayment/Reimbursement Obligations.................. 59
4.9. Increased Costs; Indemnity..................................... 60
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
5.1. LIBO Rate Lending Unlawful..................................... 61
5.2. Deposits Unavailable........................................... 62
5.3. Increased LIBO Rate Loan Costs, etc............................ 62
5.4. Funding Losses................................................. 63
5.5. Increased Capital Costs........................................ 64
5.6. Taxes.......................................................... 64
5.7. Payments, Computations, etc.................................... 66
5.8. Sharing of Payments............................................ 67
5.9. Setoff......................................................... 68
5.10. Use of Proceeds................................................ 68
5.11. Use of Letters of Credit....................................... 68
5.12. Substitution of LIBOR Office or Domestic Office in Certain
Circumstances.................................................. 68
5.13. Substitution of Bank; Election to Terminate.................... 69
ARTICLE VI
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
6.1. Closing Date................................................... 70
6.1.1. Resolutions, etc............................................... 70
6.1.2. Delivery of Notes.............................................. 70
6.1.3. Termination of Existing Credit Facility........................ 70
6.1.4. Guarantees..................................................... 70
6.1.5. Delivery of Certain Documents.................................. 71
6.1.6. Consents, etc.................................................. 71
6.1.7. Delivery of Closing Date Certificates.......................... 71
6.1.8. No Material Adverse Change..................................... 71
6.1.9. Opinions of Counsel............................................ 71
6.1.10. Notification of Trustees....................................... 72
6.1.11. Closing Fees, Expenses, etc.................................... 72
6.1.12. Satisfactory Legal Form........................................ 72
6.2. All Credit Extensions.......................................... 72
6.2.1. Compliance with Warranties, No Default, etc.................... 72
6.2.2. Credit Extension Request....................................... 74
6.2.3. Closing Date................................................... 74
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc.............................................. 74
7.2. Due Authorization, Non-Contravention, etc...................... 75
7.3. Government Approval, Regulation, etc........................... 75
7.4. Validity, etc.................................................. 75
7.5. No Material Adverse Change..................................... 76
7.6. Litigation, Labor Controversies, etc........................... 76
7.7. Subsidiaries................................................... 76
7.8. Seniority of the Obligations................................... 76
7.9. Existing Letters of Credit..................................... 77
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants.......................................... 77
8.1.1. Financial Information, Reports, Notices, etc................... 77
8.1.2. Compliance with Laws, etc...................................... 79
8.1.3. Covenants Relating to Judgment Letters of Credit............... 80
8.1.4. Syndication.................................................... 82
8.2. Negative Covenants............................................. 82
8.2.1. Business Activities............................................ 82
8.2.2. Indebtedness................................................... 82
8.2.3. Financial Condition............................................ 85
8.2.4. Any Action..................................................... 86
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default................................... 86
9.1.1. Non-Payment of Obligations..................................... 86
9.1.2. Breach of Warranty............................................. 86
9.1.3. Non-Performance of Certain Covenants and Obligations........... 86
9.1.4. Non-Performance of Other Covenants and Obligations............. 87
9.1.5. Default on Other Indebtedness.................................. 87
9.1.6. Judgments...................................................... 87
9.1.7. Pension Plans.................................................. 88
9.1.8. Change in Control.............................................. 88
9.1.9. Bankruptcy, Insolvency, etc.................................... 88
9.1.10. Impairment of Loan Documents, etc.............................. 89
9.2. Action if Bankruptcy........................................... 90
9.3. Action if Other Event of Default............................... 90
ARTICLE X
THE AGENT
10.1. Actions........................................................ 90
10.2. Funding Reliance, etc.......................................... 91
10.3. Exculpation.................................................... 91
10.4. Successor...................................................... 92
10.5. Loans or Letters of Credit Issued by Scotiabank................ 93
10.6. Credit Decisions............................................... 93
10.7. Copies, etc.................................................... 93
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc....................................... 93
11.2. Notices........................................................ 94
11.3. Payment of Costs and Expenses.................................. 95
11.4. Indemnification................................................ 95
11.5. Survival....................................................... 97
11.6. Severability................................................... 97
11.7. Headings....................................................... 97
11.8. Execution in Counterparts, Effectiveness, etc.................. 97
11.9. Governing Law; Entire Agreement................................ 97
11.10. Successors and Assigns......................................... 97
11.11. Sale and Transfer of Loans and Notes; Participations in Loans
and Notes...................................................... 98
11.11.1. Assignments.................................................... 98
11.11.2. Participations.................................................100
11.12. Other Transactions.............................................101
11.13. Independence of Covenants......................................101
11.14. Forum Selection and Consent to Jurisdiction....................101
11.15. Waiver of Jury Trial...........................................102
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Intercompany Subordination Provisions
EXHIBIT A - Form of Revolving Loan Note
EXHIBIT B - Form of Competitive Bid Loan Note
EXHIBIT C-1 - Form of Revolving Loan Borrowing Request
EXHIBIT C-2 - Form of Competitive Bid Loan Borrowing Request
EXHIBIT D-1 - Form of Invitation for Bid Loan Offers
EXHIBIT D-2 - Form of Competitive Bid Loan Offer
EXHIBIT D-3 - Form of Competitive Bid Loan Acceptance
EXHIBIT E - Intentionally Omitted
EXHIBIT F - Form of Continuation/Conversion Notice
EXHIBIT G - Form of Lender Assignment Agreement
EXHIBIT H - Form of Compliance Certificate
EXHIBIT I - Form of ADT Limited Guaranty
EXHIBIT J - Form of Subsidiary Guarantor Guaranty
EXHIBIT K - Form of Opinion of Bermuda Counsel to ADT Limited
EXHIBIT L-1 - Form of Opinion of New York Counsel to ADT Limited, the
Borrower and the Other Obligors
EXHIBIT L-2 - Form Of Opinion of Corporate Counsel to the Borrower and
the Other Obligors
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of January 9, 1997, among ADT
OPERATIONS, INC., a Delaware corporation (the "Borrower"), the various
financial institutions as are or may become parties hereto (collectively, the
"Lenders"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), individually and as
agent (the "Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower and its affiliates are engaged principally in the
electronic security services business and the vehicle auction business;
WHEREAS, in connection with the extensions of credit contemplated
hereunder, the Borrower desires to replace that certain Existing Credit
Facility (as hereinafter defined);
WHEREAS, the Borrower has requested the Lenders and the Issuers (as
hereinafter defined) to extend commitments to replace the Existing Credit
Facility and to provide financing for general corporate purposes; and
WHEREAS, the Lenders and the Issuers are willing, on the terms and
subject to the conditions hereinafter set forth (including Article VI), to
extend such commitments and to make loans and issue and participate in letters
of credit pursuant thereto;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following
meanings (such meanings to be equally applicable to the singular and plural
forms thereof):
"ADT Automotive" means ADT Automotive Holdings, Inc. (formerly known as
ADT Auctions, Inc.), a Delaware corporation and Wholly Owned Subsidiary of the
Borrower.
"ADT Finance Inc." means ADT Finance Inc., a Canadian corporation.
"ADT Limited" means ADT Limited, a company organized under the laws of
Bermuda.
"ADT Limited Guaranty" means the Guaranty executed and delivered by ADT
Limited pursuant to clause (a) of Section 6.1.4, substantially in the form of
Exhibit I hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"ADT Security Services" means ADT Security Services, Inc. (formerly
known as ADT Security Systems, Inc.), a Delaware corporation.
"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 preamble and includes each other Person as
shall have subsequently been appointed as a successor Agent pursuant to
Section 10.4.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the higher of
(a) the Prime Rate in effect for such day; and
(b) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%.
For purposes hereof:
"Federal Funds Effective Rate" means, for any day, a fluctuating
rate of interest per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by
the Agent from three Federal funds brokers of recognized standing
selected by it.
"Prime Rate" means the rate of interest per annum publicly
announced by the Agent from time to time as its prime rate in effect at
its principal office in New York City. The Prime Rate is not intended
to be the lowest rate of interest charged by the Agent in connection
with extensions of credit to debtors.
If for any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening
of business on the date of such change.
"ASH" means Automated Security (Holdings) PLC.
"ASH Acquisition Date" means September 6, 1996.
"Asset Sale" is defined in Section 4.2.10 of the ADT Limited Guaranty.
"Assignee Lender" is defined in Section 11.11.1.
"Auction Business Intercompany Debt" means, with respect to any
Permitted Auction Business Sale, the net amount (if any) owed to the Borrower
or to any Subsidiary of the Borrower (other than such a Subsidiary the Capital
Stock of which, or all or substantially all of the assets of which, are sold
pursuant to such Permitted Auction Business Sale or any Subsidiary of any such
Subsidiary) by any Subsidiary of the Borrower the Capital Stock of which, or
all or substantially all of the assets of which, are sold pursuant to a
Permitted Auction Business Sale.
"Authorized Officer" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Agent and the Lenders pursuant to Section 6.1.1.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrowing" means, as the context may require, either a Competitive Bid
Loan Borrowing or a Revolving Loan Borrowing.
"Borrowing Request" means, as the context may require, either a
Revolving Loan Borrowing Request or a Competitive Bid Loan Borrowing Request.
"Business Day" means any day
(a) which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York City
and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, on which dealings in Dollars are carried on in
the London interbank market.
"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 the Borrower,
ADT Limited or any other Subsidiary of ADT Limited during such period;
plus
(b) the aggregate amount of all Capitalized Lease Liabilities
of such Person incurred during such period;
provided, however, that the Capital Expenditures of any Person for any period
that would include a Pre-Acquisition Period will not include any Capital
Expenditures made by ASH or any of its Subsidiaries during such
Pre-Acquisition Period.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or equity, whether now outstanding or issued after the
date hereof, including all common stock, preferred stock, partnership
interests and member interests.
"Capitalized 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 capitalized leases, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
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)
organized 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 ▇▇▇▇▇'▇, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, with a
maturity of 180 days or less, which is issued by either
(i) a commercial banking institution that is organized 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇, or
(ii) any Lender; 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 the ADT Limited Guaranty) of such
Person and its Subsidiaries paid by such Person and its
Subsidiaries during such period;
provided, however, that the Cash Flow of any Person for any period that would
include a Pre-Acquisition Period will not include any item that would be
included in the determination of the Cash Flow of ASH for such Pre-Acquisition
Period.
"Cash Flow Coverage Ratio" means, with respect to any Person at the end
of any Fiscal Quarter, the ratio computed for the period of four consecutive
Fiscal Quarters ending on the close of such Fiscal 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 (including any compliance
certificate delivered under the Existing Credit Facility) delivered in
connection with the Fiscal Quarter in which such Capital Expenditures
were paid 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;
provided, however, that the Cash Flow Coverage Ratio with respect to any
Person for any period that would include a Pre-Acquisition Period will not
include any item that would be included in the determination of the Cash Flow
Coverage Ratio with respect to ASH for such Pre-Acquisition Period.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) an event (including any event arising out of any
transaction or proposed transaction announced or contemplated on or
prior to the date hereof) as a result of which
(i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
direct or indirect "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act) of more than 35% of the Voting
Stock of ADT Limited; or
(ii) during any period of three consecutive years, beginning
on or after the Indenture Effective Date, individuals who either
(A) were members of the Board of Directors of ADT Limited at the
beginning of such period or (B) whose election by the Board of
Directors of ADT Limited or whose nomination for election by the
shareholders of ADT Limited was approved by a vote of 66 2/3% of
the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for
election was previously approved as provided for in this
subclause (ii)(B) cease for any reason (including as a result of
any proxy contest involving the solicitation of revocable proxies
under Section 14(a) of the Exchange Act) to constitute a majority
of such Board of Directors; or
(iii) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) possesses, directly
or indirectly, the legal right to direct the management and
policies of ADT Limited, whether through the ownership of
securities, by contract or otherwise (other than solely by virtue
of membership on the Board of Directors of ADT Limited or any
committee thereof); or
(b) the failure of ADT Limited to own, directly or
indirectly, free and clear of all Liens or other encumbrances (other
than Liens created pursuant to the Loan Documents), 100% of the
outstanding Voting Stock on a fully diluted basis of the Borrower.
"Closing Date" means the date upon which all of the conditions set
forth in Section 6.1 shall have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment Letter" means the letter dated December 31, 1996, from
Scotiabank to the Borrower, relating to this Agreement.
"Commitment Termination Event" means
(a) the occurrence with respect to the Borrower or ADT Limited
of any Event of Default described in clause (b) or (d) of Section
9.1.9; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of all outstanding Loans and other
Obligations to be due and payable pursuant to Section 9.3, or
(ii) in the absence of such declaration, the giving of notice
by the Agent, acting at the direction of the Required Lenders, to
the Borrower that the Revolving Loan Commitments have been
terminated.
"Common Shares" means the shares of common stock, par value $0.10 per
share, of ADT Limited.
"Competitive Bid Loan" means a Loan made by a Lender to the Borrower as
part of a Competitive Bid Loan Borrowing resulting from the procedures
described in Section 2.3.
"Competitive Bid Loan Acceptance" means an acceptance by the Borrower
of a Competitive Bid Loan Offer pursuant to Section 2.3.5, substantially in
the form of Exhibit D-3 attached hereto.
"Competitive Bid Loan Borrowing" means Competitive Bid Loans made by
each of the Lenders whose offer to make such Competitive Bid Loans as part of
such Borrowing has been accepted by the Borrower pursuant to Section 2.3.5.
"Competitive Bid Loan Borrowing Request" means a certificate requesting
Competitive Bid Loans, duly executed by an Authorized Officer, substantially
in the form of Exhibit C-2 attached hereto.
"Competitive Bid Loan Interest Payment Date" is defined in clause (f)
of Section 3.2.3.
"Competitive Bid Loan Maturity Date" is defined in Section 2.3.1.
"Competitive Bid Loan Note" means a promissory note of the Borrower
payable to any Lender, in the form of Exhibit B hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from Loans outstanding from such Lender that were made as Competitive Bid
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Competitive Bid Loan Offer" means an offer by a Lender to make a
Competitive Bid Loan pursuant to Section 2.3.3, substantially in the form of
Exhibit D-2 attached hereto.
"Competitive Bid Outstanding Balance" means, at any time, the then
aggregate outstanding principal amount of all Competitive Bid Loans.
"Competitive Bid Rate" means the LIBO Rate (plus (or minus) the LIBO
Rate Bid Margin) offered by a Lender in a Competitive Bid Loan Offer in
respect of a Competitive Bid Rate Loan proposed pursuant to Section 2.3.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit H hereto.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit F hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"Core Business" means any business directly related to
(a) until such time as ADT Limited and its Subsidiaries no
longer engage in any of the businesses described in this clause (a)
(whether pursuant to one or more Permitted Auction Business Sales or
otherwise), the auctioning or other distribution of
(i) vehicles held on a consignment or similar basis and
(ii) equipment which is similarly held on a consignment or
similar basis and which is related to the auctioning and
distribution of vehicles, including equipment related to the
repair and refurbishing of vehicles,
(x) exclusive, in the case of both preceding clauses (i) and (ii), of
the purchasing of items for resale (other than purchases incidental and
customary in the conduct of such business and which when added to
amounts expended in respect of all other items so purchased and still
owned (including pursuant to the conduct of any Related Business) would
not exceed $5,000,000), but (y) inclusive, in the case of the preceding
clause (i), of (1) any guaranteed residual equipment program pursuant
to which ADT Automotive or any of its Affiliates organized and
conducting its activities in the United States guarantees to a consignor
of a vehicle to be auctioned by ADT Automotive or any such Affiliate a
minimum return on such vehicle, provided that the maximum aggregate
amount of such guarantees at any one time outstanding does not exceed
$10,000,000 and (2) any short-term financing of dealer purchases of
vehicles auctioned by ADT Automotive or any of its Affiliates organized
and conducting its activities in the United States to the extent the
aggregate amount outstanding at any one time pursuant to such financing
does not exceed $40,000,000, certificates of title to such vehicles are
held by ADT Automotive or such Affiliates providing such financing and
such financing is otherwise consistent with terms given to similar
dealers by vehicle auctioneers in the ordinary course of their business,
(b) until such time as ADT Limited and its Subsidiaries no
longer engage in any of the businesses described in clause (a) above or
in any Related Business, any Related Business or
(c) services with respect to the transmission or monitoring
of information regarding the security or condition of property and any
additional information services provided through facilities used for
such transmission or monitoring.
"Covenant Termination Date" means the date on which each of the
following has occurred:
(a) all Revolving Loan Commitments have terminated,
(b) all principal of, and interest on, all Loans has been
paid in full,
(c) all fees under Section 3.3 have been paid in full,
(d) all Letters of Credit have expired or been terminated,
(e) all Reimbursement Obligations (including all interest
thereon) have been paid in full, and
(f) all other fees and expenses hereunder invoiced to the
Borrower and exceeding $3,000,000 in the aggregate have been paid in
full.
"Credit Extension" means and includes
(a) the advancing of any Loan by any Lender in connection
with a Borrowing, and
(b) the issuance, extension or renewal by any Issuer of any
Letter of Credit.
"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 Capitalization 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 Capitalization of such Person.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Disbursement Date" is defined in Section 4.5(a).
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Dividended Note" means (i) the promissory note of ADT Security
Services, payable to the Borrower in the principal amount of $432,214,964.80,
which note was dividended by the Borrower to Holdings Inc. on December 31,
1996, in the form of an assignment thereof, together with (ii) the
Subordination Agreement dated as of January 9, 1997, among ADT Security
Services, ADT Group plc (an indirect assignee of the rights of Holdings Inc.
under the Dividended Note) and the Agent.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender (or any successor
or assign of such Lender) within the United States as may be designated as
such from time to time by notice from such Lender to the Borrower and the
Agent.
"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 amortization of tangible and
intangible assets, including amortization of debt issuance costs and other
financing expenses incurred (A) prior to the Effective Date or (B) in
connection with entering into this Agreement and the other Loan Documents and
(iv) without duplication, any write-off of the costs and expenses referred to
in the preceding clause (iii); provided, however, that the EBITDA of any
Person for any period that would include a Pre-Acquisition Period will not
include any item that would be included in the determination of the EBITDA of
ASH for such Pre-Acquisition Period.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 11.8.
"Environmental Laws" means all applicable federal, 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" in the ADT Limited Guaranty.
"Equity Proceeds Amount" is defined in Section 1.1 of ADT Limited
Guaranty.
"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.
"Event of Default" is defined in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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 the Borrower, ADT Limited or any other 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 Fiscal 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.
"Existing Credit Facility" means the Credit Agreement, dated as of
August 23, 1995 (as amended or otherwise modified), among the Borrower, the
various financial institutions party thereto, The Bank of Nova Scotia, as
Documentation Agent, and Chemical Bank, as Administrative Agent.
"Existing Letter of Credit" is defined in Section 4.1.
"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.
"Federal Funds Effective Rate" is defined in the definition of the term
"Alternate Base Rate".
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g. the "1996 Fiscal Year") refer to the Fiscal Year
ending on the December 31 occurring during such calendar year.
"5 3/4% Preference Shares" means the 5 3/4% Convertible Cumulative
Redeemable Preference Shares, par value $1.00 per share, of ADT Limited.
"Fronting Rate" means, with respect to any Issuer, the per annum rate
agreed to by the Borrower and such Issuer for use in determining such Issuer's
fronting fees in connection with Letters of Credit.
"Foreign Subsidiary" means a Subsidiary of ADT Limited that is
organized 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" is defined in Section 1.4.
"Group N.V." means ADT Group N.V., a company organized under the laws
of the Netherlands Antilles.
"Guarantor" means each of ADT Limited and the Subsidiary Guarantors.
"Guarantees" means the ADT Limited Guaranty and the Subsidiary
Guarantor Guaranty.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(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.
"Hedging Arrangements" means, interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and currency exchange
agreements, and all other agreements or arrangements designed to protect
against fluctuations in interest rates or currency values.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"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 organized under the laws of a country that is a
member of the Organization 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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) organized 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) organized 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 the Borrower, ADT Limited or
any other Subsidiary of ADT Limited) organized and existing under the
laws of a country that is a member of the Organization 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 ▇▇▇▇▇'▇ 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 the Borrower, ADT Limited or any other
Subsidiary of ADT Limited) organized and existing under the laws of a
country that is a member of the Organization 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
▇▇▇▇▇'▇ 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 the Borrower, ADT Limited or any other Subsidiary
of ADT Limited) organized and existing under the laws of a country that
is a member of the Organization 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 ▇▇▇▇▇'▇ 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 the Borrower, ADT Limited or any other Subsidiary of ADT
Limited) organized and existing under the laws of a country that is a
member of the Organization 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 ▇▇▇▇▇'▇ 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 B.V." means ADT Holdings B.V., a company organized under the
laws of the Netherlands.
"Holdings Inc." means ADT Holdings, Inc., a Delaware corporation.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause such Obligor to be in default of any of its
obligations under Section 8.2.3 or Section 4.2.4 of the ADT Limited
Guaranty.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(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
Capitalized 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 a Lien 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.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Indenture Effective Date" means August 4, 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, (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 Capitalized 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 Effective Date or in connection with the entering into of
this Agreement and the other Loan Documents;
plus
(b) with respect to ADT Limited, dividends on the Preference
Shares during such period;
provided, however, that the Interest Expense of any Person for any period that
would include a Pre-Acquisition Period will not include any item that would be
included in the determination of the Interest Expense of ASH for such
Pre-Acquisition Period.
"Interest Period" means, relative to any Loans which are LIBO Rate
Loans, (i) in the case of any Revolving Loan, the period beginning on the date
on which such LIBO Rate Loan is made or continued as, or converted into, a
LIBO Rate Loan pursuant to Section 2.2 or 2.4 and ending on the day which
numerically corresponds to such date one, two, three, six or (if available)
nine or twelve months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in each case as
the Borrower may select in its relevant notice pursuant to Section 2.2 or 2.4,
or, (ii) in the case of any Competitive Bid Loan, the period beginning on the
date on which such LIBO Rate Loan is made pursuant to Section 2.3 and ending
on the Competitive Bid Loan Maturity Date applicable thereto; provided,
however, that
(a) the Borrower shall not be permitted to select Interest
Periods with respect to Revolving Loans to be in effect at any one time
which have expiration dates occurring on more than 12 different dates;
(b) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the next preceding Business Day); and
(c) no Interest Period may end later than the Stated Maturity
Date.
"Intermediate Parent Companies" means, collectively, Holdings Inc.,
Holdings B.V., Group N.V. and each other direct or indirect parent of the
Borrower (other than ADT Limited).
"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.
"Invitation for Bid Loan Offers" means an invitation to the Lenders,
substantially in the form of Exhibit D-1 hereto, sent by the Agent on behalf
of the Borrower pursuant to Section 2.3.2, inviting the Lenders to submit
Competitive Bid Loan Offers in accordance with Section 2.3.3.
"Issuance Request" means a properly completed application for the
issuance of a Letter of Credit on the applicable Issuer's standard form,
executed by an Authorized Officer of the Borrower.
"Issuer" means Scotiabank (or another Lender (selected by Scotiabank)
that agrees to be an Issuer hereunder and that has a public long-term senior
unsecured debt rating of at least A- from Standard & Poor's and at least A3
from ▇▇▇▇▇'▇), and includes any Affiliate, unit or agency of Scotiabank (or
such other Lender) having a public long-term senior unsecured debt rating of at
least A- from Standard & Poor's and at least A3 from ▇▇▇▇▇'▇.
"Judgment Letter of Credit" means any Letter of Credit issued for the
benefit of any Person (each such Person, a "Judgment Payor") that makes a
payment in United States Dollars to or for the benefit of the Borrower, ADT
Limited or any of their respective Subsidiaries (each such payment, a "Judgment
Payment") in respect of the December 6, 1995 judgment of the High Court of
Justice in the Queen's Bench Division (▇▇. ▇▇▇▇▇▇▇ May presiding) against BDO
Binder Hamlyn (the "Judgment"), which Letter of Credit (i) shall have a Stated
Amount not exceeding the amount of such payment plus interest (whether or not
then accrued) at a rate not exceeding 10% per annum calculated from the date
such payment was made to the expiry date of such Letter of Credit and (ii)
would be capable of being drawn upon to the extent the Judgment is reversed in
whole or in part pursuant to a subsequent judgment and the applicable Judgment
Payor is entitled under such judgment to repayment of all or any portion of its
Judgment Payment. A Judgment Letter of Credit may be renewed or extended in
accordance with the provisions hereof.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit G hereto.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 4.2.
"Letter of Credit Availability" means, at any time, the lesser of
(a) the excess of
(i) $100,000,000
over
(ii) the then Letter of Credit Outstandings (provided that
Letter of Credit Outstandings in respect of any Judgment Letter
of Credit shall not be included in such Letter of Credit
Outstandings for purposes of determining Letter of Credit
Availability at the time of any proposed issuance (subsequent to
the issuance of such Judgment Letter of Credit) of any other
Letter of Credit),
and
(b) the Revolving Loan Commitment Availability at such time;
provided, however, that, solely for the purpose of determining whether a
Judgment Letter of Credit may be issued or extended hereunder, Letter of
Credit Availability at any time shall mean the Revolving Loan Commitment
Availability at such time.
"Letter of Credit Outstandings" means, at any time, an amount equal to
the sum of
(a) the aggregate Stated Amount at such time of all Letters
of Credit then outstanding and undrawn (as such aggregate Stated Amount
shall be adjusted, from time to time, as a result of drawings, the
issuance of Letters of Credit or otherwise),
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Bid Margin" means, in respect of a Competitive Bid Loan, the
margin above (or below) the applicable LIBO Rate offered for such Competitive
Bid Loan, expressed as a percentage (rounded to the nearest 1/10,000th of 1%).
"LIBO Rate Margin" means, with respect to the unpaid principal amount
of each Revolving Loan maintained as a LIBO Rate Loan, subject to the proviso
to this definition, the percentage set forth opposite the "Level" below
containing the Senior Debt Rating of both Standard & Poor's and ▇▇▇▇▇'▇ then
in effect:
Senior Debt Rating Senior Debt Rating LIBO Rate
Level (by Standard & Poor's) (by ▇▇▇▇▇'▇) Margin
----- ---------------------- ------------------ ---------
I BBB or better Baa2 or better 0.30%
II BBB- Baa3 0.30%
III BB+ Ba1 0.50%
IV BB Ba2 0.575%
V below BB below Ba2 0.625%;
provided, however, that in the event of (i) a split rating by Standard &
Poor's and Moody's which differs by one Level, the percentage corresponding to
the higher Level (i.e., the better Senior Debt Rating) shall be the LIBO Rate
Margin and (ii) a split rating by Standard & Poor's and Moody's which differs
by more than one Level, the percentage corresponding to the Level immediately
below the higher Level shall be the LIBO Rate Margin; provided further,
however, that, in the event that (i) only Standard & Poor's or only ▇▇▇▇▇'▇ is
providing a Senior Debt Rating, the percentage set forth opposite the Level
containing the Senior Debt Rating which has been provided shall be the LIBO
Rate Margin or (ii) neither Standard & Poor's nor ▇▇▇▇▇'▇ is providing a
Senior Debt Rating, the percentage set forth opposite Level V shall be the
LIBO Rate Margin.
"LIBO Rate Loan" means a Revolving Loan or a Competitive Bid Rate Loan,
as the case may be, bearing interest, at all times during an Interest Period
applicable to such Revolving Loan or Competitive Bid Rate Loan, at a fixed
rate of interest determined by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, with respect to any Lender, the office of such
Lender designated as such below its signature hereto or in the applicable
Lender Assignment Agreement, or such other office of a Lender (or any
successor or assign of such Lender) as may be designated as such from time to
time by notice from such Lender to the Borrower and the Agent.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation of any kind or nature whatsoever.
"Loan Document" means this Agreement, the Notes, the Letters of Credit,
the ADT Limited Guaranty, the Subsidiary Guarantor Guaranty (including each
Subsidiary Guarantor Guaranty Supplement) and each other agreement, document
or instrument which is acknowledged by the Agent and any Obligor to be a Loan
Document.
"Loans" means, collectively, the Revolving Loans and the Competitive
Bid Loans.
"▇▇▇▇▇" means the Liquid Yield Option[Trademark] Notes due 2010 of the
Borrower, issued pursuant to the ▇▇▇▇▇ Indenture and subordinated by its terms
to the Obligations and the Indebtedness in respect of the Senior Notes and the
Senior Subordinated Notes, as the same may, subject to Section 4.2.11 of the
ADT Limited Guaranty, be amended, supplemented, amended and restated or
otherwise modified from time to time.
"▇▇▇▇▇ Guarantee" means the subordinated guarantee of ADT Limited set
forth in the guarantee provisions of the ▇▇▇▇▇ Indenture.
"▇▇▇▇▇ Indenture" means the Indenture dated as of July 1, 1995, among
the Borrower, ADT Limited and Bank of Montreal Trust Company, as trustee, as
the same may, subject to Section 4.2.11 of the ADT Limited Guaranty, be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Material Related Party" means the Borrower, ADT Limited, each
Intermediate Parent Company 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 the Borrower, and each
other Subsidiary of ADT Limited organized and existing under the laws of the
United States (or any state thereof or the District of Columbia), that
(a) is designated with an asterisk in Item 2 ("Subsidiaries")
of the Disclosure Schedule;
(b) accounted for at least 5% of the consolidated gross
revenues of ADT Limited and its Subsidiaries for the most recently
completed Fiscal Quarter with respect to which, pursuant to Section
8.1.1(a) or 8.1.1(d), financial statements have been, or are required
to have been, delivered by the Borrower 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 Fiscal Quarter with respect to
which, pursuant to Section 8.1.1(a) or 8.1.1(d), financial statements
have been, or are required to have been, delivered by the Borrower 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 ▇▇▇▇▇'▇ 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, however, that the Net Income of any Person for any Pre-Acquisition
Period will not include any item that would be included in the determination
of the Net Income of ASH for such Pre-Acquisition Period.
"Net Sale Proceeds" means, with respect to any Recapture Asset
Disposition, the excess of
(a) the gross cash proceeds received by the Borrower, ADT
Limited or any of its other Subsidiaries as a result of such Recapture
Asset Disposition
over
(b) the sum (without duplication) of
(i) the Transaction Costs incurred in connection with such
Recapture Asset Disposition;
plus
(ii) payments made to retire Indebtedness that is secured by
the assets or properties that are the subject of such Recapture
Asset Disposition;
plus
(iii) payments to holders (other than the Borrower, ADT
Limited or any other Subsidiary of ADT Limited) of Capital Stock
in Subsidiaries of ADT Limited subject to such Recapture Asset
Disposition, so long as such payments are made on a pro rata
basis, consistent with the ownership of such Capital Stock, to
the holders of such Capital Stock;
plus
(iv) any reserve for adjustment in respect of the sale price
of receivables sold on a non-recourse basis pursuant to a
receivables financing agreement or other similar agreement;
plus
(v) appropriate amounts to be provided by the recipient of
such proceeds or any Subsidiary thereof, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities
associated with such Recapture Asset Disposition and retained by
the recipient of such proceeds or any Subsidiary thereof, as the
case may be, after such transaction, including pension and other
post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Recapture Asset Disposition;
provided, however, that Net Sale Proceeds shall not include (i) any proceeds
(or portion thereof) that are received in any Fiscal Year to the extent such
proceeds (or portion thereof), together with all other such proceeds
theretofore received in such Fiscal Year, do not exceed $5,000,000 or (ii) any
proceeds of any Excluded Disposition.
"Non-Guarantors" means all Subsidiaries of ADT Limited other than the
Borrower and the Subsidiary Guarantors.
"Non-Obligors" means all Subsidiaries of the Borrower or ADT Limited
that are not Obligors.
"Non-Voting Exchangeable Shares" means the Non-Voting Exchangeable
Shares, Series A, of ADT Finance Inc., a Canadian corporation.
"Note" means, as the context may require, a Revolving Note and/or a
Competitive Bid Loan Note.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes, each other Loan Document and each Hedging Arrangement
with a Lender permitted under Section 8.2.3 or Section 4.2.2 of the ADT
Limited Guaranty.
"Obligors" means the Borrower, the Guarantors and each of their
respective successors, transferees and assigns.
"Organic Document" means, with respect to any Person, its certificate
of incorporation, memorandum of association, by-laws and/or other constitutive
documents, and all shareholder agreements, voting trusts and similar
arrangements to which such Person is a party that are applicable to any of its
Capital Stock.
"Participant" is defined in Section 11.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"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
the Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning
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.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its signature hereto or set forth in the Lender Assignment Agreement,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 11.11.
"Permitted Auction Business Sale" means an Asset Sale consisting of the
sale of the Capital Stock of any Subsidiary of the Borrower 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 the Borrower 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, the Borrower 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 and under the ADT Limited Guaranty (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 (c) of Section 4.2.10 of the ADT Limited Guaranty, the amount of such
transaction shall be applied against each such basket).
"Permitted Strategic Sale" is defined in Section 1.1 of the ADT Limited
Guaranty.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"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 any period prior to the ASH Acquisition
Date.
"Quarterly Payment Date" means the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Recapture Asset Disposition" means each Permitted Strategic Sale of
Voting Stock of a Subsidiary Guarantor, each Permitted Auction Business Sale
and each Asset Sale permitted pursuant to clause (c)(ii) of Section 4.2.10 of
the ADT Limited Guaranty.
"Redeemable Capital Stock" means Capital Stock of the Borrower, 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 January 7, 1999, (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.
"Reference Lenders" means Scotiabank and, in the event there are other
Lenders hereunder, such other Lenders as the Agent and the Borrower may from
time to time agree.
"Reimbursement Obligation" is defined in Section 4.6.
"Related Business" means any business directly related to the
auctioning or distribution of equipment or goods which (i) are held on a
consignment or similar basis and (ii) are being auctioned or distributed in
connection with the liquidation of businesses or lines of businesses,
exclusive of the purchasing of items for resale (other than purchases
incidental and customary in the conduct of such business and which when added
to the amounts expended in respect of all other items so purchased and still
owned (including pursuant to any business referred to in clause (a) of the
definition of Core Business) would not exceed $5,000,000).
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time,
(a) with respect to any provision of this Agreement other
than the declaration of the acceleration of the maturity of all or any
portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable pursuant to Section 9.3, Lenders
having Percentages aggregating at least 51%, or
(b) with respect to the declaration of the acceleration of
the maturity of all or any portion of the outstanding principal amount
of the Loans and other Obligations to be due and payable pursuant to
Section 9.3, Lenders holding at least 51% of the sum of (x) the
aggregate principal amount of outstanding Loans and (y) the Letter of
Credit Outstandings (based on the participating interests held therein).
"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.
"Revolving Loan" is defined in Section 2.1.1.
"Revolving Loan Borrowing" means Revolving Loans of the same type and,
in the case of LIBO Rate Loans, having the same Interest Period made by all
Lenders on the same Business Day in accordance with Section 2.1.
"Revolving Loan Borrowing Request" means a certificate requesting
Revolving Loans, duly executed by an Authorized Officer, substantially in the
form of Exhibit C-1 attached hereto.
"Revolving Loan Commitment" means, relative to any Lender, such
Lender's obligation to make Revolving Loans pursuant to Section 2.1.1 and to
issue (in the case of any Issuer) or participate in (in the case of all
Lenders) Letters of Credit pursuant to Section 2.1.2.
"Revolving Loan Commitment Amount" means, on any date, $200,000,000, as
such amount may be reduced from time to time pursuant to Section 2.1.4.
"Revolving Loan Commitment Availability" means, on any date, the excess
of
(a) the then Revolving Loan Commitment Amount,
over
(b) the sum of
(i) the outstanding principal amount of all Loans on such
date,
plus
(ii) the Letter of Credit Outstandings on such date
(including, notwithstanding any implication to the contrary, the
aggregate Letter of Credit Outstandings on such date in respect
of all Judgment Letters of Credit).
"Revolving Loan Commitment Termination Date" means the earliest of
(a) the Stated Maturity Date;
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section 2.1.4; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Revolving
Loan Commitments shall terminate automatically and without any further action.
"Revolving Note" means a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"Scotiabank" is defined in the preamble.
"Senior Debt Rating" means the Borrower's senior, unsecured long-term
debt rating, as determined by Standard & Poor's or Moody's.
"Senior Note Guarantees" means the guarantees of ADT Limited and of
each of the Subsidiary Guarantors 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 as of August 4, 1993,
among the Borrower, the guarantors named therein and The Chase Manhattan Bank
(National Association), as trustee, as the same may, subject to Section 4.2.11
of the ADT Limited Guaranty, 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 the Borrower,
issued pursuant to the Senior Note Indenture, as the same may, subject to
Section 4.2.11 of the ADT Limited Guaranty, 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 as of
August 4, 1993, among the Borrower, the guarantors named therein and
NationsBank of Georgia, National Association, as trustee, as the same may,
subject to Section 4.2.11 of the ADT Limited Guaranty, 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 the Borrower, issued pursuant to the Senior Subordinated Note
Indenture, as the same may, subject to Section 4.2.11 of the ADT Limited
Guaranty, be amended, supplemented, amended and restated or otherwise modified
from time to time.
"6% Preference Shares" means the 6% Convertible Cumulative Redeemable
Preference Shares 2002, par value $1.00 per share, of ADT Limited.
"Standard & Poor's" means Standard & Poor's Ratings Group.
"Stated Amount" of each Letter of Credit means the maximum amount
available for drawing thereunder (whether or not any conditions to drawing can
then be met), taking into consideration the effect of any prior drawings made
thereunder.
"Stated Expiry Date" with respect to any Letter of Credit has the
meaning provided in Section 4.2.
"Stated Maturity Date" means January 7, 1998.
"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, however, that the Stockholders' Equity of any Person will not
include any item that would be included in the determination of the retained
earnings of ASH as of the ASH Acquisition Date.
"Subordinated Debt" means all Indebtedness in respect of the Senior
Subordinated Notes, the Senior Subordinated Note Guarantees, the ▇▇▇▇▇, the
▇▇▇▇▇ Guarantee and all other Indebtedness of the Borrower, ADT Limited or any
other Subsidiary of ADT Limited for money borrowed which is subordinated in
right of payment to the payment of the Obligations.
"Subordinated Intercompany Debt" means unsecured Indebtedness (a)
subordinated to the Obligations by provisions substantially in the form set
forth in Schedule II hereto 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.
"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.
"Subsidiary Guarantors" means (i) the Subsidiaries of ADT Limited
organized under the laws of the United States (or any state thereof or the
District of Columbia) party from time to time to the Subsidiary Guarantor
Guaranty and (ii) each Subsidiary of ADT Limited that is required to execute
and deliver a Subsidiary Guarantor Guaranty Supplement pursuant to the terms
of Section 4.1.6 or 4.1.7 of the ADT Limited Guaranty.
"Subsidiary Guarantor Guaranty" means the Guaranty executed and
delivered by each Subsidiary Guarantor as of the Effective Date pursuant to
clause (b) of Section 6.1.4, substantially in the form of Exhibit J hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Subsidiary Guarantor Guaranty Supplement" means a supplement to the
Subsidiary Guarantor Guaranty, substantially in the form of Annex I thereto.
"Taxes" is defined in Section 5.6.
"10-K" means, with respect to any Person, its annual report on Form
10-K (or any successor form thereto) filed with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Exchange Act.
"10-Q" means, with respect to any Person, its quarterly report on Form
10-Q (or any successor form thereto) filed with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Exchange Act.
"Total Capitalization" 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.
"Transaction Costs" means, with respect to any Recapture Asset
Disposition, the sum of
(a) all reasonable fees and expenses incurred in connection
with such Recapture Asset Disposition (including legal, investment
banking, brokerage and accounting and other professional fees) and all
sales commissions and disbursements incurred in connection with such
Recapture Asset Disposition which have not been paid to Affiliates of
the Borrower (unless, in the case of such Affiliates that are not
Subsidiaries of ADT Limited, such fees and expenses are incurred
pursuant to arrangements permitted under Section 4.2.12 of the ADT
Limited Guaranty);
plus
(b) all taxes actually paid or estimated (in good faith) to
be or become payable in connection with such Recapture Asset
Disposition.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"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 Lenders.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan
Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section
are references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder (including under Section 4.2.4 of the ADT Limited
Guaranty) shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with, generally
accepted accounting principles as in effect in the United States ("GAAP") on
December 31, 1994 on a basis consistent with the audited financial statements
of ADT Limited and the Borrower with respect to the Fiscal Year ending on such
date.
ARTICLE II
COMMITMENTS, COMPETITIVE BID LOANS,
BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement (including Article V), each Lender and each Issuer, as the
case may be, severally agrees as follows:
SECTION 2.1.1. Revolving Loan Commitment. From time to time on any
Business Day occurring prior to the Revolving Loan Commitment Termination
Date, each Lender will make Loans (relative to such Lender, its "Revolving
Loans") to the Borrower equal to such Lender's Percentage of the aggregate
amount of the Revolving Loan Borrowing requested by the Borrower to be made on
such day. On the terms and subject to the conditions hereof, the Borrower may
from time to time borrow, prepay and reborrow Revolving Loans.
SECTION 2.1.2. Commitment to Issue Letters of Credit. From time to
time on any Business Day, each Issuer will issue, and each Lender will
participate in, the Letters of Credit, in accordance with Article IV.
SECTION 2.1.3. Lenders Not Permitted or Required To Make Loans Under
Certain Circumstances. No Lender shall be permitted or required to make any
Loan to the extent that, after giving effect thereto (and any concurrent
payment of Revolving Loans or Reimbursement Obligations with the proceeds
thereof),
(a) the aggregate outstanding principal amount of all Loans of
all Lenders, together with all Letter of Credit Outstandings, would
exceed the Revolving Loan Commitment Amount, or
(b) in the case of a Revolving Loan, the aggregate outstanding
principal amount of all Revolving Loans of such Lender would exceed
such Lender's Percentage of the amount equal to the Revolving Loan
Commitment Amount less the Letter of Credit Outstandings.
SECTION 2.1.4. Reduction of the Revolving Loan Commitment Amount. The
Revolving Loan Commitment Amount is subject to reduction from time to time
pursuant to this Section 2.1.4.
SECTION 2.1.4.1. Voluntary Reduction. The Borrower may, from time to
time on any Business Day, voluntarily reduce the amount of the Revolving Loan
Commitment Amount; provided, however, that all such reductions shall be made
pro rata among all the Lenders and shall require at least three Business Days'
prior notice to the Agent and be permanent, and any partial reduction of any
such Revolving Loan Commitment Amount shall be in a minimum amount of
$5,000,000 and in an integral multiple of $1,000,000.
SECTION 2.1.4.2. Mandatory Reduction. The Revolving Loan Commitment
Amount shall automatically and permanently be reduced on the date 18 months
after receipt by the Borrower, ADT Limited or any of its other Subsidiaries of
any Net Sale Proceeds with respect to any Recapture Asset Disposition by an
amount equal to (i) the amount of such Net Sale Proceeds less (ii) (A) in the
case such Recapture Asset Disposition is a Permitted Auction Business Sale,
the amount of such Net Sale Proceeds used during such 18 month period to make
payments in respect of the Dividended Note and/or for investments in
properties and assets owned by, and used in the electronic security businesses
conducted by, the Borrower and its Subsidiaries and (B) in the case of each
other Recapture Asset Disposition, the amount invested by the Borrower, ADT
Limited and any of its other Subsidiaries during such 18 month period in
properties and assets which replace the properties and assets that were the
subject of such Recapture Asset Disposition or in properties and assets used
in the Core Businesses; provided, however, that
(i) so long as no Event of Default has occurred and is
continuing, commitment reductions under this Section 2.1.4.2 shall not
be required until such Net Sale Proceeds aggregate $10,000,000 or more
(at which time the entire aggregate amount of such Net Sale Proceeds
shall be required as a mandatory commitment reduction hereunder); and
(ii) in the event that any such Net Sale Proceeds shall not
fully result in a commitment reduction under this Section 2.1.4.2
because such Net Sale Proceeds do not aggregate $10,000,000 or more,
the amount that did not result in a commitment reduction shall be
carried forward and added to Net Sale Proceeds subsequently received by
the Borrower, ADT Limited or any of its other Subsidiaries for the
purpose of determining any subsequent commitment reduction required
under this Section 2.1.4.2.
SECTION 2.2. Borrowing Procedure for Revolving Loans. By delivering a
Revolving Loan Borrowing Request to the Agent on or before 10:00 a.m., New
York City time, on a Business Day, the Borrower may from time to time
irrevocably request, on not less than three (in the case of any Revolving Loan
Borrowing of LIBO Rate Loans) nor more than five (in the case of any Revolving
Loan Borrowing) Business Days' notice, that a Borrowing be made (i) in a
minimum amount of $5,000,000 and an integral multiple of $1,000,000, (ii) in
the unused amount of the Revolving Loan Commitment Amount or (iii) in the case
of a Revolving Loan Borrowing of Base Rate Loans to fund any Reimbursement
Obligation pursuant to Section 4.5.2(e), in the amount of the Reimbursement
Obligation funded by such Revolving Loan Borrowing. On the terms and subject
to the conditions of this Agreement, each Revolving Loan Borrowing shall be
comprised of the type of Revolving Loans, and shall be made on the Business
Day, specified in such Revolving Loan Borrowing Request. On or before 11:00
a.m. (New York City time) on the Business Day so specified each Lender shall
deposit with the Agent same day funds in an amount equal to such Lender's
Percentage of the requested Revolving Loan Borrowing. Such deposit will be
made to an account which the Agent shall specify from time to time by notice
to the Lenders. To the extent funds are received from the Lenders, the Agent
shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Revolving Loan Borrowing
Request. No Lender's obligation to make any Revolving Loan shall be affected
by any other Lender's failure to make any Loan.
SECTION 2.3. Competitive Bid Loans. Subject to the terms and
conditions of this Agreement (including Article VI), each Lender severally
agrees that the Borrower may request that Competitive Bid Loan Borrowings
under this Section 2.3 be made from time to time on any Business Day prior to
the date occurring one month prior to the Revolving Loan Commitment
Termination Date in the manner set forth below; provided, however, that
following the making of each Competitive Bid Loan Borrowing (and any
concurrent payment of Revolving Loans or Reimbursement Obligations with the
proceeds thereof), the aggregate amount of all Loans then outstanding shall
not exceed the amount equal to the Revolving Loan Commitment Amount less the
Letter of Credit Outstandings.
SECTION 2.3.1. Competitive Bid Loan Borrowing Request. The Borrower
may request Competitive Bid Loan Borrowings under this Section by delivering
to the Agent not later than 12:00 noon (New York City time) at least four
Business Days prior to the date of the proposed Competitive Bid Loan
Borrowing, a Competitive Bid Loan Borrowing Request (which may contain
requests for up to three different Competitive Bid Loans with three different
Competitive Bid Loan Maturity Dates, but having the same date of funding),
specifying
(a) the amount of each Competitive Bid Loan to be made as
part of such proposed Competitive Bid Loan Borrowing,
(b) the proposed date (which shall be a Business Day) and
aggregate principal amount or amounts of each Competitive Bid Loan to
be made as part of such proposed Competitive Bid Loan Borrowing (which
shall be in a minimum principal amount of $5,000,000 and in an integral
multiple of $1,000,000), and
(c) the proposed maturity date or dates (each a "Competitive
Bid Loan Maturity Date") for repayment of each Competitive Bid Loan to
be made as part of such Competitive Bid Loan Borrowing (which maturity
date or dates shall be (i) the date or dates occurring one, two, three
or six months after the date of such Competitive Bid Loan Borrowing and
(ii) not later than the Stated Maturity Date).
The Borrower shall not deliver to the Agent any Competitive Bid Loan Borrowing
Request within five Business Days after the delivery of any other Competitive
Bid Loan Request.
SECTION 2.3.2. Invitation for Bid Loan Offers. Promptly upon receipt
of a Competitive Bid Loan Borrowing Request but in no event later than 4:00
p.m. (New York City time) on the date of such receipt, the Agent shall send to
the Lenders by telecopy an Invitation for Bid Loan Offers substantially in the
form of Exhibit D-1 attached hereto, which shall constitute an invitation on
behalf of the Borrower to each Lender to submit Competitive Bid Loan Offers
offering to make the Competitive Bid Loans to which such Competitive Bid Loan
Borrowing Request relates in accordance with this Section 2.3.
SECTION 2.3.3. Submission and Contents of Bid Loan Offers.
(a) If any Lender, in its sole discretion, elects to offer to make a
Competitive Bid Loan to the Borrower as part of a proposed Competitive Bid
Loan Borrowing at a rate of interest specified by such Lender in its sole
discretion, it shall deliver to the Agent not later than 10:00 a.m. (New York
City time) on the third Business Day prior to the proposed date of Borrowing, a
Competitive Bid Loan Offer, which must comply with the requirements of this
clause, substantially in the form of Exhibit D-2 hereto; provided, however,
that Competitive Bid Loan Offers submitted by the Agent (or any affiliate of
the Agent) in the capacity of a Lender may be submitted, and may only be
submitted, if the Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than 9:45 a.m. (New York
City time) on the third Business Day prior to the proposed date of borrowing.
Each Competitive Bid Loan Offer shall specify
(i) the proposed date of Borrowing, which shall be the same as
that set forth in the applicable Invitation for Bid Loan Offers,
(ii) the principal amount of the Competitive Bid Loan which the
Lender submitting such Competitive Bid Loan Offer would be willing to
make as part of such proposed Competitive Bid Loan Borrowing (which
amount shall be in a minimum principal amount of $5,000,000 and in an
integral multiple of $1,000,000 and which amount may exceed such
Lender's Percentage of the Revolving Loan Commitment Amount),
(iii) the LIBO Rate Bid Margin therefor, and
(iv) the identity of the quoting Lender;
provided, however, that any Competitive Bid Loan Offer submitted by a Lender
pursuant to this Section 2.3.3 shall be irrevocable, unless otherwise
consented to in writing by the Agent acting upon the instructions of the
Borrower.
(b) Any Competitive Bid Loan Offer that:
(i) is not substantially in the form of Exhibit D-2 hereto or
does not specify all of the information required in this Section 2.3.3;
(ii) contains qualifying, conditional or similar language;
(iii) contains proposed terms other than or in addition to those
set forth in the applicable Invitation for Bid Loan Offers; or
(iv) arrives after the time set forth in this Section 2.3.3
shall be disregarded by the Agent.
SECTION 2.3.4. Notice to Borrower. The Agent shall (by telephone,
promptly confirmed in writing) notify the Borrower of the terms of any
Competitive Bid Loan Offer submitted by a Lender that is in accordance with
Section 2.3.3 with all due haste after the receipt thereof. The Agent's
notice to the Borrower shall specify (a) the aggregate principal amount of
Competitive Bid Loans for which Competitive Bid Loan Offers have been received
in accordance with the terms specified in the related Competitive Bid Loan
Borrowing Request, (b) the respective principal amounts and LIBO Rate Bid
Margins so offered, and (c) the identity of such quoting Lenders.
SECTION 2.3.5. Competitive Bid Loan Acceptance. The Borrower shall,
before 11:00 a.m. (New York City time) on the third Business Day prior to the
proposed date of such proposed Competitive Bid Loan Borrowing, either
(a) irrevocably cancel the Competitive Bid Loan Borrowing
Request that requested such Competitive Bid Loan Borrowing by giving
the Agent telephonic notice, promptly confirmed in writing (and the
Agent shall promptly so notify each of the Lenders) to that effect
(and, for purposes of this Section, a failure on the part of the
Borrower to timely notify the Agent under the terms of this clause
shall be deemed to be non-acceptance of all Competitive Bid Loan Offers
so notified to the Borrower pursuant to Section 2.3.4), or
(b) (i) irrevocably accept, in whole or in part, one or more
of the Competitive Bid Loan Offers made by any Lender or Lenders
pursuant to Section 2.3.3, in its sole discretion, by giving the Agent
telephonic notice (promptly confirmed in writing by delivery to the
Agent of a Competitive Bid Loan Acceptance), and the Agent shall,
promptly upon receiving such telephonic notice from the Borrower,
notify each Lender whose Competitive Bid Loan Offer has been accepted,
in whole or in part, of (A) the amount of the Competitive Bid Loan
Borrowing to be made on such date, and (B) the amount of the
Competitive Bid Loan (which amount shall not be greater than the amount
offered by such Lender for such Competitive Bid Loan pursuant to
Section 2.3.3) to be made by such Lender as part of such Competitive
Bid Loan Borrowing, and (ii) irrevocably reject any remaining
Competitive Bid Loan Offers made by Lenders pursuant to Section 2.3.3
by giving the Agent telephonic notice, promptly confirmed in writing
(and the Agent shall promptly so notify the Lenders) to that effect;
provided, however, that
(A) the Borrower shall not accept an offer made at a
particular Competitive Bid Rate if the Borrower has decided to
reject an offer made in respect of the same Competitive Bid Loan
Borrowing with the same Competitive Bid Loan Maturity Date and a
lower Competitive Bid Rate,
(B) the aggregate principal amount of the Competitive Bid
Loan Offers accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Bid Loan Borrowing
Request therefor,
(C) if the Borrower shall accept an offer or offers made at
a particular Competitive Bid Rate but the amount of such offer or
offers shall cause the total amount of offers to be accepted by
the Borrower to exceed the amount specified in the Competitive Bid
Loan Borrowing Request therefor, then the Borrower shall
(1) accept a portion of such offer or offers in an
aggregate amount equal to the amount specified in the
Competitive Bid Loan Borrowing Request less the amount of all
other offers accepted with respect to such Competitive Bid
Loan Borrowing Request, and
(2) allocate the Competitive Bid Loans in respect of
which such offers are accepted among the Lenders submitting
such offers as nearly as possible in proportion to the
aggregate amount of such offers made by each Lender
(provided, that if the available principal amount of
Competitive Bid Loans to be so allocated is not sufficient to
enable Competitive Bid Loans to be so allocated to each such
Lender in a minimum principal amount of $5,000,000, the
number of such Lenders shall be reduced by the Agent by lot
until the Competitive Bid Loans to be made by such remaining
Lenders would be in a principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof),
(D) no bid shall be accepted for a Competitive Bid Loan
unless such Competitive Bid Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000 and is part
of a Competitive Bid Loan Borrowing in a minimum principal amount
of $5,000,000, and
(E) the Borrower may not accept any offer that is described
in clause (b) of Section 2.3.3 or that otherwise fails to comply
with the requirements of this Agreement.
A notice given by the Borrower pursuant to this clause (b) of this
Section 2.3.5 shall be irrevocable.
SECTION 2.3.6. Funding of Competitive Bid Loans. Not later than 12:00
noon (New York City time) on the date specified for each Competitive Bid Loan
Borrowing hereunder, each Lender participating therein shall deposit with the
Agent same day funds in the amount of the Competitive Bid Loan to be made by
it on such date. Such deposit will be made to an account which the Agent
shall specify from time to time by notice to the Lenders. The amount so
received by the Agent shall be made available to the Borrower by wire transfer
to the accounts the Borrower notified to the Agent in writing. As soon as
practicable after the Competitive Bid Loan Borrowing, the Agent shall notify
each Lender of the amount of the Competitive Bid Loan Borrowing, the
applicable Competitive Bid Rates accepted, the consequent Competitive Bid
Outstanding Balance, the date on which such Competitive Bid Loan Borrowing was
made and the corresponding Competitive Bid Loan Maturity Date applicable to
all Competitive Bid Loans that are part of such Competitive Bid Loan Borrowing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., New
York City time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three nor more than five Business Days'
notice that all, or any portion in an aggregate minimum amount of
$5,000,000 and an integral multiple of $1,000,000, of any Revolving Loans
be, in the case of Revolving Loans which are Base Rate Loans, converted
into Revolving Loans which are LIBO Rate Loans or, in the case of Revolving
Loans which are LIBO Rate Loans, be converted into Revolving Loans which
are Base Rate Loans or continued as Revolving Loans which are LIBO Rate
Loans (in the absence of delivery of a Continuation/Conversion Notice with
respect to any Revolving Loan which is a LIBO Rate Loan at least three
Business Days before the last day of the then current Interest Period with
respect thereto, such Revolving Loan which is a LIBO Rate Loan shall, on
such last day, automatically convert to a Revolving Loan which is a Base
Rate Loan); provided, however, that (i) each such conversion or
continuation shall be pro rated among the applicable outstanding Revolving
Loans of all Lenders, and (ii) no portion of the outstanding principal
amount of any Revolving Loans may be continued as, or be converted into,
LIBO Rate Loans when any Event of Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates or an international banking
facility created by such Lender to make or maintain such LIBO Rate Loan to the
extent such branch, Affiliate or banking facility has complied, if applicable,
with the provisions of the last paragraph of Section 5.6 as if such branch,
Affiliate or banking facility were a Lender hereunder; provided, however, that
such LIBO Rate Loan shall nonetheless be deemed to have been made and to be
held by such Lender, and the obligation of the Borrower to repay such LIBO
Rate Loan shall nevertheless be to such Lender for the account of such foreign
branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market; provided,
however, that nothing in this sentence shall affect the provisions in Article
V to the extent that such Article provides that amounts to be reimbursed by
the Borrower are to be determined on the basis of actual costs and actual
reductions incurred by one or more Lenders.
SECTION 2.6. Notes. (a) Each Lender's Revolving Loans shall be
evidenced by a Revolving Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the original Revolving
Loan Commitment Amount.
(b) Each Lender's Competitive Bid Loans shall be evidenced by a
Competitive Bid Loan Note payable to the order of such Lender in a maximum
principal amount equal to the original Revolving Loan Commitment Amount.
(c) The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Notes (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal amount of, and
the Interest Period (in the case of Revolving Loans), or the Competitive Bid
Loan Maturity Dates and the Competitive Bid Loan Interest Payment Dates (in
the case of Competitive Bid Loans) applicable to the Loans evidenced thereby.
Such notations shall, to the fullest extent permitted under applicable law, be
conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of any Lender to make any such notations shall not
limit or otherwise affect any Obligations of the Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Revolving Loan on the Stated Maturity
Date and shall repay in full the unpaid principal amount of each Competitive
Bid Loan on the Competitive Bid Loan Maturity Date thereof. Prior to such
Stated Maturity Date or such Competitive Bid Loan Maturity Date, as the case
may be, repayments and prepayments of Loans shall be made as set forth in this
Section 3.1. Each prepayment of any Loans made pursuant to this Section shall
be without premium or penalty, except as may be required by Section 5.4.
SECTION 3.1.1. Voluntary Prepayments.
SECTION 3.1.1.1. Revolving Loans. From time to time on any Business
Day, the Borrower may make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Revolving Loans, and may cash
collateralize, in whole or part, outstanding Letters of Credit; provided,
however, that
(a) any such prepayment shall be made pro rata among
Revolving Loans of the same type and, if applicable, having the same
Interest Period of all Lenders;
(b) all such voluntary prepayments shall require at least
three (in the case of Revolving Loans which are LIBO Rate Loans) or one
(in the case of Revolving Loans which are Base Rate Loans), but no more
than five (in the case of any Revolving Loans), Business Days' prior
written notice to the Agent;
(c) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $5,000,000 and an integral multiple of
$1,000,000 or in the aggregate principal amount of all Revolving Loans
of the same type and, in the case of Revolving Loans which are LIBO Rate
Loans, having the Interest Period of the Revolving Loans being prepaid;
and
(d) no voluntary prepayment of principal of any Revolving
Loan shall cause a reduction in the Revolving Loan Commitment Amount.
SECTION 3.1.1.2. Competitive Bid Loans. The Borrower shall have no
right to prepay, in whole or in part, the outstanding principal amount of any
Competitive Bid Loan, unless (i) the Lender that has made such Competitive Bid
Loan otherwise consents in writing or (ii) such Competitive Bid Loan is
accruing interest at such time at a rate determined on the basis of the
Alternate Base Rate pursuant to Section 5.1. Any Competitive Bid Loan may be
prepaid in whole or in part in amounts of at least $5,000,000 or any larger
integral multiple of $1,000,000 in excess thereof at any time at which such
Competitive Bid Loan shall bear interest at a rate determined on the basis of
the Alternate Base Rate pursuant to Section 5.1.
SECTION 3.1.2. Mandatory Prepayments. The Borrower shall make
mandatory prepayments as set forth in this Section 3.1.2. Each mandatory
prepayment under this Section 3.1.2 shall be applied in accordance with the
terms of this Section 3.1.2.
SECTION 3.1.2.1. Mandatory Prepayment Upon Commitment Reduction. The
Borrower shall, on each date when any reduction in the Revolving Loan
Commitment Amount shall become effective, including pursuant to Section 2.1.4,
make a mandatory prepayment (which shall be applied (or held for application,
as the case may be) by the Lenders first to the payment of the aggregate unpaid
principal amount of the Loans then outstanding, and then to the payment and/or
cash collateralization of the then outstanding Letter of Credit Outstandings)
equal to the excess, if any, of the aggregate, outstanding principal amount of
all Loans and Letter of Credit Outstandings over the Revolving Loan Commitment
Amount as so reduced; provided, however, that if (and to the extent) on the
date of any prepayment required under this Section 3.1.2.1 a LIBO Rate Loan
would otherwise be required to be prepaid on a day other than the last day of
the then current Interest Period (or, in the case of a Competitive Bid Loan,
the Competitive Bid Loan Maturity Date applicable thereto) with respect to
such Loan (after prepaying any Revolving Loans then outstanding that are Base
Rate Loans), the Borrower may (in the case of LIBO Rate Loans which are
Revolving Loans) or shall (in the case of Competitive Bid Loans) defer such
prepayment with respect to such LIBO Rate Loan until, in the case of a LIBO
Rate Loan which is a Revolving Loan, the last day of the then current Interest
Period with respect to such LIBO Rate Loan or, in the case of a Competitive
Bid Loan, the Competitive Bid Loan Maturity Date applicable thereto.
SECTION 3.1.2.2. Acceleration of Scheduled Maturity. The Borrower
shall, immediately upon any acceleration of the Stated Maturity Date or
Competitive Bid Loan Maturity Date of any Loans pursuant to Section 9.2 or
Section 9.3, repay all Loans, unless, pursuant to Section 9.3, only a portion
of all Loans is so accelerated, in which case the Borrower shall repay such
Loans so accelerated.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
Section 3.2.
SECTION 3.2.1. Rates. (a) Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may
elect that Revolving Loans comprising a Revolving Loan Borrowing accrue
interest at a rate per annum:
(i) on that portion maintained from time to time as a Base Rate
Loan, equal to the Alternate Base Rate from time to time in effect; and
(ii) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the applicable LIBO
Rate Margin.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for any LIBO Rate
Loan will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from the Reference Lender or Reference Lenders, as the case may be,
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 3.2.4.
"LIBO Rate" means, relative to any Interest Period for any LIBO Rate
Loan, the rate of interest equal to the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates per annum at which Dollar
deposits in immediately available funds are offered to each Reference Lender's
LIBOR Office in the London interbank market as at or about 11:00 a.m. London
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of each such Reference Lender's LIBO Rate
Loan (in the case of a LIBO Rate Loan which is a Revolving Loan) or the amount
of the Competitive Bid Loan Borrowing of which such LIBO Rate Loan is a part
(in the case of a LIBO Rate Loan which is a Competitive Bid Loan) and for a
period approximately equal to such Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
any LIBO Rate Loan, the reserve percentage (expressed as a decimal) equal to
the maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to liabilities consisting of and including "Eurocurrency
Liabilities", as currently defined in Regulation D of the F.R.S. Board.
(b) Each Competitive Bid Loan shall accrue interest at a rate per
annum equal to the Competitive Bid Rate specified by the Lender making such
Competitive Bid Loan in its Competitive Bid Loan Offer with respect thereto
delivered pursuant to Section 2.3.3 above and accepted by the Borrower
pursuant to Section 2.3.5.
(c) All LIBO Rate Loans shall bear interest from and including the
first day of the applicable Interest Period to (but not including) the last
day of such Interest Period at the interest rate determined as applicable to
such LIBO Rate Loan for such Interest Period.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only
to the extent permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Alternate Base Rate plus a
margin of 2.0% (or, to the extent any such amounts constitute principal in
respect of any LIBO Rate Loan, at a rate per annum equal to the LIBO Rate
(Reserve Adjusted) with respect thereto plus a margin of 2.0% plus the LIBO
Rate Margin (or, in the case of Competitive Bid Loans, plus (or minus) the
applicable LIBO Rate Bid Margin) applicable to such amounts for the remaining
period of the applicable Interest Period then in effect).
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) in the case of any Revolving Loan, on the Stated Maturity
Date therefor;
(b) on any portion of the principal amount of any Loan that
is voluntarily or mandatorily paid or prepaid, on the date of such
voluntary or mandatory payment or prepayment;
(c) with respect to Revolving Loans which are Base Rate
Loans, on each Quarterly Payment Date occurring after the Effective
Date;
(d) with respect to Revolving Loans which are LIBO Rate
Loans, on the last Business Day of each applicable Interest Period
(and, if such Interest Period shall exceed three months, on each three
(and integral of three) month anniversary of the making of such LIBO
Rate Loan);
(e) with respect to any Revolving Loans which are Base Rate
Loans converted into Revolving Loans which are LIBO Rate Loans on a day
when interest would not otherwise have been payable pursuant to clause
(c), on the date of such conversion;
(f) with respect to Competitive Bid Loans, on each
Competitive Bid Loan Maturity Date and, with respect to Competitive Bid
Loans with a Competitive Bid Loan Maturity Date in excess of three
months after the date such Competitive Bid Loan is made, on each three
(and integral of three) month anniversary of the making of such
Competitive Bid Loan (each such date (including each Competitive Bid
Loan Maturity Date), a "Competitive Bid Loan Interest Payment Date");
and
(g) on that portion of any Loans the Stated Maturity Date of
which (or, in the case of any Competitive Bid Loans, the Competitive
Bid Loan Maturity Date of which) is accelerated pursuant to Section 9.2
or Section 9.3, immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.2.4. Interest Rate Determination. Each Reference Lender
agrees to furnish to the Agent timely information for the purpose of
determining each LIBO Rate. If any one or more of the Reference Lenders shall
fail timely to furnish such information to the Agent for any such interest
rate, the Agent shall determine such interest rate on the basis of the
information furnished by the remaining Reference Lenders.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Facility Fee. The Borrower agrees to pay to the Agent
for the account of each Lender for each day during the period (including any
portion thereof when any of the Revolving Loan Commitments are suspended by
reason of the Borrower's inability to satisfy any condition of Article VI)
commencing on January 14, 1996 and continuing through the Revolving Loan
Commitment Termination Date, a facility fee on the Revolving Loan Commitment
Amount for such day, calculated on the basis of the percentage per annum set
forth opposite the "Level" below containing the Senior Debt Rating of both
Standard & Poor's and Moody's in effect for such day; provided, however, that
in the event of (i) a split rating by Standard & Poor's and Moody's which
differs by one Level, the percentage corresponding to the higher Level (i.e.,
the better Senior Debt Rating) shall be the percentage and (ii) a split rating
by Standard & Poor's and Moody's which differs by more than one Level, the
percentage corresponding to the Level immediately below the higher Level shall
be the percentage; provided further, however, that in the event that (i) only
Standard & Poor's or only ▇▇▇▇▇'▇ is providing a Senior Debt Rating, the
percentage set forth opposite the Level containing the Senior Debt Rating
which has been provided shall be the percentage or (ii) neither Standard &
Poor's nor ▇▇▇▇▇'▇ is providing a Senior Debt Rating, the percentage set forth
opposite Level V shall be the percentage.
Senior Debt Rating Senior Debt Rating
Level (by Standard & Poor's) (by Moody's) Percentage
----- ---------------------- ------------------ ----------
I BBB or better Baa2 or better 0.15%
II BBB- Baa3 0.20%
III BB+ Ba1 0.25%
IV BB Ba2 0.30%
below BB or below Ba2 or
V non-rated non-rated 0.375%
Such fee shall be payable by the Borrower in arrears on each Quarterly Payment
Date, commencing with the first such Quarterly Payment Date following the
Effective Date and on the Revolving Loan Commitment Termination Date.
SECTION 3.3.2. Letter of Credit Face Amount Fee. The Borrower agrees
to pay to the Agent, for the account of the Lenders, a fee for each Letter of
Credit for the period from and including the date of the issuance of such
Letter of Credit (which date, in the case of an Existing Letter of Credit,
shall be the Closing Date) to (but excluding) the date upon which such Letter
of Credit expires equal to the LIBO Rate Margin then in effect per annum of
the Stated Amount of such Letter of Credit. Such fee shall be calculated on a
daily basis and shall be payable by the Borrower in arrears on each Quarterly
Payment Date to occur after issuance of such Letter of Credit and on the
Revolving Loan Commitment Termination Date.
SECTION 3.3.3. Letter of Credit Issuer Fronting Fee. The Borrower
agrees to pay to the Agent, for the account of the applicable Issuer, an
issuing fee for each Letter of Credit for the period from and including the
date of issuance of such Letter of Credit (which date, in the case of an
Existing Letter of Credit, shall be the Closing Date) to (but excluding) the
date upon which such Letter of Credit expires equal to the product of the
applicable Fronting Rate multiplied by the Stated Amount of such Letter of
Credit. Such fee shall be payable by the Borrower in arrears on each
Quarterly Payment Date to occur after issuance of such Letter of Credit and on
the Revolving Loan Commitment Termination Date.
SECTION 3.3.4. Letter of Credit Administrative Expenses. The Borrower
agrees to pay to the Agent, for the account of the applicable Issuer(s), the
amounts referred to in Section 4.3.
SECTION 3.3.5. Other Fees. The Borrower agrees to pay to the Agent
for its account, or to the Agent for the account of the Lenders and/or the
Issuer(s), as the case may be, such fees as previously agreed to in writing by
the applicable parties and not otherwise set forth in this Section 3.3.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1. Issuances and Extensions. On the terms and subject to
the conditions of this Agreement (including Article VI), the applicable Issuer
or Issuers shall issue Letters of Credit (and extend the Stated Expiry Dates
of outstanding Letters of Credit) in accordance with the Issuance Requests made
therefor pursuant to Section 4.2. Each Issuer will make available the
original of each Letter of Credit which it issues in accordance with the
Issuance Request therefor to the beneficiary thereof, and will promptly
provide each of the Lenders with a copy of such Letter of Credit (and will
notify the beneficiary under any such Letter of Credit of any extension of the
Stated Expiry Date thereof). Each Letter of Credit (as defined in the
Existing Credit Facility) outstanding under the Existing Credit Facility on
the Closing Date (each, an "Existing Letter of Credit") shall be deemed to
have been issued hereunder on the Closing Date and, on and as of the Closing
Date, each Issuer of each Existing Letter of Credit hereby releases each
Lender (as defined in the Existing Credit Facility) from all obligations under
the Existing Credit Facility in respect of any Existing Letter of Credit.
SECTION 4.2. Issuance Requests. By delivering to the Agent and the
applicable Issuer an Issuance Request on or before 12:00 noon, New York City
time, the Borrower may request, from time to time prior to the Revolving Loan
Commitment Termination Date and on not less than three nor more than ten
Business Days' notice, that such Issuer issue an irrevocable commercial or
standby letter of credit in such form as may be requested by the Borrower
(each such request to include (i) the forms of instruments to be used to make
draws thereunder and to extend or renew the term thereof and (ii) the written
confirmation of the beneficiary thereunder as to its acceptance of such forms)
and approved in every respect by such Issuer (each such letter of credit,
together with each Existing Letter of Credit, a "Letter of Credit"), for any
purpose permitted under Section 5.11. Upon receipt of an Issuance Request,
the Agent shall promptly notify the Lenders thereof. Each Letter of Credit
shall by its terms:
(a) be issued in a Stated Amount which
(i) is at least $100,000; and
(ii) does not exceed the then Letter of Credit Availability;
(b) be stated to expire on a date (its "Stated Expiry Date")
no later than the Revolving Loan Commitment Termination Date; and
(c) in the case of Letters of Credit other than Judgment
Letters of Credit and Letters of Credit to be used as credit support
for corporate insurance purposes, on or prior to its Stated Expiry Date
(i) terminate immediately upon notice to the Issuer thereof
from the beneficiary thereunder that all obligations covered
thereby have been terminated, paid, or otherwise satisfied in
full, and
(ii) reduce in part immediately and to the extent the
beneficiary thereunder has notified the Issuer thereof that the
obligations covered thereby have been paid or otherwise satisfied
in part.
So long as no Default has occurred and is continuing, by delivery to the
applicable Issuer and the Agent of an Issuance Request at least three (or, in
the case of a Judgment Letter of Credit, fifteen) but not more than sixty
Business Days prior to the Stated Expiry Date of any Letter of Credit, the
Borrower may request such Letter of Credit Issuer to extend the Stated Expiry
Date of such Letter of Credit for an additional period that does not end after
the Revolving Loan Commitment Termination Date. Notwithstanding any provision
contained in the foregoing to the contrary, the Borrower may not request the
issuance of, and no Issuer shall have an obligation to issue, (i) any Judgment
Letter of Credit at any time when, or if after giving effect to such issuance,
and as long as, there shall be outstanding in the aggregate eight Judgment
Letters of Credit or (ii) any Letter of Credit at any time when, or if after
giving effect to such issuance, and so long as, there shall be outstanding in
the aggregate thirty Letters of Credit (including Judgment Letters of Credit).
SECTION 4.3. Expenses. The Borrower agrees to pay to the Agent for
the account of the applicable Issuer(s) all standard administrative expenses
of such Issuer(s) in connection with the issuance, maintenance, modification
(if any) and administration of each Letter of Credit issued by such Issuer(s)
upon demand from time to time.
SECTION 4.4. Participation By Lenders. (a) Each Letter of Credit
issued or deemed issued pursuant to this Article IV shall, effective upon its
issuance or deemed issuance and without further action, be issued or deemed
issued on behalf of all Lenders (including the applicable Issuer) pro rata
according to their respective Percentages. Each Lender shall, to the extent
of its Percentage, be deemed irrevocably to have participated in the issuance
of such Letter of Credit and shall be responsible to reimburse promptly the
applicable Issuer for Reimbursement Obligations which have not been reimbursed
by the Borrower in accordance with Section 4.5, or which have been reimbursed
by the Borrower but must be returned, restored or disgorged by such Issuer for
any reason. Each Lender shall, to the extent of its Percentage, be entitled
to receive from the Agent a ratable portion of the letter of credit fees
received by the Agent pursuant to Section 3.3.2, with respect to each Letter
of Credit.
(b) In the event that the Borrower shall fail to reimburse any
Issuer, or if for any reason Revolving Loans shall not be made to fund any
Reimbursement Obligation, all as provided in Section 4.5 and in an amount
equal to the amount of any drawing honored by such Issuer under a Letter of
Credit issued by it, or in the event such Issuer must for any reason return or
disgorge such reimbursement, such Issuer shall promptly notify each Lender of
the unreimbursed amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to such Issuer,
whether or not any Default shall have occurred and be continuing, an amount
equal to its respective participation in same day or immediately available
funds at the office of such Issuer specified in such notice not later than
11:00 a.m., New York City time, on the Business Day (under the laws of the
jurisdiction of such Issuer) after the date notified by such Issuer. In the
event that any Lender fails to make available to such Issuer the amount of
such Lender's participation in such Letter of Credit as provided herein, such
Issuer shall be entitled to recover such amount on demand from such Lender
together with interest at the daily average Federal Funds Effective Rate for
three Business Days (together with such other compensatory amounts as may be
required to be paid by such Lender to the Agent pursuant to the Rules for
Interbank Compensation of the council on International Banking or the
Clearinghouse Compensation Committee, as the case may be, as in effect from
time to time) and thereafter at the Federal Funds Effective Rate plus 2.0%.
(c) Nothing in this Section shall be deemed to prejudice the right of
any Lender to recover from any Issuer any amounts made available by such
Lender to such Issuer pursuant to this Section in the event that it is
determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit by such Issuer in respect of which payment was made by
such Lender constituted gross negligence or wilful misconduct on the part of
such Issuer.
(d) Each Issuer shall distribute to each other Lender which has paid
all amounts payable by it under this Section with respect to any Letter of
Credit issued by such Issuer such other Lender's Percentage of all payments
received by such Issuer from the Borrower in reimbursement of drawings honored
by such Issuer under such Letter of Credit when such payments are received.
SECTION 4.5. Disbursements. (a) The applicable Issuer will notify
the Borrower and the Agent promptly of the presentment for payment of any
drawing under any Letter of Credit, together with notice of the amount of such
drawing and the date (a "Disbursement Date") such payment shall be made.
(b) Subject to the terms and provisions of such Letter of Credit, the
applicable Issuer shall make such payment to the beneficiary (or its designee)
of such Letter of Credit.
(c) Prior to 12:00 noon, New York City time, on the Business Day
immediately succeeding the Disbursement Date, the Borrower will reimburse the
applicable Issuer for all amounts which it has disbursed under such Letter of
Credit.
(d) To the extent the applicable Issuer is not reimbursed in full on
the Disbursement Date for all amounts it has disbursed under any Letter of
Credit, the Borrower's Reimbursement Obligation shall accrue interest from and
including such Disbursement Date to but excluding the date such Reimbursement
Obligation is paid in full (whether pursuant to a Borrowing of Base Rate Loans
under Section 4.5(e) or otherwise) at a fluctuating rate per annum equal to,
during the initial two days after such Disbursement Date, the Alternate Base
Rate and, thereafter, the Alternate Base Rate plus a margin of 2.0%, payable
on demand.
(e) In the event the applicable Issuer is not reimbursed by the
Borrower on the Disbursement Date, or if such Issuer must for any reason
return or disgorge such reimbursement, the Lenders (including such Issuer)
shall, on the terms and subject to the conditions of this Agreement, fund the
Reimbursement Obligation therefor by making, on the next Business Day,
Revolving Loans which are Base Rate Loans as provided in Section 2.1.1 (the
Borrower being deemed to have given a timely Borrowing Request therefor for
such amount); provided, however, for the purpose of determining the
availability of the Revolving Loan Commitments to make Revolving Loans
immediately prior to giving effect to the application of the proceeds of such
Revolving Loans, such Reimbursement Obligation shall be deemed not to be
outstanding at such time.
SECTION 4.6. Repayment/Reimbursement. The Borrower's obligation (a
"Reimbursement Obligation") under Section 4.5 to reimburse an Issuer with
respect to each disbursement thereunder (including interest thereon), and each
Lender's obligation to make participation payments in each drawing which has
not been reimbursed by the Borrower, shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim, or
defense to payment which the Borrower may have or have had against any Lender
or any beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid
or insufficient, the failure of any disbursement thereunder to conform to the
terms of the applicable Letter of Credit (if, in the applicable Issuer's good
faith opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
disbursement, or the legality, validity, form, regularity, or enforceability
of such Letter of Credit.
SECTION 4.7. Deemed Disbursements and Cash Collateralization of
Letters of Credit. Upon the occurrence and during the continuation of any
Event of Default or the occurrence of the Revolving Loan Commitment
Termination Date, an amount equal to that portion of Letter of Credit
Outstandings attributable to outstanding and undrawn Letters of Credit shall,
at the election of the applicable Issuer acting on instructions from the
Required Lenders, and without demand upon or notice to the Borrower, be deemed
to have been paid or disbursed (but not for purposes of Sections 3.3 and 4.5)
by such Issuer under such Letters of Credit (notwithstanding that such amount
may not in fact have been so paid or disbursed), and, upon notification by
such Issuer to the Agent and the Borrower of its obligations under this
Section (which notification shall be deemed given if the applicable Event of
Default is an Event of Default with respect to the Borrower or ADT Limited
described in clause (b) or (d) of Section 9.1.9), the Borrower shall be
immediately obligated to reimburse such Issuer the amount deemed to have been
so paid or disbursed by such Issuer. Any amounts so received by such Issuer
from the Borrower pursuant to this Section shall be held as collateral
security for the repayment of the Borrower's obligations in connection with
the Letters of Credit issued by such Issuer. At any time when the aggregate
amount held by any Issuer as collateral hereunder shall exceed the then
aggregate Letter of Credit Outstandings in respect of all Letters of Credit
issued by such Issuer, such Issuer shall return to the Borrower such excess.
At such time when all Events of Default shall have been cured or waived, each
Issuer shall return to the Borrower all amounts then on deposit with such
Issuer pursuant to this Section. Any interest on such amounts on deposit
shall be held by the applicable Issuer as additional collateral security for
the repayment of the Borrower's Obligations in connection with the Letters of
Credit issued by such Issuer or otherwise.
SECTION 4.8. Nature of Repayment/Reimbursement Obligations. With
respect to all Letters of Credit, the Borrower shall assume all risks of
the acts, omissions, or misuse of any Letter of Credit by the beneficiary
thereof. Neither any Issuer nor any Lender (except to the extent of its
own gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness,
or legal effect of any Letter of Credit or any document submitted by
any party in connection with the application for and issuance of a
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness,
or legal effect of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit or of the proceeds thereof.
None of the foregoing shall affect, impair, or prevent the vesting of any of
the rights or powers granted any Issuer or any Lender hereunder. In
furtherance and extension, and not in limitation or derogation, of any of the
foregoing, any action taken or omitted to be taken by any Issuer in good faith
shall be binding upon the Borrower and shall not put such Issuer under any
resulting liability to the Borrower.
SECTION 4.9. Increased Costs; Indemnity. With respect to all Letters
of Credit, if by reason of
(a) any change after the date hereof in applicable law,
regulation, rule, decree or regulatory requirement or any change in the
interpretation or application by any judicial or regulatory authority
of any law, regulation, rule, decree or regulatory requirement, or
(b) compliance by any Issuer or any Lender with any
direction, request or requirement (whether or not having the force of
law) of any governmental or monetary authority, including Regulation D
of the F.R.S. Board, first issued after the date hereof:
(i) any Issuer or any Lender shall be subject to any tax
(other than taxes on net income and franchises), levy, charge or
withholding of any nature or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment of its
obligations under this Article IV, whether directly or by such
being imposed on or suffered by such Issuer or any Lender;
(ii) any reserve, deposit or similar requirement is or shall
be applicable, imposed or modified in respect of any Letters of
Credit issued by any Issuer or participations therein purchased
by any Lender; or
(iii) there shall be imposed on any Issuer or any Lender any
other condition regarding this Article IV, any Letter of Credit
or any participation therein;
and the result of the foregoing is directly or indirectly to increase the
actual cost to such Issuer or such Lender of issuing, making or maintaining
any Letter of Credit or of purchasing or maintaining any participation
therein, or to actually reduce any amount receivable in respect thereof by such
Issuer or such Lender, then and in any such case such Issuer or such Lender
may, at any time after the additional cost is incurred or the amount received
is reduced, notify the Borrower thereof, and the Borrower shall pay within
fourteen days of demand thereof such amounts as such Issuer or Lender may
specify to be necessary to compensate such Issuer or Lender for such
additional cost or reduced receipt, together with interest on such amount from
the date demanded until payment in full thereof at a rate equal, during the
initial fifteen Business Days after the date of such demand, the Alternate
Base Rate, and, thereafter, the Alternate Base Rate plus a margin of 2.0%;
provided, however, that the Borrower shall have no obligation to pay any such
additional amount with respect to any day or days unless such Issuer or Lender
shall have notified the Borrower of its demand therefor within 60 days of the
date upon which such Issuer or Lender has obtained audited information with
respect to the fiscal year of such Issuer or Lender in which such day or days
occurred; provided further, however, that each such Issuer or Lender will use
all reasonable efforts to obtain such audited information in a timely manner.
The determination by such Issuer or Lender, as the case may be, of any amount
due pursuant to this Section, as set forth in a statement setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
error, be final and conclusive and binding on all of the parties hereto. In
addition to amounts payable as elsewhere provided in this Article IV, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuer
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees and
allocated costs of internal counsel) which such Issuer may incur or be subject
to as a consequence, direct or indirect, of
(x) the issuance of the Letters of Credit, other than as a
result of the gross negligence or wilful misconduct of such Issuer as
determined by a court of competent jurisdiction, or
(y) the failure of such Issuer to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority.
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 5.1. LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction
of, or any change in or in the interpretation of, any law makes it unlawful,
or any central bank or other governmental authority asserts that it is
unlawful, for such Lender to make, continue or maintain any Loan as, or to
convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Agent that the circumstances causing such suspension
no longer exist, and all LIBO Rate Loans of such Lender shall automatically
convert into Base Rate Loans at the end of the then current Interest Periods
with respect thereto or sooner, if required by such law or assertion and all
Loans of such Lender that would otherwise have been made or continued as, or
converted into, LIBO Rate Loans shall instead be made as or converted into, or
continued as, Base Rate Loans upon which interest shall be payable (i) in the
case of Revolving Loans, at the same time as the related LIBO Rate Loans and
(ii) in the case of Competitive Bid Loans, on the Competitive Bid Loan
Interest Payment Date with respect thereto.
SECTION 5.2. Deposits Unavailable. If the Agent shall have determined
that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Reference Lender or
the Reference Lenders, as the case may be, in their relevant market; or
(b) by reason of circumstances affecting the Reference
Lenders' relevant market, adequate means do not exist for ascertaining
the interest rate applicable hereunder to LIBO Rate Loans,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.2 and Section 2.4 to make or
continue any Revolving Loans as, or to convert any Revolving Loans into, LIBO
Rate Loans shall forthwith be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 5.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees
to reimburse each Lender for any increase in the actual cost to such Lender
of, or any actual reduction in the amount of any sum receivable by such Lender
in respect of, making, continuing or maintaining (or of its obligation to make,
continue or maintain) any Loans as, or of converting (or of its obligation to
convert) any Loans into, LIBO Rate Loans arising by reason of (i) any change
(after the date hereof, in respect of LIBO Rate Loans that are Revolving
Loans, or after the date of the applicable Competitive Bid Loan Offer, in
respect of Competitive Bid Loans) in any applicable law, rule, regulation,
decree or regulatory requirement or any change (after such date) in the
interpretation or application by any judicial or regulatory authority of any
applicable law, rule, regulation, decree or regulatory requirement or (ii)
compliance by such Lender with any direction, request or requirement (whether
or not having the force of law) of any governmental or monetary authority,
including Regulation D of the F.R.S. Board, first issued after such date;
provided, however, that the Borrower shall have no obligation to pay any such
additional amount with respect to any day or days unless such Lender shall
have notified the Borrower of its demand therefor within 60 days of the date
upon which such Lender has obtained audited information with respect to the
fiscal year of such Lender in which such day or days occurred; provided
further, however, that each such Lender will use all reasonable efforts to
obtain such audited information in a timely manner. Such Lender shall promptly
notify the Agent and the Borrower in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and
the additional amount required fully to compensate such Lender for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower directly to such Lender within fourteen days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
SECTION 5.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Revolving Loans not being continued as, or converted
into, LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor,
but excluding loss of margin for the period after such payment, conversion or
failure to borrow, then, upon the written notice of such Lender to the
Borrower (with a copy to the Agent), the Borrower shall, within fourteen days
of its receipt thereof, pay directly to such Lender such amount as will (in
the reasonable determination of such Lender) reimburse such Lender for such
loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 5.5. Increased Capital Costs. If after the date hereof (or,
with respect to any Competitive Bid Loan, the date of the Competitive Bid Loan
Offer with respect thereto), there shall be any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Revolving Loan Commitment, issuance of or participation in
Letters of Credit or the Loans made by such Lender is reduced to a level below
that which such Lender or such controlling Person could have achieved but for
the occurrence of any such circumstance, then, in any such case upon notice
from time to time by such Lender to the Borrower, the Borrower shall, within
fourteen days of its receipt of such notice from such Lender, pay directly to
such Lender additional amounts sufficient to compensate such Lender or such
controlling Person for such reduction in rate of return; provided, however,
that the Borrower shall have no obligation to pay any such additional amount
with respect to any day or days unless such Lender shall have notified the
Borrower of its demand therefor within 60 days of the date upon which such
Lender has obtained audited information with respect to the fiscal year of
such Lender in which such day or days occurred; provided further, however,
that each such Lender will use all reasonable efforts to obtain such audited
information in a timely manner. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any reasonable
method of averaging and attribution that it shall deem applicable.
SECTION 5.6. Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes, and other taxes, fees, duties, withholdings
and all liabilities related thereto, imposed by any taxing authority and
arising as a result of any change after the date hereof (or, in the case of
any Competitive Bid Loan, after the date of the Competitive Bid Loan Offer
with respect thereto) in any law, regulation or treaty or the interpretation
or application thereof by any relevant taxing authority, but excluding
franchise taxes and taxes imposed on or measured by any Lender's net income or
receipts (such non-excluded items being called "Taxes"). In the event that
any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder,
the Agent or such Lender may pay such Taxes and the Borrower will promptly pay
such additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such person would have received had not such Taxes been
asserted; provided, however, that the Borrower shall have no obligation to pay
any such additional amount unless such Lender shall have notified the Borrower
of its demand therefor within 60 days of the date upon which such Lender has
obtained audited information with respect to the fiscal year of such Lender
during which the payment of such additional amounts occurred; provided
further, however, that each such Lender will use all reasonable efforts to
obtain such audited information in a timely manner.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 5.6, a distribution hereunder by
the Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
Each Lender that is organized under the laws of a jurisdiction other
than the United States (or any state thereof or the District of Columbia)
shall provide its portion of the Revolving Loan Commitment through a branch or
office the income of which that relates hereto is effectively connected with
the conduct of a trade or business in the United States. On or prior to the
Effective Date (in the case of any Lender party hereto on the Effective Date
or the Agent) or the date upon which such Lender or Agent becomes a Lender or
Agent hereunder (in the case of any other Lender or Agent) and from time to
time thereafter as the Borrower may reasonably request (which request shall
not be made more than once per Fiscal Year), each Lender and Agent that is
organized under the laws of a jurisdiction other than the United States (or
any state thereof or the District of Columbia) shall execute and deliver to
the Borrower and the Agent one or more (as the Borrower or the Agent may
reasonably request) United States Internal Revenue Service Forms 4224 or such
other forms or documents (or successor forms or documents), appropriately
completed, as may be applicable to establish the extent, if any, to which a
payment to such Lender or Agent is exempt from withholding or deduction of
Taxes. If the form provided by any Lender or the Agent at the time such
Lender or the Agent first becomes a party to this Agreement indicates a
withholding or deduction of taxes at a rate in excess of zero, withholding or
deduction of taxes at such rate shall be excluded from "Taxes" as defined in
this Section 5.6; provided, however, that any increase in such rate shall not
be so excluded from "Taxes". For any period with respect to which a Lender
has failed to provide the Borrower with the appropriate form pursuant to this
Section 5.6, such Lender shall not be entitled to receive any additional
amount pursuant to this Section 5.6.
SECTION 5.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes
or any other Loan Document shall be made by the Borrower to the Agent for the
pro rata account of the Lenders entitled to receive such payment. All such
payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 12:00 noon, New York City time, on
the date due, in same day or immediately available funds, to such account as
the Agent shall specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by the Agent on
the next succeeding Business Day. The Agent shall promptly remit in same day
funds to each Lender its share, if any, of such payments received by the Agent
for the account of such Lender. All interest and fees shall be computed on the
basis of the actual number of days (including the first day but excluding the
last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a
Base Rate Loan (other than when calculated with respect to the Federal Funds
Effective Rate), 365 days or, if appropriate, 366 days). Whenever any payment
to be made shall otherwise be due on a day which is not a Business Day, such
payment shall (except as otherwise required by clause (b) of the definition of
the term "Interest Period" with respect to LIBO Rate Loans) be made on the
next succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 5.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Revolving Loan (other than pursuant to
the terms of Sections 5.3, 5.4 and 5.5) or any Letter of Credit in excess of
its pro rata share of payments then or therewith obtained by all Lenders, such
Lender shall purchase from the other Lenders such participations in Revolving
Loans made by them and/or Letters of Credit as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase
price to the ratable extent of such recovery together with an amount equal to
such selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment to
the purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section
may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 5.9) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation. If under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu of a setoff
to which this Section applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim.
SECTION 5.9. Setoff. Each Lender 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 owing to
it (whether or not then due) any and all balances, credits, deposits, accounts
or moneys of the Borrower then or thereafter maintained with or otherwise held
by such Lender; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 5.8. Each Lender agrees
promptly to notify the Borrower and the Agent after any such setoff and
application made by such Lender; provided, however, that, to the fullest extent
permitted under applicable law, the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including
other rights of setoff under applicable law or otherwise) which such Lender
may have.
SECTION 5.10. Use of Proceeds. The proceeds of any Loans shall be
used for general corporate purposes, including to provide working capital and
to finance acquisitions permitted hereunder in Core Businesses. Without
limiting the foregoing, no proceeds of any Loan shall be used to acquire any
equity security of a class which is registered pursuant to Section 12 of the
Exchange Act or any "margin stock", as defined in F.R.S. Board Regulation U.
SECTION 5.11. Use of Letters of Credit. Letters of Credit shall be
used for general corporate purposes, including:
(a) as credit support for corporate insurance purposes;
(b) as credit support for working capital facilities provided to
Affiliates of the Borrower;
(c) in support of trade obligations; and
(d) in the case of Judgment Letters of Credit, in support of
obligations to Judgment Payors (as defined in the definition of
"Judgment Letters of Credit").
SECTION 5.12. Substitution of LIBOR Office or Domestic Office in
Certain Circumstances. If any Lender would otherwise (a) have its obligation
to make, continue or maintain Loans as, or convert Loans into, LIBO Rate Loans
suspended pursuant to Section 5.1 or (b) be entitled to receive additional
amounts pursuant to Section 5.3, 5.5 or 5.6, such Lender shall designate a
different Domestic Office or LIBOR Office, as the case may be, if such
designation will avoid the need for such suspension or eliminate or reduce the
amounts of such additional amounts and will not, in the sole judgement of such
Lender, be otherwise disadvantageous to such Lender.
SECTION 5.13. Substitution of Bank; Election to Terminate. If (a) the
obligation of any Lender to make, continue or maintain Loans as, or to convert
Revolving Loans into, LIBO Rate Loans has been suspended pursuant to Section
5.1 or (b) any Lender has demanded to be paid additional amounts pursuant to
Section 5.3, 5.5 or 5.6 (and the Borrower, in its reasonable judgment,
believes such Lender is likely to demand additional amounts thereunder), the
Borrower shall have the right, with the assistance of the Agent, to seek one
or more financial institutions (a "Substitute Lender"), which may be one or
more of the Lenders, to purchase the Notes and assume the Revolving Loan
Commitment of such Lender (the "Affected Lender"), and if the Borrower locates
a Substitute Lender, the Affected Lender shall, upon (i) payment to it of the
purchase price agreed between it and the Substitute Lender (or, failing such
agreement, a purchase price in the amount of the outstanding principal amount
of its Loans and accrued interest thereon to the date of payment) plus any
amount (other than principal and interest) then due to it or accrued for its
account hereunder, (ii) the written consent of each Issuer (which consent
shall be based on such Issuer's reasonable determination of the ability of
such Substitute Lender to meet the financial obligations of a Lender
hereunder) and (iii) payment by the Borrower to the Affected Lender and the
Agent of all reasonable out-of-pocket expenses in connection with such
assignment and assumption, assign all its rights and obligations under this
Agreement and the Notes (including its Revolving Loan Commitment and its
Loans) to the Substitute Lender, and the Substitute Lender shall assume such
rights and obligations, whereupon the Substitute Lender shall become a party
hereto and shall have the rights and obligations of a Lender hereunder and
under the other Loan Documents and the Affected Lender shall be released from
its obligations hereunder and under the other Loan Documents.
ARTICLE VI
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
SECTION 6.1. Closing Date. The Closing Date shall occur on the date
on which each of the conditions precedent set forth in this Section 6.1 shall
have been satisfied.
SECTION 6.1.1. Resolutions, etc. The Agent shall have received from
each Obligor a certificate, dated the Closing Date, of its Secretary or
Assistant Secretary as to
(a) resolutions of such Obligor's Board of Directors then in
full force and effect authorizing the execution, delivery and
performance of each Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its officers
authorized to act with respect to each Loan Document executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.
SECTION 6.1.2. Delivery of Notes. The Agent shall have received for
the account of each Lender such Lender's Revolving Note and Competitive Bid
Loan Note, each duly executed and delivered by the Borrower.
SECTION 6.1.3. Termination of Existing Credit Facility. All
obligations and liabilities of the Borrower under the Existing Credit
Facility, including all principal, all interest, all prepayment premiums, all
commitment fees and all letter of credit fees, shall have been paid in full,
whether or not then due (including, to the extent necessary, from proceeds of
the initial Credit Extension).
SECTION 6.1.4. Guarantees. The Agent shall have received
(a) the ADT Limited Guaranty, dated as of the date hereof,
duly executed by ADT Limited,
(b) the Subsidiary Guarantor Guaranty, dated as of the date
hereof, duly executed by each Subsidiary Guarantor, and
(c) evidence satisfactory to the Agent that each Material
Subsidiary and each obligor in respect of a Senior Note Guarantee has
duly executed the Subsidiary Guarantor Guaranty.
SECTION 6.1.5. Delivery of Certain Documents. The Agent shall have
received all documents referred to in Section 3.15 of the ADT Limited Guaranty.
SECTION 6.1.6. Consents, etc. The Agent shall have received true and
correct copies of all consents and approvals (if any) required for the
execution and delivery of this Credit Agreement and the other Loan Documents.
SECTION 6.1.7. Delivery of Closing Date Certificates. The Agent shall
have received
(a) a certificate in a form to be provided by the Agent,
dated the Closing Date and duly executed by the Borrower, in which
certificate the Borrower shall have represented and warranted that the
statements therein are true and correct on and as of the Closing Date,
including a statement that attached to such certificate are true,
correct and complete copies of the Dividended Note, the Senior Note
Indenture, the Senior Subordinated Note Indenture and the ▇▇▇▇▇
Indenture and specimen copies of the Senior Notes, the Senior
Subordinated Notes and the ▇▇▇▇▇, and
(b) a certificate in a form to be provided by the Agent,
dated the Closing Date and duly executed by ADT Limited, in which
certificate ADT Limited shall have represented and warranted that the
statements therein are true and correct on and as of the Closing Date.
SECTION 6.1.8. No Material Adverse Change. There shall not have
occurred a material adverse change in the business, results of operations,
financial condition or prospects of ADT Limited and its Subsidiaries, taken as
a whole, or the Borrower and its Subsidiaries, taken as a whole, since
December 31, 1995.
SECTION 6.1.9. Opinions of Counsel. The Agent shall have received,
dated the Closing Date and addressed to the Agent and all Lenders,
(a) an opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Bermuda
counsel for ADT Limited, substantially in the form of Exhibit K hereto;
(b) an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New York
counsel to ADT Limited, the Borrower and the other Obligors,
substantially in the form of Exhibit L-1 hereto;
(c) an opinion of ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special corporate
counsel to the Borrower and the other Obligors, substantially in the
form of Exhibit L-2 hereto; and
(d) an opinion of ▇▇▇ ▇▇▇▇, Esq., general counsel to certain of
the Obligers, substantially in the form of Exhibit L-3 hereto.
SECTION 6.1.10. Notification of Trustees. The Agent shall have
received evidence satisfactory to it that the Borrower has notified each of
the trustees under the Senior Subordinated Note Indenture and the ▇▇▇▇▇
Indenture that this Agreement replaces the Existing Credit Facility and
thereby constitutes, from and after the Effective Date, the "New Bank Credit
Agreement" and the "Credit Agreement" under the Senior Subordinated Note
Indenture and ▇▇▇▇▇ Indenture, respectively.
SECTION 6.1.11. Closing Fees, Expenses, etc. The Agent shall have
received for its own account, or for the account of each Lender and Issuer, as
the case may be, (i) such fees as have been previously agreed to by the
applicable parties to be due and payable on or prior to the Closing Date and
(ii) to the extent then invoiced, all fees, costs and expenses due and payable
pursuant to Section 11.3.
SECTION 6.1.12. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligor shall be satisfactory in form and substance
to the Agent and its counsel; and the Agent and such counsel shall have
received all information, approvals, opinions, documents or instruments as the
Agent or such counsel may reasonably request.
SECTION 6.2. All Credit Extensions. The obligation of each Lender to
make any Credit Extension shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 9.1.5 shall have occurred with respect to
any other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Borrowing to the payment of any
Indebtedness involved in such Default) the following statements shall be true
and correct
(a) the representations and warranties set forth in Article
VII (excluding, however, those contained in Section 7.6) and Article
III of the ADT Limited Guaranty (excluding, however, those contained in
Section 3.7 of the ADT Limited Guaranty) shall be true and correct with
the same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall
be true and correct as of such earlier date);
(b) (i) except as disclosed by the Borrower or ADT Limited to
the Agent and the Lenders pursuant to, or as excepted from, Section
7.6 or Section 3.7 of the ADT Limited Guaranty, no labor controversy,
litigation, arbitration or governmental investigation or proceeding
shall be pending or, to the knowledge of the Borrower or ADT Limited,
threatened against ADT Limited, the Borrower or any of their respective
Subsidiaries which might reasonably be expected to materially adversely
affect the consolidated business, operations, assets, revenues,
properties or prospects of ADT Limited and its Subsidiaries or the
Borrower and its Subsidiaries or which purports to affect the legality,
validity or enforceability of this Agreement, the Notes or any other
Loan Document; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to, or as excepted from, Section 7.6 or
Section 3.7 of the ADT Limited Guaranty which might reasonably be
expected to materially adversely affect the consolidated businesses,
operations, assets, revenues, properties or prospects of ADT Limited
and its Subsidiaries or the Borrower and its Subsidiaries;
(c) no Default shall have then occurred and be continuing; and
(d) except in the case of the deemed issuance of Letters of
Credit pursuant to the last sentence of Section 4.1, with respect to
the issuance, extension or renewal by an Issuer of any Letter of
Credit, no order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain such Issuer
from issuing letters of credit generally or the Letter of Credit to be
issued by it pursuant to the applicable Issuance Request and no request
or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Agent or the Issuer
shall prohibit or request that the Agent or the Issuer refrain from the
issuance of letters of credit generally or such Letter of Credit in
particular.
SECTION 6.2.2. Credit Extension Request. Except in the case of
Letters of Credit deemed issued pursuant to the last sentence of Section 4.1,
the Agent shall have received a Borrowing Request or Issuance Request, as the
case may be, for such Credit Extension. Each of the delivery of a Borrowing
Request or an Issuance Request and the acceptance by the Borrower of the
proceeds of any Borrowing or the issuance, deemed issuance, extension or
renewal of any Letter of Credit, as applicable, shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the issuance, extension or renewal of
such Letter of Credit, as applicable, the statements made in clauses (a), (b)
and (c) of Section 6.2.1 are true and correct.
SECTION 6.2.3. Closing Date. The Closing Date shall have occurred on
or prior to January 31, 1997.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans and issue Letters of Credit hereunder, the
Borrower represents and warrants unto the Agent and each Lender as set forth
in this Article VII.
SECTION 7.1. Organization, etc. Each of the Borrower and its
Subsidiaries that is an Obligor is a corporation duly organized and validly
existing and in good standing under the laws of the State of its
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the nature of its business or
the location of its assets 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 the Borrower and its Subsidiaries taken as a whole.
Each of the Borrower and its Subsidiaries that is an Obligor 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 the Borrower and its
Subsidiaries taken as a whole and (ii) to enter into and perform its
Obligations under each Loan Document to which it is a party.
SECTION 7.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower of this Agreement, the
Notes and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each Subsidiary of the Borrower that is
an Obligor of each Loan Document executed or to be executed by it are within
the Borrower's and each such Obligor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting the Borrower or any such Obligor 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
the Borrower and its Subsidiaries taken as a whole or (ii) to subject
any Lender, Issuer or Agent to any liability; or
(c) result in, or require the creation or imposition of, any
Lien on any of any Obligor's properties.
SECTION 7.3. Government Approval, Regulation, etc. No authorization
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 the Borrower or any Subsidiary of
the Borrower that is an Obligor of this Agreement, the Notes or any other Loan
Document to which it is a party. Neither the Borrower nor any of its
Subsidiaries that is an Obligor is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding company", or
a "subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 7.4. Validity, etc. This Agreement, the Notes and each other
Loan Document executed by the Borrower constitute the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect affecting creditors'
rights generally and to general principles of equity.
SECTION 7.5. No Material Adverse Change. Since December 31, 1995,
there has been no material adverse change in the business, results of
operations, financial condition or prospects of the Borrower and its
Subsidiaries taken as a whole.
SECTION 7.6. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting the Borrower 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 the
Borrower and its Subsidiaries, taken as a whole, or which purports to affect
the legality, validity or enforceability of this Agreement, the Notes or any
other Loan Document, except as disclosed in Item 7.6 ("Litigation") of the
Disclosure Schedule.
SECTION 7.7. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in Item 7.7 ("Existing
Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been created or acquired in
accordance with Section 4.2.5 or 4.2.9 of the ADT Limited Guaranty.
Without limiting any term or provision hereof, to the extent any Person
becomes a Subsidiary of the Borrower in accordance with (and not in
contravention of) any term or provision hereof, the ADT Limited Guaranty or
any other Loan Document, the Borrower may supplement such Item 7.7 of the
Disclosure Schedule to include such new Subsidiary by delivering a
certificate, signed by an Authorized Officer of the Borrower, certifying (i)
as to the name and place of organization of such new Subsidiary, (ii) as to the
method by which such new Subsidiary was created and (iii) that such new
Subsidiary was created without contravening any term or provision of this
Agreement, the ADT Limited Guaranty or any other Loan Document.
SECTION 7.8. Seniority of the Obligations. The Obligations of the
Borrower are senior to all Indebtedness of the Borrower in respect of the
Senior Subordinated Notes and the ▇▇▇▇▇, and the Obligations of ADT Limited
are senior to all Indebtedness of ADT Limited in respect of the Senior
Subordinated Note Guarantee and the ▇▇▇▇▇ Guarantee, and constitute, and are
entitled to the benefits of being, (i) "Senior Indebtedness" and "Guarantor
Senior Indebtedness", as such terms are defined in the Senior Subordinated
Note Indenture, and (ii) "Senior Indebtedness" and "Guarantor Senior
Indebtedness", as such terms are defined in the ▇▇▇▇▇ Indenture.
SECTION 7.9. Existing Letters of Credit. Item 7.9 ("Existing Letters
of Credit") of the Disclosure Schedule lists each Existing Letter of Credit.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. The Borrower agrees with the
Agent and each Lender that, until the Covenant Termination Date, the Borrower
will perform the obligations set forth in this Section 8.1.
SECTION 8.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) 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 Fiscal Year,
copies of the audited annual financial statements for such Fiscal Year
for each of the Borrower and its Subsidiaries and ADT Limited and its
Subsidiaries, in each case including therein consolidated balance sheets
for each of the Borrower and its Subsidiaries and ADT Limited and its
Subsidiaries as of the end of such Fiscal Year and consolidated
statements of income, cash flow and changes in shareholders' equity of
each of the Borrower and its Subsidiaries and ADT Limited and its
Subsidiaries for such Fiscal Year, in each case, reported on (without
any Impermissible Qualification) as to fairness of presentation,
generally accepted accounting principles and consistency by Coopers &
▇▇▇▇▇▇▇, or other independent public accountants of nationally
recognized 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 Default that has occurred and
is continuing;
(b) [intentionally omitted];
(c) promptly and in any event prior to the 30th day of each
Fiscal Year, a certified copy of the annual budget of the Borrower, ADT
Limited and its other Subsidiaries, on a consolidated basis, for such
Fiscal Year, in form and scope consistent with the annual budget of the
Borrower, ADT Limited and its other Subsidiaries, on a consolidated
basis, for the 1996 Fiscal Year furnished to the Agent prior to the
Effective Date;
(d) promptly and in any event within 60 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, quarterly
unaudited consolidated balance sheets as of the end of such Fiscal
Quarter for each of the Borrower and its Subsidiaries and ADT Limited
and its Subsidiaries, and quarterly unaudited consolidated statements
of income, cash flow and changes in shareholders' equity of each of the
Borrower and its Subsidiaries and ADT Limited and its Subsidiaries for
such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, in
each case, certified (subject to normal year-end adjustments) as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial Authorized Officer of such Person;
(e) within ten Business Days of the delivery of the financial
statements required by clauses (a) and (d) of this Section, a
Compliance Certificate, executed by the chief financial Authorized
Officer of ADT Limited, (i) showing (in reasonable detail and with
appropriate calculations and computations in all respects reasonably
satisfactory to the Agent) compliance with the financial covenants set
forth in Section 8.2.3 and Sections 4.2.4, 4.2.6 and 4.2.7 of the ADT
Limited Guaranty and (ii) giving notice of the other items referred to
in the Compliance Certificate;
(f) promptly after the sending or filing thereof, copies of
all reports which ADT Limited 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 ADT Limited or any of its Subsidiaries 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;
(g) as soon as possible and in any event within five Business
Days after any executive or financial officer of the Borrower or ADT
Limited obtains knowledge of the occurrence of any Default, a statement
of the chief financial Authorized Officer of the Borrower setting forth
details of such Default and the action which the Borrower or ADT
Limited has taken and proposes to take with respect thereto;
(h) as soon as possible and in any event within five Business
Days after (x) the occurrence of any material adverse development with
respect to any litigation, action, proceeding, or labor controversy
described in Section 7.6 or Section 3.7 of the ADT Limited Guaranty or
(y) the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 7.6 or Section 3.7 of the
ADT Limited Guaranty, notice thereof describing in reasonable detail
such development or such labor controversy, litigation, action or
proceeding;
(i) immediately upon becoming aware of the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Borrower furnish a
bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which could
result in the incurrence by the Borrower of any material liability, fine
or penalty, or any material increase in the contingent liability of the
Borrower with respect to any post-retirement Welfare Plan benefit,
notice thereof and copies of all documentation relating thereto; and
(j) such other information respecting the condition or
operations, financial or otherwise, of the Borrower, ADT Limited or any
other Subsidiary of ADT Limited as any Lender through the Agent may
from time to time reasonably request.
SECTION 8.1.2. Compliance with Laws, etc. The Borrower 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 of the
ADT Limited Guaranty, the maintenance and preservation by the Borrower
and each of its Subsidiaries that is an Obligor 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
the Borrower and its Subsidiaries, taken as a whole (it being
acknowledged that the failure of the Borrower to maintain and preserve
its corporate existence (except as permitted under Section 4.2.9 of the
ADT Limited Guaranty) 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 8.1.3. Covenants Relating to Judgment Letters of Credit. (a)
The Borrower agrees that, in the case of each draw under a Judgment Letter of
Credit (each such draw, a "Draw Event"), it will provide to the Agent a
certificate executed by its chief financial Authorized Officer (each such
certificate, a "Draw Certificate") pursuant to which it will show in reasonable
detail:
(i) to the extent it shall have received such information from
the Issuer, the amount of such draw (such amount, the "Current Draw
Amount"),
(ii) to the extent it shall have previously received such
information from the Issuer, the aggregate amount of all previous draws
under all Judgment Letters of Credit (such aggregate amount, the "Prior
Draw Amount"),
(iii) the aggregate amount (without duplication) of all cash
contributions made to the capital of the Borrower by the Borrower's
parent and of all cash proceeds of Subordinated Intercompany Debt
provided by ADT Limited or Wholly Owned Subsidiaries of ADT Limited
(other than Subsidiaries of the Borrower) and permitted pursuant to
clause (m) of Section 8.2.2, in each case since December 6, 1995 (such
aggregate amount, the "Investment Amount"), and
(iv) the aggregate amount (without duplication) counted (A) as an
Investment under clause (c) of Section 4.2.5 of the ADT Limited
Guaranty (by virtue of clause (k) of Section 4.2.2 of the ADT Limited
Guaranty) (the maximum amount permitted under such clause (c) by virtue
of such clause (k) at any time, the "Borrower Intercompany Debt
Basket"), (B) as an Investment under clause (o) of Section 4.2.5 of the
ADT Limited Guaranty (the maximum amount permitted under such clause
(o) at any time, the "General Debt Basket") or (C) as a Restricted
Borrower Distribution under clause (b)(ii) of Section 4.2.6 of the ADT
Limited Guaranty (the maximum amount permitted under such clause
(b)(ii) at any time, the "Restricted Borrower Distribution Basket"), in
each case prior to such Draw Event as a result of the immediately
succeeding sentence (such aggregate amount, the "Basket Usage Amount").
The failure of the Borrower to deliver to the Agents a Draw Certificate within
ten Business Days after notice of a Draw Event shall have been given to the
Borrower shall constitute an Event of Default.
(b) The Borrower acknowledges that, upon each Draw Event, the excess,
if any, of (i) the sum of the Current Draw Amount with respect to such Draw
Event plus the Prior Draw Amount with respect to such Draw Event over (ii) the
sum of the Investment Amount with respect to such Draw Event plus the Basket
Usage Amount with respect to such Draw Event shall, to the extent available
and as specified in the applicable Draw Certificate (or, in the absence of
such Draw Certificate, as specified by the Agent), count against the Borrower
Intercompany Debt Basket, the General Debt Basket and/or the Restricted
Borrower Distribution Basket. In the event the aggregate amount then
available under the Borrower Intercompany Debt Basket, the General Debt Basket
and/or the Restricted Borrower Distribution Basket is less than the excess
referred to in the immediately preceding sentence, the Borrower agrees that it
will use its best efforts to obtain, within ten Business Days after notice of
the applicable Draw Event shall have been given to it, a cash capital
contribution from its parent and/or cash proceeds of Subordinated Intercompany
Debt provided by ADT Limited or Wholly Owned Subsidiaries of ADT Limited
(other than Subsidiaries of the Borrower) to the extent permitted by clause
(m) of Section 8.2.2 in an aggregate amount equal to or greater than such
excess. The failure of the Borrower to obtain such amount and provide to the
Agent a certificate executed by its chief financial Authorized Officer
certifying as to its receipt of such amount within such ten day period shall
constitute an Event of Default (regardless of whether the Borrower has used
its best efforts).
SECTION 8.1.4. Syndication. Solely for the benefit of the Agent and
the Lenders on the Closing Date, the Borrower acknowledges its agreements
under the Commitment Letter with respect to the syndication of Scotiabank's
Revolving Loan Commitment, Revolving Loans and Letter of Credit Outstandings,
which agreements are incorporated herein by this reference, including its
agreements to assist Scotiabank in such syndication and to limit (as set forth
in the Commitment Letter) the arrangement of any other syndicated or
multi-bank financing for it or any of its Affiliates (exclusive of the U.K.
Credit Facility (as defined in the ADT Limited Guaranty) currently in
syndication) and the offering, placement or arrangement of any of its or its
Affiliates' debt or equity securities prior to the completion of such
syndication.
SECTION 8.2. Negative Covenants. The Borrower agrees with the Agent
and each Lender that, until the Covenant Termination Date, the Borrower will
perform the obligations set forth in this Section 8.2.
SECTION 8.2.1. Business Activities. The Borrower 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 Businesses and the
businesses identified in Item 8.2.1 ("Permitted Existing Business Activities")
of the Disclosure Schedule, and such activities as may be incidental or
related thereto; provided, however, that the Borrower will not be in default
in the observance of this Section 8.2.1 if, as part of the acquisition of a
Core Business, the Borrower 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) the Borrower 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 prospects of
the Borrower and its Subsidiaries taken as a whole.
SECTION 8.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries 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 the Credit Extensions and
other Obligations;
(b) Indebtedness in respect of the Senior Notes in an
aggregate principal amount not to exceed $250,000,000 at any time
outstanding;
(c) Indebtedness in respect of the Senior Subordinated Notes
in an aggregate principal amount not to exceed $350,000,000 at any time
outstanding;
(d) Indebtedness in respect of the ▇▇▇▇▇ in an aggregate
principal amount equal to $297,373,612.50 plus the amount of original
issue discount accrued thereon through the date such principal amount
is determined, less the portion of such amount represented by ▇▇▇▇▇
which have been exchanged for Common Shares;
(e) Indebtedness in respect of the Senior Note Guarantees to
the extent the guarantor under any such Senior Note Guarantee is
subject to a Guarantee that is in full force and effect with respect to
the Indebtedness referred to in clause (a) above;
(f) (i) Indebtedness existing as of June 30, 1995; provided
that (A) such Indebtedness having a principal amount in excess of
$3,000,000 is identified in Item 8.2.2(f) ("Ongoing Indebtedness") of
the Disclosure Schedule and (B) true and correct copies of any indenture
or agreement governing such Indebtedness having a principal amount in
excess of $10,000,000 have been provided to the Agent and (ii)
Indebtedness of ADT Security Services in respect of the Dividended Note;
(g) Indebtedness of ADT Automotive, ADT Auctions, Inc., ADT
Property Holdings, Inc. and Auction Transport, Inc., each a Delaware
corporation and Wholly Owned Subsidiary of the Borrower, incurred for
cash management purposes in the ordinary course of business in an
aggregate principal amount not to exceed $60,000,000 at any time
outstanding, which Indebtedness shall include the Indebtedness of ADT
Automotive under the facility agreement dated December 1, 1991, between
it and NBD Bank (the National Bank of Detroit);
(h) obligations of the Borrower or any of its Subsidiaries
pursuant to Hedging Arrangements designed to protect the Borrower or
any of its Subsidiaries against fluctuations in interest rates in
respect of Indebtedness of the Borrower or such Subsidiary and not
entered into for purposes of speculation;
(i) obligations of the Borrower or any of its Subsidiaries
pursuant to Hedging Arrangements designed to protect the Borrower 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;
(j) 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 the
Borrower or any of its Subsidiaries);
(k) Indebtedness in respect of Capitalized 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 of the ADT Limited Guaranty, to
the extent a Capitalized Lease Liability (assuming for the purposes of
this clause only that Capex Indebtedness constitutes a Capitalized
Lease Liability) could have been incurred under such Section 4.2.7;
(l) Indebtedness of the Borrower and Subsidiary Guarantors
owing to the Borrower and Subsidiary Guarantors;
(m) Indebtedness of the Borrower and Subsidiary Guarantors
owing to Wholly Owned Subsidiaries of ADT Limited (other than
Indebtedness in respect of the Dividended Note), provided that such
Indebtedness constitutes Subordinated Intercompany Debt or, to the
extent not constituting Subordinated Intercompany Debt, does not exceed
at any time outstanding $20,000,000;
(n) Indebtedness of Subsidiaries of the Borrower (other than
Subsidiary Guarantors) owing to ADT Limited;
(o) Indebtedness of Wholly Owned Subsidiaries of the Borrower
(other than Subsidiary Guarantors) owing to Wholly Owned Subsidiaries
of ADT Limited;
(p) Indebtedness consisting of guarantees, surety or
performance bonds or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(q) Indebtedness in respect of surety bonds and performance
bonds provided in the ordinary course of business;
(r) Indebtedness which refinances Indebtedness permitted by
clauses (b), (c), (d), (e), (f), (g) and (k) 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), (c), (d), (e) or (f), 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, if any, as the Indebtedness being refinanced; and
(s) other Indebtedness of the Borrower 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 clause (q) of Section 4.2.2
of the ADT Limited Guaranty, does not exceed $75,000,000;
provided, however, that (i) no Indebtedness otherwise permitted by clauses (m)
or (s) shall be permitted if, after giving effect to the incurrence thereof,
any Event of Default shall have occurred and be continuing and (ii) upon the
occurrence of a Permitted Auction Business Sale, all Auction Business
Intercompany Debt is paid in full in cash at par.
SECTION 8.2.3. Financial Condition. The Borrower will not permit:
(a) its Stockholders' Equity to be at any time less than
negative $75,000,000; and
(b) its EBITDA, as of any date, for the four consecutive
Fiscal Quarters ending on the last day of the Fiscal Quarter most
recently ended on or prior to such date to be less than $300,000,000.
SECTION 8.2.4. Any Action. The Borrower 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 any Obligor fully and
properly to perform and observe all of its obligations under any Loan Document
to which it is a party.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 9.1 shall constitute an "Event
of Default".
SECTION 9.1.1. Non-Payment of Obligations. The Borrower shall (a)
default in the payment or prepayment when due of any principal of any Loan,
(b) default in the payment when due of any Reimbursement Obligation, (c)
default in the payment of any amount due pursuant to Section 4.7, (d) default
(and such default shall continue unremedied for a period of three Business
Days) in the payment when due of any interest on any Competitive Bid Loan, (e)
default (and such default shall continue unremedied for a period of three
Business Days) in the payment when due of any interest on any Revolving Loan
or (f) default (and such default shall continue unremedied for a period of
three Business Days) in the payment when due of any fee or of any other
Obligation payable hereunder or under any other Loan Document.
SECTION 9.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in
any other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any other Obligor to the Agent,
any Issuer or any Lender for the purposes of or in connection with this
Agreement or any such other Loan Document (including any certificates
delivered pursuant to Article VI) is or shall be incorrect when made in any
material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations.
(a) The Borrower shall default in the due performance and observance of any
of its obligations under Sections 8.2.2 and 8.2.3 or, with respect to the
Borrower, clause (a) of Section 8.1.2.
(b) ADT Limited shall default in the due performance and observance of
any of its obligations under Section 4.2 (other than Sections 4.2.1 and
4.2.20) or Sections 4.1.6 or 4.1.7 or, with respect to the Borrower and ADT
Limited, clause (a) of Section 4.1.1 of the ADT Limited Guaranty.
(c) The Borrower shall default in the due performance and observance
of any of its obligations under Section 8.2.1 or Section 8.1.1 (other than
clauses (c), (f) and (j) of Section 8.1.1), and such default shall continue
unremedied for a period of five Business Days.
(d) ADT Limited shall default in the due performance and observance of
any of its obligations under Section 4.2.1 of the ADT Limited Guaranty, and
such default shall continue unremedied for a period of five Business Days.
(e) The Borrower shall default in the due performance of any of its
obligations under Section 8.1.3 within the time periods set forth therein.
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan
Document executed by it, and such default shall continue unremedied for a
period of 30 days after notice thereof shall have been given to the Borrower
by the Agent or any Lender.
SECTION 9.1.5. Default on Other Indebtedness. A default shall occur
(a) in the payment when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 9.1.1) of the Borrower, ADT Limited or any other
Subsidiary of ADT Limited having a principal amount, individually or in the
aggregate, in excess of $15,000,000, or (b) in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause such Indebtedness to become due and payable prior
to its expressed maturity.
SECTION 9.1.6. Judgments. Any judgment or order for the payment of
money in excess of $15,000,000 shall be rendered against the Borrower, ADT
Limited or any other Subsidiary of ADT Limited and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $15,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 9.1.8. Change in Control. Any Change in Control shall occur.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. The Borrower or any other
Material Related Party shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, or permit any
other Subsidiary of the Borrower or ADT Limited to apply for, the
appointment of a trustee, administrator, receiver, sequestrator or
other custodian for the Borrower or any other Material Related Party or
any property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
administrator, receiver, sequestrator or other custodian for the
Borrower or any other Material Related Party or for a substantial part
of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days,
provided that the Borrower hereby expressly authorizes the Agent and
each Lender to appear in any court conducting any relevant proceeding
during such 60 day period to preserve, protect and defend their rights
under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement, administration,
receivership or other case or proceeding under any bankruptcy or
insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Borrower or any other Material Related
Party, and, if any such case or proceeding is not commenced by the
Borrower, ADT Limited or any other Subsidiary of ADT Limited, such case
or proceeding shall be consented to or acquiesced in by the Borrower or
such other Material Related Party or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that
the Borrower hereby expressly authorizes the Agent and each Lender to
appear in any court conducting any such case or proceeding during such
60-day period to preserve, protect and defend their rights under the
Loan Documents; or
(e) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
SECTION 9.1.10. Impairment of Loan Documents, etc. (a) Any Loan
Document shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any Obligor party thereto, except pursuant to a
transaction permitted under Section 4.2.9 of the ADT Limited Guaranty
(provided that, if, as a result of such transaction, any such Obligor shall
cease to exist, such obligation of such Obligor is expressly assumed by the
other Person party to such transaction) or a sale or transfer of the Capital
Stock of any such Obligor permitted under clause (c)(ii) of Section 4.2.10 of
the ADT Limited Guaranty or pursuant to a Permitted Auction Business Sale; or
the Borrower, any such Obligor or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding nature
or enforceability.
(b) The subordination provisions contained in, or relating to, the
Senior Subordinated Note Indenture, the ▇▇▇▇▇ Indenture or the Dividended Note
shall (except in accordance with their respective terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any holder of Senior Subordinated Notes, ▇▇▇▇▇ or
the Dividended Note or of any party to the Senior Subordinated Note Indenture
or the ▇▇▇▇▇ Indenture.
SECTION 9.2. Action if Bankruptcy. If any Event of Default described
in clause (b) or (d) of Section 9.1.9 shall occur with respect to the Borrower
or ADT Limited, the Revolving Loan Commitment (if not theretofore terminated)
shall automatically terminate, the outstanding principal amount of all
outstanding Loans and all other Obligations shall automatically be and become
immediately due and payable and the Borrower shall immediately comply with its
obligations under Section 4.7, in each case without notice or demand.
SECTION 9.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default with respect to the Borrower or ADT
Limited described in clause (b) or (d) of Section 9.1.9) shall occur for any
reason, whether voluntary or involuntary, and be continuing, the Agent, upon
the direction of the Required Lenders, shall by notice to the Borrower declare
all or any portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable, terminate the Revolving Loan Commitment (if
not theretofore terminated) and/or demand immediate compliance of the Borrower
with its obligations under Section 4.7, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice,
demand or presentment, the Revolving Loan Commitment shall terminate and/or,
as the case may be, the Borrower shall be obligated to comply immediately with
its obligations under Section 4.7.
ARTICLE X
THE AGENT
SECTION 10.1. Actions. Each Lender hereby appoints Scotiabank as its
agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Agent (and the Agent hereby agrees that it will comply,
except as otherwise provided in this Section or as otherwise advised by
independent counsel of nationally recognized standing, with such written
instructions), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto.
Each Lender hereby indemnifies the Agent and each Issuer (which indemnities
shall survive any termination of this Agreement and shall be pro rata
according to such Lender's Percentage), from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any
kind or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, the Agent or any Issuer in any way relating to or arising
out of this Agreement, the Notes and any other Loan Document, including
reasonable attorneys' fees, and as to which the Agent is not reimbursed by the
Borrower; provided, however, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, claims,
costs or expenses which are determined by a court of competent jurisdiction to
have resulted from the Agent's gross negligence or wilful misconduct. The
Agent shall not be required to take any action hereunder, under the Notes or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of the Agent shall
be or become, in the Agent's determination, inadequate, the Agent may call for
additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.
SECTION 10.2. Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by 5:00 p.m., New York City time,
on the day prior to a Borrowing by any Lender that is to participate in such
Borrowing that such Lender will not make available the amount which would
constitute its portion of such Borrowing on the date specified therefor, the
Agent may assume that such Lender has made such amount available to the Agent
and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have
made such amount available to the Agent, such Lender and the Borrower
severally agree to repay the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the Agent
made such amount available to the Borrower to the date such amount is repaid
to the Agent, at, in the case of the Borrower, the interest rate applicable at
the time to Loans comprising such Borrowing, and, in the case of such Lender,
the Federal Funds Effective Rate.
SECTION 10.3. Exculpation. None of the Agent, the Issuers or any of
their respective directors, officers, employees or agents shall be liable to
any Lender for any action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its own wilful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any other Loan
Document, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other
Loan Document. Any such inquiry which may be made by the Agent or an Issuer
shall not obligate the Agent or such Issuer, as the case may be, to make any
further inquiry or to take any action. The Agent and each Issuer shall be
entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which the Agent or such
Issuer believes to be genuine and to have been presented by a proper Person.
SECTION 10.4. Successor. The Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If the
Agent at any time shall resign, (i) the Required Lenders may appoint another
Lender as successor Agent which shall thereupon become the Agent hereunder and
(ii) if no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be one of the
Lenders or a commercial banking institution organized under the laws of the
U.S. (or any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$500,000,000; provided that if any such successor Agent is organized under the
laws of any jurisdiction other than the United States or any state thereof or
is beneficially owned or controlled by a person so organized, such successor
Agent shall execute such documents and instruments, if any, as may be required
by the United States Department of Defense. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as the Agent, the provisions of
(a) this Article X shall inure to such retiring Agent's
benefit as to any actions taken or omitted to be taken by it while it
was the Agent under this Agreement; and
(b) Section 11.3 and Section 11.4 shall continue to inure to
such retiring Agent's benefit.
SECTION 10.5. Loans or Letters of Credit Issued by Scotiabank.
Scotiabank has the same rights and powers with respect to (x) the Loans made
by it or any of its Affiliates, (y) the Notes held by it or any of its
Affiliates, and (z) its participating interests in the Letters of Credit as
any other Lender and may exercise the same as if it were not the Agent.
Scotiabank and each of Scotiabank's Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower or
any Subsidiary or Affiliate of the Borrower as if Scotiabank were not the
Agent hereunder.
SECTION 10.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Revolving Loan Commitment. Each Lender also acknowledges that it will,
independently of the Agent and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under
this Agreement or any other Loan Document.
SECTION 10.7. Copies, etc. The Agent shall give prompt notice to each
Lender of each notice or request required or permitted to be given to the
Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). The Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by the Agent from the Borrower
for distribution to the Lenders by the Agent in accordance with the terms of
this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. (a) The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing
and consented to by the Borrower and the Required Lenders; provided, however,
that no such amendment, modification or waiver shall:
(i) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Required Lenders, modify this
Section 11.1(a) or change the definition of "Required Lenders", or
release ADT Limited from its guarantee of the Obligations of the
Borrower under Section 2.1 of the ADT Limited Guaranty, unless consented
to by each Lender;
(ii) increase any Revolving Loan Commitment Amount with respect
to such Lender or the Percentage of any Lender, reduce any fees (or
extend any payment date therefor) described in Article III payable to
any Lender or extend the Revolving Loan Commitment Termination Date with
respect to any Lender, without the consent of such Lender;
(iii) extend the due date for, or reduce the amount of, any
scheduled repayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan), without the
consent of the holder of the Note evidencing such Loan;
(iv) affect adversely the interests, rights or obligations of
any Issuer qua Issuer, without the consent of such Issuer; or
(v) affect adversely the interests, rights or obligations of the
Agent qua Agent, without the consent of the Agent.
(b) No failure or delay on the part of the Agent, any Lender or the
holder of any Note in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
notice to or demand on the Borrower in any case shall entitle it to any notice
or demand in similar or other circumstances. No waiver or approval by the
Agent, any Lender or the holder of any Note under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 11.2. Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be
in writing or by facsimile and addressed, delivered or transmitted to such
party at its address or facsimile number set forth below its signature hereto
or set forth in the Lender Assignment Agreement or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. 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 (it being understood and agreed that notice
transmitted by facsimile to ADT Inc. shall constitute notice to the Borrower
hereunder).
SECTION 11.3. Payment of Costs and Expenses. The Borrower agrees to
pay on demand all reasonable out-of-pocket expenses of the Agent (including
the fees and out-of-pocket expenses of counsel to the Agent (and of local
counsel, if any, who may be retained by such counsel)) in connection with
(a) the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated, and
(b) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other similar taxes which may be
payable in connection with the execution or delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes, the issuance of the Letters
of Credit, or any other Loan Documents. The Borrower also agrees to reimburse
the Agent and each Lender upon demand for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses) incurred by the Agent
or such Lender in connection with (x) the negotiation of any restructuring or
"work-out", whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Revolving
Loan Commitments, the Borrower hereby indemnifies, exonerates and holds the
Agent, each Issuer and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to
the action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or the use
of any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to Article VI not to make
any Credit Extension);
(c) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the Release by the Borrower or
any of its Subsidiaries of any Hazardous Material; or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any Subsidiary
thereof of any Hazardous Material (including any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under
any Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct and provided that an Indemnified Party
will not effect any settlement in connection with any such Indemnified
Liabilities without the prior written consent of the Borrower, which consent
shall not be unreasonably withheld or delayed. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
SECTION 11.5. Survival. The obligations of the Borrower under
Sections 4.9, 5.3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the obligations of the
Lenders under Section 10.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Revolving Loan Commitments. The representations and warranties made by each
Obligor in this Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower and each
Lender (or notice thereof satisfactory to the Agent) shall have been received
by the Agent.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement, the Notes, the other Loan Documents and the agreements referred to
in Sections 3.3.3, 3.3.4, 3.3.5 and 11.11.1 constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 11.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent
and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans
and Revolving Loan Commitment to one or more other Persons in accordance with
this Section 11.11.
SECTION 11.11.1. Assignments. Any Lender,
(a) with the written consents of the Borrower, the Agent and
each Issuer (which consents shall not be unreasonably delayed or
withheld) may at any time assign and delegate to one or more commercial
banks or other financial institutions (provided that such consents shall
not, except to the extent provided in the Commitment Letter, be
required in connection with any syndication by Scotiabank of its
Revolving Loan Commitment, Revolving Loans and Letter of Credit
Outstandings in accordance with the provisions of the Commitment
Letter), and
(b) with notice to the Borrower and the Agent, but without
the consent of the Borrower or the Agent, may assign and delegate to
any of its branches, agencies or Affiliates (provided a majority of the
Capital Stock of such Affiliate is held directly or indirectly by such
Lender or such Lender's holding company) or to any other Lender
(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), (x) all or any fraction of such Lender's
Competitive Bid Loans and/or (y) all or any proportionate fraction of such
Lender's Revolving Loans, Letter of Credit Outstandings and Revolving Loan
Commitment, in each case, in a minimum aggregate amount equal to the lesser of
$5,000,000 and all of its (x) Competitive Bid Loans or (y) Revolving Loans,
Letter of Credit Outstandings and Revolving Loan Commitment, as the case may
be; provided, however, that any such Assignee Lender will comply, if
applicable, with the provisions contained in the second sentence of the last
paragraph of Section 5.6; provided further, however, that, the Borrower, each
other Obligor and the Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until
(i) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower
and the Agent by such Lender and such Assignee Lender,
(ii) such Assignee Lender shall have executed and delivered to
the Borrower and the Agent a Lender Assignment Agreement, accepted by
the Agent, and
(iii) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents;
provided, that no Assignee Lender or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 5.3, 5.5 or 5.6
than such Lender would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or at a time when the circumstances giving rise to such
greater payment did not exist, and (y) the assignor Lender, to the extent that
rights and obligations hereunder have been assigned and delegated by it in
connection with such Lender Assignment Agreement, shall be released from its
obligations hereunder and under the other Loan Documents. Within five
Business Days after its receipt of notice that the Agent has received an
executed Lender Assignment Agreement, the Borrower shall execute and deliver
to the Agent (for delivery to the relevant Assignee Lender) new Notes
evidencing such Assignee Lender's assigned Loans and Revolving Loan Commitment
and, if the assignor Lender has retained Loans and any Revolving Loan
Commitment hereunder, replacement Notes in the principal amount of the Loans
and such Revolving Loan Commitment retained by the assignor Lender hereunder
(such Notes to be in exchange for, but not in payment of, those Notes then
held by such assignor Lender). Each such Note shall be dated the date of the
predecessor Notes. The assignor Lender shall ▇▇▇▇ the predecessor Notes
"exchanged" and deliver them to the Borrower. Accrued interest on that part
of the predecessor Notes evidenced by the new Notes, and accrued fees, shall
be paid as provided in the Lender Assignment Agreement. Accrued interest on
that part of the predecessor Notes evidenced by the replacement Notes shall
be paid to the assignor Lender. Accrued interest and accrued fees shall be
paid at the same time or times provided in the predecessor Notes and in this
Agreement. Such assignor Lender or such Assignee Lender must also pay a
processing fee to the Agent upon delivery of any Lender Assignment Agreement
in the amount of $3,000. Any attempted assignment and delegation not made in
accordance with this Section 11.11.1 shall be null and void. Notwithstanding
any provision contained in this Section 11.11.1 to the contrary, nothing shall
prevent or prohibit any Lender from pledging its rights under this Agreement
and/or its Loans and/or Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank; provided that
no such pledge by any Lender shall relieve such Lender of any of its
obligations hereunder.
SECTION 11.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each of such commercial banks
and other Persons being herein called a "Participant") participating interests
(or a sub-participating interest, in the case of a Lender's participating
interest in a Letter of Credit) in any of the Loans, Revolving Loan Commitment,
or other interests of such Lender hereunder; provided, however, that
(a) no participation or sub-participation contemplated in this
Section 11.11 shall relieve such Lender from its Revolving Loan
Commitment or its other obligations hereunder or under any other Loan
Document,
(b) such Lender shall remain solely responsible for the
performance of its Revolving Loan Commitment and such other obligations,
(c) the Borrower and each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each
of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (ii) or (iii)
of Section 11.1(a), and
(e) the Borrower shall not be required to pay any amount under
Section 5.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that, to the extent permitted under
applicable law, each Participant, for purposes of Sections 5.3, 5.4, 5.5, 5.6,
5.8, 11.3 and 11.4, shall be considered a Lender; provided, that no
Participant shall be entitled to receive any greater payment under Section
5.3, 5.5 or 5.6 than the Lender that transferred such rights to such
Participant would have been entitled to receive with respect to such rights,
unless such transfer is made with the Borrower's prior written consent or at a
time when the circumstances giving rise to such greater payment did not exist.
SECTION 11.12. Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender or Issuer from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any
other Person.
SECTION 11.13. Independence of Covenants. All covenants contained in
this Agreement or any other Loan 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 a
Default or an Event of Default if such action is taken or such condition
exists.
SECTION 11.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY
BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE
BORROWER HEREBY IRREVOCABLY APPOINTS ▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT ▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ (ATTENTION: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇), AS ITS AGENT TO
RECEIVE, ON THE BORROWER'S BEHALF AND ON BEHALF OF ITS PROPERTY, SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR
DELIVERING A COPY OF SUCH PROCESS TO THE BORROWER IN CARE OF THE PROCESS AGENT
AT THE PROCESS AGENT'S ABOVE ADDRESS, AND THE BORROWER HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, THE BORROWER ALSO IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWER HEREBY AGREES
THAT IN THE EVENT THE PROCESS AGENT IS NO LONGER RESIDENT IN NEW YORK, NEW
YORK, IT SHALL APPOINT A SUCCESSOR PROCESS AGENT RESIDENT IN NEW YORK, NEW
YORK, REASONABLY ACCEPTABLE TO THE AGENT, WHICH SUCCESSOR PROCESS AGENT SHALL
THEREAFTER BE THE PROCESS AGENT HEREUNDER. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES
TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.15. Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
ADT OPERATIONS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇
----------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
ADT Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
AGENT
THE BANK OF NOVA SCOTIA, as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Relationship Manager
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
LETTER OF CREDIT ISSUER
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Relationship Manager
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
PERCENTAGE LENDERS
100% THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Relationship Manager
Domestic,
LIBOR
and
Notice
Office: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
----
100% ▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE II
to the Credit Agreement
SUBORDINATION PROVISIONS TO BE CONTAINED IN
SUBORDINATED INTERCOMPANY DEBT
The following provisions and conditions shall be made a part of
each instrument evidencing or pursuant to which Subordinated Intercompany Debt
may be incurred by any Person (a "Debtor") to another Person (a "Creditor")
in accordance with the Bank Credit Agreement referred to below.
1. DEFINED TERMS.
"ADT Limited Guaranty" means the ADT Limited Guaranty referred to
in the Bank Credit Agreement.
"Bank Credit Agreement" means, collectively, the Credit Agreement
dated as of January 9, 1997, among ADT Operations, Inc., a Delaware
corporation, the financial institutions as are or may become parties thereto
(collectively, the "Lenders"), and The Bank of Nova Scotia, as agent (the
"Agent") for the Lenders, together with any related documents (including,
without limitation, any guarantees) as in effect on the date hereof and as such
agreement (and such related documents) may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time, including any
agreement extending the maturity of or refinancing or refunding all or any
portion of the Indebtedness or increasing the amount to be borrowed under such
agreement or any successor agreement, whether or not by or among the same
parties.
"Senior Indebtedness" means the principal of (and premium, if any,
on) and interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law, whether or not
allowable as a claim in such proceeding) and other amounts due on or in
connection with, any indebtedness or other obligation of any nature of the
Debtor, whether outstanding on the date hereof or hereafter created, incurred
or assumed, under or with respect to (i) the Bank Credit Agreement (ii) the
ADT Limited Guaranty, (iii) the Subsidiary Guarantor Guaranty, (iv) the Senior
Note Indenture and the Senior Subordinated Note Indenture and (v) any interest
rate or foreign exchange agreement now existing or hereafter entered into by
the Debtor with any Lender (or any Affiliate of a Lender), including in each
case, without limitation, all fees, expenses (including fees and expenses of
counsel), claims, charges and indemnity obligations.
"Senior Note Indenture" means the Senior Note Indenture referred
to in the Bank Credit Agreement.
"Senior Subordinated Note Indenture" means the Senior Subordinated
Note Indenture referred to in the Bank Credit Agreement.
"Subsidiary Guarantor Guaranty" means the Subsidiary Guarantor
Guaranty referred to in the Bank Credit Agreement.
2. SUBORDINATION PROVISIONS.
(a) No principal payment shall be made or scheduled to be
made on or with respect to any Subordinated Intercompany Debt until
the later of the scheduled repayment of all Senior Indebtedness or
the actual payment in full in cash of all such Senior Indebtedness.
(b) Each Debtor and each Creditor agrees that all payments
by any Debtor of Subordinated Intercompany Debt to any Creditor
shall be subordinate and subject in right of payment to the prior
payment in full in cash of all Senior Indebtedness.
(c) The provisions contained herein shall constitute a
continuing offer to all Persons who are or become holders of
Senior Indebtedness or any document or instrument evidencing
Senior Indebtedness (regardless of whether such Senior
Indebtedness was created or acquired after the date hereof). The
subordination provisions contained herein are made for the benefit
of all present and future holders of Senior Indebtedness and shall
be enforceable by each of them directly.
3. PRIORITY AND PAYMENT OVER IN CERTAIN EVENTS.
(a) Subordination On Dissolution, Liquidation or
Reorganization of any Debtor. Upon any payment or distribution of
assets or securities of any Debtor of any kind or character
(whether in cash, property or securities) upon any dissolution,
winding up or total or partial liquidation or reorganization of
such Debtor, whether voluntary or involuntary or in a bankruptcy,
insolvency, receivership or other proceeding, or any assignment
for the benefit of creditors or any marshalling of assets and
liabilities of any Debtor (each such event, an "Insolvency
Event"), all Senior Indebtedness shall first be paid in full in
cash, before any Creditor shall be entitled to receive, directly or
indirectly, any payment of the principal of, premium, if any, or
interest on or any other amount due with respect to any
Subordinated Intercompany Debt or to receive any distribution of
any assets or securities. Before any payment of the principal of,
premium, if any, or interest on or any other amount due with
respect to any Subordinated Intercompany Debt upon any such
Insolvency Event, any payment or distribution of assets or
securities of such Debtor of any kind or character (whether in
cash, property or securities) to which any Creditor would be
entitled but for the subordination provisions hereof, shall be
made by such Debtor or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution directly to the holders of Senior Indebtedness or
their representatives to the extent necessary to pay the Senior
Indebtedness in full in cash after giving effect to any concurrent
payment or distribution to the holders thereof.
(b) Subordination on Default in Senior Indebtedness. If
there exists any default under the documents and instruments
evidencing any Senior Indebtedness, (i) no direct or indirect
payment by or on behalf of any Debtor of any Subordinated
Intercompany Debt or any other amount due with respect to such
Subordinated Intercompany Debt shall be made and (ii) no Creditor
will accelerate or declare in default any Subordinated
Intercompany Debt or exercise any remedies with respect thereto,
unless otherwise agreed to by the requisite holders of such Senior
Indebtedness pursuant to the terms of the documents and
instruments evidencing such Senior Indebtedness.
(c) Payment After Acceleration. In the event that any
Senior Indebtedness (or any part thereof) is declared due and
payable before its stated maturity or is not paid at its stated
maturity, then and in such event the holders of Senior
Indebtedness at the time such Senior Indebtedness so becomes due
and payable shall be entitled to receive payment in full in cash
of all amounts due or to become due on or in respect of all such
Senior Indebtedness before any Creditor is entitled to receive any
payment in respect of any Subordinated Intercompany Debt.
(d) Rights and Obligations of the Creditors. If,
notwithstanding the foregoing provisions of this Section 3
prohibiting such payment or distribution, any Creditor shall have
received any payment on account of any Subordinated Intercompany
Debt at a time when such payment is prohibited by the
subordination provisions contained herein and before all Senior
Indebtedness is paid in full in cash, then such payment or
distribution shall be received and held in trust for the holders
of Senior Indebtedness and shall be paid over or delivered to such
holders remaining unpaid to the extent necessary to pay in full
all Senior Indebtedness in cash, in accordance with their terms
after giving effect to any concurrent payment or distribution to
the holders of Senior Indebtedness.
4. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS IN AN INSOLVENCY
EVENT. If the Senior Indebtedness has not been paid in full in cash at a time
at which the Debtor is subject to an Insolvency Event, (a) the holders of
Senior Indebtedness are hereby irrevocably authorized, but shall have no
obligation, to demand, ▇▇▇ for, collect and receive every payment or
distribution received in respect of any such Insolvency Event and give
acquittance therefor and to file claims and proofs of claim, as their interests
may appear, and (b) the appropriate Creditor shall duly and promptly take, for
the account of the holders of Senior Indebtedness as their interests may
appear, such actions as such holders may request to collect and receive all
amounts payable by such Debtor, as the case may be, in respect of any
Subordinated Intercompany Debt and to file appropriate claims or proofs of
claim in respect of any Subordinated Intercompany Debt.
5. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT TO BE IMPAIRED.
No right of any holder of Senior Indebtedness to enforce subordination as
herein provided shall at any time or in any way be prejudiced or impaired by
any failure to act by any other such holder or by any noncompliance by the
Debtor with the terms and provisions and covenants contained in any document
or instrument evidencing Senior Indebtedness (or any document related thereto)
to which it is a party regardless of any knowledge thereof a holder of Senior
Indebtedness may have or otherwise be charged with. The provisions contained
herein are intended to be for the benefit of, and shall be enforceable
directly by, each holder of Senior Indebtedness.
6. SUBROGATION. (a) Each Creditor hereby agrees that it will
not exercise any rights of subrogation until the payment in full in cash of all
Senior Indebtedness.
(b) Payments or distributions made to the holders of Senior
Indebtedness pursuant to the terms hereof shall not, as against third parties,
be construed as a discharge of the indebtedness represented by any Subordinated
Intercompany Debt.
7. LIMITATION ON OTHER ACTIONS. (a) Each Creditor hereby agrees
to forbear and not take any action, the purpose or effect of which would give
it a preference or priority over the Senior Indebtedness or the holders
thereof with respect to the assets of the Debtor.
(b) Without limiting the effect of Section 3(b), each Creditor
hereby agrees to forebear and not accelerate or declare in default any
Subordinated Intercompany Debt or exercise any remedies with respect thereto
without giving the applicable representatives of the holders of Senior
Indebtedness (which, in the case of the Bank Credit Agreement, shall be the
Agent) 45 days prior written notice.
EXHIBIT A
REVOLVING NOTE
New York, New York
$___ ____ 19__
FOR VALUE RECEIVED, the undersigned, ADT OPERATIONS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
____________________ (the "Lender") on _________, 19__ the principal sum of
_________________ DOLLARS ($ ________) or, if less, the aggregate unpaid
principal amount of all Revolving Loans shown on the schedule attached hereto
(and any continuation thereof) made by the Lender pursuant to that certain
Credit Agreement, dated as of January __, 1997 (together with all amendments
and other modifications, if any, from time to time thereafter made thereto,
the "Credit Agreement"), among the Borrower, the financial institutions as are
or may become parties thereto (collectively, the "Lenders"), and The Bank of
Nova Scotia ("Scotiabank"), individually and as agent (the "Agent") for the
Lenders.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of the
United States of America in same day or immediately available funds to the
account designated by the Agent pursuant to the Credit Agreement.
This Note is one of the Revolving Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a statement of the terms and conditions on which the Borrower is permitted
and required to make prepayments and repayments of principal of the
Indebtedness evidenced by this Note and on which such Indebtedness may be
declared to be immediately due and payable. Unless otherwise defined, terms
used herein have the meanings provided in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally waive
presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
ADT OPERATIONS, INC.
By
-------------------
Title:
REVOLVING LOANS AND PRINCIPAL PAYMENTS
Amount of Revolving Interest Amount of Principal Unpaid Principal
Loan Made Period Repaid Balance Notation
Date Interest Total Made By
---- ----------------------- Period ----------------------- --------------------- ----- --------
Alternate (If Ap- Alternate Alternate
Base LIBO plic- Base LIBO Base LIBO
Rate Rate able) Rate Rate Rate Rate
---- ---- ---- ---- ---- ---- ----
EXHIBIT B
COMPETITIVE BID LOAN NOTE
$______________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, ADT OPERATIONS, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of ____________________________ (the "Lender") at the office of The
Bank of Nova Scotia located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
in lawful money of the United States of America and in immediately
available funds, the aggregate unpaid principal amount of each Competitive
Bid Loan which is made by the Lender to the Borrower pursuant to Section
2.3 of the Credit Agreement, as hereinafter defined. The principal amount
of each Competitive Bid Loan evidenced hereby shall be payable on the
Competitive Bid Loan Maturity Date therefor. The Borrower further agrees
to pay interest in like money at such office on the unpaid principal amount
of each Competitive Bid Loan evidenced hereby, at the Competitive Bid Rate
with respect thereto from the borrowing date of such Competitive Bid Loan
until the due date thereof (whether at the stated maturity, by acceleration
or otherwise) and thereafter at the rates determined in accordance with
Section 3.2.2 of the Credit Agreement. Interest on each Competitive Bid
Loan evidenced hereby shall be payable on any applicable Competitive Bid
Loan Interest Payment Dates and on the Competitive Bid Loan Maturity Date.
Except as otherwise provided in Section 3.1.1.2 of the Credit Agreement,
Competitive Bid Loans evidenced by this Note may not be prepaid without the
written consent of the Lender.
The holder of this Note is authorized to endorse on the schedule attached
hereto and made a part hereof or on a continuation of such schedule which
shall be attached hereto and made a part hereof (the "Grid") the date of the
Competitive Bid Loan Borrowing, amount, Competitive Bid Rate, Competitive Bid
Loan Interest Payment Dates and Competitive Bid Loan Maturity Date in respect
of each Competitive Bid Loan made by such holder pursuant to Section 2.3 of
the Credit Agreement and each payment of principal with respect thereto. Each
such endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement shall not
affect the obligations of the Borrower in respect of such Competitive Bid Loan.
This Note is one of the Competitive Bid Loan Notes referred to in the
Credit Agreement dated as of January __, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the various other financial institutions as are or
may become parties thereto (together with the Lender, the "Lenders"), and
The Bank of Nova Scotia ("Scotiabank"), individually and as agent (the
"Agent") for the Lenders, to which reference is made for a statement of the
terms and conditions on which the Borrower is permitted or required to make
prepayments and repayments of principal of the Indebtedness evidenced by
this Note and on which such Indebtedness may be declared to be immediately
due and payable.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
ADT OPERATIONS, INC.
By
----------------------
Title:
SCHEDULE OF COMPETITIVE BID LOANS
___________________, Lender
ADT OPERATIONS, INC., Borrower
Credit Agreement dated January __, 1997
Date of
Competitive Competitive
Bid Amount of Bid Loan Competitive Competitive
Loan Competitive Competitive Interest Bid Loan Bid Loan
Borrowing Bid Loan Bid Rate Payment Dates Maturity Date Payment Date Authorization
EXHIBIT C-1
REVOLVING LOAN BORROWING REQUEST
The Bank of Nova Scotia,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ______________
ADT Operations, Inc.
--------------------
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.2 of the
Credit Agreement, dated as of January __, 1997 (together with all amendments
and other modifications, if any, from time to time made thereto, the "Credit
Agreement"), among ADT Operations, Inc., a Delaware corporation (the
"Borrower"), the financial institutions as are or may become parties thereto
(collectively, the "Lenders"), and The Bank of Nova Scotia ("Scotiabank"),
individually and as agent (the "Agent") for the Lenders. Unless otherwise
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.
The Borrower hereby requests that a Revolving Loan be made in the aggregate
principal amount of $__________ on ________ __, 199_ as a [LIBO Rate Loan
having an Interest Period of [one] [two] [three] [six] [nine] [twelve] months]
[Base Rate Loan].
The Borrower hereby acknowledges that, pursuant to Section 6.2.2 of the Credit
Agreement, each of the delivery of this Borrowing Request and the acceptance
by the Borrower of the proceeds of the Borrowing requested hereby constitute a
representation and warranty by the Borrower that, on the date of such
Borrowing, and before and after giving effect thereto and to the application
of the proceeds therefrom, all statements set forth in clauses (a), (b) and
(c) of Section 6.2.1 are true and correct in all material respects.
The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent. Except to
the extent, if any, that prior to the time of the Borrowing requested hereby
the Agent shall receive written notice to the contrary from the Borrower, each
matter certified to herein shall be deemed once again to be certified as true
and correct at the date of such Borrowing as if then made.
Please wire transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated respectively:
Amount to be Person to be Paid Name, Address, etc.
Transferred Name Account No. of Transferee Lender
------------ ----------------- --------------------
$__________ __________ ___________ ______________________
______________________
Attention:____________
$__________ __________ ___________ ______________________
______________________
Attention:____________
Balance of The Borrower _________ ______________________
such proceeds ______________________
Attention:____________
The Borrower has caused this Borrowing Request to be executed and delivered,
and the certification and warranties contained herein to be made, by its duly
Authorized Officer this ____ day of ___________, 19___.
ADT OPERATIONS, INC.
By
-----------------------------
Title:
EXHIBIT C-2
COMPETITIVE BID LOAN BORROWING REQUEST
_______ __, ▇▇▇____
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
ADT Operations, Inc.
Reference is made to the Credit Agreement, dated
as of January __, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among ADT Operations, Inc., a Delaware
corporation (the "Borrower"), the various financial institutions as are or may
become parties thereto (the "Lenders"), and The Bank of Nova Scotia
("Scotiabank"), individually and as agent (the "Agent") for the Lenders. Terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
This is a Competitive Bid Loan Borrowing Request(1)) pursuant to
Section 2.3.1 of the Credit Agreement requesting Competitive
Bid Loan Offers for the following Competitive Bid Loans:
Loan(1) Loan (2) Loan 3(2)
Aggregate Principal Amount $ $ $
----------- ----------- -----------
Date of Competitive
Bid Loan Borrowing
Competitive Bid Loan
Maturity Date
----------
(1) A Competitive Bid Loan Borrowing Request may be transmitted in
writing, by telecopy, or by telephone, immediately confirmed by
telecopy. In any case, a Competitive Bid Loan Borrowing Request
shall contain the information specified in the second paragraph of
this form.
(2) Include if applicable.
The Borrower hereby acknowledges that, pursuant to Section 6.2.2 of the Credit
Agreement, each of the delivery of this Borrowing Request and the acceptance
by the Borrower of the proceeds of the Borrowing requested hereby constitute a
representation and warranty by the Borrower that, on the date of such
Borrowing, and before and after giving effect thereto and to the application
of the proceeds therefrom, all statements set forth in clauses (a), (b) and
(c) of Section 6.2.1 are true and correct in all material respects.
The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent. Except to
the extent, if any, that prior to the time of the Borrowing requested hereby
the Agent shall receive written notice to the contrary from the Borrower, each
matter certified to herein shall be deemed once again to be certified as true
and correct at the date of such Borrowing as if then made.
Very truly yours,
ADT OPERATIONS, INC.
By
--------------------
Name:
Title:
EXHIBIT D-1
INVITATION FOR BID LOAN OFFERS
[NAME OF LENDER]
_______________________
_______________________
Attention: ____________
Invitation for Bid Loan Offers to ADT Operations, Inc.
Pursuant to Section 2.3.2 of the Credit Agreement, dated as of January
__, 1997 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among ADT Operations, Inc., a Delaware corporation
(the "Borrower"), the various financial institutions as are or may become
parties thereto (the "Lenders"), and The Bank of Nova Scotia
("Scotiabank"), individually and as agent (the "Agent") for the Lenders
(capitalized terms used herein are used as defined in the Credit
Agreement), we are pleased on behalf of the Borrower to invite you to
submit Competitive Bid Loan Offers to the Borrower for the following
proposed Competitive Bid Loan(s):
*1. Date of Proposed Competitive Bid Loan Borrowing:
__________ __, 19__.
2. Principal Amount
$
3. The Competitive Bid Loan Maturity Date
will be __________ __, 199_.
4. The Competitive Bid Loan Interest Payment
Date(s) will be ________ __, 199_.
Such Competitive Bid Loan Offers should offer a LIBO Rate Bid Margin.
(*) Information to be repeated if multiple Competitive Bid Loans have
been requested in a single Competitive Bid Loan Borrowing Request.
PLEASE RESPOND TO THIS INVITATION BY NO LATER THAN 10:00 am (NEW YORK
CITY TIME) ON ____________ __, 199_.
THE BANK OF NOVA SCOTIA, as
Agent
By:____________________________
Title:
EXHIBIT D-2
COMPETITIVE BID LOAN OFFER
________ __, ▇▇▇__
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:__________________
ADT Operations, Inc.
Reference is made to the Credit Agreement, dated as of January __, 1997
(as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among ADT Operations, Inc., a Delaware corporation
(the "Borrower"), the various financial institutions as are or may become
parties thereto (the "Lenders"), and The Bank of Nova Scotia
("Scotiabank"), individually and as agent (the "Agent") for the Lenders.
Terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
In accordance with Section 2.3.3 of the Credit
Agreement, the undersigned Lender offers to make Competitive Bid Loans
thereunder in the following amounts with the following maturity dates:
Date of Competitive Aggregate Maximum Amount: $______
Bid Loan Borrowing:
________ __, 199__
Competitive Bid Loan Maturity Date 1: Maximum Amount: $________
______ __, 199__ $_______ offered at ________*
$_______ offered at ________*
Competitive Bid Loan Maturity Date 2**: Maximum Amount: $________
_______ __, 199__ $_______ offered at ________*
$_______ offered at ________*
Competitive Bid Loan Maturity Date 3**: Maximum Amount: $________
_______ __, 199__ $_______ offered at ________*
$_______ offered at ________*
Very truly yours,
[NAME OF LENDER]
By:__________________
Name:
Title:
Telephone No.:
Telecopy No.:
* Insert the LIBO Rate Bid Maragin
** Include if applicable
EXHIBIT D-3
COMPETITIVE BID LOAN ACCEPTANCE
_________ __, ▇▇▇__
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ________________
ADT Operations, Inc.
Reference is made to the Credit Agreement, dated as of January __, 1997
(as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among ADT Operations, Inc., a Delaware corporation
(the "Borrower"), the various financial institutions as are or may become
parties thereto (the "Lenders"), and The Bank of Nova Scotia
("Scotiabank"), individually and as agent (the "Agent") for the Lenders.
Terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
In accordance with Section 2.3.5 of the Credit Agreement, the
undersigned accepts and confirms the offers by the Lender(s) to make
Competitive Bid Loans to the undersigned on ________, 19__ under Section
2.3 of the Credit Agreement in the (respective) amount(s) set forth on the
attached list of Competitive Bid Loans offered.
Very truly yours,
ADT OPERATIONS, INC.
By:___________________
Name:
Title:
[The Borrower must attach the list of Competitive Bid Loans offered prepared
by the Agent in accordance with Section 2.3.4 with the accepted amount entered
by the Borrower to right of each Competitive Bid Loan offered].
EXHIBIT F
CONTINUATION/CONVERSION NOTICE
The Bank of Nova Scotia,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ______________
ADT Operations, Inc.
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to Section
2.4 of the Credit Agreement, dated as of January __, 1997 (together with all
amendments and other modifications, if any, from time to time made thereto,
the "Credit Agreement"), among ADT Operations, Inc., a Delaware corporation
(the "Borrower"), the financial institutions as are or may become parties
thereto (collectively, the "Lenders"), and The Bank of Nova Scotia
("Scotiabank"), individually and as agent (the "Agent") for the Lenders.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that on _____________________, 19___,
(1) $_________ of the presently outstanding principal amount of the
Revolving Loans,
(2) and all presently being maintained as (1)[Base Rate
Loans] [LIBO Rate Loans with Interest Periods ending on _______ __, 199__],
(3) be (2)[converted into] [continued as],
(4) (3)[LIBO Rate Loans having an Interest Period of [one]
[two] [three] [six] [nine] [twelve] months] [Base Rate Loans].
(1) Insert appropriate interest rate option.
(2) Insert and complete as appropriate.
(3) Complete as appropriate.
(4) Insert only upon conversion of a Base Rate Loan into a LIBO Rate Loan
or continuation of a LIBO Rate Loan.
(5) Insert upon conversion of a Base Rate Loan into a LIBO Rate Loan on a
date other than a Quarterly Payment Date.
(4)[The Borrower hereby:
(a) certifies and warrants that no Event of Default has occurred and is
continuing; and
(b) agrees that if prior to the time of such continuation or conversion
any matter certified to herein by it will not be true and correct at such time
as if then made, it will immediately so notify the Agent.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Agent shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall be deemed
to be certified at the date of such continuation or conversion as if then
made.] (4)[The Borrower agrees to remit to the Agent for the benefit of the
Lenders, on the date of such conversion, an interest payment in the amount
of $________ pursuant to clause (e) of Section 3.2.3 of the Credit
Agreement.]
The Borrower has caused this Continuation/Conversion Notice to be
executed and delivered, and the certification and warraenties contained
herein to be made, by its Authorized Officer this _________ day of
_____________, 19___.
ADT OPERATIONS, INC.
By: ____________________
Title:
EXHIBIT G
LENDER ASSIGNMENT AND ACCEPTANCE AGREEMENT
To: ADT Operations, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To:The Bank of Nova Scotia,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ADT Operations, Inc.
Gentlemen and Ladies:
We refer to the Credit Agreement, dated as of January __, 1997
(together with all amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement"), among ADT
Operations, Inc., a Delaware Corporation (the "Borrower"), the financial
institutions as are or may become parties thereto (collectively, the
"Lenders"), and The Bank of Nova Scotia ("Scotiabank"), individually and as
agent (the "Agent") for the Lenders. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
This Lender Assignment and Acceptance Agreement (this "Agreement") is
delivered to you pursuant to clause (ii) of Section 11.11.1 of the Credit
Agreement and also constitutes notice to each of you, pursuant to clause (i)
of Section 11.11.1 of the Credit Agreement, of the assignment and delegation
to _______________ (the "Assignee") of __% of the Competitive Bid Loans and
__% of the Revolving Loans, Revolving Loan Commitments, and Letter of Credit
Outstandings (collectively, the "Assigned Portion") of _____________ (the
"Assignor") outstanding under the Credit Agreement as of ____________ (the
"Assignment Date"). From and after the Assignment Date, the Assignor's and the
Assignee's Percentages for the purposes of the Credit Agreement and each other
Loan Document are set forth opposite such Person's name on the signature pages
hereof.
The Assignee is entitled to receive all payments on account of interest,
principal and fees with respect to the Assigned Portion made during the period
from and after the Assignment Date.
The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together
with copies of the documents which were required to be delivered under the
Credit Agreement as a condition to the making of the Credit Extensions
thereunder. The Assignee further confirms and agrees that in becoming a
Lender and in making its Commitments and Loans under the Credit Agreement,
such actions have and will be made without recourse to, or representation
or warranty by the Agent.
The Assignor represents and warrants that (a) it is legally authorized to
enter into and deliver this Agreement, (b) this Agreement constitutes its
legal, valid and binding obligation and (c) it is the legal and beneficial
owner of the Assigned Portion, free and clear of any Lien. Except as set forth
in the previous sentence, the Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made pursuant to or in connection with this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto, including
the financial condition of the Borrower or any of its Subsidiaries or the
performance or observance by any Lender of any of its obligations under the
Credit Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto. The Assignee represents and warrants
that (a) it is legally authorized to enter into and deliver this Agreement and
(b) this Agreement constitutes its legal, valid and binding obligation. The
Assignee independently and without reliance upon the Assignor, any other
Lender or the Agent, and based on such documents and information as it deems
appropriate, has made its own credit determination in entering into this
Agreement, and the Assignee shall continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, the other Loan
Documents and the other instruments and documents delivered in connection
therewith. The Assignee hereby appoints and authorizes the Agent to act as
such and exercise all their rights and obligations, in each case pursuant to
and in accordance with the terms of the Credit Agreement and the other Loan
Documents.
Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Agent
(a) the Assignee
(i) shall be deemed automatically to have become a party to the
Credit Agreement, have all the rights and obligations of a "Lender" under
the Credit Agreement and the other Loan Documents as if it were an original
signatory thereto to the extent specified in the second paragraph hereof;
and
(ii) agrees to be bound by the terms and conditions set forth in the
Credit Agreement and the other Loan Documents as if it were an original
signatory thereto; and
(b) the Assignor shall be released from its obligations under the Credit
Agreement and the other Loan Documents to the extent specified in the second
paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor]
[Assignee] will pay to the Agent the $3,000 processing fee referred to in
Section 11.11.1 of the Credit Agreement upon the delivery hereof.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and Commitments and requests the
Agent to acknowledge receipt of this document:
(A) Address for Notices:
Institution Name:
Attention:
Domestic Office:
Telephone:
Facsimile:
LIBOR Office:
Telephone:
Facsimile:
(B) Payment Instructions:
The Assignee agrees to furnish the Internal Revenue Service form
referred to in the last paragraph of Section 5.6 (if so required) of the
Credit Agreement no later than the date of acceptance hereof by the Agent.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same agreement.
Adjusted Percentage [ASSIGNOR]
___%
By_______________________
Title:
Percentage [ASSIGNEE]
___%
By_______________________
Title:
(1)[Consented to this ___ day
of __________, 19__:
ADT OPERATIONS, INC.
By__________________________]
Title:
(2)[Consented to this ___ day
of __________, 19__:
THE BANK OF NOVA SCOTIA,
as Agent
By__________________________]
Title:
[(2)[Consented to this ___ day
of __________, 19__:
________________________,
as Issuer
By__________________________]
Title:]
(1) Include if appropriate.
EXHIBIT H
[Form of Compliance Certificate]
COMPLIANCE CERTIFICATE
ADT Operations, Inc.
ADT Limited
This Compliance Certificate is delivered pursuant to clause (e)
of Section 8.1.1 of the Credit Agreement, dated as of January 9, 1997 (together
with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among ADT Operations, Inc.,
a Delaware corporation (the "Borrower"), the various financial institutions as
are or may become parties thereto (collectively, the "Lenders"), and The Bank
of Nova Scotia, individually and as agent (the "Agent") for the Lenders. The
Guaranty of ADT Limited, dated as of January 9, 1997, is referred to herein as
the "ADT Limited Guaranty". 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 Credit Agreement or the ADT Limited Guaranty.
This Compliance Certificate relates to the _____ Fiscal Quarter
(the "Computation Period"), commencing on ________, _____ and ending on
___________, ____ (such latter date being the "Computation Date"). Each of
the Borrower and ADT Limited hereby certifies, represents and warrants that:
(a) Default.
Except as described below, as of the Computation Date, no Default or
Event of Default has occurred and is continuing.
(b) Stockholders' Equity of the Borrower.
As of the Computation Date, Stockholders' Equity of the Borrower was
$__________. The minimum amount of Stockholders' Equity of the
Borrower required by clause (a) of Section 8.2.3 of the Credit
Agreement as of such date is negative $75,000,000.
(c) Stockholders' Equity of ADT Limited.
As of the Computation Date, 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 Guaranty as
of such date is $__________.
(d) Borrower's EBITDA.
The Borrower's EBITDA for the four Fiscal Quarters ending on the
Computation Date was $__________. The minimum EBITDA of the Borrower
required by clause (b) of Section 8.2.3 of the Credit Agreement for
such period is $300,000,000.
(e) ADT Limited's Cash Flow Coverage Ratio.
ADT Limited's Cash Flow Coverage Ratio for the four Fiscal 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 Guaranty for such
period is 1.5 to 1.0.
(f) ADT Limited's Debt to Total Capitalization Ratio.
As of the Computation Date, ADT Limited's Debt to Total Capitalization
Ratio was ____ to 1.0, as computed on Attachment 2 hereto. The maximum
Debt to Total Capitalization Ratio of ADT Limited permitted by clause
(c) of Section 4.2.4 of the ADT Limited Guaranty as of such date is 0.5
to 1.0.
(g) Business Acquisitions.
The aggregate amount of expenditures of ADT Limited and its
Subsidiaries in respect of Business Acquisitions during the portion of
ADT Limited's Fiscal Year ended on the Computation Date is $__________.
(h) Capitalized Lease Liabilities.
The aggregate amount of Capitalized Lease Liabilities incurred by ADT
Limited and its Subsidiaries during the portion of ADT Limited's Fiscal
Year ended on the Computation Date is $__________. The maximum amount
of Capitalized Lease Liabilities permitted to be incurred under the ADT
Limited Guaranty during this Fiscal Year is $30,000,000.
(i) Distributions.
(i) The sum of (A) the aggregate amount of Restricted Distributions (other
than Restricted Distributions permitted under Section 1012(b)(ii)
of the Senior Note Indenture) declared during the Computation
Period and (B) the aggregate amount of payments, prepayments,
redemptions or repurchases (other than payments, prepayments,
redemptions or repurchases permitted under Section 1012(b)(iv), (v)
and (vi) of the Senior Note Indenture [(which amounted to
$__________ during the Computation Period)](1)), referred to in
Section 4.2.6(c) of the ADT Limited Guaranty that were made during
the Computation Period was $__________. The maximum amount of such
Restricted Distributions and such payments, prepayments,
redemptions or repurchases permitted by such Sections during the
Computation Period is $ , as computed on Attachment 3 hereto (Item
II(F)).
(ii) The aggregate amount of Restricted Borrower Distributions declared
during the Computation Period was $__________. The maximum amount
of Restricted Borrower Distributions permitted under Section
4.2.6(b) of the ADT Limited Guaranty during such period is
$__________.
(j) Equity Proceeds Amount.
As of the Computation Date, the Equity Proceeds Amount was $__________,
as computed on Attachment 4 hereto.
(k) Asset Dispositions, etc.
(i) The net book value of all assets sold or transferred pursuant to
clause (c)(ii) of Section 4.2.10 of the ADT Limited Guaranty (or
clause (c)(ii) of Section 4.2.10 of the ADT Limited Guaranty (as
defined in the Existing Credit Facility)) since the Existing Credit
Facility Effective Date through the Computation Date was
$__________. The maximum aggregate net book value of such assets
that may be sold or transferred since the Existing Credit F acility
Effective Date pursuant to such clause (c)(ii) is $130,000,000.
(ii) As of the Computation Date, the amount of Net Sale Proceeds
received by the Borrower, ADT Limited or any of ADT Limited's other
Subsidiaries in respect of Recapture Asset Dispositions during the
period of 18 months ending on the Computation Date less (A) in the
case of a Recapture Asset Disposition that is a Permitted Auction
Business Sale, the amount of such Net Sale Proceeds used during
such 18 month period to make payments in respect of the Dividended
Note and/or for investments in properties and assets owned by, and
used in the electronic security businesses conducted by, the
Borrower and its Subsidiaries and (B) in the case of each other
Recapture Asset Disposition, the portion thereof invested by the
Borrower, ADT Limited and any of ADT Limited's other Subsidiaries
during such 18 month period in properties and assets which will
replace the properties and assets that were the subject of such
Recapture Asset Disposition or in properties and assets used in the
Core Businesses was $__________.
(1) Include if applicable.
(l) Consolidations, Mergers, etc.
All Permitted Business Acquisitions, Permitted Auction Business Sales
and all liquidations, dissolutions, consolidations, mergers, purchases,
or other types of acquisitions of the types described in Section 4.2.9
of the ADT Limited Guaranty and all acquisitions or creations of
Subsidiaries of ADT Limited which have occurred during the Computation
Period are disclosed in reasonable detail in Attachment 5 hereto.
IN WITNESS WHEREOF, the undersigned have caused this Compliance
Certificate to be delivered by their respective chief financial Authorized
Officers this ___ day of __________, ____.
ADT OPERATIONS, INC.
By:_______________________________
Title:
ADT LIMITED
By:_______________________________
Title:
ATTACHMENT 1
(to__/__/__ Compliance
Certificate)
ADT LIMITED'S CASH FLOW COVERAGE RATIO
for the _____ Fiscal Quarter,
ending on __________,____
(the "Computation Date")
I. ADT Limited's Cash Flow:
------------------------
A. EBITDA (as defined in the Credit Agreement) of ADT
Limited and its Subsidiaries for the period of four consecutive
Fiscal 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
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 Guaranty) 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 Credit Agreement) 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 CAPITALIZATION RATIO
for the ______ Fiscal Quarter,
ending on __________, ____
(the "Computation Date")
ADT Limited's Debt to Total Capitalization Ratio:
-------------------------------------------------
A. As at the Computation Date, the
aggregate amount of Debt (as defined in
its Subsidiaries, determined on a consolidated basis: $_______
B. As at the Computation Date, Stockholders' Equity (as defined
in the Credit Agreement) of ADT Limited $_______
C. TOTAL CAPITALIZATION: The sum of
Items A and B: $_______
D. ADT LIMITED'S DEBT TO TOTAL
CAPITALIZATION RATIO: The ratio of
Item A to Item C: _____ to 1.0
ATTACHMENT 3
(to __/__/__ Compliance
Certificate)
RESTRICTED DISTRIBUTIONS
for the ______ Fiscal Quarter,
ending on __________, ____
(the "Computation Date")
I. Restricted Payment Basket Amount:
---------------------------------
A. 50% of the aggregate Consolidated Adjusted Net Income (as
defined in the Senior Note Indenture) of ADT Limited accrued on
a cumulative basis during the period (taken as one accounting
period) from August 4, 1993 to the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter as to which this
Compliance Certificate is being delivered (or, if such aggregate
cumulative Consolidated Adjusted Net Income shall be a loss,
100% of such loss): $_______
B. The aggregate net cash proceeds received by ADT Limited after
August 4, 1993 from the issuance or sale (other than to a
Restricted Subsidiary (as defined in the Senior Note Indenture))
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): $_______
C. The aggregate net cash proceeds received by ADT Limited after
August 4, 1993 (other than from the Borrower or another
Restricted Subsidiary (as defined in the Senior Note Indenture))
upon the exercise of options, warrants or rights to purchase
shares of Capital Stock of ADT Limited (other than Redeemable
Capital Stock): $_______
D. The aggregate net cash proceeds received by ADT Limited after
August 4, 1993 from the issuance or sale (other than to the
Borrower or another Restricted Subsidiary (as defined in the
Senior Note Indenture)) 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: $_______
E. Subtotal: The sum of Items I(A), (B), (C) and (D), treating the
amount of Item I(A) as a negative number if such amount is in
respect of an aggregate cumulative loss: $_______
F. The aggregate amount of all Restricted Payments (as defined in
the Senior Note Indenture) (other than Restricted Payments
permitted under Section 1012(b)(ii), (iv), (v) and (vi) of the
Senior Note Indenture) declared or paid during the period from
August 4, 1993 to the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter as to which this Compliance
Certificate is being delivered: $_______
G. RESTRICTED PAYMENT BASKET AMOUNT: The excess of
Item I(E) over Item I(F): $_______
II Adjustment to Restricted Payment Basket Amount:
-----------------------------------------------
A. 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 the
Existing Credit Facility Effective Date in excess of the applicable
Annual Limits (or, during the effectiveness of the Existing Credit
Facility, the applicable Annual Limits (as defined under the
Existing Credit Facility)): $_______
B. Aggregate amount of Capital Expenditures made after the
Existing Credit Facility Effective Date and designated in Item
I(D) of Attachment 1 of this Compliance Certificate and each
Compliance Certificate (including any Compliance Certificate (as
defined under the Existing Credit Facility)) delivered since the
Existing Credit Facility Effective Date: $_______
C. The sum of Items II(A) and (B): $_______
D. The portion of Item II(C) which resulted in a decrease of the
Restricted Payment Basket Amount: $_______
E. ADJUSTMENT: The excess of Item II(C) over Item II(D): $_______
F. ADJUSTED RESTRICTED PAYMENT BASKET AMOUNT:
The excess of Item I(G) over Item II(E): $_______
ATTACHMENT 4
(to __/__/__ Compliance
Certificate)
EQUITY PROCEEDS AMOUNT
for the _________ Fiscal Quarter
ending on ____________, ____
(the "Computation Date")
A. The Equity Proceeds Amount as of the last day of the Fiscal
Quarter immediately preceding the Fiscal Quarter as to which this
Compliance Certificate is being delivered: $_______
B. (i) the aggregate net cash proceeds received by ADT
Limited during the Computation Period 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): $_______
(ii) The aggregate net cash proceeds received by ADT
Limited during the Computation Period (other than
from the Borrower 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): $_______
(iii) The aggregate net cash proceeds received by ADT
Limited during the Computation Period from the
issuance or sale (other than to the Borrower 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: $_______
C. The sum of Items A, B(i), (ii), and (iii): $_______
D. The amount of each Restricted Payment (as defined under the
Senior Note Indenture) made after ADT Limited shall have
received cash proceeds of the type referred to in Item B (whether
during or prior to the Computation Period) which, pursuant to the
terms of the Senior Note Indenture, decreases the Restricted
Payment Basket Amount: $_______
E. The greater of (i) zero and (ii) the excess of Item C over Item D: $_______
F. The amount expended during the Computation Period 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 applicable Annual Limit (or,
during the effectiveness of the Existing Credit Facility, the
applicable Annual Limit (as defined under the Existing Credit
Facility)): $_______
G. The amount of Capital Expenditures made during the Computation
Period with the cash proceeds referred to in Item B (whether
received during or prior to the Computation Period) and
designated in Item I(D) of Attachment 1 of this Compliance
Certificate: $_______
H. EQUITY PROCEEDS AMOUNT AS OF THE
COMPUTATION DATE: The excess of (i) Item E over (ii) the
sum of Items F and G: $_______
(2) The Equity Proceeds Amount as of September 30, 1996 to be inserted in
the first Compliance Certificate delivered under the Credit
Agreement.
ATTACHMENT 5
(to __/__/__ Compliance
Certificate)
CONSOLIDATIONS, MERGERS, ETC.
for the _____ Fiscal Quarter,
ending on __________, ____
(the "Computation Date")
EXHIBIT I
GUARANTY,
dated as of January __, 1997,
made by
ADT LIMITED
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.1. Certain Terms...................................... 1
1.2. Credit Agreement Definitions....................... 6
ARTICLE II
GUARANTY PROVISIONS
2.1. Guaranty........................................... 6
2.2. Guaranty Absolute, etc............................. 7
2.3. Stay of Acceleration, Reinstatement, etc........... 8
2.4. Waiver, etc........................................ 9
2.5. Subrogation........................................ 9
2.6. Successors, Transferees and Assigns; Transfers of
Notes, etc......................................... 10
2.7. Payments Free and Clear of Taxes, etc.............. 10
2.8. Judgment........................................... 12
2.9. Consent to Jurisdiction; Waiver of Immunities...... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Organization, etc.................................. 14
3.2. Due Authorization, Non-Contravention, etc.......... 14
3.3. Government Approval, Regulation, etc............... 15
3.4. Validity, etc...................................... 15
3.5. Financial Information.............................. 15
3.6. No Material Adverse Change......................... 15
3.7. Litigation, Labor Controversies, etc............... 15
3.8. Subsidiaries....................................... 16
3.9. Ownership of Properties............................ 16
3.10. Taxes.............................................. 16
3.11. Pension and Welfare Plans.......................... 17
3.12. Environmental Warranties........................... 17
3.13. Regulations G, U and X............................. 19
3.14. No Defaults........................................ 19
3.15. Delivery of Organizational Chart................... 20
3.16. Accuracy of Information............................ 20
3.17. Restricted Payment Basket Amount; Equity Proceeds
Amount............................................. 21
3.18. Restricted Borrower Distributions.................. 21
ARTICLE IV
COVENANTS, ETC.
4.1. Affirmative Covenants.............................. 21
4.1.1. Compliance with Laws, etc.......................... 21
4.1.2. Maintenance of Properties.......................... 22
4.1.3. Insurance.......................................... 22
4.1.4. Books and Records.................................. 22
4.1.5. Environmental Covenant............................. 23
4.1.6. Guaranty Supplements............................... 23
4.1.7. Maintenance of Adequate Guarantees................. 23
4.2. Negative Covenants................................. 24
4.2.1. Business Activities................................ 24
4.2.2. Indebtedness....................................... 24
4.2.3. Liens.............................................. 27
4.2.4. Financial Condition................................ 29
4.2.5. Investments........................................ 30
4.2.6. Restricted Payments, etc........................... 33
4.2.7. Capital Expenditures, etc.......................... 37
4.2.8. [Intentionally Omitted.]........................... 37
4.2.9. Consolidation, Merger, etc......................... 37
4.2.10. Asset Dispositions, etc............................ 39
4.2.11. Modification of Certain Documents.................. 40
4.2.12. Transactions with Affiliates....................... 40
4.2.13. Negative Pledges, Restrictive Agreements, etc...... 41
4.2.14. Accounting Changes................................. 42
4.2.15. Ability to Amend; Restrictive Agreements........... 43
4.2.16. [Intentionally Omitted.]........................... 43
4.2.17. Activities of Certain Subsidiaries................. 43
4.2.18. Ownership of Certain Subsidiaries.................. 44
4.2.19. Certain Intercompany Indebtedness.................. 44
4.2.20. Any Action......................................... 44
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1. Loan Document................................. .... 44
5.2. Binding on Successors, Transferees and Assigns;
Assignment......................................... 44
5.3. Amendments, etc.................................... 45
5.4. Addresses for Notices.............................. 45
5.5. No Waiver; Remedies................................ 45
5.6. Captions........................................... 45
5.7. Setoff............................................. 45
5.8. Independence of Covenants.......................... 46
5.9. Severability....................................... 46
5.10. Governing Law...................................... 46
5.11. Waiver of Jury Trial............................... 47
DISCLOSURE SCHEDULE
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of January __, 1997,
made by ADT LIMITED, a company organized under the laws of Bermuda ("ADT
Limited"), in favor of each of the Lender Parties (as defined below),
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of the date
hereof (together with all amendments and other modifications, if any, from
time to time thereafter made thereto, the "Credit Agreement"), among ADT
Operations, Inc., a Delaware corporation (the "Borrower"), the financial
institutions as are or may become parties thereto (collectively, the
"Lenders"), The Bank of Nova Scotia ("Scotiabank"), individually and as agent
(the "Agent") for the Lenders, the Lenders have extended Commitments to make
Credit Extensions to the Borrower; and
WHEREAS, as a condition precedent to the making of the initial
Credit Extension under the Credit Agreement, ADT Limited is required to execute
and deliver this Guaranty; and
WHEREAS, ADT Limited has duly authorized the execution, delivery
and performance of this Guaranty; and
WHEREAS, it is in the best interests of ADT Limited to execute this
Guaranty inasmuch as ADT Limited will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt
of which is hereby acknowledged, and in order to enable the Borrower to obtain
more favorable interest rates and terms, ADT Limited agrees, for the benefit
of each Lender Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"ADT Limited" is defined in the preamble.
"Agent" is defined in the first recital and includes each other
Person which may be appointed as any successor agent pursuant to the Credit
Agreement.
"Annual Limit" is defined in subclause (a)(i) of the definition of
"Permitted Business Acquisition" in Section 1.1.
"ASH Transaction" means, collectively, (i) the acquisition by ADT
Limited on September 6, 1996 of the entire Capital Stock of ASH pursuant to
a stock-for-stock exchange in which the stockholders of ASH received Common
Shares and (ii) in connection with such acquisition, (A) the repayment of
certain Indebtedness of ASH and its Subsidiaries and (B) the guaranty by ADT
Limited of certain Indebtedness of ASH 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.
"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.
"Credit Agreement" is defined in the first recital.
"Disclosure Schedule" means the Disclosure Schedule attached hereto
as Schedule I, as it may be amended, supplemented or otherwise modified from
time to time by ADT Limited with the written consent of the Agent and the
Required Lenders.
"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
the Borrower 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 the Effective Date from the issuance or sale
(other than to the Borrower 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 the Existing Credit Facility
Effective Date 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 Existing Credit Facility, the
applicable Annual Limits (as defined under the Existing Credit
Facility)), and
(iii) the amount of Capital Expenditures made after the
Existing Credit Facility Effective Date 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 Existing Credit Facility)
delivered in connection with the Fiscal Quarter in which such
Capital Expenditures were paid.
"Existing Credit Facility Effective Date" means August 23, 1995.
"Lender Party" means, as the context may require, any Lender, any
Issuer or the Agent and each of their respective successors, transferees and
assigns.
"Lenders" is defined in the first recital.
"Other Taxes" is defined in clause (b) of Section 2.7.
"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 Fiscal 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 Fiscal Quarter with respect to which, pursuant
to Section 8.1.1(a) or 8.1.1(d) of the Credit Agreement (or Section
8.1.1(d) of the Existing Credit Facility), financial statements
have been, or are required to have been, delivered by the
Borrower, ADT Limited and the Borrower would be in compliance with
Section 4.2.4 as of the last day of such Fiscal Quarter and
Section 8.2.3 of the Credit Agreement as of the last day of such
Fiscal Quarter (or, if such last day of such Fiscal Quarter is
September 30, 1996, Section 8.2.3 of the Existing Credit Facility).
"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 the Borrower 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).
"Process Agent" is defined in clause (a) of Section 2.9.
"Restricted Distribution" is defined in Section 4.2.6(a).
"Restricted Borrower Distribution" is defined in Section 4.2.6(b).
"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).
"Taxes" is defined in clause (a) of Section 2.7.
"U.K. Credit Facility" is defined in clause (d)(ii) of Section
4.2.2.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. ADT Limited hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the
Borrower and each other Obligor now or hereafter existing, whether
for principal, interest, Reimbursement Obligations, fees, expenses
or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a)
of the United States Bankruptcy Code, 11 U.S.C. Section 362(a),
and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. Section 502(b) and Section
506(b)); and
(b) indemnifies and holds harmless each Lender Party and
each holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Lender
Party or such holder, as the case may be, in enforcing any rights
under this Guaranty.
This Guaranty constitutes a guaranty of payment when due and not of
collection, and ADT Limited specifically agrees that it shall not be necessary
or required that any Lender Party or any holder of any Note exercise any
right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower or any other Obligor (or any other Person) before or as a condition
to the obligations of ADT Limited hereunder.
SECTION 2.2. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of the
Borrower and each other Obligor have been paid in full, all obligations of ADT
Limited hereunder shall have been paid in full and all Commitments shall have
terminated. ADT Limited guarantees that the Obligations of the Borrower and
each other Obligor and their respective Subsidiaries will be paid strictly in
accordance with the terms of the Credit Agreement and each other Loan Document
under which they arise, without regard (to the fullest extent permitted under
applicable law) to any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Lender Party
or any holder of any Note with respect thereto (and ADT Limited hereby waives
to the fullest extent it may do so any right or rights it may have under any
such law, regulation or order). Without limiting the generality of the
foregoing, the liability of ADT Limited under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement, any Note, any Letter of
Credit or any other Loan Document (other than this Guaranty) or of
any of the Obligations (other than the Obligations of ADT Limited
hereunder);
(b) the failure of any Lender Party or any holder of any
Note
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or
any other Person (including any other guarantor) under the
provisions of the Credit Agreement, any Note, any Letter of
Credit, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including any other Guarantor) of, or collateral
securing, any Obligations of the Borrower or any other
Obligor;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower or any other Obligor (other than ADT Limited), or any
other extension, compromise or renewal of any Obligation of the
Borrower or any other Obligor (other than ADT Limited);
(d) any reduction, limitation, impairment or termination of
the Obligations of the Borrower or any other Obligor (other than
ADT Limited) for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be
subject to (and ADT Limited hereby waives any right to or claim
of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Obligations of the
Borrower, any other Obligor (other than ADT Limited) or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the
terms of the Credit Agreement, any Note, any Letter of Credit or
any other Loan Document (other than this Guaranty);
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty (or any other Guarantee), held by any Lender Party or any
holder of any Note securing any of the Obligations of the Borrower
or any other Obligor; or
(g) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor, any surety or any other guarantor (or
any other Guarantor).
SECTION 2.3. Stay of Acceleration, Reinstatement, etc. ADT
Limited agrees that, if acceleration of the time for payment of any amount
payable by the Borrower under the Credit Agreement, the Notes or any other
Loan Document or of compliance by the Borrower with its obligations under
Section 4.7 of the Credit Agreement is, in either case, stayed upon the
occurrence with respect to the Borrower of any Event of Default described in
clause (b) or (d) of Section 9.1.9 of the Credit Agreement, all such amounts
and obligations otherwise subject to acceleration or compliance under the terms
of the Credit Agreement shall nonetheless be payable and performed by ADT
Limited hereunder forthwith on demand by the Agent made at the request of the
requisite proportion of the Lenders specified in Section 9.3 of the Credit
Agreement. ADT Limited agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Obligations is rescinded or must otherwise be
restored by any Lender Party or any holder of any Note, upon the insolvency,
bankruptcy or reorganization of the Borrower, any other Obligor (other than
ADT Limited) or otherwise, all as though such payment had not been made.
SECTION 2.4. Waiver, etc. ADT Limited hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of
the Obligations of the Borrower or any other Obligor and this Guaranty and any
requirement that any Agent, any other Lender Party or any holder of any Note
protect, secure, perfect or insure any security interest or Lien, or any
property subject thereto, or exhaust any right or take any action against the
Borrower, any other Obligor or any other Person (including any other guarantor
and any other Guarantor) or entity or any collateral securing the Obligations
of the Borrower or any other Obligor, as the case may be.
SECTION 2.5. Subrogation. ADT Limited hereby agrees that it will
not exercise any rights which it may now or hereafter acquire against the
Borrower or any other Obligor that arise from the existence, payment,
performance or enforcement of ADT Limited's obligations under this Guaranty
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of the Lender Parties against the Borrower or any other Obligor or any
collateral which any Agent now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including the right to take or receive from the Borrower or any other
Obligor, directly or indirectly, in cash or other property or by set-off or
in any manner, payment or security on account of such claim or other rights,
until the Obligations have been paid in full in cash and the Commitments have
been terminated. If any amount shall be paid to ADT Limited in violation of
the preceding sentence and the Obligations shall not have been paid in cash in
full and the Commitments have not been terminated, such amount shall be deemed
to have been paid to ADT Limited for the benefit of, and held in trust for,
the Lender Parties, and shall forthwith be paid to the Lender Parties to be
credited and applied to the Obligations, whether matured or unmatured. ADT
Limited acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
agreement set forth in this Section is knowingly made in contemplation of such
benefits.
SECTION 2.6. Successors, Transferees and Assigns; Transfers of
Notes, etc. This Guaranty 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 Lender Party.
Without limiting the generality of clause (b), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof granted to such Lender
under any Loan Document (including this Guaranty) or otherwise, subject,
however, to the provisions of Section 11.11 and Article X of the Credit
Agreement.
SECTION 2.7. Payments Free and Clear of Taxes, etc. ADT Limited
hereby agrees that:
(a) Any and all payments made by ADT Limited hereunder
shall be made in accordance with Section 5.6 of the Credit
Agreement free and clear of, and without deduction for, any and
all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender Party or any holder of a
Note, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender Party
or such holder, as the case may be, is organized and by any
political subdivision thereof and, in the case of each Lender,
taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Domestic Office or LIBOR Office
and any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If ADT
Limited shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender Party or any
holder of a Note
(i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section) such Lender Party or such holder, as the
case may be, receives an amount equal to the sum it would
have received had no such deductions been made,
(ii) ADT Limited shall make such deductions, and
(iii) ADT Limited shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable law.
(b) ADT Limited shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with
respect to, this Guaranty (hereinafter referred to as "Other
Taxes").
(c) ADT Limited hereby indemnifies and holds harmless each
Lender Party and each holder of a Note for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by such Lender Party or such holder, as the
case may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, ADT Limited will furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof. If no
Taxes or Other Taxes are payable in respect of any payment
hereunder to any Lender Party or any holder of a Note, ADT Limited
will furnish to the Agent upon its reasonable request (which
request shall not be made more than once per Fiscal Year) a
certificate from each appropriate taxing authority, or an opinion
of counsel acceptable to the Agent, in either case stating that
such payment is exempt from or not subject to Taxes or Other Taxes.
(e) Without prejudice to the survival of any other
agreement of ADT Limited hereunder, the agreements and obligations
of ADT Limited contained in this Section 2.7 shall survive the
payment in full of the principal of and interest on the Loans.
SECTION 2.8. Judgment. ADT Limited hereby 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 United
States Dollars 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 United States
Dollars 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 Lender Party or any holder of a Note hereunder
shall, notwithstanding any judgment in a currency other than
United States Dollars, be discharged only to the extent that on
the Business Day following receipt by such Lender Party or such
holder, as the case may be, of any sum adjudged to be so due in
such other currency such Lender Party or such holder, as the case
may be, may, in accordance with normal banking procedures,
purchase United States Dollars with such other currency; in the
event that the United States Dollars so purchased are less than
the sum originally due to such Lender Party in United States
Dollars, ADT Limited, as a separate obligation and notwithstanding
any such judgment, hereby indemnifies and holds harmless such
Lender Party and such holder against such loss, and if the United
States Dollars so purchased exceed the sum originally due to such
Lender Party or such holder in United States Dollars, such Lender
Party or such holder, as the case may be, shall remit to ADT
Limited such excess.
SECTION 2.9. Consent to Jurisdiction; Waiver of Immunities. ADT
Limited hereby acknowledges and agrees that:
(a) It has irrevocably submitted to the jurisdiction of the
courts of the State of New York and of the United States District
Court for the Southern District of New York for the purposes of
any action or proceeding arising out of or relating to this
Guaranty, and ADT Limited hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and
determined in such New York state or federal court. ADT Limited
hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. ADT Limited hereby
irrevocably appoints ▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ (the "Process Agent"),
with an office on the date hereof at ▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇), as
its agent to receive on behalf of ADT Limited and its property
service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such
service may be made by mailing or delivering a copy of such
process to ADT Limited in care of the Process Agent at the Process
Agent's above address, and ADT Limited hereby irrevocably
authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of service, ADT Limited also
irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process
to ADT Limited at its address specified on the signature page
hereof. ADT Limited hereby agrees that in the event the Process
Agent is no longer resident in New York, New York, it shall
appoint a successor Process Agent resident in New York, New York
reasonably acceptable to the Agent, which successor Process Agent
shall thereafter be the Process Agent hereunder. ADT Limited
agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section shall affect the right of any
Lender Party or any holder of any Note to serve legal process in
any other manner permitted by law or affect the right of any
Lender Party or any holder of any Note to bring any action or
proceeding against ADT Limited or any of its properties in the
courts of any other jurisdictions.
(c) To the extent that ADT Limited has or hereafter may
acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, ADT Limited
hereby irrevocably waives, to the fullest extent permitted under
applicable law, such immunity in respect of its obligations under
this Guaranty.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
ADT Limited hereby represents and warrants unto each Lender Party
as set forth in this Article III.
SECTION 3.1. Organization, 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 organized and validly existing and, to
the extent applicable, in good standing under the laws of the jurisdiction of
its organization, 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 Loan Document, if any, to which it is a
party.
SECTION 3.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by ADT Limited of this Guaranty and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed
or to be executed by it, are within ADT Limited's and each such Obligor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene ADT Limited's or any such Obligor's Organic
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
▇▇▇ ▇▇▇▇ 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 Lender, Issuer or Agent to enforce the Obligations
or (iii) to subject any Lender, Issuer or Agent to any liability;
or
(c) result in, or require the creation or imposition of,
any Lien on any of ADT Limited's or any Obligor's properties.
SECTION 3.3. Government Approval, Regulation, etc. No
authorization 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 Guaranty or any other Loan Document to which it is a party. Neither
ADT Limited nor any other Obligor is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
SECTION 3.4. Validity, etc. This Guaranty constitutes, and each
other Loan 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, reorganization, moratorium or similar laws
from time to time in effect affecting creditors' rights generally and to
general principles of equity; and each Loan Document executed pursuant hereto
by each other Obligor will, on the due execution and delivery thereof by such
Obligor, be the legal, valid and binding obligation of such Obligor enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, 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 financial statements set
forth in the 10-K of ADT Limited for the 1995 Fiscal Year and in the 10-Qs of
ADT Limited for the first three Fiscal Quarters of the 1996 Fiscal Year and
all financial statements of ADT Limited and its Subsidiaries furnished to the
Agent and the Lenders pursuant to clauses (a) and (d) of Section 8.1.1 of the
Credit Agreement have, in each case, been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated financial condition
of the corporations covered thereby, as at the dates thereof, and the results
of their operations for the periods then ended.
SECTION 3.6. No Material Adverse Change. Since December 31,
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, Labor Controversies, etc. There is no
pending or, to the knowledge of ADT Limited, threatened litigation, action,
proceeding, or labor 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 January 8, 1997, provided to
the Agent prior to the date hereof, including any amendment to the complaint
referred to therein provided to the Agent prior to the Closing Date 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 Guaranty, or any other Loan Document,
except as disclosed in Item 3.7 ("Litigation") of the Disclosure Schedule.
SECTION 3.8. Subsidiaries. ADT Limited has no Subsidiaries,
except those Subsidiaries
(a) which are identified in Item 3.8 ("Existing
Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been created or acquired in
accordance with Section 4.2.5 or 4.2.9.
Without limiting any term or provision hereof, to the extent any Person
becomes a Subsidiary of ADT Limited in accordance with (and not in
contravention of) any term or provision hereof or of any other Loan Document,
ADT Limited may supplement such Item 3.8 of the Disclosure Schedule to include
such new Subsidiary by delivering a certificate, signed by an Authorized
Officer, certifying (i) as to the name and place of organization of such new
Subsidiary, (ii) as to the method by which such new Subsidiary was created and
(iii) that such new Subsidiary was created without contravening any term or
provision hereof or of any other Loan Document.
SECTION 3.9. Ownership of Properties. ADT Limited and each of
its Subsidiaries owns good and marketable title to, or valid leases of, all of
its properties and assets necessary to conduct its business substantially as
currently conducted by it.
SECTION 3.10. Taxes. ADT Limited and each of its Subsidiaries,
and each other Obligor, has filed all material tax returns and reports required
by law to have been filed by it and has paid 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 3.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of the Credit Agreement and prior to the date of any Credit Extension
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 a Lien
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 in Item 3.11
("Employee Benefit Plans") of the Disclosure Schedule, 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 3.12. Environmental Warranties. Except as set forth in
Item 3.12 ("Environmental Matters") of the Disclosure Schedule,
(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 or the Borrower and its Subsidiaries, 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 or the Borrower and its
Subsidiaries;
(c) there have been no Releases of Hazardous Materials at,
on or under any property now or previously owned or leased by ADT
Limited or any of its Subsidiaries that, singly or in the
aggregate, have, or may 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 or the
Borrower and its Subsidiaries;
(d) ADT Limited and its Subsidiaries have been issued and
are in compliance with all permits, certificates, approvals,
licenses and other authorizations 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 authorization 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 or the Borrower and its
Subsidiaries;
(e) no property now or previously owned or leased by ADT
Limited or any of its Subsidiaries is listed or proposed for
listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up
that 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;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by ADT Limited or any of
its Subsidiaries that, singly or in the aggregate, have, or may
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 or the Borrower and its
Subsidiaries;
(g) 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 the CERCLIS or on any similar state 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;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or leased
by ADT Limited or any Subsidiary of ADT Limited that, singly or in
the aggregate, have, or may 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 or the Borrower and its Subsidiaries; and
(i) 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 or the Borrower and its
Subsidiaries.
SECTION 3.13. 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 3.14. 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 Organic 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 3.15. Delivery of Organizational Chart. The Agent has
been furnished on or prior to the Effective Date a detailed organizational
chart of ADT Limited and all its Subsidiaries (other than Non-Guarantors
identified in Item 3.15 ("Existing Subsidiaries") of the Disclosure Schedule
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
Authorized Officer of ADT Limited. Such chart indicates each Subsidiary of
ADT Limited that is or is required to be a Subsidiary Guarantor as of the
Effective Date and indicates with respect to each such Subsidiary Guarantor
that is a Material Subsidiary, its respective percentages of consolidated
gross revenues and consolidated gross assets of the Borrower and its
Subsidiaries for the 1995 Fiscal Year.
SECTION 3.16. Accuracy of Information. (a) All information (other
than financial projections) taken as a whole, prepared by ADT Limited, any
Subsidiary of ADT Limited or any other Obligor, or any Affiliate of any such
Person, or heretofore or contemporaneously furnished by or on behalf of ADT
Limited, any Subsidiary of ADT Limited or any other Obligor, or any Affiliate
of any such Person, in writing to any Agent or any Lender for purposes of or
in connection with this Guaranty, the Credit Agreement or any other Loan
Document or any transaction contemplated hereby or thereby (including in
connection with the Existing Credit Facility and each Loan Document referred
to therein) is, and all other such information (other than financial
projections) taken as a whole, hereafter furnished by or on behalf of ADT
Limited, any Subsidiary of ADT Limited or any other Obligor, or any Affiliate
of any such Person, to any Agent or any Lender will be, true, complete and
accurate in every material respect on the date as of which such information is
dated or certified and as of the date of execution and delivery of the Credit
Agreement by such Agent and such Lender (it being acknowledged that, with
respect to any specific financial statement included in such information, such
financial statement shall have been true, complete and accurate in every
material respect on the date or for the period expressly set forth therein and
not necessarily on any other date or for any other period), and such
information taken as a whole does not and will not contain any untrue
statement of a material fact and is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading, and (b) all financial projections heretofore or
contemporaneously furnished by or on behalf of ADT Limited, any Subsidiary of
ADT Limited or any other Obligor, or any Affiliate of any such Person, to any
Agent or any Lender, have been, and all such financial projections hereafter
furnished by or on behalf of ADT Limited, any Subsidiary of ADT Limited or any
other Obligor, or any Affiliate of any such Person, to the Agent or any Lender
shall be, prepared in good faith based upon reasonable assumptions.
SECTION 3.17. Restricted Payment Basket Amount; Equity Proceeds
Amount. As of September 30, 1996, the Restricted Payment Basket Amount was
not greater than $135,000,000 and, as of December 31, 1996, the Equity
Proceeds Amount was not greater than $54,000,000.
SECTION 3.18. Restricted Borrower Distributions. As of September
30, 1996, the amount available for Restricted Borrower Distributions was not
greater than $38,000,000.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Affirmative Covenants. ADT Limited covenants and
agrees that, until the Covenant Termination Date, ADT Limited will, unless the
Required Lenders 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 (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 each
Lender at reasonable intervals a certificate of an Authorized 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
any of its representatives, at reasonable times and intervals (but not more
often than once per Fiscal Quarter, unless an Event of Default shall have
occurred and be continuing (in which case, and during such period, each Lender
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
Lender'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 Fiscal 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 authorizations 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 or the Borrower and its Subsidiaries
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 or the Borrower
and its Subsidiaries; 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. Guaranty Supplements. ADT Limited will cause each
Material Subsidiary and each Subsidiary subject to a Senior Note Guarantee to
be a Guarantor. In furtherance of the foregoing, ADT Limited will, in the
event any Person becomes a Material Subsidiary, notify the Agent of such event
or condition and will cause such new Material Subsidiary to execute and
deliver to the Agent as soon as practicable (but in no event later than thirty
days after the occurrence of such event or condition) a Subsidiary Guarantor
Guaranty Supplement, together with such certificates and legal opinions as the
Agent may reasonably request.
SECTION 4.1.7. Maintenance of Adequate Guarantees. If at any time
the Subsidiary Guarantors subject to the obligations of the Subsidiary
Guarantor Guaranty do not account on a consolidated basis for at least 90% of
the consolidated gross revenues of the Borrower and its Subsidiaries and at
least 90% of the consolidated gross assets of the Borrower and its Subsidiaries
(collectively, the "90% Test"), as reflected in the consolidated statement of
income and consolidated balance sheet most recently delivered, or required to
be delivered, pursuant to Section 8.1.1(a) or 8.1.1(d) of the Credit Agreement,
ADT Limited will cause such Non-Guarantors organized under the laws of the
United States (or any state thereof or the District of Columbia) as are
necessary to meet the 90% Test to execute and deliver to the Agent as soon as
practicable (but in no event later than thirty days after the occurrence of
such event or condition) a Subsidiary Guarantor Guaranty Supplement, together
with such certificates and legal opinions as the Agent may reasonably request.
SECTION 4.2. Negative Covenants. ADT Limited covenants and
agrees that, until the Covenant Termination Date, ADT Limited will not,
without the prior written consent of the Required Lenders, 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 Businesses and the
businesses identified in Item 4.2.1 ("Permitted Existing Business Activities")
of the Disclosure Schedule, 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 (other than the Borrower and its Subsidiaries)
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 the Obligations hereunder;
(b) Indebtedness in respect of the Senior Note Guarantees,
the Senior Subordinated Note Guarantees and the ▇▇▇▇▇ Guarantee to
the extent the guarantor under any such Senior Note Guarantee,
Senior Subordinated Note Guarantee or ▇▇▇▇▇ Guarantee is subject
to a Guarantee that is in full force and effect with respect to
Indebtedness in respect of the Obligations;
(c) Indebtedness existing as of June 30, 1995; provided that
(i) such Indebtedness having a principal amount in excess of
$3,000,000 is identified in Item 4.2.2(c) ("Ongoing Indebtedness")
of the Disclosure Schedule and (ii) true and correct copies of any
indenture or agreement governing such Indebtedness having a
principal amount in excess of $10,000,000 have been provided to
the Agent;
(d) (i) Indebtedness of ADT Canada, Inc., a Wholly Owned
Subsidiary of ADT Limited organized under the laws of Ontario,
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 and (ii)
Indebtedness of ADT Finance plc, a Wholly Owned Subsidiary of ADT
Limited organized under the laws of England, in an aggregate
amount not to exceed at any time outstanding Pound
Sterling90,000,000 and guarantees thereof by ADT Limited, ADT (UK)
Holdings Limited, each Subsidiary of ADT (UK) Holdings Limited and
each other Subsidiary of ADT Limited (other than an Intermediate
Parent Company, the Borrower, any Subsidiary of the Borrower or
any other Subsidiary of ADT Limited which conducts the major
portion of its business in the United States or substantially all
of the property or assets of which are located in the United
States) (the agreements governing the Indebtedness and guarantees
described in this subclause (ii) being herein collectively
referred to as the "U.K. Credit Facility");
(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 Capitalized 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
Capitalized Lease Liability (assuming for the purposes of this
clause only that Capex Indebtedness constitutes a Capitalized
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 Wholly Owned Subsidiaries of ADT Limited
owing to Wholly Owned Subsidiaries of ADT Limited (other than the
Borrower and the Subsidiary Guarantors);
(k) Indebtedness of Wholly Owned Subsidiaries of ADT
Limited (other than the Intermediate Parent Companies) owing to the
Borrower or any Subsidiary Guarantor in an aggregate amount not to
exceed at any time outstanding $175,000,000;
(l) Indebtedness of ADT Limited owing to Wholly Owned
Subsidiaries of ADT Limited in an aggregate amount not to exceed at
any time outstanding $75,000,000;
(m) Indebtedness consisting of guarantees, surety or
performance bonds or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of
assets;
(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) except in the case of clause (d)(ii) above,
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 Existing Credit
Facility Effective Date; and
(q) 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 clause (s) of
Section 8.2.2 of the Credit Agreement, does not exceed $75,000,000;
provided, however, that (i) no Indebtedness otherwise permitted by clauses (i),
(k) and (q) shall be permitted if, after giving effect to the incurrence
thereof, any Event of Default shall have occurred and be continuing and (ii) no
Indebtedness permitted by clause (i) or (k) shall be permitted unless evidenced
by promissory notes or other written loan documents that provide that the
Indebtedness evidenced thereby may not be forgiven or satisfied for any
consideration other than payment in full in cash at par.
SECTION 4.2.3. Liens. ADT Limited will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets (including Capital Stock of
Subsidiaries of ADT Limited), whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Liens granted prior to the Existing Credit Facility
Effective Date to secure payment of Indebtedness of the type
permitted and described in clause (c) of Section 4.2.2 and clause
(f) of Section 8.2.2 of the Credit Agreement and Liens securing
refinancings thereof permitted by clause (o) of Section 4.2.2 and
clause (r) of Section 8.2.2 of the Credit Agreement, respectively;
(c) (i) Liens granted to secure payment of Indebtedness of
the type permitted and described in clause (h) of Section 4.2.2
and clause (k) of Section 8.2.2 of the Credit Agreement and
covering only those assets acquired with the proceeds of such
Indebtedness and Liens with respect to such assets securing
refinancings of such Indebtedness permitted by clause (o) of
Section 4.2.2 and clause (r) of Section 8.2.2 of the Credit
Agreement, respectively and (ii) Liens granted to secure
obligations under the U.K. Credit Facility and covering only
assets of the obligors and guarantors thereunder and Liens with
respect to such assets securing refinancings of such Indebtedness
permitted by clause (o) of Section 4.2.2;
(d) Liens 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) Liens 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) Liens 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 Liens (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) Liens with respect to assets of a Subsidiary of ADT
Limited (other than the Borrower) granted to secure Indebtedness
owing to the Borrower or a Wholly Owned Subsidiary of the Borrower
that is a Guarantor;
(i) Liens with respect to assets of a Subsidiary of ADT
Limited (other than the Borrower or any of its Subsidiaries or an
Intermediate Parent Company) granted to secure Indebtedness owing
to ADT Limited or a Wholly Owned Subsidiary of ADT Limited;
(j) Liens (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 Lien covers only assets
that were subject to such Lien 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 Lien inherent in the right of any bank to set off
deposits against debts owed to such bank;
(m) Liens in favor 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) Liens arising by operation of law incurred in the
ordinary course of business and which Liens, singly or in the
aggregate, do not interfere in any material respect with the
business of ADT Limited or any of its Subsidiaries; and
(o) other Liens 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 Fiscal Year commencing with the
1995 Fiscal Year (less, for each such Fiscal 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 Fiscal Year);
(b) its Cash Flow Coverage Ratio, as at the end of any
Fiscal Quarter, to be less than 1.5 to 1.0;
(c) its Debt to Total Capitalization Ratio, as at the end
of any Fiscal 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 June 30, 1995 and
identified in Item 4.2.5(a) ("Ongoing Investments") of the
Disclosure Schedule and (ii) Investments acquired in the ASH
Transaction (including the sale of such Investments by ADT Limited
to ADT (UK) Holdings Limited, the sale of certain of such
Investments by ASH and its Subsidiaries to the Borrower 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
hereof);
(b) Cash Equivalent Investments and High Quality
Investments;
(c) without duplication, Investments permitted as
Indebtedness pursuant to Section 4.2.2 or Section 8.2.2 of the
Credit 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 Wholly Owned Subsidiary
of ADT Limited to the extent the Person making such Investment
would be allowed to make and maintain a loan or advance to such
Wholly Owned Subsidiary under Section 4.2.2 or Section 8.2.2 of
the Credit Agreement; provided that, solely for purposes of
determining under this Section 4.2.5 or Section 4.2.2 or under
Section 8.2.2 of the Credit Agreement whether such Person may make
and maintain any such loan or advance, the aggregate amount of
Investments pursuant to this clause (e) shall be taken into
account as if such Investments were a loan or advance;
(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 reorganization of any debtor or ADT
Limited or any of its Subsidiaries or of foreclosure, perfection
or enforcement of any Lien, 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 Existing Credit Facility Effective Date and (ii)
the acquisition of Common Shares to the extent (A) the acquisition
of such Common Shares is not prohibited by any provision hereof or
of any other Loan Document (including Section 4.2.6(a)) 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 ▇▇▇▇▇ (and payment of cash in lieu of fractional shares)
pursuant to the terms of the ▇▇▇▇▇ Indenture in effect on the
Existing Credit Facility Effective 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 or under the Credit Agreement; and
(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
Existing Credit Facility Effective Date in connection with
Business Acquisitions permitted under clause (f) of Section 4.2.9
(or clause (f) of Section 4.2.9 of the ADT Limited Guaranty (as
defined in the Existing Credit Facility)), does not exceed at any
one time $25,000,000;
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) Investments made by the Borrower and the Subsidiary
Guarantors after the Existing Credit Facility Effective Date in
Subsidiaries of ADT Limited (other than the Borrower and the
Subsidiary Guarantors) may not exceed in the aggregate at any time
$175,000,000;
(iii) no Investment otherwise permitted by clause (g) shall
be permitted to be made if an Event of Default described in
Section 9.1.1, 9.1.3 (to the extent resulting from a default in
the observance of any obligation under Section 4.2.4 or Section
8.2.3 of the Credit Agreement), 9.1.5 or 9.1.9 of the Credit
Agreement shall have occurred and be continuing or would occur
upon giving effect thereto;
(iv) no Investment otherwise permitted by clause (e), (f),
(m) or (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
(v) 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) thorough (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 the Existing Credit Facility
Effective Date; 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 the Existing Credit Facility Effective Date, 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 the Existing Credit Facility Effective Date)
shall be permitted if an Event of Default (including a default in
the observance by the Borrower of its obligations under clause (a)
of Section 8.2.3 of the Credit 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 the
Existing Credit Facility Effective Date in excess of the
applicable Annual Limits (or, during the effectiveness of the
Existing Credit Facility, the applicable Annual Limits (as defined
under the Existing Credit Facility)) and (B) the aggregate amount
of Capital Expenditures made after the Existing Credit Facility
Effective Date 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 Existing Credit Facility)
delivered in connection with the Fiscal 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) declare or pay any dividend on, or make any
distribution to holders of, any shares of Capital Stock of the
Borrower (other than (A) dividends or distributions payable in
shares of Capital Stock of the Borrower 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 and (B) the dividend of
the Dividended Note), or
(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
the Borrower or any warrants, rights or options to purchase or
acquire any such Capital Stock
(such payments or any other actions described in (but not excluded from) the
foregoing clauses (i) and (ii) being herein referred to as "Restricted Borrower
Distributions"), unless the amount of such Restricted Borrower Distribution
(which amount, in the case of a Restricted Borrower Distribution to be made
in property, shall equal the Fair Market Value thereof (as determined, in the
case of any property with an aggregate value in excess of $15,000,000, in good
faith by the Board of Directors of the Borrower, whose determination shall be
evidenced by a certified written resolution of such Board)), when added to the
aggregate amount of all such Restricted Borrower Distributions declared since
the Existing Credit Facility Effective Date, would not exceed 50% of the
aggregate Net Income of the Borrower accrued on a cumulative basis during the
period (taken as one accounting period) from the Existing Credit Facility
Effective Date to the last day of the most recently completed Fiscal Quarter
with respect to which, pursuant to Section 8.1.1(a) or 8.1.1(d) of the Credit
Agreement (or Section 8.1.1(d) of the Existing Credit Facility), financial
statements have been delivered to the Agent on or prior to the date of the
proposed Restricted Borrower Distribution; provided, however, that no
Restricted Borrower Distribution otherwise permitted pursuant to this Section
4.2.6(b) shall be permitted if an Event of Default (including a default in the
observance by the Borrower of its obligations under clause (a) of Section
8.2.3 of the Credit Agreement) shall have occurred and be continuing or would
occur upon giving effect to such Restricted Borrower Distribution.
(c) 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 ▇▇▇▇▇, the ▇▇▇▇▇ 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, Sections 1010 and 1016 of the Senior Subordinated Note
Indenture, Section 3.09 of the ▇▇▇▇▇ Indenture or in the other
documents and instruments memorializing 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 ▇▇▇▇▇ Indenture or any
other document or instrument memorializing 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 the Existing Credit Facility Effective Date in
excess of the applicable Annual Limits (or, during the
effectiveness of the Existing Credit Facility, the applicable
Annual Limits (as defined under the Existing Credit Facility)) and
(B) the aggregate amount of Capital Expenditures made after the
Existing Credit Facility Effective Date 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 Existing Credit Facility) delivered in connection with the
Fiscal 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,
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 Capitalized Lease Liabilities otherwise permitted to be incurred pursuant
to this Section shall be permitted to be incurred if the aggregate amount of
all such Capitalized Lease Liabilities incurred during any Fiscal 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 ADT Limited that is a direct or
indirect parent of the Borrower may liquidate or dissolve
voluntarily into, and may amalgamate or consolidate with or merge
into, ADT Limited or any Wholly Owned Subsidiary of ADT Limited
that is an indirect parent of the Borrower, and any assets or
Capital Stock of any Subsidiary of ADT Limited that is an indirect
parent of the Borrower may be purchased or otherwise acquired by
ADT Limited or any Wholly Owned Subsidiary of ADT Limited that is
an indirect parent of the Borrower;
(b) 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;
(c) any Non-Guarantor that is not a Subsidiary of the
Borrower 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 Non-Guarantor
may be purchased or otherwise acquired by ADT Limited or any Wholly
Owned Subsidiary of ADT Limited;
(d) 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 organized 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 Guaranty shall remain in full force
and effect; (B) immediately before and immediately after giving
effect to such transaction, no Default or 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 Guaranty shall remain in full force and effect;
and (E) the surviving entity shall have delivered, or caused to be
delivered, to the Lenders 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;
(e) ADT Limited or any Subsidiary of ADT Limited may enter
into or consummate any Permitted Business Acquisition; and
(f) 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 (f) (or clause
(f) of Section 4.2.9 of the ADT Limited Guaranty (as defined in
the Existing Credit Facility)) since the Existing Credit Facility
Effective Date 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) with respect to assets other than the Capital Stock of
the Borrower and any Intermediate Parent Company
(i) such Asset Sale is in the ordinary course of
business; or
(ii) (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 the Effective Date)
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 (ii) (or clause (c)(ii) of Section 4.2.10 of the
ADT Limited Guaranty (as defined in the Existing Credit
Facility)) since the Existing Credit Facility Effective
Date, does not exceed $130,000,000; or
(d) each party to such Asset Sale is either ADT Limited or a
Subsidiary of ADT Limited (other than the Borrower, any Subsidiary
Guarantor or any Intermediate Parent Company); or
(e) all parties to such Asset Sale are either the Borrower
or a Subsidiary Guarantor.
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 ▇▇▇▇▇ 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 Lender Parties.
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 shall not apply to (i) any arrangement
or contract between or among ADT Limited, the Borrower or any Guarantor that
is a Wholly Owned Subsidiary of the Borrower or (ii) 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 Guaranty and any other Loan Document)
(a) prohibiting the creation or assumption of any Lien to
secure the Obligations 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) (A) any indenture or agreement governing
Indebtedness permitted by clause (b), (c) or (d)(i) of
Section 4.2.2 or clause (b), (c), (d), (e), (f) or (g) of
Section 8.2.2 of the Credit Agreement, as in effect on the
Existing Credit Facility Effective Date, (B) the U.K. Credit
Facility to the extent that the U.K. Credit Facility
prohibits the creation or assumption of any Lien which
secures the Obligations on the property, revenues or assets
of ADT Limited and its Subsidiaries (other than the Borrower
and its Subsidiaries) or requires any obligor under the U.K.
Credit Facility to maintain a certain level of net worth and
(C) any refinancings of any of the foregoing permitted by
clause (o) of Section 4.2.2 or clause (r) of Section 8.2.2
of the Credit Agreement;
(ii) any agreement governing any Indebtedness
permitted by clause (h) of Section 4.2.2 or clause (k) of
Section 8.2.2 of the Credit 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 clause (r) of Section 8.2.2 of the Credit 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 Liens 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 Fiscal Year from twelve
consecutive calendar months ending on December 31.
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 clause (b), (c), (d), (e), (f) or (g) of
Section 8.2.2 of the Credit Agreement, as in effect on the Existing Credit
Facility Effective Date, or (y) any agreement governing Indebtedness permitted
under clause (o) of Section 4.2.2 or clause (r) of Section 8.2.2 of the Credit
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 Guaranty or any other Loan
Documents or (ii) containing any provision that would contravene any provision
of any Loan Document.
SECTION 4.2.16. [Intentionally Omitted.]
SECTION 4.2.17. Activities of Certain Subsidiaries. (a) 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 permitted by Section 4.2.2, (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
Section 8.2.2 of the Credit Agreement, in each case to the extent such
proceeds or payments are concurrently used (A) to repay Indebtedness of such
Intermediate Parent Company to the extent such Indebtedness is permitted under
Section 4.2.2 or (B) to make a loan, advance or Distribution to its parent or
ADT Limited, to the extent such loan, advance or Distribution is permitted
under Section 4.2.5 or 4.2.6, as applicable.
(b) ADT Limited will not permit any Subsidiary of it that is (i)
a Non-Obligor and (ii) an obligee in respect of Indebtedness set forth under
the caption "Continuing Indebtedness - Intercompanies" in Item 4.2.2(c)
("Ongoing Indebtedness") of the Disclosure Schedule to receive any payments
under any such Indebtedness, except to the extent such payments are used
within a reasonable period of time, directly or indirectly, (A) to repay
Indebtedness owing to an Obligor or (B) to make a loan, advance or
Distribution to an Obligor, to the extent such loan, advance or Distribution is
permitted under Section 4.2.5 or 4.2.6, as applicable. ADT Limited will not
permit any of its Subsidiaries that is subject to the subordination provisions
of any Subordinated Intercompany Debt (including Indebtedness in respect of the
Dividended Note) to take or omit to take any action the taking or the omission
of which would result in the failure of such Subsidiary fully and properly to
perform and observe all of its obligations in respect of such subordination
provisions.
SECTION 4.2.18. Ownership of Certain Subsidiaries. Except
pursuant to a transaction permitted pursuant to Section 4.2.9 or 4.2.10, ADT
Limited will not permit:
(a) any Subsidiary of Holdings N.V. now existing to not be
at any time a Wholly Owned Subsidiary of ADT Limited except to the
extent disclosed in Item 3.8 ("Existing Subsidiaries") of the
Disclosure Schedule; and
(b) any Subsidiary of the Borrower now existing to not be at
any time a Wholly Owned Subsidiary of the Borrower.
SECTION 4.2.19. Certain Intercompany Indebtedness. Without
limiting the effect of Section 4.2.11, ADT Limited will not, and will not
permit any of its Subsidiaries, to amend or modify the terms of any
Indebtedness referred to in clause (ii) of the proviso to Section 4.2.2, which
terms provide for satisfaction of such Indebtedness in cash at par.
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 Credit Agreement or any other Loan Document to which it is a party.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof, including, without
limitation, Article XI thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.6, this
Guaranty shall be binding upon ADT Limited and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Lender
Party and each holder of a Note 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 Lenders.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, 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 Lenders under
Section 11.1 of the Credit Agreement, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
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 Credit 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 (it being understood and agreed that
notice transmitted by facsimile to ADT Inc. shall constitute notice to ADT
Limited hereunder).
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
Lender Party or any holder of a Note 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 Guaranty are
for convenience of reference only, and shall not affect the construction of
this Guaranty.
SECTION 5.7. Setoff. In addition to, and not in limitation of,
any rights of any Lender Party or any holder of a Note under applicable law,
each Lender Party and each such holder 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 Lender Party or such holder; provided, however, that any
such appropriation and application shall be subject to the provisions of
Section 5.8 of the Credit Agreement.
SECTION 5.8. Independence of Covenants. All covenants contained
in this Guaranty or any other Loan 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 a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 5.9. Severability. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty 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 Guaranty.
SECTION 5.10. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENT (OR ANY OTHER LENDER PARTY) SHALL BE
BROUGHT AND MAINTAINED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND. FOR PURPOSES OF ANY SUCH LITIGATION INVOLVING THIS GUARANTY, ADT
LIMITED HEREBY EXPRESSLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND EXPRESSLY CONSENTS AND ACKNOWLEDGES THE TERMS AND
AGREEMENTS SET FORTH IN SECTION 2.9 HEREOF.
SECTION 5.11. Waiver of Jury Trial. ADT LIMITED AND, BY ITS
ACCEPTANCE HEREOF, THE AGENT (ON BEHALF OF THE LENDER PARTIES) HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY. ADT LIMITED ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THE CREDIT AGREEMENT AND MAKING CREDIT EXTENSIONS (INCLUDING THE
INITIAL CREDIT EXTENSION) TO THE BORROWER THEREUNDER.
IN WITNESS WHEREOF, ADT Limited has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ADT LIMITED
By:
------------------------
Title:
Address: ▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇
Bermuda
With a copy to:
ADT Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
Acknowledged and Accepted:
THE BANK OF NOVA SCOTIA,
as Agent
By:
-------------------
Title:
EXHIBIT J
SUBSIDIARY GUARANTOR GUARANTY
THIS SUBSIDIARY GUARANTOR GUARANTY (together with all amendments
and other modifications made from time to time, this "Guaranty"), dated as of
January _____, 1997, made by each Person (such capitalized term and all other
capitalized terms not otherwise defined herein to have the meanings provided
for in Article I) identified on the signature pages hereto and each Additional
Subsidiary Guarantor (collectively, the "Subsidiary Guarantors"), in favor of
each of the Lender Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of January ____,
1997 (together with all amendments and other modifications, if any, from time
to time thereafter made thereto, the "Credit Agreement"), among ADT
Operations, Inc., a Delaware corporation (the "Borrower"), the financial
institutions as are or may become parties thereto (collectively, the
"Lenders"), and The Bank of Nova Scotia ("Scotiabank"), individually and as
agent (the "Agent") for the Lenders, the Lenders have extended Commitments to
make Credit Extensions to or on behalf of the Borrower;
WHEREAS, as a condition precedent to the occurrence of the Closing
Date under the Credit Agreement, each Subsidiary Guarantor is required to
execute and deliver this Guaranty;
WHEREAS, each Subsidiary Guarantor has duly authorized the
execution, delivery and performance of this Guaranty; and
WHEREAS, it is in the best interests of each Subsidiary Guarantor
to execute this Guaranty inasmuch as each Subsidiary Guarantor will derive
substantial direct and indirect benefits from the Credit Extensions made from
time to time to or on behalf of the Borrower by the Lenders;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, each Subsidiary Guarantor agrees, for the
benefit of each Lender Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guaranty" is defined in the preamble.
"Lender" is defined in the first recital.
"Lender Party" means, as the context may require, any Lender, any
Issuer or the Agent and each of their respective successors, transferees and
assigns.
"Lenders" is defined in the first recital.
"Other Taxes" is defined in clause (b) of Section 2.7.
"Scotiabank" is defined in the first recital.
"Subsidiary Guarantor" is defined in the preamble.
"Taxes" is defined in clause (a) of Section 2.7.
"U.C.C." means the Uniform Commercial Code as in effect in the
State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Each Subsidiary Guarantor hereby
absolutely, unconditionally and irrevocably, jointly and severally,
(a) guarantees the full and punctual payment when due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the
Borrower and each other Obligor now or hereafter existing, whether
for principal, interest, Reimbursement Obligations, fees, expenses
or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a)
of the United States Bankruptcy Code, 11 U.S.C. Section 362(a),
and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. Section 502(b) and Section
506(b)); and
(b) indemnifies and holds harmless each Lender Party and
each holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Lender
Party or such holder, as the case may be, in enforcing any rights
under this Guaranty;
provided, however, that each Subsidiary Guarantor shall be liable under this
Guaranty for the maximum amount of such liability that can be hereby incurred
without rendering this Guaranty, as it relates to such Subsidiary Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount. This Guaranty constitutes a
guaranty of payment when due and not of collection, and each Subsidiary
Guarantor specifically agrees that it shall not be necessary or required that
any Lender Party or any holder of any Note exercise any right, assert any
claim or demand or enforce any remedy whatsoever against the Borrower or any
other Obligor (or any other Person) before or as a condition to the
obligations of such Subsidiary Guarantor hereunder.
SECTION 2.2. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of the
Borrower and each other Obligor have been paid in full, all obligations of each
Subsidiary Guarantor hereunder shall have been paid in full and all
Commitments shall have terminated. Each Subsidiary Guarantor guarantees that
the Obligations of the Borrower and each other Obligor and their respective
Subsidiaries will be paid strictly in accordance with the terms of the Credit
Agreement and each other Loan Document under which they arise, without regard
(to the fullest extent permitted under applicable law) to any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender Party or any holder of any Note with respect
thereto (and each Subsidiary Guarantor hereby waives to the fullest extent it
may do so any right or rights it may have under any such law, regulation or
order). Without limiting the generality of the foregoing, the liability of
each Subsidiary Guarantor under this Guaranty shall be absolute, unconditional
and irrevocable irrespective of:
(a) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement or any other Loan Document
(other than, in respect of such Subsidiary Guarantor, this
Guaranty) or of any of the Obligations (other than the Obligations
of such Subsidiary Guarantor hereunder);
(b) the failure of any Lender Party or any holder of any
Note
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or
any other Person (including any other Subsidiary Guarantor)
under the provisions of the Credit Agreement or any other
Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including any other Subsidiary Guarantor) of, or
collateral securing, any Obligations of the Borrower or any
other Obligor;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower or any other Obligor (other than such Subsidiary
Guarantor), or any other extension, compromise or renewal of any
Obligation of the Borrower or any other Obligor (other than such
Subsidiary Guarantor);
(d) any reduction, limitation, impairment or termination of
the Obligations of the Borrower or any other Obligor (other than
such Subsidiary Guarantor) for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall
not be subject to (and each Subsidiary Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting,
the Obligations of the Borrower, any other Obligor (other than
such Subsidiary Guarantor) or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the
terms of the Credit Agreement or any other Loan Document (other
than, in respect of such Subsidiary Guarantor, this Guaranty);
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release of or addition to, or consent to departure from, any other
guaranty (including the ADT Limited Guaranty), held by any Lender
Party or any holder of any Note securing any of the Obligations of
the Borrower or any other Obligor; or
(g) any other circumstances which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Borrower, any other Obligor, any surety or any
other guarantor (or any other Guarantor).
SECTION 2.3. Stay of Acceleration, Reinstatement, etc. Each
Subsidiary Guarantor agrees that, if acceleration of the time for payment of
any amount payable by the Borrower under the Credit Agreement, the Notes or
any other Loan Document or of compliance by the Borrower with its obligations
under Section 4.7 of the Credit Agreement is, in either case, stayed upon the
occurrence with respect to the Borrower of any Event of Default described in
clause (b) or (d) of Section 9.1.9 of the Credit Agreement, all such amounts
and obligations otherwise subject to acceleration or compliance under the
terms of the Credit Agreement shall nonetheless be payable and performed by
such Subsidiary Guarantor hereunder forthwith on demand by the Agent made at
the request of the requisite proportion of the Lenders specified in Section
9.3 of the Credit Agreement. Each Subsidiary Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Lender Party or any holder of
any Note, upon the insolvency, bankruptcy or reorganization of the Borrower,
any other Obligor (other than such Subsidiary Guarantor) or otherwise, all as
though such payment had not been made.
SECTION 2.4. Waiver, etc. Each Subsidiary Guarantor hereby
waives promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations of the Borrower or any other Obligor and this
Guaranty and any requirement that the Agent, any other Lender Party or any
holder of any Note protect, secure, perfect or insure any security interest or
Lien, or any property subject thereto, or exhaust any right or take any action
against the Borrower, any other Obligor or any other Person (including any
other guarantor and any other Guarantor) or entity or any collateral securing
the Obligations of the Borrower or any other Obligor, as the case may be.
SECTION 2.5. Subrogation. Each Subsidiary Guarantor hereby
agrees that it will not exercise any rights which it may now or hereafter
acquire against the Borrower or any other Obligor that arise from the
existence, payment, performance or enforcement of such Subsidiary Guarantor's
obligations under this Guaranty or any other Loan Document, including any
right of subrogation, reimbursement, exoneration, or indemnification, any
right to participate in any claim or remedy of the Lender Parties against the
Borrower or any other Obligor or any collateral which the Agent now has or
hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take
or receive from the Borrower or any other Obligor, directly or indirectly, in
cash or other property or by set-off or in any manner, payment or security on
account of such claim or other rights, until the Obligations have been paid in
full in cash and the Commitments have been terminated. If any amount shall be
paid to such Subsidiary Guarantor in violation of the preceding sentence and
the Obligations shall not have been paid in cash in full and the Commitments
have not been terminated, such amount shall be deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for, the
Lender Parties, and shall forthwith be paid to the Lender Parties to be
credited and applied upon the Obligations, whether matured or unmatured. Each
Subsidiary Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and that the agreement set forth in this Section is knowingly made in
contemplation of such benefits.
SECTION 2.6. Successors, Transferees and Assigns; Transfers of
Notes, etc. This Guaranty shall:
(a) be binding upon each Subsidiary Guarantor and its
successors, transferees and assigns; and
(b) inure to the benefit of and be enforceable by the Agent
and each other Lender Party.
Without limiting the generality of clause (b), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof granted to such Lender
under any Loan Document (including this Guaranty) or otherwise, subject,
however, to the provisions of Section 11.11 and Article X of the Credit
Agreement.
SECTION 2.7. Payments Free and Clear of Taxes, etc. Each
Subsidiary Guarantor hereby agrees that:
(a) Any and all payments made by such Subsidiary Guarantor
hereunder shall be made in accordance with Section 5.6 of the
Credit Agreement free and clear of, and without deduction for, any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender Party or any holder of a
Note, taxes imposed on its net income and franchise taxes imposed
on it (such non-excluded items being hereinafter referred to as
"Taxes"). If any such Subsidiary Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender Party or any holder of a Note
(i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section) such Lender Party or such holder, as the
case may be, receives an amount equal to the sum it would
have received had no such deductions been made,
(ii) such Subsidiary Guarantor shall make such
deductions, and
(iii) such Subsidiary Guarantor shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) Such Subsidiary Guarantor shall pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Guaranty (hereinafter referred to
as "Other Taxes").
(c) Such Subsidiary Guarantor hereby indemnifies and holds
harmless each Lender Party and each of holder of a Note for the
full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section) paid by such Lender Party
or such holder, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted.
(d) Without prejudice to the survival of any other
agreement of such Subsidiary Guarantor hereunder, the agreements
and obligations of such Subsidiary Guarantor contained in this
Section 2.7 shall survive the payment in full of the principal of
and interest on the Loans.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Subsidiary
Guarantor hereby represents and warrants for itself unto each Lender Party as
to all matters contained in Article VII of the Credit Agreement and Article III
of the ADT Limited Guaranty, in each case insofar as applicable to such
Subsidiary Guarantor or such Subsidiary Guarantor's properties, together with
all related definitions and ancillary provisions, all of which are hereby
incorporated into this Section 3.1 as those specifically set forth herein. In
addition, each Subsidiary Guarantor hereby represents and warrants for itself
unto each Lender Party as further set forth in this Article III.
SECTION 3.1.1. Organization, etc. Such Subsidiary Guarantor and
each of its Subsidiaries is a corporation duly organized and validly existing
and in good standing under the laws of the State of its incorporation, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business or the location of its
assets 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 the Borrower and its Subsidiaries taken as a whole. Such
Subsidiary Guarantor and each of its Subsidiaries 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 the Borrower and its Subsidiaries taken as a whole
and (ii) to enter into and perform its obligations under this Guaranty and
each other Loan Document to which it is a party.
SECTION 3.1.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by such Subsidiary Guarantor of this
Guaranty and each other Loan Document executed or to be executed by it and
such Subsidiary Guarantor's participation in the consummation of the
Transaction are within such Subsidiary Guarantor's corporate powers, have been
duly authorized by all necessary corporate action, and do not
(a) contravene such Subsidiary Guarantor's Organic
Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting such Subsidiary Guarantor 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 the Borrower and its Subsidiaries taken as a whole,
(ii) to impair the ability of any Lender, any Issuer or the Agent
to enforce the Obligations or (iii) to subject any Lender, any
Issuer or the Agent to any liability; or
(c) result in, or require the creation or imposition of,
any Lien on any of such Subsidiary Guarantor's properties.
SECTION 3.1.3. Government Approval, Regulation, etc. No
authorization 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 such Subsidiary Guarantor of
this Guaranty or any other Loan Document to which it is a party. No
Subsidiary Guarantor is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 3.1.4. Validity, etc. This Guaranty constitutes, and each
other Loan Document executed by such Subsidiary Guarantor will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of such Subsidiary Guarantor enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect affecting enforceability
of creditors' rights generally and to general principles of equity.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Affirmative Covenants. Each Subsidiary Guarantor
covenants and agrees that, until the Covenant Termination Date, such
Subsidiary Guarantor will perform, comply with and be bound by all the
agreements, covenants and obligations contained in Article VIII of the Credit
Agreement and Article IV of the ADT Limited Guaranty applicable to such
Subsidiary Guarantor or such Subsidiary Guarantor's properties. Each such
agreement, covenant and obligation contained in each such Article and all
related definitions and ancillary provisions are hereby incorporated into this
Guaranty as though specifically set forth herein.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof, including, without
limitation, Article XI thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.6, this
Guaranty shall be binding upon each Subsidiary Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
each Lender Party and each holder of a Note and their respective successors,
transferees and assigns (to the full extent provided pursuant to Section 2.6);
provided, however, that no Subsidiary Guarantor may assign any of its
obligations hereunder without the prior written consent of all Lenders.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by any Subsidiary
Guarantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by each Subsidiary Guarantor and the Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 5.4. Addresses for Notices to the Subsidiary Guarantor.
All notices and other communications hereunder to any Subsidiary Guarantor
shall be in writing or by facsimile and addressed, delivered or transmitted to
it in care of the Borrower at the address and facsimile number and in the
manner provided for in Section 11.2 of the Credit Agreement.
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
Lender Party or any holder of a Note 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. Headings. The various headings used in this Guaranty
are for convenience of reference only and shall not affect the construction of
this Guaranty.
SECTION 5.7. Setoff. In addition to, and not in limitation of,
any rights of any Lender Party or any holder of a Note under applicable law,
each Lender Party and each such holder 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 any
Subsidiary Guarantor owing to it hereunder, whether or not then due, any and
all balances, credits, deposits, accounts or moneys of such Subsidiary
Guarantor then or thereafter maintained with such Lender Party or such holder;
provided, however, that any such appropriation and application shall be
subject to the provisions of Section 5.8 of the Credit Agreement.
SECTION 5.8. Severability. Wherever possible, each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty 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 Guaranty.
SECTION 5.9. Execution in Counterparts. This Guaranty may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 5.10. Governing Law; Entire Agreement. THIS GUARANTY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.
SECTION 5.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR ANY SUBSIDIARY GUARANTOR
SHALL BE BROUGHT AND MAINTAINED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH SUBSIDIARY GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH SUBSIDIARY GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH
SUBSIDIARY GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY SUBSIDIARY GUARANTOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, SUCH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 5.12. Waiver of Jury Trial. THE LENDER PARTIES AND EACH
SUBSIDIARY GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE LENDER PARTIES OR ANY SUBSIDIARY GUARANTOR. EACH SUBSIDIARY
GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO THE CREDIT AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
SECTION 5.13. Additional Subsidiary Guarantors. Upon
execution and delivery by the Agent and any other Person (each such Person
being an "Additional Subsidiary Guarantor") of an instrument in the form of
Annex I attached hereto, such Additional Subsidiary Guarantor shall become a
Subsidiary Guarantor hereunder with the same force and effect as if originally
named as a Subsidiary Guarantor herein. The execution and delivery of any
such instrument shall not require the consent of any Subsidiary Guarantor
hereunder. The rights and obligations of each Subsidiary Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any
Additional Subsidiary Guarantor as a party to this Guaranty.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
ADT GENERAL HOLDINGS, INC.
By:
----------------------
Title:
ADT SECURITY SERVICES, INC.
(formerly known as ADT
SECURITY SYSTEMS, INC.)
By:
----------------------
Title:
ADT SECURITY SYSTEMS,
WEST, INC.
By:
----------------------
Title:
ADT AUTOMOTIVE, INC.
By:
----------------------
Title:
ADT AUTOMOTIVE HOLDINGS, INC.
By:
----------------------
Title:
AA PROPERTY HOLDINGS, INC.
By:
----------------------
Title:
ADT INVESTMENTS, INC.
By:
----------------------
Title:
AAAA DEALERS SERVICES, INC.
By:
----------------------
Title:
ADT BUSINESS HOLDINGS, INC.
By:
----------------------
Title:
ADT PROPERTY HOLDINGS, INC.
By:
----------------------
Title:
ADT SECURITY SYSTEMS
MANUFACTURING, INC.
By:
----------------------
Title:
MID-ATLANTIC SECURITY, INC.
By:
----------------------
Title:
ADT AUTOMOTIVE SERVICES, INC.
By:
----------------------
Title:
AUCTION TRANSPORT, INC.
By:
----------------------
Title:
BRITISH CAR AUCTIONS, INC.
By:
----------------------
Title:
CCTC INTERNATIONAL, INC.
By:
----------------------
Title:
ADT SPECIALTY AUCTIONS, INC.
By:
----------------------
Title:
FLYING LION INC.
By:
----------------------
Title:
TRI-CITY AUTO AUCTION, INC.
By:
----------------------
Title:
ADT SERVICES, INC.
By:
----------------------
Title:
Acknowledged and Accepted:
THE BANK OF NOVA SCOTIA,
as Agent
By:
-----------------------------
Title:
ANNEX I
to
Subsidiary Guarantor Guaranty
SUBSIDIARY GUARANTOR GUARANTY SUPPLEMENT
THIS SUBSIDIARY GUARANTOR GUARANTY SUPPLEMENT (this "Supplement"),
dated as of _____________, 199_, to the Subsidiary Guarantor Guaranty, dated
as of January ___, 1997 (as amended or otherwise modified through the date
hereof, the "Subsidiary Guaranty"), made by each Person identified on the
signature pages thereto, certain other Persons who subsequently became a party
thereto by executing an agreement in substantially the form hereof (each an
"Additional Subsidiary Guarantor" and, together with each Person identified on
the signature pages of the Guaranty, the "Subsidiary Guarantors"), in favor of
The Bank of Nova Scotia ("Scotiabank"), as documentation agent (the
"Documentation Agent") for each of the Lender Parties (such capitalized term
and all other capitalized terms used in this Supplement without being defined
shall have the meaning provided for in the Subsidiary Guaranty).
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of January ___,
1997 (together with all amendments and other modifications, if any, from time
to time made thereto, the "Credit Agreement"), among ADT Operations, Inc., a
Delaware corporation (the "Borrower"), the financial institutions as are or
may become parties thereto (collectively, the "Lenders"), and The Bank of Nova
Scotia ("Scotiabank"), individually and as agent (the "Agent") for the
Lenders, the Lenders have extended Commitments to make Credit Extensions to or
on behalf of the Borrower;
WHEREAS, it is in the best interests of the undersigned (the "New
Additional Subsidiary Guarantor") to execute this Supplement inasmuch as the
New Additional Subsidiary Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made by the Lenders pursuant to the Credit
Agreement; and
WHEREAS, the New Additional Subsidiary Guarantor desires to become
an Additional Subsidiary Guarantor under the Subsidiary Guaranty pursuant to
Section 5.13 thereof;
NOW, THEREFORE, for good and valuable consideration the receipt
of which is hereby acknowledged, the New Additional Subsidiary Guarantor
agrees, for the benefit of each Lender Party, as follows:
SECTION 1. Additional Subsidiary Guarantor. In accordance with
Section 5.13 of the Subsidiary Guaranty, the New Additional Subsidiary
Guarantor by its signature hereto shall become a Subsidiary Guarantor under
the Subsidiary Guaranty with the same force and effect as if originally named
as a Subsidiary Guarantor therein, and each reference to a "Subsidiary
Guarantor" or an "Additional Subsidiary Guarantor" in the Subsidiary Guaranty
shall be deemed to include the New Additional Subsidiary Guarantor. The New
Additional Subsidiary Guarantor hereby agrees to all the terms and provisions
of the Subsidiary Guaranty applicable to it as an Additional Subsidiary
Guarantor thereunder.
SECTION 2. Guaranty. Without limiting the terms of Section 1, the
New Additional Subsidiary Guarantor hereby absolutely, unconditionally and
irrevocably, jointly and severally,
(a) guarantees the full and punctual payment when due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the
Borrower and each other Obligor, whether for principal, interest,
fees, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
Section 362(a), and the operation of Sections 502(b) and 506(b) of
the United States Bankruptcy Code, 11 U.S.C. Section 502(b) and
Section 506(b)); and
(b) indemnifies and holds harmless each Lender Party and
each holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Lender
Party or such holder, as the case may be, in enforcing any rights
under this Supplement or the Subsidiary Guaranty;
provided, however, that the New Additional Subsidiary Guarantor shall be
liable under this Supplement and the Subsidiary Guaranty for the maximum
amount of such liability that can be incurred without rendering this Supplement
and the Subsidiary Guaranty, as it relates to the New Additional Subsidiary
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount. This Supplement and the
Subsidiary Guaranty constitute a guaranty of payment when due and not of
collection, and the New Additional Subsidiary Guarantor specifically agrees
that it shall not be necessary or required that any Lender Party or any holder
of any Note exercise any right, assert any claim or demand or enforce any
remedy whatsoever against the Borrower or any other Obligor (or any other
Person) before or as a condition to the obligations of the New Additional
Subsidiary Guarantor under this Supplement or the Subsidiary Guaranty.
SECTION 3. Warranties, etc. The New Additional Subsidiary
Guarantor hereby represents and warrants unto each Lender Party, as of the
date hereof, as follows:
(a) each of the representations and warranties set forth in
Article III of the Subsidiary Guaranty as applied to such New
Additional Subsidiary Guarantor are true and correct; and
(b) the execution, delivery and performance by the New
Additional Subsidiary Guarantor of this Supplement are within its
corporate powers, have been duly authorized by all necessary
corporate action and constitute the legal, valid and binding
obligation of the New Additional Subsidiary Guarantor enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting enforceability of creditors,
rights generally and to general principles of equity.
SECTION 4. Subsidiary Guaranty Remains in Full Force and Effect.
Except as expressly supplemented hereby, the Subsidiary Guaranty shall remain
in full force and effect in accordance with its terms.
SECTION 5. Governing Law. THIS SUPPLEMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK.
SECTION 6. Severability. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement 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 Supplement.
SECTION 7. Execution in Counterparts. This Supplement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute but one and the same
agreement.
SECTION 8. Consent to Jurisdiction. If the New Additional
Subsidiary Guarantor is organized under the laws of a jurisdiction outside of
the United States, such New Additional Subsidiary Guarantor shall consent to
the jurisdiction of New York courts (including the appointment of an agent to
receive summons and complaints in connection with any litigation) on terms
reasonably satisfactory to the Agent.
SECTION 9. Expenses. Without limiting the provisions of the
Credit Agreement, the New Additional Subsidiary Guarantor agrees to reimburse
the Agent for all reasonable out-of-pocket expenses incurred in connection with
this Supplement, including the reasonable fees and expenses of counsel of the
Agent.
SECTION 10. Notices. The address and facsimile number for all
notices to be delivered to the New Additional Subsidiary Guarantor in
connection with the Subsidiary Guaranty is as set forth in Section 5.4 of the
Subsidiary Guaranty.
SECTION 11. Subsidiary Guaranty. This Supplement hereby
incorporates by reference the provisions of the Subsidiary Guaranty, which
provisions are deemed to be a part hereof, and this Supplement shall be deemed
to be a part of the Subsidiary Guaranty.
IN WITNESS WHEREOF, the New Additional Subsidiary Guarantor
has duly executed this Supplement to the Subsidiary Guaranty as of the day and
year first above written.
[NAME OF NEW ADDITIONAL
SUBSIDIARY GUARANTOR]
By
-----------------------
Title:
Acknowledged and Accepted:
THE BANK OF NOVA SCOTIA,
as Agent
By
------------------------
Title:
EXHIBIT K
[LETTERHEAD OF ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇]
______________, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as the Agent for the Lenders,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇,
▇.▇.▇.
- and -
Each of the Lenders party to the Credit
Agreement referred to below
Dear Sirs,
Re: ADT LIMITED (the "Company")
We have been instructed by the Company to address this opinion to
you in connection with the Guaranty, dated as of the 9th January, 1997 (the
"Guaranty"), entered into by the Company in connection with the US$200,000,000
Credit Agreement, dated as of the 9th January, 1997 (the "Credit Agreement")
among ADT Operations, Inc (the "Borrower''), the certain commercial lending
institutions as are or may become parties thereto (collectively, the
"Lenders"), The Bank of Nova Scotia, individually and as Agent for the Lenders
(the "Agent"). This opinion is given pursuant to Section 6.1.9(b) of the
Credit Agreement.
Unless otherwise defined herein, terms defined in the Guaranty,
have the same meanings when used in this opinion.
For the purposes of this opinion, we have been supplied with and
have reviewed, and relied upon the following documents:
(a) a copy of the executed Credit Agreement;
(b) a copy of the executed Guaranty;
(c) certified copies of the Certificate of Incorporation,
Memorandum of Association and Bye-laws of the Company; and
(d) a certified copy of the Resolutions of the Board of
Directors of the Company passed on the 6th January, 1997 (the
"Certificate"), approving the Guaranty and the Credit Agreement
and authorizing the execution and delivery of the Guaranty on
behalf of the Company.
We have also relied upon our searches of documents of public record
maintained by the Registrar of Companies in Bermuda and of the Cause Book of
the Supreme Court of Bermuda made on the 8th January, 1997 (the "Searches").
In giving this opinion, we have assumed:
(a) the capacity, power and authority of each of the parties to
the Credit Agreement;
(b) the due execution and delivery of the Credit Agreement by
each of the parties thereto;
(c) the conformity to original documents of all documents
submitted to us as copies and the authenticity and completeness of
all original documents;
(d) that the information disclosed by our Searches has not been
materially altered and that the Searches did not fail to disclose
any material information which had been delivered for filing or
registration, but was not disclosed or did not appear on the
public file at the time of the Searches;
(e) that the Guaranty and the Credit Agreement are legal, valid,
binding and enforceable under the laws of the State of New York, by
which they are expressed to be governed;
(f) the truth, accuracy and completeness of all factual
representations and warranties made in the Certificate, the
Guaranty and the Credit Agreement;
(g) the genuineness of all signatures on the documents which we
have examined; and
(h) that there are no provisions of the laws of any
jurisdiction, other than Bermuda, which would have any implication
in relation to the opinion expressed herein.
The opinion is limited to Bermuda law as applied by the Bermuda
Courts. We have made no investigation of the laws of any jurisdiction
other than Bermuda and neither express nor imply any opinion as to any
other law, in particular the laws of the United States of America.
Based upon the foregoing, subject to the qualifications set out
below, to matters not disclosed to us and matters of fact which would affect
the conclusions set out below, and having regard to such legal considerations
as we deem relevant, we are of the opinion that insofar as the present laws of
Bermuda are concerned:
(1) The Company is a company duly incorporated and validly
existing under and in compliance with Bermuda law.
(2) The Company has the corporate power and authority to enter
into and perform the Guaranty and has taken all necessary action
to authorise the execution, delivery and performance of the
Guaranty.
(3) The Guaranty has been duly executed and validly delivered.
(4) The obligations of the Company as set out in the Guaranty
constitute legal, valid and binding obligations of the Company.
(5) The Company having been designated as non-resident for the
purposes of the Exchange Control ▇▇▇ ▇▇▇▇, it is not necessary for
the consent of any authority or agency of Bermuda to be obtained
to enable the Company to enter into and perform its obligations
set out in the Guaranty.
(6) The obligations of the Company under the Guaranty will rank
at least pari passu in priority of payment with all other unsecured
unsubordinated indebtedness of the Company other than indebtedness
which is preferred by virtue of any provision of Bermuda law of
general application.
(7) The execution, delivery and performance of the Guaranty by
the Company (i) does not and will not violate the Certificate of
Incorporation, Bye-laws or Memorandum of Association of the
Company; (ii) conflict with any law or governmental rule or
regulation of Bermuda (including the Companies Act of 1981 of
Bermuda); and (iii) as far as can be ascertained from the Searches
does not and will not violate or conflict with any judgment,
order, decree, injunction or award of any authority, agency or
court in Bermuda to which the Company is subject.
(8) As far as can be ascertained from the Searches, no
litigation, arbitration or administrative proceeding of or before
any court, arbitrator or governmental instrumentality of or in
Bermuda is, to the best of our knowledge, pending with respect to
the Credit Agreement, the Guaranty or the transactions
contemplated thereby.
(9) The Company will be permitted to make all payments under the
Guaranty free of any deduction or withholding therefrom in Bermuda
and such payments will not be subject in the hands of the Lenders
or the Agents to any Tax imposed by the government of Bermuda or
any taxing authority thereof or therein.
(10) The entry into, performance and enforcement of the Guaranty
will not give rise to any registration fee or to any stamp, excise
or other similar tax imposed by the government of Bermuda or any
taxing authority thereof or therein.
(11) It is not necessary or advisable under the laws of Bermuda
in order to ensure the validity, effectiveness or enforceability
of the Guaranty that the Guaranty be filed, registered or recorded
in any public office or elsewhere in Bermuda.
(12) The choice of the laws of the State of New York to govern the
Guaranty is a proper, valid and binding choice of law and will be
recognised and applied by the Courts of Bermuda assuming that such
choice of law is a valid and binding choice of law under the laws
of the State of New York.
(13) The submission by the Company to the non-exclusive
jurisdiction of the courts of New York pursuant to Section 5 of
the Guaranty is valid and binding upon the Company, assuming that
such submission is accepted by the courts of New York, and is not
subject to revocation.
(14) A final and conclusive judgment obtained in the courts of
the State of New York under which a sum of money is payable, not
being a sum payable in respect of taxes or other charges of a like
nature or in respect of a fine or other penalty or in respect of
Multiple Damages (as defined in The Protection of Trading Interest
Act 1981), would be enforced as a debt against the Company by an
action in the Supreme Court of Bermuda without a re-examination of
the merits of the case under the Common Law Doctrine of
Obligation, provided that such judgment was not obtained by fraud
or that its enforcement would not be contrary to public policy in
Bermuda or that the proceedings in which the same was obtained
were not contrary to natural justice.
(15) It is not necessary under the laws of Bermuda (a) in order to
enable the Agents or the Lenders to enforce their rights under the
Guaranty or (b) by reason of the execution of the Guaranty or the
Credit Agreement or the performance by the Lenders of their
obligations under the Credit Agreement, that the Lenders or the
Agents be licensed or qualified or otherwise entitled to carry on
business in Bermuda.
(16) None of the Agents or the Lenders is or will be deemed to be
resident, domiciled, carrying on business or subject to taxation in
Bermuda by reason only of the entry into, performance and/or
enforcement of the Company Guaranty or the Credit Agreement.
Our reservations as follows:
A. We express no opinion as to whether specific performance or
injunctive relief, being equitable remedies, would necessarily be available in
respect of any of the obligations of the
Company as set out in the Guaranty.
B. We express no opinion as to the validity or the binding effect of
any obligations set out in the Credit Agreement or the Guaranty which provides
for the payment of a higher rate of interest on overdue amounts than on amounts
which are current. A Bermuda court, even if it were applying the laws of the
State of New York, might not give effect to such a provision if it could be
established that the amount expressed as being payable was such that the
provision was in the nature of a penalty; that is to say a requirement for a
stipulated sum to be paid irrespective of, or necessarily greater than, the
loss likely to be sustained.
C. The obligations of the Company under the Guaranty will be subject
to any laws from time to time in effect relating to bankruptcy or liquidation
or any other laws or other legal procedures affecting generally the
enforcement of creditors' rights and may also be the subject of the statutory
limitation of the time within which such proceedings may be brought.
D. The registration of a New York Court judgment in the Supreme Court
of Bermuda involves the conversion of the judgment debt into Bermuda dollars,
but the Controller of Foreign Exchange has indicated that the present policy
is to give the consents necessary for any Bermuda dollar award made by the
Supreme Court of Bermuda as aforesaid to be converted into external currency.
E. Any provision in the Guaranty that certain calculations and/or
certificates will be conclusive and binding will not be effective if such
calculations are fraudulent or erroneous on their face and will not
necessarily prevent juridical enquiries into the merits of any claim by an
aggrieved party.
F. To the extent that the Credit Agreement, Guaranty or the
transactions contemplated thereunder, create or give rise to the creation of
any charge over any assets of the Company, or create a charge on property in
Bermuda which is acquired by a Company incorporated outside of Bermuda, such
Charge will be registrable under Part V of the Companies Act, 1981 of Bermuda.
The fee payable for registration of a Charge (securing a sum greater than
US$1,000,000) is $425.00. Registration is not compulsory and there is no time
limit within which it must be effected. However, to the extent that matters of
priority of competing charges over such assets are determined in accordance
with Bermuda law, any charge registered under the said Act will have priority
based on the date that it is registered and not on the date of its creation
and will have such priority over any unregistered charge and on any charge
which is subsequently registered under the said Act in each case, which
pertains to such assets.
G. A Bermuda court may refuse to give effect to any provisions of the
Guaranty in respect of costs of unsuccessful litigation brought before the
court or where that court has itself made an order for costs.
H. We express no opinion as to any law other than Bermuda law and none
of the opinions expressed herein relates to compliance with or matters governed
by the laws of any jurisdiction except Bermuda. Where an obligation is to be
performed in a jurisdiction other than Bermuda, the Courts of Bermuda may
refuse to enforce it to the extent that such performance would be illegal or
contrary to public policy under the laws of such other jurisdiction.
I. The Searches showed a cause of action in which the Company is named
as defendant. The Acton was commenced in 1991 under action number 01299. The
Plaintiff is ▇▇▇▇▇▇▇ Investments (Barbados) Ltd. We are unable to verify
whether this litigation is proceeding, or has been discontinued, and whether
if it proceeded any judgment was rendered against the Company, whether this
judgment would have any material effect on the Company.
This opinion is issued on the basis that it will be governed by and construed
in accordance with the laws of Bermuda and that any legal proceedings with
respect thereto will be brought in the Courts of Bermuda. It is issued solely
for your benefit for the purpose of the transactions described in the Credit
Agreement and the Guaranty and it is not to be relied upon by any other Person
(other than permitted assigns under the Credit Agreement), or for any other
purpose, without our prior written consent.
Yours faithfully,
EXHIBIT L-1
[LETTERHEAD OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
____________, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-and-
Each of the Lenders party to the
Credit Agreement referred to below
Dear Sirs:
We have participated in the preparation of the $US200,000,000
Credit Agreement, dated as of January 9, 1997 (the "Credit Agreement"), among
ADT Operations, Inc. (the "Borrower"), the financial institutions parties
thereto as lenders (collectively, the "Lenders") and The Bank of Nova Scotia,
individually, as issuer of letters of credit thereunder and as agent for the
Lenders (the "Agent"). Unless otherwise defined herein, terms used herein have
the meanings provided in the Credit Agreement. This opinion is given pursuant
to Section 6.1.9(b) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
These documents, records, certificates and instruments include the following
(in each case dated as of the date of the Credit Agreement unless otherwise
indicated):
(a) An executed copy of the Credit Agreement;
(b) An executed copy of each of the Notes issued on January 14,
1997 (the "Notes");
(c) An executed copy of the ADT Limited Guaranty; and
(d) An executed copy of the Subsidiary Guarantor Guaranty.
The documents referred to in items (a) through (d) above are
referred to herein collectively as the "Credit Documents". The Borrower, ADT
Limited and the Subsidiary Guarantors are collectively referred to as the
"Credit Parties".
On the basis of the foregoing, and in reliance thereon, and
subject to the limitations, qualifications, assumptions and exceptions set
forth herein, we are of the opinion that as of the date hereof:
1. Each Credit Document (other than the Notes) constitutes a
valid and binding agreement of each Credit Party party thereto, and each Note
constitutes a valid and binding obligation of the Borrower, in each case
enforceable against such Credit Party or the Borrower, as the case may be, in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general principles
of equity.
2. None of the execution and delivery on the date hereof by any
Credit Party of any Credit Document to which it is a party or the performance
by such Credit Party of its obligations thereunder (a) conflicts with, results
in a breach or violation of, or constitutes a default under, any of the terms,
conditions or provisions of (i) any agreement or instrument listed on Schedule
1 hereto (each a "Designated Agreement") or (ii) the Delaware General
Corporation Law or any federal or New York State law, statute, rule or
regulation binding on any Credit Party which in our experience is normally
applicable to general business corporations and to transactions of the type
contemplated by the Credit Documents or (b) results in the creation of any
Lien upon any assets of any Credit Party under any Designated Agreement.
3. Neither the making of the Loans nor the issuance of the
Letters of Credit as provided in the Credit Agreement violates Regulation G, U
or X of the Board of Governors of the Federal Reserve System.
4. No governmental consents, approvals, authorizations,
registrations, declarations or filings (other than those that have been duly
obtained and are in full force and effect and routine filings with the
Securities and Exchange Commission) are required to be made or obtained by any
Credit Party under the Delaware General Corporation Law or any federal or New
York State law in connection with (a) the making of the Loans or the issuance
of the Letters of Credit under the Credit Agreement, (b) the execution,
delivery and performance by each Credit Party thereto of any of the Credit
Documents or (c) the legality, validity, binding effect or enforceability of
any Credit Document.
5. No Credit Party is an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
6. No Credit Party is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
7. The obligations of the Borrower and ADT Limited under the
Credit Documents constitute "Senior Indebtedness" and "Guarantor Senior
Indebtedness", respectively, in each case as defined in each of the Senior
Subordinated Note Indenture and the ▇▇▇▇▇ Indenture.
The foregoing opinion is subject to the following
qualifications:
(a) Our opinion is subject to the effect of, and we express no
opinion as to the possible application to the transactions contemplated by the
Credit Documents of, any applicable fraudulent conveyance, fraudulent transfer
or similar law.
(b) We express no opinion as to provisions in the Credit
Documents which purport to create rights of set-off in favor of participants
or which provide for set-off to be made otherwise than in accordance with
applicable laws.
(c) We have assumed (i) the genuineness of all signatures of all
parties to any Credit Document, (ii) that each Person that is a party to any
Credit Document has full power, authority and legal right under its charter
and other governing documents and laws applicable to it to execute, deliver
and perform its obligations under the Credit Documents to which it is a party,
(iii) that the execution, delivery and performance by each Credit Party of
each Credit Document to which it is a party have been duly authorized by all
necessary corporate action and do not conflict with the charter or other
governing documents of such Credit Party and (iv) that each of the Credit
Documents constitutes a valid and binding agreement of each Person party
thereto that is not a Credit Party, enforceable against each such Person in
accordance with its terms.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the Delaware General Corporation Law.
In giving the foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New York) in which
any Lender is located which limits the rate of interest that such Lender may
charge or collect.
This opinion is rendered solely to you and is solely for your
benefit (and the benefit of your permitted assigns under the Credit Agreement)
in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by any other Person without our prior
written consent.
Very truly yours,
Schedule 1
Company and Facility
Purchase Agreement dated January 20, 1993 among the shareholders of Skyline
Auto Exchange, Inc., ▇▇▇▇▇▇▇▇ Auto Auction, Inc., ▇▇▇▇▇▇▇▇ Auto
Transport, Inc., Keystone Recon Center, Inc., Johnst on Auto Auction,
Inc., Dothan Auto Exchange Inc. and Anglo Ameri can Auto Auctions Inc.
ADT Limited guaranty dated as of March, 1993 of Anglo American Auto Auctions
Inc.'s payment and performance under the Purchase Agreement dated
January 20, 1993 among the shareholders of Skyline Auto Exchange, Inc.,
▇▇▇▇▇▇▇▇ Auto Auction, Inc., ▇▇▇▇▇▇▇▇ Auto Transport, Inc., Keystone Recon
Center, Inc., ▇▇▇▇▇▇▇▇ Auto Auction, Inc., Dothan Auto Exchange Inc. and
Anglo American Auto Auctions Inc.
ADT Limited guaranty dated February 7, 1992, of Anglo American AutoAuctions,
Inc.'s facility with NBD Bank, N.A.
ADT Limited guarantee and waiver dated as of July 11, 1992, of P.I. Management
Services Limited's obligations to Stork Limited and Sentry Financial
Corporation
Senior Note Indenture
Senior Subordinated Note Indenture
▇▇▇▇▇ Indenture
EXHIBIT L-2
[LETTERHEAD OF ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP]
______________, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-and -
Each of the Lenders
party to the Credit
Agreement referred to below
Dear Sirs:
We have acted as counsel to ADT Operations, Inc., a Delaware
corporation (the "Borrower"), in connection with the US $200,000,000 Credit
Agreement dated as of January 9, 1997 (the "Credit Agreement") among the
Borrower, the financial institutions parties thereto (collectively, the
"Lenders") and The Bank of Nova Scotia, individually and as agent (in such
capacity, the "Agent") for the Lenders. Unless otherwise defined herein, terms
used herein have the respective meanings provided in the Credit Agreement.
In this connection, we have examined originals, or certified or
photostatic copies, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for
purposes of this opinion, including without limitation:
(a) the Credit Agreement;
(b) each of the Notes;
(c) the ADT Limited Guaranty;
(d) the Subsidiary Guarantor Guaranty; and
(e) the Subordination Agreement.
The documents referred to in items (a) through (e) above are
referred to herein collectively as the "Credit Documents". The Borrower, ADT
Limited and each Subsidiary Guarantor are collectively referred to as the
"Credit Parties".
We have assumed the genuineness of all signatures, the
authenticity of all documents tendered to us as originals, the conformity to
original documents of all documents submitted to us as certified, photostatic
or facsimile copies and the corporate authority of any individual executing
such documents.
Based upon the foregoing and such other investigations of fact and
law as we have deemed appropriate, it is our opinion that:
1. Each of the Credit Parties organized under the laws of the
State of Delaware (the "Delaware Credit Parties"), which Delaware Credit
Parties are set forth on Exhibit A attached hereto, is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority under such laws to (a)
own, lease and operate its properties and conduct its business and (b)
execute, deliver and perform the Credit Documents to which it is a party.
2. Each Delaware Credit Party is qualified to do business as a
foreign corporation and is in good standing in each other jurisdiction in
which, to our knowledge, its properties or business require such
qualification, provided that any failure to be so qualified does not create a
materially adverse effect on the Delaware Credit Parties taken as a whole.
3. The execution and delivery by the Delaware Credit Parties of
the Credit Documents to which they are parties, and the performance by such
Delaware Credit Parties of their respective obligations thereunder, do not and
will not result in any violation of the charter and by-laws of any of the
Delaware Credit Parties.
4. The Credit Documents executed by the Delaware Credit Parties
have been duly executed and delivered by such Delaware Credit Parties.
5. The execution, delivery and performance by the Delaware
Credit Parties of the Credit Documents executed by such Delaware Credit
Parties have been duly authorized.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware.
This opinion is made as the date hereof and we assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in law
which may hereafter occur. This opinion is rendered solely to you and is
solely for your benefit (and the benefit of your permitted assigns under the
Credit Agreement) in connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by any other Person
without our prior written consent.
Very truly yours,
▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
EXHIBIT A
DELAWARE CREDIT PARTIES
Corporate
AAAA Dealer Services, Inc.
AA Property Holdings, Inc.
ADT Automotive Holdings, Inc.
ADT Automotive, Inc.
ADT Automotive Services, Inc.
ADT Business Holdings, Inc.
ADT General Holdings, Inc.
ADT Investments, Inc.
ADT Operations, Inc.
ADT Property Holdings, Inc.
ADT Security Services, Inc.
ADT Security Systems, Manufacturing, Inc.
ADT Security Systems, West, Inc.
ADT Services, Inc.
British Car Auctions, Inc.
CCTC International, Inc.
Flying Lion, Inc.
Mid-Atlantic Security, Inc.
EXHIBIT L-3
[ADT LOGO]
___________, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
I have participated in the preparation of the US$200,000,000
Credit Agreement, dated as of January 9, 1997 (the "Credit Agreement"), among
ADT Operations, Inc. (the "Borrower"), the financial institutions parties
thereto (the "Lenders") and The Bank of Nova Scotia, individually, as issuer
of letters of credit thereunder and as agent for the Lenders ( in such
capacity, the "Agent"). Unless otherwise defined herein, terms used herein
have the meanings provided in the Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as in my judgment are
necessary or appropriate to enable me to render the opinions expressed below.
These documents, records, certificates and instruments include the following
(in each case dated as of the date of the Credit Agreement unless otherwise
indicated):
(a) An executed copy of the Credit Agreement;
(b) An executed copy of the Note;
(c) An executed copy of the ADT Limited Guaranty; and
(d) An executed copy of the Subsidiary Guarantor Guaranty.
The documents referred to in items (a) through (d) above are
referred to herein collectively as the "Credit Documents". The Borrower, ADT
Limited and each Subsidiary Guarantor are collectively referred to as the
"Credit Parties".
On the basis of the foregoing, and in reliance thereon, and
subject to the limitations, qualification, assumptions and exceptions set
forth herein, I am of the opinion that as of the date hereof:
1. To the best of my knowledge, neither the execution and
delivery on the date hereof by the Credit Parties of the Credit Documents to
which they are parties, the consummation on the date hereof of the
transactions contemplated thereby nor the performance by such Credit Parties
of their obligations thereunder conflicts with, results in a breach or
violation of, or constitutes a default under, any of the terms, conditions or
provisions of any order, writ, injunction, or decree of any court or
governmental authority applicable to ADT Limited or any of its Subsidiaries.
2. To the best of my knowledge, there is no litigation, action,
proceeding or labor controversy pending or threatened against any Credit Party
in which an injunction or order has been entered preventing the making of the
Loans or the issuance or maintenance of the Letters of Credit, or which
questions the validity or enforceability of any of the Credit Documents or the
transactions contemplated thereby.
I am a member of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and federal
laws of the United States of America.
This opinion is rendered solely to you and is solely for your
benefit (and the benefit of your permitted assigns under the Credit Agreement)
in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by any other Person without my prior
written consent.
Sincerely,
▇▇▇ ▇. ▇▇▇▇
ADT, Inc.
Vice President and General Counsel
[ADT LOGO]
VIA FEDERAL EXPRESS
___________, 1997
Each of the Lenders party
from time to time to the Credit
Agreement referred to below
- and -
The Bank of Nova Scotia,
as Agent for the Lenders
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you pursuant to clause (d) of
Section 6.1.9 of the US$200,000,000 Credit Agreement, dated as of January 9,
1997 (the "Credit Agreement"), among ADT Operations, Inc., a Delaware
corporation (the "Borrower"), the various financial institutions as are or may
become parties thereto (collectively, the "Lenders") and The Bank of Nova
Scotia, individually and as agent (the "Agent") for the Lenders. Unless
otherwise defined herein or the context otherwise requires, capitalized terms
used herein have the meanings provided in the Credit Agreement.
I have acted as general counsel to ADT Group plc, a company
organized under the laws of England ("ADT Group plc"), and ADT Security
Services, Inc. (formerly known as ADT Security Systems, Inc.), a Delaware
corporation (together with ADT Group plc, the "Subject Companies"), in
connection with the Subordination Agreement, dated as of January 9, 1997 (the
"Subordination Agreement"), made by the Subject Companies in favor of the
holders from time to time of Senior Indebtedness (as defined in the
Subordination Agreement), and, in that regard, I have examined originals, or
certified or photostatic copies, of such documents, corporate records,
certitudes of public officials and other instruments as I have deemed
necessary for purposes of this letter, including, without limitation, the
Subordination Agreement.
In my examination of the Subordination Agreement, I have
assumed the authenticity of all its documents submitted to me as originals,
the genuineness of all signatures, the conformity to original documents
submitted to me as certified copies of photocopies and the authenticity of the
originals of such letter documents.
Based upon the foregoing examination of documents and
assumptions and upon such other investigation as I have deemed necessary, I am
of the opinion that:
1. ADT Group plc is a company duly incorporated and validly
existing under and in compliance with English law.
2. Each of the Subject Companies has the corporate power and
authority to enter into and perform the Subordination Agreement and has taken
all necessary action to authorize the execution, delivery and performance of
the Subordination Agreement.
3. The Subordination Agreement has been duly executed and validly
delivered by ADT Group plc.
4. The Subordination Agreement executed and delivered by each of
the Subject Companies constitutes a legal, valid and binding obligation of
each Subject Company, enforceable against it in accordance with its terms.
5. The choice of the laws of the State of New York to govern the
Subordination Agreement is a proper, valid and binding choice of law and will
be recognized and applied by the courts of England assuming that such choice
of law is a valid and binding choice of law under the laws of the State of New
York.
6. The submission by ADT Group plc to the jurisdiction of the
courts of New York pursuant to Section 16 of the Subordination Agreement is
valid and binding upon ADT Group plc, assuming that such submission is
accepted by the courts of New York.
This opinion letter is being furnished to you for your use in
connection with the transactions contemplated by the Subordination Agreement
and may not be relied upon by any other person without my prior written
consent.
Very truly yours,
▇▇▇ ▇. ▇▇▇▇
Vice President and General Counsel