EXHIBIT 10.18
[CONFORMED COPY]
GUARANTY,
dated as of January 9, 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 9, 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: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Chief Financial Officer &
Executive Vice President
Address: Cedar House
41 Cedar Avenue
▇▇▇▇▇▇▇▇ ▇▇ 12
Bermuda
With a copy to:
ADT Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
Acknowledged and Accepted:
THE BANK OF NOVA SCOTIA,
as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Relationship Manager