1
EXHIBIT 10.3
CONFORMED COPY
$500,000,000
BRIDGE CREDIT AGREEMENT
dated as of
June 27, 1997
among
Tyco International Ltd.,
The Banks Listed Herein
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent
2
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Accounting Terms and Determinations...........................17
SECTION 1.03. Types of Borrowings...........................................17
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend...........................................18
SECTION 2.02. Notice of Committed Borrowing.................................18
SECTION 2.03. The Money Market Borrowings...................................18
SECTION 2.04. Notice to Banks; Funding of Loans.............................22
SECTION 2.05. Promissory Notes..............................................23
SECTION 2.06. Maturity of Loans.............................................23
SECTION 2.07. Interest Rates................................................24
SECTION 2.08. Facility Fee..................................................27
SECTION 2.09. Optional Termination or Reduction of Commitments..............27
SECTION 2.10. Mandatory Termination and Reduction of Commitments............28
SECTION 2.11. Prepayments...................................................28
SECTION 2.12. General Provisions as to Payments.............................29
SECTION 2.13. Funding Losses................................................29
SECTION 2.14. Computation of Interest and Fees..............................30
SECTION 2.15. Regulation D Compensation.....................................30
SECTION 2.16. Method of Electing Interest Rates.............................30
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness.................................................32
SECTION 3.02. Consequences of Effectiveness; Transitional Provisions........33
SECTION 3.03. Borrowings....................................................33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power.................................34
SECTION 4.02. Corporate and Governmental Authorization; No Contravention....34
SECTION 4.03. Binding Effect................................................34
SECTION 4.04. Financial Information.........................................34
3
PAGE
----
SECTION 4.05. Litigation....................................................35
SECTION 4.06. Compliance with ERISA.........................................35
SECTION 4.07. Environmental Matters.........................................35
SECTION 4.08. Taxes.........................................................36
SECTION 4.09. Subsidiaries..................................................36
SECTION 4.10. Not an Investment Company.....................................36
SECTION 4.11. Full Disclosure...............................................36
ARTICLE 5
COVENANTS
SECTION 5.01. Information...................................................37
SECTION 5.02. Payment of Obligations........................................39
SECTION 5.03. Maintenance of Property; Insurance............................39
SECTION 5.04. Conduct of Business and Maintenance of Existence..............39
SECTION 5.05. Compliance with Laws..........................................40
SECTION 5.06. Inspection of Property, Books and Records; Confidentiality....40
SECTION 5.07. Limitation on Restrictions on Subsidiary Dividends and Other
Distributions.................................................42
SECTION 5.08. Debt..........................................................43
SECTION 5.09. Fixed Charge Coverage.........................................44
SECTION 5.10. Restricted Payments...........................................44
SECTION 5.11. Negative Pledge...............................................44
SECTION 5.12. Consolidations, Mergers and Sales of Assets...................46
SECTION 5.13. Use of Proceeds...............................................47
SECTION 5.14. Transactions with Affiliates..................................47
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Defaults............................................48
SECTION 6.02. Notice of Default.............................................51
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization.................................51
SECTION 7.02. Agent and Affiliates..........................................51
SECTION 7.03. Action by Agent...............................................51
SECTION 7.04. Consultation with Experts.....................................51
SECTION 7.05. Liability of Agent............................................51
ii
4
SECTION 7.06. Indemnification...............................................52
SECTION 7.07. Credit Decision...............................................52
SECTION 7.08. Successor Agent...............................................52
SECTION 7.09. Agent's Fee...................................................53
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair......53
SECTION 8.02. Illegality....................................................54
SECTION 8.03. Increased Cost and Reduced Return.............................54
SECTION 8.04. Taxes.........................................................55
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans.....57
SECTION 8.06. Substitution of Bank..........................................58
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices.......................................................58
SECTION 9.02. No Waivers....................................................59
SECTION 9.03. Expenses; Indemnification.....................................59
SECTION 9.04. Sharing of Set-Offs...........................................59
SECTION 9.05. Amendments and Waivers........................................60
SECTION 9.06. Successors and Assigns........................................60
SECTION 9.07. Collateral....................................................62
SECTION 9.08. Governing Law; Submission to Jurisdiction.....................62
SECTION 9.09. Counterparts; Integration.....................................63
SECTION 9.10. Waiver of Jury Trial..........................................63
Commitment Schedule
Commitment Schedule
Exhibit A - Promissory Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of General Counsel of the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Form of Subsidiary Guarantee
Exhibit I - Form of Subsidiary Counsel Opinion
Exhibit J - Form of Parent Guarantee
Exhibit K - Form of Parent Counsel Opinion
iii
5
BRIDGE CREDIT AGREEMENT
AGREEMENT dated as of June 27, 1997 among TYCO INTERNATIONAL LTD., the
BANKS listed on the signature pages hereof and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, certain of the Banks and the Agent are parties to
an Amended and Restated Credit Agreement dated as of December 23, 1996 (the
"Existing Agreement"); and
WHEREAS, the parties hereto wish to replace the credit facility under the
Existing Agreement with a new credit facility hereunder.
WHEREAS, when all the conditions specified in Section 3.01 have been
satisfied, the Existing Agreement will be automatically terminated and the loans
outstanding thereunder (if any) will be repaid;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03
"ADJUSTED CD RATE" has the meaning set forth in Section 2.07(b).
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"ADT" means ADT Limited, a company organized under the laws of Bermuda.
"ADT'S FORM S-4" means ADT's Form S-4 as filed with the Securities and
Exchange Commission on June 3, 1997, pursuant to the Securities Exchange Act of
1934.
"AFFILIATE" means (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Borrower (a "Controlling Person") or (ii)
any Person (other than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling
6
Person. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. The fact that an Affiliate of a Person is a member of a
law firm that renders services to such Person or its Affiliates does not mean
that the law firm is an Affiliate of such Person.
"AGENT" means ▇▇▇▇▇▇ Guaranty Trust Company of New York in its capacity
as agent for the Banks under the Financing Documents, any successor agent that
becomes the Agent pursuant to Section 7.08, and the respective corporate
successors of the foregoing acting in such capacity.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.
"APPLICABLE MARGIN" has the meaning set forth in Section 2.07(h).
"ASSESSMENT RATE" has the meaning set forth in Section 2.07(b).
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and the respective
corporate successors of the foregoing.
"BANK AFFILIATE" means, with respect to the Agent or any Bank, any Person
controlling, controlled by or under common control with the Agent or such Bank,
as the case may be.
"BASE RATE" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"BASE RATE LOAN" means a Committed Loan which bears interest at the Base
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Section 2.07(a) or Article 8.
"BORROWER" means Tyco International Ltd., a Massachusetts corporation,
and its successors.
"BORROWER'S 1996 FORM 10-K" means the Borrower's annual report on Form
10-K for fiscal year 1996, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"BORROWING" has the meaning set forth in Section 1.03.
2
7
"CD BASE RATE" has the meaning set forth in Section 2.07(b).
"CD LOAN" means a Committed Loan which bears interest at a CD Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of Interest
Rate Election.
"CD RATE" means a rate of interest determined pursuant to Section 2.07(b)
on the basis of an Adjusted CD Rate.
"CD REFERENCE BANKS" means The Hongkong and Shanghai Banking Corporation
Limited, The Dai-Ichi Kangyo Bank, Ltd. and ▇▇▇▇▇▇ Guaranty Trust Company of New
York.
"COMMITMENT" means (i) with respect to each Bank listed on the Commitment
Schedule, the amount set forth opposite the name of such Bank on the Commitment
Schedule and (ii) with respect to any Assignee, the amount of the transferor
Bank's Commitment assigned to it pursuant to Section 9.06(c), in each case as
such amount may be changed from time to time pursuant to Section 2.09 or
9.06(c).
"COMMITMENT SCHEDULE" means the Commitment Schedule attached hereto.
"COMMITTED BORROWING" has the meaning set forth in Section 1.03.
"COMMITTED LOAN" means a loan made by a Bank pursuant to Section 2.01;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term Committed
Loan shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"CONDUIT" means a special purpose corporation which is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business.
"CONDUIT DESIGNATION" has the meaning set forth in Section 9.06(f).
"CONSENTS" has the meaning set forth in Section 4.01.
"CONSOLIDATED ASSETS" means, at any time, the total assets of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such time.
"CONSOLIDATED DEBT" means, at any date, the aggregate amount of Debt of
the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis as of such date; provided that (i) if a Permitted Receivables Transaction
is outstanding at such date and is accounted for as a sale of accounts
receivable under generally accepted accounting principles, Consolidated Debt
determined as aforesaid shall be adjusted to include the additional Debt,
determined on a consolidated basis as of such date, which would have been
outstanding at such date had such Permitted Receivables Transaction been
accounted for as a borrowing at such date and (ii)
3
8
Consolidated Debt shall in any event include all Debt of any Person other than
the Borrower or a Consolidated Subsidiary which is Guaranteed by the Borrower or
a Consolidated Subsidiary, except that Consolidated Debt shall not include Debt
of a joint venture, partnership or similar entity which is Guaranteed by the
Borrower or a Consolidated Subsidiary by virtue of the joint venture,
partnership or similar arrangement with respect to such entity or by operation
of applicable law (and not otherwise) so long as the aggregate outstanding
principal amount of all such excluded Debt at any date does not exceed
$50,000,000.
"CONSOLIDATED EBIT" means, for any fiscal period, Consolidated Net Income
for such period plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate amount of (i) Consolidated Interest
Expense and (ii) federal, state and local income tax expense.
"CONSOLIDATED INTEREST EXPENSE" means, for any fiscal period, (without
duplication) (i) the consolidated interest expense of the Borrower and its
Consolidated Subsidiaries for such period minus (ii) the consolidated interest
income of the Borrower and its Consolidated Subsidiaries for such period, if,
and only if, such consolidated interest income is equal to or less than
$5,000,000, plus (iii) if a Permitted Receivables Transaction outstanding during
such period is accounted for as a sale of accounts receivable under generally
accepted accounting principles, the additional consolidated interest expense
that would have accrued during such period had such Permitted Receivables
Transaction been accounted for as a borrowing during such period, in each case
determined on a consolidated basis.
"CONSOLIDATED NET INCOME" means, for any fiscal period, the consolidated
net income of the Borrower and its Consolidated Subsidiaries for such period,
determined on a consolidated basis after eliminating therefrom all Extraordinary
Gains and Losses. "EXTRAORDINARY GAINS AND LOSSES" means and includes, for any
fiscal period, all extraordinary gains and losses of the Borrower and its
Consolidated Subsidiaries for such period, determined on a consolidated basis
and, in addition, includes, without limitation, gains or losses from the
discontinuance of operations and gains or losses of the Borrower and its
Consolidated Subsidiaries for such period resulting from the sale, conversion or
other disposition of material assets of the Borrower or any Consolidated
Subsidiary other than in the ordinary course of business.
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis as of such date and adjusted so as to exclude
the effect of the currency translation adjustment as of such date.
"CONSOLIDATED SUBSIDIARY" means, at any date, with respect to any Person,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in such Person's consolidated financial statements if such
statements were prepared as of such date; unless otherwise specified,
Consolidated Subsidiary means a Consolidated Subsidiary of the Borrower.
4
9
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date, (i) Consolidated
Net Worth as of such date minus (ii) Intangible Assets as of such date.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any date, the sum of
Consolidated Debt and Consolidated Net Worth, each determined as of such date.
"DEBT" of any Person means, at any date, without duplication, (i) the
principal amount of all obligations of such Person for borrowed money, (ii) the
principal amount of all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments (it being understood that,
subject to the proviso to this definition of "Debt," performance bonds,
performance guaranties, letters of credit, bank guaranties and similar
instruments shall not constitute Debt of such Person to the extent that the
outstanding reimbursement obligations of such Person in respect thereof are
collateralized by cash or cash equivalents, which cash or cash equivalents would
not be reflected as assets on a balance sheet of such Person prepared in
accordance with generally accepted accounting principles), (iii) all obligations
of such Person to pay the deferred purchase price of property or services
recorded on the books of such Person, except for (a) trade and similar accounts
payable and accrued expenses arising in the ordinary course of business, and (b)
employee compensation and pension obligations, and other obligations arising
from employee benefit programs and agreements or other similar employment
arrangements, (iv) all obligations of such Person as lessee which are
capitalized on the books of such Person in accordance with generally accepted
accounting principles, (v) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such Person, and
(vi) all Debt of others Guaranteed by such Person; provided, however, that Debt
shall not include:
(A) contingent reimbursement obligations in respect of
performance bonds, performance guaranties, bank
guaranties or letters of credit issued in lieu of
performance bonds or performance guaranties or
similar instruments, in each case, incurred by such
Person in the ordinary course of business;
(B) contingent reimbursement obligations in respect of
trade letters of credit, or similar instruments, in
each case, incurred by such Person in the ordinary
course of business; or
(C) contingent reimbursement obligations in respect of
standby letters of credit or similar instruments
securing self-insurance obligations of such Person;
in each case, so long as the underlying obligation supported thereby does not
itself constitute Debt.
"DEBT RATING" means a rating of the Borrower's long-term debt which is
not secured or supported by a guarantee, letter of credit or other form of
credit enhancement. If a Debt Rating
5
10
by a Rating Agency is required to be at or above a specified level and such
Rating Agency shall have changed its system of classifications after the date
hereof, the requirement will be met if the Debt Rating by such Rating Agency is
at or above the new rating which most closely corresponds to the specified level
under the old rating system.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"DOMESTIC LOANS" means CD Loans or Base Rate Loans or both.
"DOMESTIC PARENT" means any Affiliate incorporated under the laws of the
United States, any State thereof or the District of Columbia of which the
Borrower is a Subsidiary.
"DOMESTIC RESERVE PERCENTAGE" has the meaning set forth in Section
2.07(b).
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
6
11
"ERISA GROUP" means the Borrower, any Subsidiary Guarantor and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Subsidiary Guarantor, are treated as a single employer under
Section 414 of the Internal Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"EURO-DOLLAR LOAN" means a Committed Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of The
Hongkong and Shanghai Banking Corporation Limited, The Dai-Ichi Kangyo Bank,
Ltd. and ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.15.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXISTING AGREEMENT" has the meaning set forth in the recitals hereto.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to ▇▇▇▇▇▇ Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"FINANCING DOCUMENTS" means this Agreement, the Subsidiary Guarantees,
the Promissory Notes and, on any date on or after the Parent Guarantee Date, the
Parent Guarantee.
7
12
"FIXED RATE LOANS" means CD Loans or Euro-Dollar Loans or Money Market
Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01(a)) or any combination of the foregoing.
"GROUP OF LOANS" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Base Rate Loans at such time, (ii) all Euro-Dollar
Loans having the same Interest Period at such time or (iii) all CD Loans having
the same Interest Period at such time, provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means any Subsidiary Guarantor and, on and after the Parent
Guarantee Date, the Parent Guarantor.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INTANGIBLE ASSETS" means, at any date, the amount (if any) which would
be stated under the heading "Costs in Excess of Net Assets of Acquired
Companies" or under any other heading relating to intangible assets separately
listed, in each case, on the face of a balance sheet of the Borrower and its
Consolidated Subsidiaries prepared on a consolidated basis as of such date.
"INTEREST PERIOD" means: (1) with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter (or such other
period of time as may at the time be mutually agreed by the Borrower and the
Banks), as the Borrower may elect in such notice; provided that:
8
13
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Loan, the period commencing on the date of
borrowing specified in the applicable Notice of Borrowing or on the date
specified in an applicable Notice of Interest Rate Election and ending 30, 60,
90 or 180 days thereafter (or such other period of time as may at the time be
mutually agreed by the Borrower and the Banks), as the Borrower may elect in
such notice; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such whole number of months thereafter as the Borrower may
elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date; and
9
14
(4) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than 30 days)
as the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"LEVEL I STATUS" exists at any date if, at such date, the Borrower has
Debt Ratings at or above the level of A by S&P or A2 by Moody's.
"LEVEL II STATUS" exists at any date if, at such date, (i) the Borrower
has Debt Ratings at or above the level of A- by S&P or A3 by Moody's and (ii)
Level I Status does not exist at such date.
"LEVEL III STATUS" exists at any date if, at such date, (i) the Borrower
has Debt Ratings at the level of BBB+ by S&P or Baa1 by Moody's and (ii) Level I
Status and Level II Status do not exist at such date.
"LEVEL IV STATUS" exists at any date if, at such date, (i) the Borrower
has Debt Ratings at the level of BBB by S&P or Baa2 by Moody's and (ii) Level I
Status, Level II Status and Level III Status do not exist at such date.
"LEVEL V STATUS" exists at any date if, at such date, (i) the Borrower
has a Debt Rating from neither Rating Agency or (ii) Level I Status, Level II
Status, Level III Status and Level IV do not exist at such date.
"LIBOR AUCTION" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant to
Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement (other than an operating lease)
relating to such asset.
10
15
"LOAN" means a Domestic Loan or a Euro-Dollar Loan or a Money Market Loan
and "LOANS" means Domestic Loans or Euro-Dollar Loans or Money Market Loans or
any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(c).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole, or
(ii) the ability of the Borrower and the Subsidiary Guarantors to perform their
obligations under the Financing Documents.
"MATERIAL DEBT" means Debt (other than (i) the Promissory Notes, (ii) the
Subsidiary Guarantees, (iii) any Guarantee by the Borrower of Debt of a
Subsidiary, (iv) any Guarantee by a Subsidiary of Debt of the Borrower or
another Subsidiary, (v) any Debt of the Borrower owed to a Wholly-Owned
Consolidated Subsidiary or (vi) any Debt of a Subsidiary owed to the Borrower or
a Wholly-Owned Consolidated Subsidiary) of the Borrower and/or one or more of
its Subsidiaries, arising in one or more related or unrelated transactions, in
an aggregate outstanding principal amount exceeding $50,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"MERGER" means the merger of a Subsidiary of ADT with and into the
Borrower pursuant to the Plan of Merger dated March 17, 1997.
"MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.03(d).
"MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"MONEY MARKET BORROWING" has the meaning set forth in Section 1.03.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Agent; provided that any Bank may from time to time by notice to the
Borrower and the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate
Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant to a
LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant
to Section 8.01(a)).
11
16
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section 2.03(d).
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market Loan
in accordance with Section 2.03.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor to such
corporation's business of rating debt securities.
"MULTIEMPLOYER PLAN" means at any time a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA either (i) to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
(ii) has at any time within the preceding five plan years been maintained, or
contributed to, by any Person who was at such time a member of the ERISA Group
for employees of any Person who was at such time a member of the ERISA Group.
"NET CASH PROCEEDS" means, with respect to any Reduction Event, an amount
equal to the cash proceeds received by the Borrower or any of its Subsidiaries
from or in respect of such Reduction Event, less the sum of any underwriting
discounts and commissions, fees and other expenses reasonably incurred by such
Person in respect of such Reduction Event.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as defined
in Section 2.02 or a Notice of Money Market Borrowing (as defined in Section
2.03(f)).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.16.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARENT GUARANTOR" means ADT (to be renamed Tyco International Ltd. upon
consummation of the Merger), and its successors.
"PARENT GUARANTEE" means a Parent Guarantee Agreement between the Parent
Guarantor and the Agent for the benefit of the Banks, substantially in the form
of Exhibit J, as amended from time to time.
"PARENT GUARANTEE DATE" means the date the Agent receives (i) duly
executed counterparts of the Parent Guarantee, (ii) an opinion of counsel for
the Parent Guarantor reasonably satisfactory to the Agent to substantially the
effect of Exhibit K hereto and covering such additional matters relating to the
Parent Guarantee as the Required Banks may reasonably request and (iii) all
documents the Agent may reasonably request relating to the existence of the
Parent Guarantor, the corporate authority for and the validity of the Parent
Guarantee, and any
12
17
other matters reasonably determined by the Agent to be relevant thereto, all in
form and substance reasonably satisfactory to the Agent.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED RECEIVABLES TRANSACTION" means any sale or sales of,
refinancing of and/or financing secured by, any accounts receivable of the
Borrower and/or any of its Subsidiaries (the "RECEIVABLES") pursuant to which
the Borrower and its Subsidiaries realize aggregate net proceeds of not more
than $500,000,000 at any one time outstanding, including, without limitation,
any revolving purchase(s) of Receivables where the maximum aggregate uncollected
purchase price (exclusive of any deferred purchase price) for such Receivables
at any time outstanding does not exceed $500,000,000.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"PRIME RATE" means the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"PROMISSORY NOTES" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "PROMISSORY NOTE" means any one of such promissory notes
issued hereunder.
"PROPERTY" means any interest of any kind in any property or assets,
whether real, mixed or personal and whether tangible or intangible.
"PROSPECTS" means, at any time, results of future operations which are
reasonably foreseeable based upon the facts and circumstances in existence at
such time.
"QUARTERLY PAYMENT DATES" means each March 31, June 30, September 30 and
December 31.
13
18
"RATING AGENCY" means S&P or Moody's.
"REDUCTION EVENT" means the issuance to third parties of any long-term
debt securities of the Borrower or any of its Subsidiaries or any Domestic
Parent (excluding any such debt securities issued for the purpose of financing
the acquisition of specific assets).
"REFERENCE BANKS" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "REFERENCE BANK" means any one
of such Reference Banks.
"REFINANCING" has the meaning set forth in Section 5.07 (and the term
"REFINANCED" has a correlative meaning).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having more than 60% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Promissory Notes evidencing more than 60% of the aggregate
unpaid principal amount of the Loans.
"RESPONSIBLE OFFICER" means any of the following: the Chairman,
President, Vice President and Chief Financial Officer, Treasurer and Secretary
of the Borrower.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on any
shares of the Borrower's capital stock (except to the extent such dividends and
distributions are payable in shares of its capital stock or Stock Equivalents)
or (ii) any payment (except to the extent payable in shares of the Borrower's
capital stock or Stock Equivalents) on account of the purchase, redemption,
retirement or acquisition of (a) any shares of the Borrower's capital stock or
(b) any option, warrant or other right to acquire shares of the Borrower's
capital stock; provided that prior to the consummation of the Merger,
repurchases by the Borrower of up to 5,000,000 shares of its common stock shall
not constitute Restricted Payments.
"SIGNIFICANT SUBSIDIARY" means, at any date, (A) each Subsidiary
Guarantor and (B) any other Consolidated Subsidiary which, including its
consolidated subsidiaries, meets any of the following conditions:
(i) the investments in and advances to such Consolidated
Subsidiary by the Borrower and its other Consolidated Subsidiaries
exceed 15% of the total assets of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as
of the end of the most recently completed fiscal year; or
(ii) the proportionate share attributable to such
Consolidated Subsidiary of the total assets of the Borrower and
its Consolidated Subsidiaries (after intercompany eliminations)
exceeds 15% of the total assets of the Borrower and
14
19
the Consolidated Subsidiaries, determined on a consolidated basis
as of the end of the most recently completed fiscal year; or
(iii) the Borrower's and its Consolidated Subsidiaries'
equity in the income of such Consolidated Subsidiary from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle exceeds 15%
of such income of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis for the most recently completed
fiscal year.
"STATUS" means, at any date, whichever of Level I Status, Level II
Status, Level III Status, Level IV Status or Level V Status exists at such date.
"STOCK EQUIVALENTS" means, with respect to any Person, options, warrants,
calls or other rights entered into or issued by such Person to acquire any
capital stock or equity securities of, or other ownership interests in, or
securities convertible into or exchangeable for, capital stock or equity
securities of, or other ownership interests in, such Person.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor to its business of rating debt
securities.
"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, Subsidiary means a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTEE" means a Guarantee entered into by a Subsidiary
substantially in the form of Exhibit H hereto.
"SUBSIDIARY GUARANTOR" means, at any time, a Subsidiary which at or prior
to such time shall have delivered to the Agent (i) a Subsidiary Guarantee in
substantially the form of Exhibit H, duly executed by such Subsidiary, which
Subsidiary Guarantee has not terminated in accordance with its terms, (ii) an
opinion of counsel for such Subsidiary (which counsel may be an employee of the
Borrower or such Subsidiary) reasonably satisfactory to the Agent with respect
to such Subsidiary Guarantee, substantially in the form of Exhibit I hereto and
covering such additional matters relating to such Subsidiary Guarantee as the
Required Banks may reasonably request and (iii) all documents the Agent may
reasonably request relating to the existence of such Subsidiary, the corporate
authority for and the validity of such Subsidiary Guarantee, and any other
matters reasonably determined by the Agent to be relevant thereto, all in form
and substance reasonably satisfactory to the Agent.
"TERMINATION DATE" means December 31, 1997, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
15
20
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or to any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means, with respect to any Person,
any Consolidated Subsidiary all of the shares of capital stock or other
ownership interests of which (except directors' qualifying shares and
investments by foreign nationals mandated by applicable law) are at the time
beneficially owned, directly or indirectly, by such Person; unless otherwise
specified, Wholly-Owned Consolidated Subsidiary means a Wholly-Owned
Consolidated Subsidiary of the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the then most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if either (i) the Borrower notifies the Agent that
the Borrower wishes to eliminate the effect of any change in generally accepted
accounting principles on the operation of any covenant contained in Article 5 or
(ii) the Agent notifies the Borrower that the Required Banks wish to effect such
an elimination, then the Borrower's compliance with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until either (A) such notice is withdrawn by the
party giving such notice or (B) such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks to reflect such change in
generally accepted accounting principles.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their
16
21
Commitments, while a "Money Market Borrowing" is a Borrowing under Section 2.03
in which the Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section 2.01 from time to time prior to the Termination Date in
amounts such that the aggregate principal amount of Committed Loans by such Bank
at any one time outstanding shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount of
$5,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing
may be in the aggregate amount available in accordance with Section 3.03(b)) and
shall be made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay or, to the extent permitted by Section 2.11, prepay Loans and
reborrow at any time prior to the Termination Date under this Section 2.01.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give the
Agent notice (a "Notice of Committed Borrowing") not later than 11:00 A.M. (New
York City time) on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate, a CD Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
SECTION 2.03. The Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks, at any time prior to the Termination Date, to make offers to
make Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
17
22
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may,
in its sole discretion, submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of this
subsection 2.03(d) and must be submitted to the Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 9.01 not later
than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
9:30 A.M. (New York City
18
23
time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Money Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective); provided that Money
Market Quotes submitted by the Agent (or any affiliate of the Agent) in the
capacity of a Bank may be submitted, and may only be submitted, if the Agent or
such affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than (x) one hour prior to the deadline for the
other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute Rate Auction. Subject
to Articles 3 and 6, any Money Market Quote so made shall be irrevocable except
with the written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing and the Interest
Period therefor,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount (w)
may be greater than or less than the Commitment of the quoting
Bank, (x) must be $5,000,000 or a larger multiple of $1,000,000,
(y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market Loans for
which offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money
Market Margin") offered for each such Money Market Loan, expressed
as a percentage (specified to the nearest 1/10,000th of 1%) to be
added to or subtracted from the applicable London Interbank
Offered Rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%)
(the "Money Market Absolute Rate") offered for each such Money
Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection 2.03(d)(ii);
19
24
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to those
set forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection
2.03(d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection 2.03(d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection 2.03(e) (and the failure of the Borrower to give such notice by such
time shall constitute non-acceptance) and the Agent shall promptly notify each
affected Bank. In the case of acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may, but shall not be obligated
to, accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending order of Money Market Margins or Money Market Absolute Rates,
as the case may be, in each case beginning with the lowest rate so
offered, and
20
25
(iv) the Borrower may not accept any offer where the Agent has
advised the Borrower that such offer is described in subsection
2.03(d)(iii) or that otherwise fails to comply with the requirements of
this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 2:00 P.M. (New York City time) on the date of each
Borrowing, each Bank participating therein shall make available its share of
such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article 3 has not been
satisfied or waived in accordance with Section 9.05, the Agent will make the
funds so received from the Banks available to the Borrower no later than 3:00
P.M. (New York City time) on such date, in Federal or other funds immediately
available in New York City, as directed by the Borrower.
(c) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and, if such Bank shall not have
paid such amount to the Agent within two Domestic Business Days of the Agent's
demand therefor, the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at the Federal Funds Rate. If such Bank shall
repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
21
26
(d) The failure of any Bank to make any Loan to be made by it on the
date specified therefor shall not relieve any other Bank of any obligation to
make a Loan on such date.
SECTION 2.05. Promissory Notes. (a) The Loans of each Bank shall be
evidenced by a single Promissory Note payable to the order of such Bank for the
account of its Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Promissory Note
in an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Promissory Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Promissory Note" of
such Bank shall be deemed to refer to and include any or all of such Promissory
Notes, as the context may require.
(c) Upon receipt of each Bank's Promissory Note pursuant to Section
3.01(b), the Agent shall forward such Promissory Note to such Bank. Each Bank
shall record the date, amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Promissory Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Promissory Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Promissory Note and to
attach to and make a part of its Promissory Note a continuation of any such
schedule as and when required.
SECTION 2.06. Maturity of Loans. (a) Each Committed Loan shall mature,
and the principal amount thereof shall be due and payable (together with
interest accrued thereon), on the Termination Date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable
(together with interest accrued thereon), on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for each such day. Such interest shall be payable at maturity, quarterly in
arrears on each Quarterly Payment Date prior to maturity and, with respect to
the principal amount of any Base Rate Loan converted to a CD Loan or a Euro-
Dollar Loan, on the date such amount is so converted. Any overdue principal of
or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day from and including the
22
27
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base
Rate Loans for each such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Applicable Margin for each such day
plus the applicable Adjusted CD Rate for such Interest Period; provided that if
any CD Loan shall, as a result of subsection (2)(b) of the definition of
Interest Period, have an Interest Period of less than 30 days, such CD Loan
shall bear interest during such Interest Period at the rate applicable to Base
Rate Loans during such period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than 90
days, at intervals of 90 days after the first day thereof. Any overdue principal
of or interest on any CD Loan shall bear interest, payable on demand, for each
day from and including the date payment thereof was due to but excluding the
date of actual payment, at a rate per annum equal to the sum of 2% plus the
higher of (i) the sum of the Applicable Margin for each such day plus the
Adjusted CD Rate applicable to such Loan on the day before such payment was due
and (ii) the rate applicable to Base Rate Loans for each such day.
The "Adjusted CD Rate" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if necessary, to the next higher
1/100 of 1%
The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"DOMESTIC RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including
23
28
without limitation any basic, supplemental or emergency reserves) for a member
bank of the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of new non-personal time deposits in dollars in New
York City having a maturity comparable to the related Interest Period and in an
amount of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically
on and as of the effective date of any change in the Domestic Reserve
Percentage.
"ASSESSMENT RATE" means for any day the annual assessment rate in effect
on such day which is payable by a member of the Bank Insurance Fund classified
as adequately capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R. sec.
327.4(a) or any successor provision (a "BIF Member") to the Federal Deposit
Insurance Corporation (or any successor) for the Federal Deposit Insurance
Corporation's (or such successor's) insuring time deposits at offices of such
BIF Member in the United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Assessment
Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for each
such day plus the applicable London Interbank Offered Rate for such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the
Applicable Margin for such day plus the London Interbank Offered Rate applicable
to such Loan on the day before such payment was due and (ii) the Applicable
Margin for such day plus the quotient obtained (rounded upward, if necessary, to
the next higher 1/100 of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than six months as
the Agent may select) deposits in dollars in an amount approximately equal to
such overdue payment due to each of the Euro-Dollar Reference Banks are offered
to such Euro-Dollar Reference Bank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the Euro-Dollar
Reserve Percentage (or, if the
24
29
circumstances described in subsection (a) or (b) of Section 8.01 shall exist, at
a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for each day during
the Interest Period applicable thereto, at a rate per annum equal to the sum of
the London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each Money
Market Absolute Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank making
such Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the Base Rate for each such day.
(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
(h) The "APPLICABLE MARGIN" with respect to any Euro-Dollar Loan or CD
Loan at any date is the applicable percentage amount set forth in the table
below based on the Status on such date:
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
STATUS STATUS STATUS STATUS STATUS
------- -------- --------- -------- -------
Euro-Dollar Loans 0.150% 0.195% 0.240% 0.260% 0.325%
CD Loans 0.275% 0.320% 0.365% 0.385% 0.450%
(i) For each day on which the aggregate outstanding principal amount
of the Loans equals or exceeds 50% of the aggregate amount of the Commitments,
the Borrower shall pay additional interest at the rate of 0.05% per annum on the
aggregate principal amount of Euro-Dollar Loans and CD Loans outstanding to it
on such day. Accrued interest under this subsection (i) shall be
25
30
payable quarterly in arrears on each Quarterly Payment Date and upon the date of
termination of the Commitments in their entirety (and, if later, the date the
Loans shall be repaid in their entirety).
SECTION 2.08. Facility Fee. (a) The Borrower shall pay to the Agent for
the account of the Banks ratably a facility fee at the Facility Fee Rate. Such
facility fee shall accrue (i) from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date (or
earlier date of termination of the Commitments in their entirety) to but
excluding the date the Loans shall be repaid in their entirety, on the daily
aggregate outstanding principal amount of the Loans.
The "FACILITY FEE RATE" at any date is: (i) 0.050% if Level I Status
exists at such date, (ii) 0.055% if Level II Status exists at such date, (iii)
0.060% if Level III Status exists at such date, (iv) 0.090% if Level IV Status
exists at such date or (v) 0.125% if Level V Status exists at such date.
(b) Accrued fees under this Section shall be payable quarterly in
arrears on each Quarterly Payment Date and upon the date of termination of the
Commitments in their entirety (and, if later, the date the Loans shall be repaid
in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans. Promptly after receiving a notice pursuant to this Section, the Agent
shall notify each Bank of the contents thereof.
SECTION 2.10. Mandatory Termination and Reduction of Commitments. (a) The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
(b) In addition, in the event that the Borrower or any of its
Subsidiaries or any Domestic Parent shall receive any Net Cash Proceeds as a
result of any Reduction Event, the Commitments shall be ratably reduced (i) on
the date of each repayment or prepayment pursuant to Section 2.11(b), by an
aggregate amount equal to the amount of such repayment or prepayment and (ii) on
the date of receipt of any such Net Cash Proceeds in an amount exceeding the
then aggregate outstanding principal amount of the Loans, by an amount equal to
the excess, if any, of (x) the largest multiple of $1,000,000 which does not
exceed the amount of such Net Cash Proceeds over (y) the then aggregate
outstanding principal amount of the Loans. The Borrower shall give the Agent at
least five Euro-Dollar Business Days' notice of each reduction required to be
made pursuant to this subsection (b).
26
31
SECTION 2.11. Prepayments. (a) Optional Prepayments. The Borrower may (i)
upon at least one Domestic Business Day's notice to the Agent, prepay any Group
of Base Rate Loans (or any Money Market Borrowing bearing interest at the Base
Rate pursuant to Section 8.01(a)), (ii) upon at least three Domestic Business
Days' notice to the Agent, subject to Section 2.13, prepay any Group of CD Loans
and (iii) upon at least three Euro-Dollar Business Days' notice to the Agent,
subject to Section 2.13, prepay any Group of Euro-Dollar Loans, in whole at any
time, or from time to time in part in amounts aggregating $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to but not including the date of
prepayment. Each such optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Group of Loans (or such Money Market
Borrowing).
(b) Mandatory Prepayments. In addition, in the event that the Borrower
or any of its Subsidiaries or any Domestic Parent shall receive any Net Cash
Proceeds as a result of any Reduction Event, the Borrower shall repay or prepay
Loans in an aggregate principal amount equal to the largest multiple of
$1,000,000 which does not exceed the amount of such Net Cash Proceeds; provided
that if any prepayment would otherwise require prepayment of Fixed Rate Loans or
portions thereof prior to the last day of the then current Interest Period, then
such prepayment shall, unless the Agent otherwise notifies the Borrower upon the
instructions of the Required Banks, be deferred to the last day of such Interest
Period. The Borrower shall give the Agent at least five Euro-Dollar Business
Days' notice of each prepayment required to be made pursuant to this subsection
(b).
(c) Except as provided in Section 2.11(a)(i), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(d) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and once notice is so given to
the Banks, the Borrower's notice of prepayment shall not thereafter be revocable
by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 2:00 P.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the respective accounts of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the
27
32
Money Market Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any payment of principal is extended
by operation of law or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a different type of Loan (pursuant to Article 2, 6 or 8 (other than
Section 8.02) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow, prepay, convert or continue
any Fixed Rate Loans after notice has been given to any Bank in accordance with
Section 2.04(a), 2.11(d) or 2.16 (other than as a result of default by such
Bank), the Borrower shall reimburse each Bank within 15 days after written
demand for any resulting loss or expense reasonably incurred by it (or by an
existing or prospective Participant in the related Loan) in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to borrow,
prepay, convert or continue; provided that such Bank shall have delivered to the
Borrower a certificate specifying in reasonable detail the calculation of, and
the reasons for, the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. Each Bank may require the
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of such
Bank at a rate per annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered Rate divided by (B)
one minus the Euro-Dollar Reserve Percentage over (ii) the applicable London
Interbank Offered Rate. Any Bank wishing to require payment of such additional
interest (x) shall so notify the Borrower and the Agent, in which case such
additional interest on the Euro- Dollar Loans of such Bank shall be payable to
such Bank at the place indicated in such notice
28
33
with respect to each Interest Period commencing at least three Euro-Dollar
Business Days after the giving of such notice, and (y) shall notify the Borrower
at least five Euro-Dollar Business Days prior to each date on which interest is
payable on the Euro-Dollar Loans of the amount then due it under this Section.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
SECTION 2.16. Method of Electing Interest Rates. (a) The Loans included
in each Committed Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject to subsection
2.16(d) of this Section and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect to
continue such Loans as CD Loans for an additional Interest Period,
subject to Section 2.13 if any such conversion is effective on any day
other than the last day of an Interest Period applicable to such Loans;
and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or CD Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period,
subject to Section 2.13 if any such conversion is effective on any day
other than the last day of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent not later than 10:30 A.M. (New York City time) on
the third Euro-Dollar Business Day before the conversion or continuation
selected in such notice is to be effective (unless the relevant Loans are to be
converted from Domestic Loans of one type to Domestic Loans of the other type or
are CD Loans to be continued as CD Loans for an additional Interest Period, in
which case such notice shall be delivered to the Agent not later than 10:30 A.M.
(New York City time) on the second Domestic Business Day before such conversion
or continuation is to be effective). A Notice of Interest Rate Election may, if
it so specifies, apply to only a portion of the
29
34
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies, and the remaining portion to which it
does not apply, are each at least $5,000,000 (unless such portion is comprised
of Base Rate Loans). If no such notice is timely received before the end of an
Interest Period for any Group of CD Loans or Euro-Dollar Loans, the Borrower
shall be deemed to have elected that such Group of Loans be converted to Base
Rate Loans at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the applicable
clause of subsection 2.16(a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if the Loans resulting from such conversion are to
be CD Loans or Euro- Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Agent shall notify each Bank
of the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
(d) The Borrower shall not be entitled to elect to convert any
Committed Loans to, or continue any Committed Loans for an additional Interest
Period as, CD Loans or Euro-Dollar Loans if (i) the aggregate principal amounts
of any Group of CD Loans or Euro-Dollar Loans created or continued as a result
of such election would be less than $5,000,000 or (ii) a Default shall have
occurred and be continuing when the Borrower delivers notice of such election to
the Agent.
30
35
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party);
(b) receipt by the Agent of a duly executed Promissory Note for the
account of each Bank dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of the General Counsel of the
Borrower, substantially in the form of Exhibit E hereto;
(d) receipt by the Agent from each Subsidiary Guarantor under the
Existing Agreement of (i) a Subsidiary Guarantee in substantially the form of
Exhibit H hereto, duly executed by such Subsidiary Guarantor, (ii) an opinion of
counsel for such Subsidiary Guarantor, reasonably satisfactory to the Agent,
with respect to such Subsidiary Guarantee, substantially in the form of Exhibit
I hereto and covering such additional matters relating to such Subsidiary
Guarantee as the Required Banks may reasonably request and (iii) all documents
the Agent may reasonably request relating to the existence of such Subsidiary
Guarantee, the corporate authority for and the validity of such Subsidiary
Guarantee, and any other matters reasonably determined by the Agent to be
relevant thereto, all in form and substance reasonably satisfactory to the
Agent;
(e) receipt by the Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel for the Agent, substantially in the form of Exhibit F hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(f) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Promissory Notes, and any other
matters reasonably determined by the Agent to be relevant hereto, all in form
and substance reasonably satisfactory to the Agent; and
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
July 30, 1997.
SECTION 3.02. Consequences of Effectiveness; Transitional Provisions. (a)
On the Effective Date, the commitments under the Existing Agreement shall
terminate without further action by any party thereto. The Agent will promptly
notify each of the other parties hereto and to the Existing Agreement of the
effectiveness of this Agreement.
31
36
(b) Concurrently with the effectiveness of this Agreement, the
Borrower shall repay or prepay in full (including accrued and unpaid interest
thereon to, but excluding, the Effective Date) all "Loans" outstanding under the
Existing Agreement. Concurrently with the effectiveness of this Agreement, the
Borrower shall pay all accrued and unpaid facility fees under the Existing
Agreement to, but excluding, the Effective Date.
SECTION 3.03. Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction (or waiver in
accordance with Section 9.05) of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate amount
of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
and each Guarantor contained in the Financing Documents (except the
representations and warranties set forth in Sections 4.04(a) and 4.11, which are
made only as of the date of this Agreement) shall be true in all material
respects on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in
subsections (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Banks that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts. The Borrower has all corporate powers
and all governmental licenses, authorizations, consents and approvals
(collectively, the "Consents") required to carry on its business as now
conducted, other than those powers and Consents, the failure of which to be
possessed or obtained could not, based upon the facts and circumstances in
existence at the time this representation and warranty is made or deemed made,
reasonably be expected to have a Material Adverse Effect.
32
37
SECTION 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of this Agreement and
the Promissory Notes: (a) are within the Borrower's corporate powers; (b) have
been duly authorized by all necessary corporate action on the part of the
Borrower; (c) require no action by or in respect of, or filing with, any
governmental body, agency or official, in each case, on the part of the
Borrower; and (d) do not contravene, or constitute a default by the Borrower
under, any provision of (i) applicable law or regulation, (ii) the certificate
of incorporation or by-laws of the Borrower, or (iii) any agreement or
instrument evidencing or governing Debt of the Borrower or any other material
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and the Promissory Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 1996 and the related consolidated
statements of income, of shareholders' equity and of cash flows for the fiscal
year then ended, reported on by Coopers & ▇▇▇▇▇▇▇ L.L.P. and set forth in the
Borrower's 1996 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) Since June 30, 1996 there has been no material adverse change in
the business, financial position, results of operations or Prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could, based upon the facts and circumstances in
existence at the time this representation and warranty is made or deemed made,
reasonably be expected to have a Material Adverse Effect or which in any manner
draws into question the validity of the Financing Documents.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance, except
where the failure to so comply could not, based upon the facts and circumstances
in existence at the time this representation and warranty is made or deemed
made, reasonably be expected to have a Material Adverse Effect, with the
presently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard
33
38
under Section 412 of the Internal Revenue Code in respect of any Plan, (ii)
failed to make any required contribution or payment to any Plan or Multiemployer
Plan, or made any amendment to any Plan, which has resulted in or could, based
upon the facts and circumstances in existence at the time this representation
and warranty is made or deemed made, reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code or (iii) incurred any liability under Title IV of
ERISA (other than a liability to the PBGC for premiums under Section 4007 of
ERISA), which could, based upon the facts and circumstances existing at the time
this representation and warranty is made or deemed made, reasonably be expected
to have a Material Adverse Effect.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, could not, based upon the facts and circumstances existing at the time
this representation and warranty is made or deemed made, reasonably be expected
to have a Material Adverse Effect.
SECTION 4.08. Taxes. The United States Federal income tax liability of
the Borrower and its Subsidiaries has been finally determined for all fiscal
years through the fiscal year ended June 30, 1990. The Borrower and its
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes shown on such returns or pursuant to any assessment received by the
Borrower or any Subsidiary, except those assessments which are being contested
in good faith by appropriate proceedings. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate Consolidated
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, except where the
failure to be so incorporated, existing or in good standing could not, based
upon the facts and circumstances existing at the time this representation and
warranty is made or deemed made, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has all corporate powers and all Consents
required to carry on its business as now conducted, other than those powers and
Consents, the failure of which to
34
39
be possessed or obtained could not, based upon the facts and circumstances in
existence at the time this representation and warranty is made or deemed made,
reasonably be expected to have a Material Adverse Effect.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. Full Disclosure. The factual information, reports,
financial statements, exhibits and schedules concerning the Borrower and its
Subsidiaries furnished by or on behalf of the Borrower and contained in the
information furnished under cover of a memorandum dated June 2, 1997 by ▇.▇.
▇▇▇▇▇▇ Securities Inc. to a limited number of banks which were being invited to
participate in this Agreement, do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Promissory Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, of shareholders' equity and of
cash flows for such fiscal year, setting forth, in each case in comparative
form, the figures for the previous fiscal year, all reported on by Coopers &
▇▇▇▇▇▇▇ L.L.P. or other independent public accountants of nationally recognized
standing in a manner complying with the applicable rules and regulations
promulgated by the Securities and Exchange Commission;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower,
consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
consolidated statements of cash flows for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter, setting forth in
the case of such statements of income and of cash flows in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency on behalf of the Borrower by the chief financial
officer, the chief accounting officer or the treasurer of the Borrower;
35
40
(c) simultaneously with the delivery of each set of financial
statements referred to in subsections (a) and (b) above, a certificate on behalf
of the Borrower signed by the chief financial officer, the chief accounting
officer or the treasurer of the Borrower (i) setting forth in reasonable detail
the calculations required to establish whether the Borrower was in compliance
with the requirements of Sections 5.08 to 5.11, inclusive, on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth, in reasonable
detail, the nature thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in subsection (a) above, a statement of the firm of
independent public accountants which reported on such financial statements
stating that, in making the audit necessary for the certification of such
financial statements, such firm of accountants has obtained no knowledge of any
Default, or if it has obtained knowledge of such Default, specifying the nature
and period of existence thereof; provided such firm of accountants shall not be
liable to any Person by reason of such firm's failure to obtain knowledge of any
Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted accounting principles;
(e) within five Domestic Business Days after any Responsible Officer
obtains knowledge of any Default, if such Default is then continuing, a
certificate on behalf of the Borrower signed by the chief financial officer, the
chief accounting officer or the treasurer of the Borrower setting forth, in
reasonable detail, the nature thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly following the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all final registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and final reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(h) within 30 days after any Responsible Officer of the Borrower
obtains knowledge that any member of the ERISA Group (i) gave or was required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knew that the plan administrator of any
Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) received notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) received notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than under Sections 4007, 4071 and 4302 of ERISA) in respect
of, or appoint a trustee to administer any Plan, a copy of such notice; (iv)
applied for a waiver of the
36
41
minimum funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gave notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gave notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) failed to make any required payment or
contribution to any Plan or Multiemployer Plan or made any amendment to any Plan
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate on behalf of the Borrower, signed by the
chief financial officer, the chief accounting officer or the treasurer of the
Borrower setting forth, to the best of its knowledge, in reasonable detail, the
nature of such occurrence and action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes to take;
(i) promptly following, and in any event within 10 days of, any change
in a Debt Rating by any Rating Agency, notice thereof; and
(j) from time to time, upon reasonable notice, such additional
information regarding the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where (i) any such failure to so pay
or discharge could not, based upon the facts and circumstances in existence at
the time, reasonably be expected to have a Material Adverse Effect or (ii) such
liabilities or obligations may be contested in good faith by appropriate
proceedings. The Borrower will maintain, and will cause each Subsidiary to
maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of such liabilities or obligations.
SECTION 5.03. Maintenance of Property; Insurance. (a) Except as permitted
by Section 5.04 or 5.12, the Borrower will keep, and will cause each Subsidiary
to keep, all property necessary in its business in good working order and
condition, ordinary wear and tear excepted, unless the failure to so keep could
not, based upon the facts and circumstances existing at the time, reasonably be
expected to have a Material Adverse Effect.
(b) The Borrower will maintain, and will cause each Subsidiary to
maintain, with financially sound and reputable insurers, insurance with respect
to its assets and business against such casualties and contingencies, of such
types (including, without limitation, loss or damage, product liability,
business interruption, larceny, embezzlement or other criminal misappropriation)
and in such amounts as is customary in the case of similarly situated
corporations of established reputations engaged in the same or a similar
business, unless the failure to maintain such insurance could not, based upon
the facts and circumstances existing at the time, reasonably be expected to have
a Material Adverse Effect.
37
42
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower (a) will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower and
its Subsidiaries and reasonably related extensions thereof, and (b) will
preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect (x) their
respective corporate existence and (y) their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, unless in
the case of either the failure of the Borrower to comply with subclause (b) (y)
of this Section 5.04 or the failure of a Subsidiary to comply with clauses (a)
or (b) of this Section 5.04, such failure could not, based upon the facts and
circumstances existing at the time, reasonably be expected to have a Material
Adverse Effect; provided that nothing in this Section 5.04 shall prohibit (i)
the merger or consolidation of a Subsidiary with or into the Borrower or a
Wholly-Owned Consolidated Subsidiary, (ii) the sale, lease, transfer, assignment
or other disposition by a Subsidiary of all or any part of its assets to the
Borrower or to a Wholly-Owned Consolidated Subsidiary, (iii) the merger or
consolidation of a Subsidiary with or into a Person other than the Borrower or a
Wholly-Owned Consolidated Subsidiary, if the Person surviving such consolidation
or merger is a Subsidiary and immediately after giving effect thereto, no
Default shall have occurred and be continuing, (iv) the sale, lease, transfer,
assignment or other disposition by a Subsidiary of all or any part of its assets
to a Person other than the Borrower or a Wholly-Owned Consolidated Subsidiary if
the Person to which such sale, lease, transfer, assignment or other disposition
is made is a Subsidiary and immediately after giving effect thereto, no Default
shall have occurred and be continuing, (v) any transaction permitted pursuant to
Section 5.12, (vi) the termination of the corporate existence of any Subsidiary
if the Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the Banks and
(vii) the sale, lease, transfer, assignment or other disposition (including any
such transaction by way of merger or consolidation) by the Borrower of all or
any part of its assets to a Person other than the Borrower or a Subsidiary if
(A) immediately after giving effect thereto, no Default shall have occurred and
be continuing and (B) the Borrower is a Subsidiary of such Person or the
Borrower and such Person are Subsidiaries of the same Person.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where (a) noncompliance therewith could not,
based upon the facts and circumstances in existence at the time, reasonably be
expected to have a Material Adverse Effect or (b) the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records; Confidentiality.
(a) The Borrower will keep, and will cause each Subsidiary to keep, proper books
of record and account in which true and correct entries shall be made of its
business transactions and activities so that financial statements that fairly
present its business transactions and activities can be properly prepared in
accordance with generally accepted accounting principles.
38
43
(b) The Borrower will permit, and will cause each Subsidiary to
permit, representatives of any Bank at such Bank's expense to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all upon reasonable notice to the Borrower, at such
reasonable times and as often as may reasonably be requested by any Bank.
(c) Each Bank and the Agent shall, by its receipt of Confidential
Information (as defined below) pursuant to or in connection with this Agreement
or its exercise of any of its rights hereunder, be deemed to have agreed (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to (i) keep such information confidential, (ii) (except as
permitted by clause (iii) of this Section 5.06(c)) not disclose such information
to any Person other than an officer, director, employee, legal counsel,
independent auditor or authorized agent or advisor of the Agent or such Bank
needing to know such information (it being understood that any such officer,
director, employee, legal counsel, independent auditor or authorized agent or
advisor shall be informed by the Agent or such Bank of the confidential nature
of such information), (iii) not disclose such information to any Assignee or
Participant (or prospective Assignee or Participant), unless such Assignee or
Participant (or prospective Assignee or Participant) shall agree in writing to
be bound by the provisions of this Section 5.06(c) and (iv) not use any such
information except for purposes relating to this Agreement or the Notes. The
term "Confidential Information" shall mean non-public information furnished by
or on behalf of the Borrower or any of its Subsidiaries to the Agent, any Bank
or other Person exercising rights hereunder or required to be bound hereby
(collectively "Recipients"), but shall not include any such information which
(1) has become or hereafter becomes available to the public other than as a
result of a disclosure by a Recipient, or (2) has become or hereafter becomes
available to a Recipient, on a non-confidential basis, from a source other than
the Borrower or any of its Subsidiaries (or any of their respective
representatives or agents) or any Recipient, which source, to the knowledge of
the Recipient, is not prohibited from disclosing such information by a
confidentiality agreement with, or other legal or fiduciary obligation to, the
Borrower or its Subsidiaries.
The restrictions set forth in the immediately preceding paragraph shall
not prevent the disclosure by a Recipient of any such information:
(A) with the prior written consent of the Borrower,
(B) at the request of a bank regulatory agency or in
connection with an examination by bank examiners, or
(C) upon order of any court or administrative agency of
competent jurisdiction, to the extent required by such order and
not effectively stayed on appeal or otherwise, or as otherwise
required by law; provided that in the case of any intended
disclosure under this clause (C), the Recipient shall (unless
otherwise required by applicable law) give the Borrower not less
than five
39
44
Domestic Business Days prior notice (or such shorter period as
may, in the good faith discretion of the Recipient, be reasonable
under the circumstances or may be required by any court or agency
under the circumstances), specifying the Confidential Information
involved and stating such Recipient's intention to disclose such
Confidential Information (including the manner and extent of such
disclosure) in order to allow the Borrower an opportunity to seek
an appropriate protective order.
Each Recipient shall agree that, in addition to all other remedies
available, the Borrower shall be entitled to specific performance and injunctive
and other equitable relief as a remedy for any breach of this Section 5.06(c) by
such Recipient.
SECTION 5.07. Limitation on Restrictions on Subsidiary Dividends and
Other Distributions. The Borrower will not, and will not permit any Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (a) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits, owned by the Borrower or any
Subsidiary, or pay any Debt owed to the Borrower or any Subsidiary, (b) make
loans or advances to the Borrower or any Subsidiary or (c) transfer any of its
properties or assets to the Borrower or any Subsidiary, except for such
encumbrances or restrictions existing under or by reason of
(i) applicable law, agreements with foreign governments with
respect to assets located in their jurisdiction, or condemnation or
eminent domain proceedings,
(ii) any of the Financing Documents,
(iii) (A) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or
a Subsidiary, or (B) customary restrictions imposed on the transfer of
copyrighted or patented materials or provisions in agreements that
restrict the assignment of such agreements or any rights thereunder,
(iv) provisions contained in the instruments evidencing or
governing Debt or other obligations or agreements, in each case existing
on the Effective Date,
(v) provisions contained in documents evidencing or governing
any Permitted Receivables Transaction,
(vi) provisions contained in instruments evidencing or governing
Debt or other obligations or agreements of any Person, in each case, at
the time such Person (A) shall be merged or consolidated with or into the
Borrower or any Subsidiary, (B) shall sell, transfer, assign, lease or
otherwise dispose of all or substantially all of such Person's assets to
the Borrower or a Subsidiary, or (C) otherwise becomes a Subsidiary,
provided that in the case of clause (A), (B) or (C), such Debt,
obligation or agreement was not
40
45
incurred or entered into, or any such provisions adopted, in
contemplation of such transaction,
(vii) provisions contained in instruments amending, restating,
supplementing, extending, renewing, refunding, refinancing, replacing or
otherwise modifying, in whole or in part (collectively, "Refinancing"),
instruments referred to in clauses (ii), (iv) and (vi) of this Section
5.07, so long as such provisions are, in the good faith determination of
the Borrower's board of directors, not materially more restrictive than
those contained in the respective instruments so Refinanced,
(viii) provisions contained in any instrument evidencing or
governing Debt or other obligations of a Subsidiary Guarantor,
(ix) any encumbrances and restrictions with respect to a
Subsidiary imposed in connection with an agreement which has been entered
into for the sale or disposition of such Subsidiary or its assets,
provided such sale or disposition otherwise complies with this Agreement,
(x) the subordination (pursuant to its terms) in right and
priority of payment of any Debt owed by any Subsidiary (the "Indebted
Subsidiary") to the Borrower or any other Subsidiary, to any other Debt
of such Indebted Subsidiary, provided (A) such Debt is permitted under
this Agreement and (B) the Borrower's board of directors has determined,
in good faith, at the time of the creation of such encumbrance or
restriction, that such encumbrance or restriction could not, based upon
the facts and circumstances in existence at the time, reasonably be
expected to have a Material Adverse Effect,
(xi) provisions governing preferred stock issued by a
Subsidiary, provided that such preferred stock is permitted under Section
5.08, and
(xii) provisions contained in debt instruments obligations or
other agreements of any Subsidiary which are not otherwise permitted
pursuant to clauses (i) through (xi) of this Section 5.07, provided that
the aggregate investment of the Borrower in all such Subsidiaries
(determined in accordance with generally accepted accounting principles)
shall at no time exceed the greater of (a) $50,000,000 or (b) 10% of
Consolidated Tangible Net Worth.
The provisions of this Section 5.07 shall not prohibit (x) Liens not prohibited
by Section 5.11 or (y) restrictions on the sale or other disposition of any
property securing Debt of any Subsidiary, provided such Debt is otherwise
permitted by this Agreement.
SECTION 5.08. Debt. Consolidated Debt will at no time exceed 52.5% of
Consolidated Total Capitalization. The total Debt of all Consolidated
Subsidiaries (excluding (i) Debt of a Consolidated Subsidiary to the Borrower or
to a Wholly-Owned Consolidated Subsidiary, (ii) Debt of a Subsidiary Guarantor
and (iii) Debt of any Person (a) existing at the time such Person
41
46
becomes a Subsidiary or merges into a Subsidiary and (b) not created in
contemplation of such event, but only for a period ending 180 days after the
date of such event) will at no time exceed $300,000,000 in aggregate outstanding
principal amount. For purposes of this Section any preferred stock of a
Consolidated Subsidiary held by a Person other than the Borrower or a
Wholly-Owned Consolidated Subsidiary shall be included, at the higher of its
voluntary or involuntary liquidation value, in "Consolidated Debt" and in the
"Debt" of such Consolidated Subsidiary.
SECTION 5.09. Fixed Charge Coverage. The ratio of Consolidated EBIT to
Consolidated Interest Expense will not, for any period of four consecutive
fiscal quarters, be less than 2.5 to 1.
SECTION 5.10. Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment unless, after giving
effect thereto, the aggregate of all Restricted Payments declared or made
subsequent to the date hereof does not exceed an amount equal to the sum of (a)
$332,000,000 plus (b) 50% of Consolidated Net Income (or minus 100% of
Consolidated Net Income, in the event of a net loss for such period) for the
period from July 1, 1996 through the end of the then most recently ended fiscal
quarter of the Borrower (treated for this purpose as a single accounting
period), plus (c) the aggregate cash proceeds (net of underwriting commissions)
received by the Borrower (other than from a Subsidiary) from the issuance or
sale after June 30, 1996 of capital stock or Stock Equivalents of the Borrower
(other than the proceeds of any capital stock or Stock Equivalent which by its
terms is subject to redemption otherwise than at the sole option of the
Borrower) plus (d) the aggregate amount of capital contributions received by the
Borrower subsequent to the Parent Guarantee Date. Nothing in this Section 5.10
shall prohibit the payment of any dividend or distribution within 60 days after
the declaration thereof if such declaration was not prohibited by this Section
5.10.
SECTION 5.11. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any Lien existing on any asset on the Effective Date securing Debt
outstanding on the Effective Date;
(b) any Lien existing on any asset of, or capital stock of, or other
ownership interest in, any Person (such capital stock and other ownership
interests are collectively referred to herein as "Stock") at the time such
Person becomes a Subsidiary, which Lien was not created in contemplation of such
event;
(c) any Lien on any asset securing the payment of all or part of the
purchase price of such asset upon the acquisition thereof by the Borrower or a
Subsidiary or securing Debt (including any obligation as lessee incurred under a
capital lease) incurred or assumed by the Borrower or a Subsidiary prior to, at
the time of or within one year after such acquisition (or in the case of real
property, the completion of construction (including any improvements on an
existing property) or the commencement of full operation of such asset or
property, whichever is later), which Debt is incurred or assumed for the purpose
of financing all or part of the cost of
42
47
acquiring such asset or, in the case of real property, construction or
improvements thereon; provided, that in the case of any such acquisition,
construction or improvement, the Lien shall not apply to any asset theretofore
owned by the Borrower or a Subsidiary, other than assets so acquired,
constructed or improved;
(d) any Lien existing on any asset or Stock of any Person at the time
such Person is merged or consolidated with or into the Borrower or a Subsidiary
which Lien was not created in contemplation of such event;
(e) any Lien existing on any asset or Stock of any Person at the time
of acquisition thereof by the Borrower or a Subsidiary, which Lien was not
created in contemplation of such acquisition;
(f) any Lien arising out of the Refinancing of any Debt secured by any
Lien permitted by any of the subsections (a) through (e) of this Section 5.11,
provided the principal amount of Debt is not increased and is not secured by any
additional assets, except as provided in the last sentence of this Section 5.11;
(g) any Lien to secure Debt of a Subsidiary to the Borrower or to a
Wholly-Owned Consolidated Subsidiary;
(h) any Lien created pursuant to a Permitted Receivables Transaction;
(i) any Lien in favor of the United States or any other country (or
any department, agency, instrumentality or political subdivision of the United
States or any other country) securing obligations arising in connection with
partial, progress, advance or other payments pursuant to any contract, statute,
rule or regulation or securing obligations incurred for the purpose of financing
all or any part of the purchase price (including the cost of installation
thereof or, in the case of real property, the cost of construction or
improvement or installation of personal property thereon) of the asset subject
to such Lien (including, but not limited to, any Lien incurred in connection
with pollution control, industrial revenue or similar financings);
(j) Liens arising in the ordinary course of its business which (i) do
not secure Debt, (ii) do not secure any single obligation in an amount exceeding
$50,000,000 and (iii) do not in the aggregate materially detract from the value
of its assets or materially impair the use thereof in the operation of its
business; and
(k) Liens not otherwise permitted by the foregoing clauses (a) through
(j) of this Section 5.11 securing Debt (without duplication) in an aggregate
principal amount at any time outstanding not to exceed an amount equal to the
greater of (i) $50,000,000 or (ii) 10% of Consolidated Tangible Net Worth.
It is understood that any Lien permitted to exist on any asset pursuant to the
foregoing provisions of this Section 5.11 may attach to the proceeds of such
asset and, with respect to Liens permitted
▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (▇), (▇), (▇), (▇), (▇) (but only with respect to the
Refinancing of a Debt secured by a Lien permitted pursuant to subsections (a),
(b), (d) or (e)) or (g) of this Section 5.11, may attach to an asset acquired in
the ordinary course of business as a replacement of such former asset.
SECTION 5.12. Consolidations, Mergers and Sales of Assets. (a) The
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer all or substantially all of its assets to any
other Person, unless
(A) the Borrower or a Subsidiary or a Domestic Parent is
the surviving corporation;
(B) the Person (if other than the Borrower) formed by
such consolidation or into which the Borrower is merged, or the
Person which acquires by sale or other transfer, or which leases,
all or substantially all of the assets of the Borrower (any such
Person, the "Successor"), shall be organized and existing under
the laws of the United States, any state thereof or the District
of Columbia and shall expressly assume, in a writing executed and
delivered to the Agent for delivery to each of the Banks, in form
reasonably satisfactory to the Agent, the due and punctual payment
of the principal of and interest on the Promissory Notes and the
performance of the other obligations under this Agreement and the
Promissory Notes on the part of the Borrower to be performed or
observed, as fully as if such Successor were originally named as
the Borrower in this Agreement;
(C) immediately after giving effect to such transaction,
no Default shall have occurred and be continuing; and
(D) the Borrower has delivered to the Agent a
certificate on behalf of the Borrower signed by a Responsible
Officer and an opinion of counsel (which counsel may be an
employee of the Borrower), each stating that all conditions
provided in this Section 5.12 relating to such transaction have
been satisfied.
The foregoing provisions of this Section 5.12 shall not restrict the
merger or consolidation of any Subsidiary with and into the Borrower.
Upon the satisfaction (or waiver in accordance with Section 9.05) of the
conditions set forth in this Section 5.12, the Successor shall succeed, and may
exercise every right and power of, the Borrower under this Agreement and the
Promissory Notes with the same effect as if the Successor had been originally
named as the Borrower herein and in the Promissory Notes, and the Borrower shall
be relieved of its obligations under this Agreement and the Promissory Notes.
(b) The Borrower will not, and will not permit any Subsidiary to,
sell, lease or otherwise transfer, in any transaction or series of related
transactions, to any Person (other than the Borrower, a Subsidiary, a Person of
which the Borrower is a Subsidiary or a Subsidiary of
44
49
such a Person) any Property (including, without limitation, the stock of any
Subsidiary) having a net book value in excess of 15% of Consolidated Assets
determined as of the end of the fiscal quarter of the Borrower most recently
ended at the time of such sale or other transaction, or Property (including
without limitation, stock of a Subsidiary) which contributed in excess of 15% of
Consolidated EBIT for the fiscal year of the Borrower most recently ended at the
time of such sale or other transaction.
SECTION 5.13. Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for its general corporate purposes,
including, without limitation, capital expenditures and (subject to the
following sentence) acquisitions. None of such proceeds will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
SECTION 5.14. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, on any date before the Parent Guarantee Date,
directly or indirectly, pay any funds to or for the account of, make any
investment (whether by acquisition of stock or indebtedness, by loan, advance,
transfer of property, guarantee or other agreement to pay, purchase or service,
directly or indirectly, any Debt, or otherwise) in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect any transaction in connection with any joint enterprise or other joint
arrangement with, any Affiliate (collectively, "AFFILIATE TRANSACTIONS");
provided, however, that the foregoing provisions of this Section 5.14 shall not
prohibit the Borrower or any of its Subsidiaries from: (a) making Restricted
Payments (including, for this purpose, transactions expressly excluded from the
definition of a Restricted Payment) permitted by Section 5.10, (b) making sales
to or purchases from any Affiliate and, in connection therewith, extending
credit or making payments, or from making payments for services rendered by any
Affiliate, if such sales or purchases are made or such services are rendered in
the ordinary course of business and on terms and conditions at least as
favorable to the Borrower or such Subsidiary as the terms and conditions which
the Borrower would reasonably expect to be obtained in a similar transaction
with a Person which is not an Affiliate at such time, (c) making payments of
principal, interest and premium on any Debt of the Borrower or such Subsidiary
held by an Affiliate if the terms of such Debt are at least as favorable to the
Borrower or such Subsidiary as the terms which the Borrower would reasonably
expect to have been obtained at the time of the creation of such Debt from a
lender which was not an Affiliate, (d) participating in, or effecting any
transaction in connection with, any joint enterprise or other joint arrangement
with any Affiliate if the Borrower or such Subsidiary participates in the
ordinary course of its business and on a basis no less advantageous than the
basis on which such Affiliate participates, (e) paying or granting reasonable
compensation and benefits to any director, officer, employee or agent of the
Borrower or any Subsidiary, (f) paying reasonable legal fees and expenses to a
law firm of which an Affiliate is a member or (g) engaging in any Affiliate
Transaction not otherwise addressed in subsections (a) - (f) of this Section
5.14, the terms of which are not less favorable to the Borrower or such
Subsidiary than those that the Borrower would reasonably expect to be obtained
in a comparable transaction at such time with a Person which is not an
Affiliate.
45
50
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Defaults. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing and shall not have
been waived in accordance with Section 9.05:
(a) the Borrower shall fail to pay when due any principal of any Loan,
or shall fail to pay within three Domestic Business Days of the due date thereof
any interest on any Loan or any fees payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.08 or 5.09;
(c) the Borrower shall fail to observe or perform any covenant
contained in Section 5.07 or Sections 5.10 to 5.14, inclusive, and such failure
shall not be remedied within five days after any Responsible Officer obtains
actual knowledge thereof;
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b) or (c) of this Section 6.01) for 10 days after notice thereof has been given
to the Borrower by the Agent at the request of any Bank;
(e) any representation, warranty, certification or statement made in
writing by the Borrower or any Guarantor in the Financing Documents or in any
certificate, financial statement or other document required to be delivered to
the Agent or any of the Banks pursuant to the Financing Documents shall prove to
have been incorrect in any material respect when made (or deemed made);
(f) on any date on or after the Parent Guarantee Date, any Guarantor
Event of Default (as defined in the Parent Guarantee);
(g) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Debt when due (after giving effect to any applicable
grace period);
(h) any event or condition shall occur that results in the
acceleration of the maturity of any Material Debt or that entitles the holder or
holders of any Material Debt or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof;
(i) the Borrower or any Significant Subsidiary shall (i) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
substantially all of its property, or (ii) consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other similar proceeding
46
51
commenced against it, or (iii) make a general assignment for the benefit of
creditors, or (iv) fail generally to pay its debts as they become due, or (v)
take corporate action authorizing any of the foregoing;
(j) (i) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or substantially all of its property, and such
involuntary case or other proceeding shall remain in effect and undismissed and
unstayed for a period of 60 consecutive days or (ii) an order for relief shall
be entered against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(k) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $5,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $25,000,000;
(l) a judgment or order for the payment of money in excess of
$30,000,000 (after deducting amounts covered by insurance, except to the extent
that the insurer providing such insurance has declined such coverage) shall be
rendered against the Borrower or any Subsidiary and, within 60 days after entry
thereof, such judgment or order is not discharged or execution thereof stayed
pending appeal, or within 60 days after the expiration of any such stay, such
judgment or order is not discharged;
(m) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 40% or more of the
outstanding shares of common stock of the Borrower; or, on the last day of any
period of twelve consecutive calendar months, a majority of members of the board
of directors of the Borrower shall no longer be composed of individuals (i) who
were members of said board of directors on the first day of such twelve
consecutive calendar month period or (ii) whose election or nomination to said
board of directors was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
said board of directors; provided that, the events described in this subsection
(m) shall not constitute an Event of Default on any date on or after the Parent
Guarantee Date;
47
52
(n) the Borrower or any Subsidiary shall fail to make any payment
owing by it in respect of any performance bond, performance guaranty or bank
guaranty issued in lieu of a performance bond or performance guaranty (other
than a payment which is disputed by the Borrower or such Subsidiary in good
faith), and the aggregate of all such defaulted payments shall exceed
$50,000,000 at any one time for the Borrower and its Subsidiaries;
(o) on any date on or after the Parent Guarantee Date, the Parent
Guarantee shall cease to be valid and enforceable; or
(p) on any date on or after the Parent Guarantee Date, the Borrower
shall cease to be a Wholly-Owned Consolidated Subsidiary of the Parent
Guarantor;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 60% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Promissory Notes evidencing more than 60% in
aggregate principal amount of the Loans, by notice to the Borrower declare the
Promissory Notes (together with accrued interest thereon) to be, and the
Promissory Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any of the Events of
Default specified in subsection (i) or (j) above with respect to the Borrower,
without any notice to the Borrower or any other act by the Agent or the Banks,
the Commitments shall thereupon terminate and the Promissory Notes (together
with accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Financing Documents as are delegated to the
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty Trust Company of New
York (and any successor acting as Agent) in its capacity as a Bank hereunder
shall have the same rights and powers under the Financing Documents as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and ▇▇▇▇▇▇ Guaranty Trust Company
48
53
of New York (and any successor acting as Agent) and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent under the
Financing Documents are only those expressly set forth therein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower or any Guarantor; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Subsidiary Guarantees, the Parent Guarantee,
the Promissory Notes or any other instrument or writing furnished in connection
herewith. The Agent shall not incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank
wire, telex or similar writing) believed by it in good faith to be genuine or to
be signed by or on behalf of the proper party or parties. Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with the Financing Documents or any action taken
or omitted by such indemnitees thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and
49
54
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and its own decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by giving
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Required Banks shall have the right to appoint a successor Agent, subject to the
consent of the Borrower. If no successor Agent shall have been so appointed by
the Required Banks and consented to by the Borrower and shall have accepted such
appointment within 45 days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $50,000,000. Upon the acceptance of its appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Financing Documents. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
acting as the Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for its
own account fees in the amounts and at the times previously agreed upon in
writing between the Borrower and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any CD Loan,
Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference Banks
in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks holding 50% or
more of the aggregate amount of the affected Loans advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly reflect the cost to such
Banks of funding their CD Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
50
55
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon, until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist (which the Agent agrees to do promptly
upon such circumstances ceasing to exist), (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to continue or
convert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto. Unless the Borrower
notifies the Agent at least one Domestic Business Day before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this Agreement, any
Bank has determined in its reasonable judgment that the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency,
shall make it unlawful or impossible for such Bank (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice specifying the
circumstances giving rise to such suspension to the other Banks and the
Borrower, whereupon, until such Bank notifies the Borrower and the Agent that
the circumstances giving rise to such suspension no longer exist (which such
Bank agrees to do promptly upon such circumstances ceasing to exist), the
obligation of such Bank to make Euro-Dollar Loans, or to continue or convert
outstanding Loans as or into Euro-Dollar Loans, shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank in
the good faith exercise of its discretion, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last day of
the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan
to such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan as a Euro- Dollar Loan to such
day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date of this Agreement, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, any Bank has determined in its reasonable
judgment that the adoption of any applicable law, rule or
51
56
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency, shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan any such requirement included in an
applicable Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar
Loan any such requirement with respect to which such Bank is entitled to
compensation during the relevant Interest Period under Section 2.15), special
deposit, insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
such Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Promissory Note or its obligation to make Fixed Rate Loans and
the result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Promissory Note
with respect thereto, by an amount deemed by such Bank to be material to such
Bank, then, within 15 days after written demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date of this
Agreement, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
written demand by such Bank (with a copy to the Agent), the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date of this Agreement,
which will entitle such Bank to compensation pursuant to this Section; provided
that (i) if any Bank fails to give such notice within 90 days after it obtains
actual knowledge of such an event, such Bank shall only be entitled to payment
under this Section 8.03 for costs incurred from and after the date 90 days prior
to the date that such Bank does give such notice and (ii) each such Bank will
designate a
52
57
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank in the good faith exercise of its discretion, be otherwise disadvantageous
to such Bank. A certificate of any Bank claiming compensation under this Section
and setting forth in reasonable detail the additional amount or amounts to be
paid to it hereunder and the basis used to determine such amounts shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank will use reasonable averaging and attribution methods and will have a
reasonable basis for any assumptions it makes in connection therewith.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to or for
the account of any Bank or the Agent hereunder or under any Promissory Note
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Bank and
the Agent, taxes imposed on or measured by its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on or measured by its income, and
franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Promissory Note to any Bank or the Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.04 such Bank or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the Agent,
at its address referred to in Section 9.01, the original or a certified copy of
a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any
Promissory Note or from the execution or delivery of, or otherwise with respect
to, this Agreement or any other Financing Document (hereinafter referred to as
"OTHER TAXES").
(c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 8.04 paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days from the date
such Bank or the Agent (as the case may be) makes demand therefor.
53
58
(d) At the times indicated herein, each Bank organized under the laws
of a jurisdiction outside the United States shall provide the Borrower with
Internal Revenue Service form 1001 or 4224 (in each case accompanied by any
statements which may be required under applicable Treasury regulations), as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to receive payments under this Agreement
(i) without deduction or withholding of any United States federal income taxes
or (ii) subject to a reduced rate of United States federal withholding tax,
unless, in each case of clause (i) and (ii) of this Section 8.04(d), an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or which would prevent the Bank
from duly completing and delivering any such form with respect to it and the
Bank advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding of such taxes. Such forms shall be
provided (x) on or prior to the date of the Bank's execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof,
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, and (y) on or before the date that such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent form
so delivered by the Bank. If the form provided by a Bank at the time such Bank
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from "TAXES" as defined in Section 8.04(a). In addition, to
the extent that for reasons other than a change of treaty, law or regulation any
Bank becomes subject to an increased rate of United States interest withholding
tax while it is a party to this Agreement, withholding tax at such increased
rate shall be considered excluded from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form in accordance with Section 8.04(d)
(unless such failure is excused by the terms of Section 8.04(d)), such Bank
shall not be entitled to indemnification under Section 8.04(a) or 8.04(c) with
respect to Taxes imposed by the United States; provided, however, that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank in the good faith exercise of its discretion, is
not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans.
If (i) the obligation of any Bank to make, or to continue or convert outstanding
Loans as or to Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03 or 8.04 with respect
to its CD Loans or Euro-Dollar Loans and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through the Agent,
54
59
have elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist (which such
Bank agrees to do promptly upon such circumstances ceasing to exist), all Loans
which would otherwise be made by such Bank as (or continued as or converted to)
CD Loans or Euro-Dollar Loans, as the case may be, shall instead be Base Rate
Loans (on which interest and principal shall be payable contemporaneously with
the related Fixed Rate Loans of the other Banks). If such Bank notifies such
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist, the principal amount of each such Base Rate Loan
shall be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on
the first day of the next succeeding Interest Period applicable to the related
CD Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If any Bank (i) has demanded
compensation for increased costs pursuant to Section 8.03 or 8.04 or is entitled
to payments under Section 8.04(a) or (ii) has determined that the making or
maintaining of any Euro-Dollar Loan has become unlawful or impossible pursuant
to Section 8.02 and similar additional interest or compensation has not been
demanded by, or a similar determination has not been made by, all of the Banks,
the Borrower shall have the right (with the assistance of the Agent) to
designate an Assignee which is not an Affiliate of the Borrower to purchase for
cash, pursuant to an Assignment and Assumption Agreement in substantially the
form of Exhibit G hereto, the outstanding Loans and Commitment of such Bank and
to assume all of such Bank's other rights and obligations hereunder without
recourse to or warranty by, or expense to, such Bank, for a purchase price equal
to the principal amount of all of such Bank's outstanding Loans plus any accrued
but unpaid interest thereon and the accrued but unpaid fees in respect of that
Bank's Commitment hereunder plus such amount, if any, as would be payable
pursuant to Section 2.13 if the outstanding Loans of such Bank were prepaid in
their entirety on the date of consummation of such assignment.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to
any party provided for hereunder shall be in writing (including, without
limitation, bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower or the Agent, at
its address or facsimile or telex number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or facsimile or telex number
set forth in its Administrative Questionnaire or (z) in the case of any party,
such other address or facsimile or telex number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this Section and
the appropriate answerback is received, (ii) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section 9.01
and electronic, telephonic or other
55
60
appropriate confirmation of receipt is received by the sender, (iii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article 2 or Article 8 shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any other Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein and
therein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including reasonable fees
and disbursements of special counsel for the Agent, in connection with the
preparation and administration of the Financing Documents, any waiver or consent
hereunder or any amendment thereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and each Bank, including reasonable fees and disbursements
of counsel, in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective Bank Affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses, including, without limitation, the reasonable fees and disbursements
of counsel, which may be incurred by such Indemnitee (whether or not such
Indemnitee shall be designated a party thereto) arising out of any
investigative, administrative or judicial proceeding (brought or threatened)
relating to or arising out of the Financing Documents, the arrangement,
administration, performance or enforcement thereof or any actual or proposed use
of proceeds of Loans hereunder; provided that no Indemnitee shall have the right
to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction; provided
further that no Indemnitee shall have the right to be indemnified hereunder in
connection with any proceedings between it and another Indemnitee which does not
relate to the Borrower.
(c) If any proceeding or claim shall be brought or asserted against
any Indemnitee in respect of which indemnity may be sought pursuant to the
preceding subsection, such Indemnitee shall promptly notify the Borrower. The
Borrower shall not be liable for any costs or expenses in connection with any
settlement entered into without its consent.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Promissory Note held by it which is
56
61
greater than the proportion received by any other Bank in respect of the
aggregate amount of principal and interest due with respect to any Promissory
Note held by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Promissory Notes held by the
other Banks, and such other adjustments shall be made, as may be required, so
that all such payments of principal and interest with respect to the Promissory
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Promissory Notes.
SECTION 9.05. Amendments and Waivers. Any provision of this Agreement or
the Promissory Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks (and,
if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for termination of any Commitment,
(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Promissory Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section or
any other provision of this Agreement or (v) release the Parent Guarantor from
its obligations under the Parent Guarantee.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii) or (iv) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement and subject to subsection (e), (f) and (g) below, be
entitled to the benefits of Article 8 with respect to its participating
interest. An assignment or other transfer which is not
57
62
permitted by subsection 9.06(c) or 9.06(d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (in an amount
equivalent to an original Commitment of not less than $10,000,000) of all, of
its rights and obligations under this Agreement and the Promissory Notes, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto executed by such Assignee and such transferor Bank, with (and subject to)
the subscribed consent of the Borrower and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank, no such consent shall be
required; and provided further that such assignment may, but need not, include
rights of the transferor Bank in respect of outstanding Money Market Loans. Upon
execution and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate arrangements so that, if
required, a new Promissory Note is issued to the Assignee. In connection with
any such assignment, the transferor Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of any United States federal
income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Promissory Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) Notwithstanding anything to the contrary contained in this Section
9.06 but subject to the terms and conditions set forth in this subsection (f),
any Bank may from time to time, elect to designate a Conduit to provide all or
any part of Loans required to be made by such Bank to the Borrower pursuant to
this Agreement (a "Conduit Designation"), provided the designation of a Conduit
by any Bank for purposes of this Section 9.06(f) shall be subject to the
approval of the Borrower. No additional Note shall be required with regard to a
Conduit Designation; provided,
58
63
however, to the extent any Conduit shall advance funds under a Conduit
Designation, the designating Bank shall be deemed to hold the Note in its
possession as an agent for such Conduit to the extent of the Loan funded by such
Conduit. Notwithstanding any such Conduit Designation, (x) the designating Bank
shall remain solely responsible to the other parties hereto for its obligations
under this Agreement and (y) the Borrower and the Agent may continue to deal
solely and directly with the designating Bank as administrative agent for such
designating Bank's Conduit, in connection with all of such Conduit's rights and
obligations under this Agreement, unless and until the Borrower and the Agent
are notified that the designating Bank has been replaced as administrative agent
for its Conduit; any payments for the benefit of any designating Bank and its
Conduit shall be paid to such designating Bank for itself and as administrative
agent for its Conduit, as applicable; provided neither the Borrower nor the
Agent shall be responsible for any designating Bank's application of any such
payments. In addition, any Conduit may (i) with notice to, but without the prior
written consent of the Borrower and the Agent, and without paying any processing
fee therefor, assign all or portions of its interest in any Loans to the Bank
that designated such Conduit or to any financial institutions consented to by
the Borrower and the Agent providing liquidity and/or credit facilities to or
for the account of such Conduit to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any
guarantee, surety, credit or liquidity enhancement to such Conduit.
(g) Each party to this Agreement hereby agrees that, at any time a
Conduit Designation is in effect, it shall not institute against, or join any
other person in instituting against, any Conduit any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law, for one year and a day after the
latest maturing commercial paper note issued by such Conduit is paid. This
Section 9.06(g) shall survive the termination of this Agreement.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
AND EACH PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH
59
64
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 9.09. Counterparts; Integration. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
SECTION 9.10. Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND
THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
60
65
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TYCO INTERNATIONAL LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Title: Vice President - Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Title: Vice President - Treasurer
▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD.
(NEW YORK BRANCH)
By: /s/ MASAYOSHI KOMAKI
------------------------------------------------
Title: Assistant Vice President
▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
BRANCH
By: /S/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President and Manager
Credit Analysis
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
67
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telex number: 177615
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
68
Commitment Schedule
▇▇▇▇▇▇ Guaranty Trust Company of New York $305,000,000
The Dai-ichi Kangyo Bank, Ltd. (New York Branch) $100,000,000
Bank Brussels ▇▇▇▇▇▇▇, New York Branch $ 35,000,000
The Hongkong and Shanghai Banking Corporation Limited $ 35,000,000
Bank of Tokyo-Mitsubishi Trust Company $ 25,000,000
Total Commitments:
$500,000,000
69
EXHIBIT A
PROMISSORY NOTE
New York, New York
, 19
For value received, TYCO INTERNATIONAL LTD., a Massachusetts corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of ▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This promissory note is one of the Promissory Notes referred to in the
Bridge Credit Agreement dated as of June 27, 1997 among the Borrower, the banks
listed on the signature pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
Except as permitted by Section 9.06 of the Credit Agreement, this
Promissory Note may not be assigned by the Bank to any other Person.
70
This Promissory Note shall be governed by and construed in accordance
with the laws of the State of New York.
TYCO INTERNATIONAL LTD.
By ________________________
Title:
By ________________________
Title:
71
Promissory Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------
Amount Type Amount of Unpaid
of of Principal Principal Maturity Notation
Date Loan Loan Repaid Amount Date Made By
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
---------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
72
EXHIBIT B
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York
(the "Agent")
From: Tyco International Ltd.
Re: Bridge Credit Agreement (the "Credit Agreement") dated as
of June 27, 1997 among the Borrower, the Banks listed on
the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
PRINCIPAL AMOUNT(1) INTEREST PERIOD(2)
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
TYCO INTERNATIONAL LTD.
By
----------------------------------------
Title:
By
----------------------------------------
Title:
--------------
(1) Amount must be $5,000,000 or a larger multiple of $1,000,000.
(2) Not less than one month (LIBOR Auction) or not less than 30 days
(Absolute Rate Auction), subject to the provisions of the definition of Interest
Period.
73
EXHIBIT C
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Tyco International
Ltd. (the "Borrower")
Pursuant to Section 2.03 of the Bridge Credit Agreement dated as of June
27, 1997 among the Borrower, the Banks parties thereto and the undersigned, as
Agent (the "Credit Agreement"), we are pleased on behalf of the Borrower to
invite you to submit Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
PRINCIPAL AMOUNT INTEREST PERIOD
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the Credit
Agreement.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By
-------------------------------
Authorized Officer
74
EXHIBIT D
FORM OF MONEY MARKET QUOTE
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to Tyco International Ltd. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
-----------------------------
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
AMOUNT** PERIOD*** [MARGIN****] [ABSOLUTE RATE*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed $____________.]**
----------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids must be
made for $5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
75
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Bridge Credit
Agreement dated as of June 27, 1997 (the "Credit Agreement") among the Borrower,
the Banks listed on the signature pages thereof and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s) for which any offer(s)
are accepted, in whole or in part, in accordance with Section 2.03(f) of the
Credit Agreement.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:_______________________________
Authorized Officer
----------
*** Not less than one month or not less than 30 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
76
EXHIBIT E
Form of Opinion of General Counsel
of the Borrower
June 27, 1997
To the Banks and the Agent
Named on the Attached Distribution List
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, As Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the General Counsel of Tyco International Ltd., a Massachusetts
corporation (the "Borrower"), and am rendering this opinion in connection with
that certain Bridge Credit Agreement (the "Credit Agreement"), dated as of June
27, 1997, among the Borrower, the banks listed on the signature pages thereof
(the "Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent. This
opinion is being delivered to you pursuant to Section 3.01(c) of the Credit
Agreement. Each term defined in the Credit Agreement and used herein, but not
otherwise defined herein, has the meaning ascribed thereto in the Credit
Agreement.
In connection with the opinion set forth herein, I have reviewed the
Credit Agreement and Promissory Notes and have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Restated
Articles of Organization and By-laws of the Borrower, each as in effect on the
date hereof and (ii) such other documents, records, certificates and instruments
as I have deemed relevant and necessary as a basis for the opinion hereinafter
expressed.
In my examination, I have assumed the genuineness of all signatures on
original documents, the authenticity of all documents submitted to me as
originals, the conformity to the originals of all copies submitted to me as
certified, conformed or photostatic copies, and the authenticity of the
originals of such copies. As to various questions of fact material to this
opinion, I have relied, without independent investigation or verification, upon
statements, representations and certificates of officers and other
representatives of the Borrower and certificates of public officials. In
addition, I have assumed that (i) the Credit Agreement has been validly
authorized, executed and delivered by all parties thereto (other than the
Borrower), (ii) each party to the Credit Agreement (other than the Borrower) has
been duly organized and is a corporation or other entity validly existing and in
good standing (to the extent applicable) under the laws of its respective
jurisdiction of organization, with the full corporate or other organizational
power to execute and deliver the Credit Agreement and to perform its respective
obligations thereunder, (iii) the Credit Agreement constitutes the legal, valid
and binding obligations of the respective parties thereto (other than the
Borrower) enforceable against such
77
parties in accordance with their respective terms, (iv) the execution and
delivery of the Credit Agreement by each party thereto (other than the Borrower)
and the performance by such parties of their respective obligations thereunder
do not violate such parties' respective articles or certificate of incorporation
or by-laws, or other organizational documents, and (v) the execution, delivery
and performance by each party to the Credit Agreement (other than the Borrower)
and the performance by such parties of their respective obligations thereunder
do not violate any agreement, judgment, injunction, decree, order of any
governmental authority, other instrument, law or regulation applicable to such
party.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, it is my opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts, and
has all corporate powers and all material governmental licenses, authorizations,
consents and approvals (collectively, the "Consents") required to carry on its
business as now conducted, other than those powers and Consents, the failure of
which to be possessed or obtained could not, based upon the facts and
circumstances in existence on the date hereof, reasonably be expected to have a
Material Adverse Effect.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Promissory Notes (a) are within the Borrower's
corporate powers; (b) have been duly authorized by all necessary corporate
action on the part of the Borrower; (c) require no action by or in respect of,
or filing with, any governmental body, agency or official, in each case, on the
part of the Borrower; and (d) do not contravene, or constitute a default by the
Borrower under, any provision of (i) applicable law or regulation, (ii) the
certificate of incorporation or by-laws of the Borrower or, (iii) any agreement
or instrument evidencing or governing Debt of the Borrower, or any other
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Promissory Notes constitute valid and binding obligations
of the Borrower.
4. There is no action, suit or proceeding pending against, or, to the
best of my knowledge, threatened against or affecting, the Borrower or any of
its Subsidiaries before any court or arbitrator or any governmental body, agency
or official, in which there is a reasonable possibility of an adverse decision
which could, based upon the facts and circumstances in existence on the date
hereof, reasonably be expected to have a Material Adverse Effect or which in any
manner draws into question the validity of the Credit Agreement or the
Promissory Notes.
5. Each of the Borrower's corporate Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, except where the failure
2
78
to be so incorporated, existing or in good standing could not, based upon the
facts and circumstances existing on the date hereof, reasonably be expected to
have a Material Adverse Effect, and has all corporate powers and all Consents
required to carry on its business as now conducted other than those powers and
Consents, the failure of which to be possessed or obtained could not, based upon
the facts and circumstances in existence on the date hereof, reasonably be
expected to have a Material Adverse Effect.
The opinion set forth herein is subject to the following qualifications
and limitations:
(a) The enforceability of the Credit Agreement and the Promissory
Notes may be subject to or limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance or transfer or other similar laws
and court decisions, now or hereafter in effect, relating to or affecting the
rights of creditors generally.
(b) The enforceability of the Credit Agreement and the Promissory
Notes is or will be subject to the application of and may be limited by general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law). Such principles of equity are of general
application, and in applying such principles a court, among other things, might
not allow a creditor to accelerate maturity of a debt under certain
circumstances including, without limitation, upon the occurrence of a default
deemed immaterial, or might decline to order the Borrower or any of the other
parties to the Credit Agreement to perform covenants. Such principles as applied
by a court might include a requirement that a creditor act with reasonableness
and in good faith. Thus, I express no opinion as to the validity or
enforceability of (i) provisions restricting access to legal or equitable
remedies, such as the specific performance of executory covenants, (ii)
provisions that purport to establish evidentiary standards, (iii) provisions
relating to waivers, severability, set-off, or delay or omission of enforcement
of rights or remedies, and (iv) provisions purporting to convey rights to
persons other than parties to the Credit Agreement.
(c) The remedy of specific performance and injunctive and other forms
of equitable relief are subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(d) I have not been requested to render, and with your permission I do
not express, any opinion as to the applicability to any provision of the Credit
Agreement or the Promissory Notes, of Section 548 of the Federal Bankruptcy
Code, Article 10 of the New York Debtor & Creditor Law, or any other fraudulent
conveyance, insolvency or transfer laws or any court decisions with respect to
any of the foregoing.
I call your attention to the fact that I am admitted to practice law only
in the State of New York and the Commonwealth of Massachusetts, and, in
rendering the foregoing opinion, I do not express any opinion as to any laws
other than the laws of the State of New York, the Commonwealth of Massachusetts
and the Federal laws of the United States of America.
3
79
The opinion expressed herein is based upon the laws in effect on the
date hereof, and I assume no obligation to revise or supplement this opinion
should any such law be changed by legislative action, judicial decision, or
otherwise.
This opinion is being delivered to you solely for your benefit in
connection with the Credit Agreement, and neither this opinion nor any part
hereof may be delivered to, or used, referred to or relied upon, by any other
person or for any other purpose without my express prior written consent.
Very truly yours,
4
80
EXHIBIT F
OPINION OF
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the Bridge Credit Agreement
(the "Credit Agreement") dated as of June 27, 1997, among Tyco International
Ltd., a Massachusetts corporation (the "Borrower"), the banks listed on the
signature pages thereof (the "Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Agent (the "Agent"), and have acted as special counsel for the Agent
for the purpose of rendering this opinion pursuant to Section 3.01(d) of the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Promissory Note constitutes a valid and binding obligation of the Borrower, in
each case enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America. In giving the foregoing opinion, (i) we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect and (ii) insofar as the foregoing
opinion involves matters governed by the laws of Massachusetts, we have relied,
without independent
81
investigation, upon the opinion of the General Counsel of the Borrower, a copy
of which has been delivered to you.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
2
82
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), TYCO INTERNATIONAL LTD. (the "Borrower") and ▇▇▇▇▇▇
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Bridge Credit Agreement dated as of June 27, 1997 among the
Borrower, the Assignor and the other Banks party thereto, as Banks, and the
Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at any
time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Committed Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the
83
Assignee hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, [the Borrower and the Agent] and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement with a Commitment
in an amount equal to the Assigned Amount, and (ii) the Commitment of the
Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.3 It is
understood that commitment and/or facility fees in respect of the Assigned
Amount accrued to the date hereof are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
[SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the Borrower
and the Agent is evidence of this consent. Pursuant to Section 9.06(c) the
Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.
--------
(3) Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
2
84
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By
--------------------------------
Title:
[ASSIGNEE]
By
--------------------------------
Title:
TYCO INTERNATIONAL LTD.
By
--------------------------------
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By
--------------------------------
Title:
3
85
EXHIBIT H
SUBSIDIARY GUARANTEE
Dated as of June 27, 1997
WHEREAS, Tyco International Ltd., a Massachusetts corporation (together
with its successors, the "Borrower") has entered into a Bridge Credit Agreement
(as the same may be amended from time to time, the "Credit Agreement") dated as
of June 27, 1997 among the Borrower, the banks listed on the signature pages
thereof, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent, pursuant to
which the Borrower is entitled, subject to certain conditions, to borrow up to
$500,000,000;
WHEREAS, in conjunction with the transactions contemplated by the Credit
Agreement and in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower may
in the future provide, to the undersigned (together with its successors, the
"Guarantor") and in order to induce the Banks and the Agent to enter into the
Credit Agreement and to make Loans thereunder, the Guarantor is willing to
guarantee the obligations of the Borrower under the Credit Agreement and the
Promissory Notes;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby agrees as follows:
ARTICLE
DEFINITIONS
SECTION 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined. In addition the
following terms, as used herein, have the following meanings:
"Guaranteed Obligations" means (i) all obligations of the Borrower in
respect of principal of and interest on the Loans and the Promissory Notes, (ii)
all other amounts payable by the Borrower under the Credit Agreement or the
Promissory Notes and (iii) all renewals or extensions of the foregoing, in each
case whether now outstanding or hereafter arising. The Guaranteed Obligations
shall include, without limitation, any interest, costs, fees and expenses which
accrue on or with respect to any of the foregoing and are payable by the
Borrower pursuant to the Credit Agreement or the Promissory Notes, whether
before or after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any one or more than
one of the Obligors, and any such interest, costs, fees and expenses that would
have accrued thereon or with respect thereto and would have been payable by the
Borrower pursuant to the Credit Agreement or the Promissory Notes but for the
commencement of such case, proceeding or other action.
86
"Obligors" means the Borrower and each of the Guarantors (as defined in
the Credit Agreement), including the Guarantor, and "Obligor" means any one of
the foregoing.
ARTICLE
GUARANTEE
SECTION 1. The Guarantees. Subject to Section 3, the Guarantor hereby
unconditionally and irrevocably guarantees to the Banks and the Agent and to
each of them, the due and punctual payment of all Guaranteed Obligations as and
when the same shall become due and payable, whether at maturity, by declaration
or otherwise, according to the terms thereof. In case of failure by the Borrower
punctually to pay the indebtedness guaranteed hereby, the Guarantor, subject to
Section 3, hereby unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and payable, whether at
maturity or by declaration or otherwise, and as if such payment were made by the
Borrower.
SECTION 2. Guarantee unconditional. The obligations of the Guarantor
under this Article 2 shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other Obligor under any Financing Document,
by operation of law or otherwise;
(b) any modification or amendment of or supplement to any Financing
Document (other than as specified in an amendment or waiver of this Subsidiary
Guarantee effected in accordance with Section 3);
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guaranty or other
liability of any third party, for any obligation of any other Obligor under any
Financing Document;
(d) any change in the corporate existence, structure or ownership of
any other Obligor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any other Obligor or its assets or any resulting
release or discharge of any obligation of any other Obligor contained in any
Financing Document;
(e) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against any other Obligor, the Agent, any Bank or
any other Person, whether or not arising in connection with the Financing
Documents; provided that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim;
2
87
(f) any invalidity or unenforceability relating to or against any
other Obligor for any reason of any Financing Document, or any provision of
applicable law or regulation purporting to prohibit the payment by any other
Obligor of the principal of or interest on any Promissory Note or any other
amount payable by any other Obligor under any Financing Document; or
(g) any other act or omission to act or delay of any kind by any other
Obligor, the Agent, any Bank or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the obligations of the Guarantor under this
Article 2.
SECTION 3. Limit of Liability. The Guarantor shall be liable under this
Subsidiary Guarantee only for amounts aggregating up to the largest amount that
would not render its obligations hereunder subject to avoidance under Section
548 of the United States Bankruptcy Code or any comparable provisions of any
applicable state law.
SECTION 4. Discharge; Reinstatement in Certain Circumstances. Subject to
Section 6, the Guarantor's obligations under this Article 2 shall remain in full
force and effect until the Commitments are terminated and the principal of and
interest on the Promissory Notes and all other amounts payable by the Borrower
under the Financing Documents shall have been paid in full. If at any time any
payment of the principal of or interest on any Promissory Note or any other
amount payable by the Borrower under any Financing Document is rescinded or must
be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of any other Obligor or otherwise, the Guarantor's obligations
under this Article 2 with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at such time.
SECTION 5. Waiver. The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against any
other Obligor or any other Person.
SECTION 6. Subrogation and Contribution. (a) The Guarantor irrevocably
waives any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder (i) to be subrogated to the rights
of the payee against the Borrower with respect to such payment or otherwise to
be reimbursed, indemnified or exonerated by any other Obligor in respect thereof
or (ii) to receive any payment, in the nature of contribution or for any other
reason, from any other Obligor with respect to such payment
(b) Notwithstanding the provision of subsection (a) of this Section 6,
the Guarantor shall have and be entitled to (i) all rights of subrogation or
contribution otherwise provided by law in respect of any payment it may make or
be obligated to make under this Subsidiary Guarantee and (ii) all claims (as
defined under Chapter 11 of Title 11 of the United States Code, as amended, or
any successor statute (the "Bankruptcy Code")) it would have against the
Borrower or any other Guarantor (each an "Other Party") in the absence of
subsection (a) of this Section 6 and to assert
3
88
and enforce the same, in each case on and after, but at no time prior to, the
date (the "Subrogation Trigger Date") which is one year and five days after the
Termination Date if, but only if, (x) no Default or Event of Default of the type
described in Section 6.01(i) or 6.01(j) of the Credit Agreement with respect to
the relevant Other Party has existed at any time on and after the date of this
Subsidiary Guarantee to and including the Subrogation Trigger Date and (y) the
existence of such Guarantor's rights under this clause (b) would not make such
Guarantor a creditor (as defined in the Bankruptcy Code) of such Other Party in
any insolvency, bankruptcy, reorganization or similar proceeding commenced on or
prior to the Subrogation Trigger Date.
SECTION 7. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower under the Financing Documents is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower, all such
amounts otherwise subject to acceleration under the terms of the Financing
Documents shall nonetheless be payable by the Guarantor hereunder forthwith on
demand by the Agent made at the request of the Required Banks.
ARTICLE
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants to the Agent and the Banks that:
SECTION 1. Corporate Existence and Power. The Guarantor is a corporation
duly incorporated, validly existing and in good standing under the laws of
___________.
SECTION 2. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Guarantor of this Subsidiary
Guarantee:
(a) are within the Guarantor's corporate powers;
(b) have been duly authorized by all necessary corporate action on the
part of the Guarantor;
(c) require no action by or in respect of, or filing with, any
governmental body, agency or official, in each case, on the part of the
Guarantor; and
(d) do not contravene, or constitute a default by the Guarantor under,
any provision of (i) applicable law or regulation, (ii) the certificate of
incorporation or by-laws of the Guarantor, or (iii) any agreement or instrument
evidencing or governing Debt of the Guarantor or any other material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Guarantor.
SECTION 3. Binding Effect. This Subsidiary Guarantee constitutes a valid
and binding obligation of the Guarantor.
4
89
SECTION 4. Not an Investment Company. The Guarantor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
ARTICLE
MISCELLANEOUS
SECTION 1. Notices. All notices, requests and other communications to be
made to or by the Guarantor hereunder shall be in writing (including, without
limitation, bank wire, telex, facsimile transmission or similar writing) and
shall be given: (a) if to the Guarantor, to it at its address or facsimile
number set forth on the signature pages hereof or such other address or
facsimile number as the Guarantor may hereafter specify for the purpose by
notice to the Agent and (b) if to any party to the Credit Agreement, to it at
its address or telex or facsimile number for notices specified in or pursuant to
the Credit Agreement. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section 1 and the appropriate answerback is received,
(ii) if given by facsimile, when such facsimile is transmitted to the facsimile
transmission number specified in this Section 1 and electronic, telephonic or
other appropriate confirmation of receipt thereof is received by the sender,
(iii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iv) if given
by any other means, when delivered at the address specified in this Section 1.
SECTION 2. No Waiver. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege under this Subsidiary Guarantee or any
other Financing Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein and therein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
SECTION 3. Amendments and Waivers. Any provision of this Subsidiary
Guarantee may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Guarantor and the Agent with the prior written
consent of the Required Banks under the Credit Agreement.
SECTION 4. Successors and Assigns. This Subsidiary Guarantee is for the
benefit of the Banks and the Agent and their respective successors and assigns
and in the event of an assignment of the Loans, the Promissory Notes or other
amounts payable under the Financing Documents, the rights hereunder, to the
extent applicable to the indebtedness so assigned, shall be transferred with
such indebtedness. All the provisions of this Subsidiary Guarantee shall be
binding upon the Guarantor and its successors and assigns.
SECTION 5. Taxes. All payments by the Guarantor hereunder shall be made
free and clear of Taxes in accordance with Section 8.04 of the Credit Agreement.
If the Guarantor is
5
90
organized under the laws of, or has its principal place of
business in, a jurisdiction outside the United States, this Section 5 shall be
modified in a manner satisfactory to the Agent and the Guarantor to indemnify
for any foreign taxes which may be applicable.
SECTION 6. Effectiveness; Termination. (a) This Agreement shall become
effective when the Agent shall have received a counterpart hereof signed by the
Guarantor.
(b) The Guarantor may at any time elect to terminate this Subsidiary
Guarantee and its obligations hereunder, provided that, after giving effect
thereto, no Default shall have occurred and be continuing. If the Guarantor so
elects to terminate this Subsidiary Guarantee, it shall give the Agent notice to
such effect, which notice shall be accompanied by a certificate of a Responsible
Officer to the effect that, after giving effect to such termination, no Default
shall have occurred and be continuing. The Agent may if it so elects
conclusively rely on such certificate. Upon receipt of such notice and such
certificate, unless the Agent determines that a Default shall have occurred and
be continuing, the Agent shall promptly deliver to the Guarantor the counterpart
of this Subsidiary Guarantee delivered to the Agent pursuant to Section 6(a),
and upon such delivery this Subsidiary Guarantee shall terminate and the
Guarantor shall have no further obligations hereunder.
SECTION 7. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS SUBSIDIARY
GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. THE GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS SUBSIDIARY GUARANTEE OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE GUARANTOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
SECTION 8. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY WAIVES
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS SUBSIDIARY GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6
91
IN WITNESS WHEREOF, the Guarantor has caused this instrument to be duly
executed by its authorized officer as of the date first above written.
[GUARANTOR]
By
--------------------------------------
Title:
[Address]
Facsimile Number:
7
92
EXHIBIT I
[Form of Opinion of Counsel for the Subsidiary Guarantor]
June 27, 1997
To the Banks and the Agent
Named on the Attached Distribution List
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the [Associate] General Counsel of Tyco International Ltd., a
Massachusetts corporation (the "Borrower"), and have acted as counsel for [name
of Subsidiary Guarantor] (the "Guarantor"), and am rendering this opinion in
connection with that certain Subsidiary Guarantee (the "Subsidiary Guarantee"),
dated as of June 27, 1997, entered into by the Guarantor, pursuant to that
certain Bridge Credit Agreement (the "Credit Agreement"), dated as of June 27,
1997, among the Borrower, the banks listed on the signature pages thereof (the
"Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent. Each term
defined in the Subsidiary Guarantee and used herein, but not otherwise defined
herein, has the meaning ascribed thereto in the Subsidiary Guarantee. This
opinion is being delivered to you pursuant to Section 1.01 of the Credit
Agreement.
In connection with the opinion set forth herein, I have reviewed the
Credit Agreement, the Promissory Notes and the Subsidiary Guarantee and have
examined originals or copies, certified or otherwise identified to my
satisfaction, of (i) the [Certificate of Incorporation] and By-laws of the
Guarantor, each as in effect on the date hereof and (ii) such other documents,
records, certificates and instruments as I have deemed relevant and necessary as
a basis for the opinion hereinafter expressed.
In my examination, I have assumed the genuineness of all signatures on
original documents, the authenticity of all documents submitted to me as
originals, the conformity to the originals of all copies submitted to be as
certified, conformed or photostatic copies, and the authenticity of the
originals of such copies. As to various questions of fact material to this
opinion, I have relied, without independent investigation or verification, upon
statements, representations and certificates of officers and other
representatives of the Guarantor and certificates of public officials.
93
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, it is my opinion that:
(1) The Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of _________________.
(2) The execution, delivery and performance by the Guarantor of the
Subsidiary Guarantee (a) are within the Guarantor's corporate powers; (b) have
been duly authorized by all necessary corporate action on the part of the
Guarantor; (c) require no action by or in respect of, or filing on the part of
the Guarantor with, any governmental body, agency or official, in each case, on
the part of the Guarantor; and (d) do not contravene, or constitute a default by
the Guarantor under, any provision of (i) applicable law or regulation, (ii) the
certificate of incorporation or by-laws of the Guarantor or, (iii) any agreement
or instrument evidencing or governing Debt of the Guarantor, or any other
material agreement, judgment, injunction, order, decree or other instrument
binding upon the Guarantor.
(3) The Subsidiary Guarantee constitutes a valid and binding
obligation of the Guarantor.
(4) The Guarantor is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
The opinion set forth herein is subject to the following qualifications
and limitations:
(a) The enforceability of the Subsidiary Guarantee may be subject to
or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent conveyance or transfer or other similar laws and court decisions, now
or hereafter in effect, relating to or affecting the rights of creditors
generally.
(b) The enforceability of the Subsidiary Guarantee is or will be
subject to the application of and may be limited by general principles of equity
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether considered in a proceeding in
equity or at law). Such principles of equity are of general application, and in
applying such principles a court, among other things, might not allow a creditor
to accelerate maturity of a debt under certain circumstances including, without
limitation, upon the occurrence of a default deemed immaterial, or might decline
to order the Guarantor to perform covenants. Such principles as applied by a
court might include a requirement that a creditor act with reasonableness and in
good faith. Thus, I express no opinion as to the validity or enforceability of
(i) provisions restricting access to legal or equitable remedies, such as the
specific performance of executory covenants, (ii) provisions that purport to
establish evidentiary standards, (iii) provisions relating to waivers,
severability, set-off, or delay or omission of enforcement of rights or
remedies, and (iv) provisions purporting to convey rights to persons other than
parties to the Subsidiary Guarantee.
2
94
(c) The remedy of specific performance and injunctive and other forms
of equitable relief are subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(d) I have not been requested to render, and with your permission I do
not express, any opinion as to the applicability to any provisions of the
Subsidiary Guarantee, of Section 548 of the Federal Bankruptcy Code, Article 10
of the New York Debtor & Creditor Law, or any other fraudulent conveyance,
insolvency or transfer laws or any court decisions with respect to any of the
foregoing.
I call your attention to the fact that I am admitted to practice law only
in the State of New York and the Commonwealth of Massachusetts, and, in
rendering the foregoing opinion, I do not express any opinion as to any laws
other than the laws of [the jurisdiction of incorporation of the Guarantor], the
State of New York, the Commonwealth of Massachusetts and the Federal laws of the
United States of America.
The opinion expressed herein is based upon the laws in effect on the date
hereof, and I assume no obligation to revise or supplement this opinion should
any such law be changed by legislative action, judicial decision, or otherwise.
This opinion is being delivered to you solely for your benefit in
connection with the Subsidiary Guarantee, and neither this opinion nor any part
hereof may be delivered to, or used, referred to or relied upon, by any other
person or for any other purpose without my express prior written consent.
Very truly yours,
3
95
EXHIBIT K
Form of Opinion of Counsel
for the Parent Guarantor
June 27, 1997
To the Banks and the Agents
named on Schedule 1 to this Opinion
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company of New York (as Agent)
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs,
Re: TYCO INTERNATIONAL LTD. (THE "COMPANY")
---------------------------------------
We have been instructed by the Company to address this opinion to you in
connection with the Parent Guarantee, dated as of [ ], 1997 (the "Guarantee"),
entered into by the Company in connection with all principal of and interest on
amounts loaned to the Borrower under the Financing Documents.
Unless otherwise defined therein, terms defined in the Guarantee have the
same meanings when used in this opinion.
For the purpose of this opinion, we have been supplied with and have
reviewed, and relied upon the following documents:
(A) a copy of the executed US $500,000,000 Credit Agreement
dated as of June 27, 1997 among the Borrower, the Banks listed on the
signature pages thereof and the Agent;
(B) a copy of the executed US $750,000,000 Credit Agreement
dated as of June 27, 1997 among the Borrower, the Banks listed on the
signature pages thereof and the Agent;
(C) a copy of the executed US $500,000,000 Five Year Credit
Agreement dated as of June 27, 1997 among the Borrower, the Banks on the
signature pages thereof and the Agent;
(D) a copy of the executed Subsidiary Guarantees;
96
(E) a copy of the executed Promissory Notes;
The Documents referred to in (a) and (e) inclusive are together referred to as
the "Financing Documents".
(F) a copy of the executed Guarantee;
(G) certified copies of the Certificate of Incorporation, the
Certificate evidencing the change of name of the Company from ADT Limited
to TYCO International Ltd. and the Memorandum of Association and the
Bye-laws of the Company;
(H) a certified copy of the minutes of a meeting of the Board
of Directors of the Company held on [ ], 1997 (the "Resolutions");
(I) a certified copy of the Share Certificate evidencing
ownership by the company of TYCO International Ltd, (Mass); and
We also relied upon our searches of documents of public record maintained
by the Registrar of Companies in Bermuda and of the Causes Book of the Supreme
Court of Bermuda which were made in 1997 (the "Searches").
In giving this opinion, we have assumed:
(1) the capacity, power and authority of each of the
parties other than the company to execute, deliver and perform its
obligations under and the due execution and delivery by all
parties other than the Company of the Facility Documents and the
Guarantee;
(2) that each party, other than the Company, has duly
authorised, executed, delivered and taken such other action as may
be required by such party to enter into and perform the Financing
Documents and the Guarantee and that all such actions were duly
authorised when taken;
(3) that no authorisation or approval by, or filing
with, any governmental or regulatory authority, other than such
authorisations, approvals and filings as each party other than the
Company has obtained or made, is necessary for such party to duly
executed and deliver, or to duly perform all of its obligations
under the Financing Documents and the Guarantee, or for the
validity and enforceability of the Financing Documents and the
Guarantee;
2
97
(4) that each of the Financing Documents and the
Guarantee constitutes the legal, valid and binding of each party
to it, other than the Company, and is enforceable against each
such party in accordance with its terms;
(5) that the Financing Documents are legal, valid and
binding under the laws by which they are expressed to be governed
and that the Guarantee is legal, valid and binding under the laws
of the State of New York by which it is expressed to be governed;
(6) that the information disclosed by the Searches has
not been materially altered and the Searches did not fail to
disclose any material information which has been delivered for
filing or registration, but was not disclosed or did not appear on
the public file at the time of the Searches;
(7) that there is no provision of the law of any
jurisdiction, other than Bermuda, which would have any implication
in relation to the opinions herein expressed;
(8) the genuineness of all signatures on the documents
which we have examined;
(9) the conformity to original documents of all
documents produced to us as copies and the authenticity of all
original documents which, or copies of which, have been submitted
to us;
(10) the accuracy and completeness of all factual
representations made in the Financing Documents, the Guarantee,
the Resolutions and any certificates examined by us; and
(11) that the Resolutions are in full force and effect
and have not been rescinded.
This opinion is limited to Bermuda Law as applied by the Bermuda courts.
We have made no investigation of the laws of any jurisdiction other than Bermuda
and neither express nor imply any opinion as to any other law, in particular the
laws of the State of New York.
Based upon the foregoing, subject to qualifications set out below, to
matters not disclosed to us and matters of fact which would affect the
conclusion set out below and having regard to such legal considerations as we
deem relevant, we are of the opinion that insofar as the present laws of Bermuda
are concerned:
(i). The Company is a company duly incorporated, duly organised and
validly existing under the laws of Bermuda. The Memorandum of Association of the
Company has been duly
3
98
filed in the office of the Registrar of Companies of Bermuda and no other
filing, recording, publishing or other act is necessary or appropriate in
Bermuda in connection with the transaction as described in the Guarantee except
those which have been duly made or performed.
(ii). The company has the corporate power and authority to enter into
and perform the Guarantee and has taken all corporate action required on its
part to authorise the execution, delivery and performance of the guarantee.
(iii). The execution, delivery and performance of the Guarantee by the
Company (i) does not and will not violate the Certificate of Incorporation,
Bye-laws or Memorandum of Association of the Company; (ii) conflict with any law
or governmental rule or regulation of Bermuda (including the Companies Act of
1981 of Bermuda); and (iii) as far as can be ascertained from the Searches
(which are not conclusive) does not and will not violate or conflict with any
judgement, order, decree, injunction or award of any authority, agency or court
in Bermuda to which the Company is subject.
(iv). The obligations of the company as set out in the guarantee
constitute, legal, valid and binding obligations of the Company.
(v). The Company having been designated as non-resident for the
purposes of the Exchange Control ▇▇▇ ▇▇▇▇, it is not necessary for the consent
of any authority or agency in Bermuda to be obtained to enable the Company to
enter into and perform its obligations set out in the Guarantee.
(vi). The obligations of the Company under the Guarantee will rank at
least par passu in priority of payment with all other unsecured unsubordinated
indebtedness of the Company other than indebtedness which is preferred by virtue
of any provision of Bermuda law of general application.
(vii). As far as can be ascertained from the Searches, no litigation,
arbitration on administrative proceedings of or before any court, arbitrator or
governmental instrumental instrumentality of or in Bermuda is, to the best of
our knowledge, pending with respect to the Company in connection with the
Guarantee or the transactions contemplated thereby.
(viii). The Company will be permitted to make all payments under the
Guarantee free of any deduction or withholding therefrom in Bermuda and such
payments will not be subject to any tax imposed by the government of Bermuda or
any taxing authority thereof or therein.
4
99
(ix). The entry into, performance and enforcement of the Guarantee will
not give rise to any registration fee or to any stamp, excise or other similar
tax imposed by the government of Bermuda or any taxing authority thereof or
therein.
(x). Subject to paragraph (12) and reservation D below, it is not
necessary or advisable under the laws of Bermuda in order to ensure the
validity, effectiveness or enforceability of the Guarantee that the Guarantee be
filed, registered or recorded in any public office or elsewhere in Bermuda.
(xi). The choice of the laws of the State of New York to govern the
Guarantee is a proper, valid and binding choice of law and will be recognised
and applied by the courts of Bermuda assuming that such choice of law is a valid
and binding choice of law under the laws of the State of New York.
(xii). A final and conclusive judgement obtained in the Courts of the
State of New York or Federal Courts of the United States of America against the
Company based upon the Guarantee under which a sum of money is payable (other
than a sum of money payable in respect of taxes or other charges of a like
nature or in respect of a fine or other penalty or multiple damages) could be
enforced by an action in the Supreme Court of Bermuda, without reexamination of
the merits, under the Common Law Doctrine of Obligation. A final opinion as to
the availability of this remedy should be sought when the facts surrounding the
foreign judgement are known but, on general principles, we would expect such an
application to be successful provided that such judgment:
(A) is final and conclusive;
(B) was not obtained by fraud;
(C) was not and its enforcement would not be contrary to public
policy of Bermuda;
(D) was obtained in circumstances where the proceedings were
not contrary to the rules of natural justice; and
(E) the correct procedures under the laws of Bermuda are duly
complied with.
Neither the Company nor any of its property or assets (or any portion
thereof) enjoys, under the laws of Bermuda, immunity from suit, execution,
attachment or other legal process in any proceedings in Bermuda in connection
with the Guarantee.
Our reservations are as follows:
(a) We express no opinion as to whether specific performance or
injunctive relief, being equitable remedies, would necessarily be available in
respect of any obligations of the Company as set out in the Guarantee.
5
100
(b) We express no opinion as to the validity or the binding effect of
any obligations of the Borrower in the Financing Documents which provide for the
payment by the Borrower of a higher rate of interest on overdue amounts than on
amounts which are current. A Bermuda court, even if it were applying the laws of
the State of New York might not give effect to such provision if it could be
established that the amount expressed as being payable was such that the
provision was in the nature of a penalty; that is to say a requirement for a
stipulated sum to be paid irrespective of, or necessarily greater than, the loss
likely to be sustained.
(c) The obligations of the Company under the Guarantee will be subject
to any laws from time to time in effect relating to bankruptcy or liquidation or
any other laws or other legal procedures affecting generally the enforcement of
creditors' rights and may also be the subject of the statutory limitation of the
time within which such proceedings may be brought.
(d) To the extent that the Financing Documents, the Guarantee or the
transactions contemplated thereunder, create or give rise to the creation of any
charge over any assets of the Company, such charge will be registerable under
Part V of The Companies ▇▇▇ ▇▇▇▇ of Bermuda. The fee payable for registration of
a charge is $425.00. Registration is not compulsory and there is no time limit
within which it must be effected. However, as a matter of Bermuda law, any
charge registered shall have priority in Bermuda based on the date that it is
registered and not on the date of its creation and shall have such priority over
any unregistered charge. Accordingly, it is advisable to register any such
charge.
(e) Any provision in the Financing Documents or the Guarantee that
certain calculations and/or certificates will be conclusive and binding will not
be effective if such calculations are fraudulent or erroneous on their face and
will not necessarily prevent juridical enquiries into the merits of any claim by
an aggrieved party.
(f) A Bermuda court may refuse to give effect to any provisions of the
Financing Documents or Guarantee in respect of costs of unsuccessful litigation
brought before the court or where that court has itself made an order for costs.
(g) We express no opinion as to any law other than Bermuda law and
none of the opinions expressed herein relates to compliance with or matters
governed by the laws of any jurisdiction except Bermuda. Where an obligation is
to be performed in a jurisdiction other than Bermuda, the Courts of Bermuda may
refuse to enforce it to the extent that such performance would be illegal or
contrary to public policy under the laws of such other jurisdiction.
[(h) The Searches showed a cause of action in which the Company is
named as defendant. The action was commenced in 1991 under action number 01299.
The plaintiff is ▇▇▇▇▇▇▇ Investments (Barbados) Ltd. We are unable to verify
whether this litigation is proceeding, or has been discontinued, and whether if
it proceeded and judgement was rendered against the Company, whether this
judgement would have any material effect on the Company.]
6
101
This opinion is issued on the basis that it will be governed by and
construed in accordance with the laws of Bermuda and that any legal proceedings
with respect thereto will be brought in the courts of Bermuda. It is issued
solely for your benefit for the purpose of the transactions described in the
Guarantee and it is not to be relied upon by any other person (other than
permitted assigns and transferees under the Financing Documents), or for any
other purpose, without our prior written consent.
Yours faithfully,
7