EXHIBIT 10.2
COLLATERAL TRUST AGREEMENT
dated as of March 25, 2002
among
AVAYA INC.,
and
The Grantors named herein
as Grantors
and
THE BANK OF NEW YORK
as Collateral Trustee
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS....................................................2
SECTION 1.02. CERTAIN REFERENCES.......................................................6
ARTICLE II
CONFIRMATION AND CREATION OF SECURITY INTERESTS
SECTION 2.01. COLLATERAL TRUST ESTATE..................................................6
SECTION 2.02. SECURITY FOR SECURED OBLIGATIONS.........................................7
ARTICLE III
COLLATERAL ACCOUNT
SECTION 3.01. COLLATERAL ACCOUNT.......................................................7
ARTICLE IV
ACTIONABLE DEFAULTS; REMEDIES
SECTION 4.01. ACTIONABLE DEFAULT NOTICE................................................8
SECTION 4.02. DIRECTION BY REQUIRED REPRESENTATIVES....................................9
SECTION 4.03. RIGHT TO INITIATE JUDICIAL PROCEEDINGS, ETC..............................9
SECTION 4.04. REMEDIES NOT EXCLUSIVE...................................................9
SECTION 4.05. WAIVER OF CERTAIN RIGHTS................................................10
SECTION 4.06. LIMITATION ON COLLATERAL TRUSTEE'S DUTIES IN RESPECT OF COLLATERAL......10
SECTION 4.07. LIMITATION BY LAW.......................................................11
SECTION 4.08. ABSOLUTE RIGHTS OF SECURED HOLDERS AND REPRESENTATIVES..................11
SECTION 4.09. TERMS OF SECURITY.......................................................11
ARTICLE V
APPLICATION OF PROCEEDS
SECTION 5.01. APPLICATION OF PROCEEDS.................................................12
SECTION 5.02. APPLICATION OF WITHHELD AMOUNTS.........................................13
SECTION 5.03. RELEASE OF AMOUNTS IN COLLATERAL ACCOUNT................................14
ARTICLE VI
AGREEMENTS WITH THE COLLATERAL TRUSTEE
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SECTION 6.01. DELIVERY OF AGREEMENTS..................................................14
SECTION 6.02. INFORMATION AS TO REPRESENTATIVES.......................................14
SECTION 6.03. COMPENSATION AND EXPENSES...............................................15
SECTION 6.04. STAMP AND OTHER SIMILAR TAXES...........................................15
SECTION 6.05. FILING FEES, EXCISE TAXES, ETC..........................................15
SECTION 6.06. INDEMNIFICATION.........................................................16
SECTION 6.07. FURTHER ASSURANCES. Each Grantor agrees, at its own expense to
perform its obligations under Section 7 of the Security Agreement.......16
ARTICLE VII
THE COLLATERAL TRUSTEE
SECTION 7.01. DECLARATION OF TRUST....................................................16
SECTION 7.02. EXCULPATORY PROVISIONS..................................................16
SECTION 7.03. DELEGATION OF DUTIES....................................................17
SECTION 7.04. RELIANCE BY COLLATERAL TRUSTEE..........................................17
SECTION 7.05. LIMITATIONS ON DUTIES OF THE TRUSTEES...................................18
SECTION 7.06. MONEYS TO BE HELD IN TRUST..............................................19
SECTION 7.07. RESIGNATION AND REMOVAL OF COLLATERAL TRUSTEE...........................19
SECTION 7.08. STATUS OF SUCCESSORS TO TRUSTEE.........................................20
SECTION 7.09. MERGER OF THE COLLATERAL TRUSTEE........................................20
SECTION 7.10. ADDITIONAL CO-TRUSTEES; SEPARATE TRUSTEES...............................21
SECTION 7.11. TRUSTEES APPOINTED ATTORNEYS-IN-FACT....................................22
SECTION 7.12. ORDINARY CARE...........................................................22
ARTICLE VIII
RELEASE OF COLLATERAL
SECTION 8.01. PARTIAL RELEASE OF COLLATERAL...........................................23
SECTION 8.02. FULL RELEASE OF COLLATERAL UPON SATISFACTION OF CERTAIN CONDITIONS......24
SECTION 8.03. EFFECT OF RELEASE OF COLLATERAL.........................................25
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, SUPPLEMENTS AND WAIVERS.....................................26
SECTION 9.02. ADDITIONAL ACTIONS OF REPRESENTATIVES...................................26
SECTION 9.03. NOTICES.................................................................27
SECTION 9.04. HEADINGS................................................................28
SECTION 9.05. SEVERABILITY............................................................28
SECTION 9.06. TREATMENT OF PAYEE OR INDORSEE BY COLLATERAL TRUSTEE....................28
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SECTION 9.07. DEALINGS WITH THE GRANTORS..............................................28
SECTION 9.08. CLAIMS..................................................................28
SECTION 9.09. BINDING EFFECT..........................................................28
SECTION 9.10. GOVERNING LAW...........................................................28
SECTION 9.11. EFFECTIVENESS...........................................................29
SECTION 9.12. REEXECUTION OF AGREEMENT................................................29
SECTION 9.13. EFFECT ON DEBT AGREEMENTS...............................................29
SECTION 9.14. COUNTERPARTS............................................................29
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COLLATERAL TRUST AGREEMENT
COLLATERAL TRUST AGREEMENT, dated as of March 25, 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time, this
"AGREEMENT") among
AVAYA INC., a Delaware corporation (the "COMPANY"), certain
of the Company's Subsidiaries listed on the signature pages hereto (such
Subsidiaries, collectively with the Company are the "GRANTORS"), and THE BANK OF
NEW YORK, a
New York banking corporation, not in its individual capacity but
solely as Collateral Trustee (together with any successor Collateral Trustee
appointed pursuant to Article 7, the "COLLATERAL TRUSTEE"), the foregoing
trustee being trustee for the Representatives and the Secured Holders (each as
hereinafter defined). Certain capitalized terms used herein are defined in
Article 1 of this Agreement.
PRELIMINARY STATEMENTS:
(1) The Company has entered into a 364-Day Competitive Advance
and Revolving Credit Facility Agreement dated as of August 28, 2001, as amended
by Amendment No. 1 dated as of February 8, 2002 (said Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "364-DAY CREDIT AGREEMENT") with the Lenders and
the Agent (each as defined therein).
(2) The Company has entered into a Five Year Competitive Advance
and Revolving Credit Facility Agreement dated as of September 25, 2000, as
amended by Amendment No. 1 dated as of August 10, 2001 and by Amendment No. 2
dated as of February 8, 2002 (said Agreement, as it may hereafter be amended,
amended and restated, supplemented or otherwise modified from time to time,
being the "FIVE YEAR CREDIT AGREEMENT", and, together with the 364-Day Credit
Agreement, the "SENIOR CREDIT FACILITIES") with the Lenders (as defined therein
and, together with the Lenders under the 364-Day Credit Agreement, the "SENIOR
LENDERS") and the Agent (as defined therein and, together with the Agent under
the 364-Day Credit Agreement, the "SENIOR AGENTS").
(3) The Company will issue 11.125% Senior Secured Notes due 2009
(as amended, restated, supplemented or otherwise modified, the "NOTES"),
pursuant to an Indenture, dated as of October 31, 2001, as supplemented by a
second supplemental indenture to be dated March 28, 2002 (as amended, restated,
supplemented or otherwise modified, the "INDENTURE"; the Indenture, the Notes
and the Senior Credit Facilities being, collectively, the "DEBT AGREEMENTS")
with The Bank of
New York, as trustee (the "JUNIOR LIEN CREDITOR").
(4) The Collateral Trustee has accepted the pledge and
assignment, and the grant of a security interest in the Collateral (as
hereinafter defined) as provided in the Security Agreement dated as of March 25,
2002 (as amended, restated, supplemented or otherwise modified, the "SECURITY
AGREEMENT"), made by the Grantors in favor of the Collateral Trustee, as
security for the Secured Obligations (as hereinafter defined) and the Company
has directed the Collateral Trustee to enter into the Intercreditor Agreement
(as hereinafter defined).
(5) This Agreement and the other Collateral Documents (as
hereinafter defined) are intended to secure the Debt Agreements to the extent
required to comply with the
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provisions of the Debt Agreements and the Collateral Trustee has agreed to
undertake the rights, powers, duties and responsibilities set forth in this
Agreement and the other Collateral Documents in order to effect such purpose.
NOW THEREFORE, in consideration of the premises, the Grantors
hereby agree with the Collateral Trustee for its benefit and for the Shared
Benefit (as hereafter defined) of the Representatives and the Secured Holders
(as hereinafter defined) as set forth herein as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. The following terms shall have
the following meanings as used herein (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ACTIONABLE DEFAULT" has the meaning specified in Section 4.01.
"ACTIONABLE DEFAULT NOTICE" has the meaning specified in Section
4.01.
"ADDITIONAL COLLATERAL" has the meaning specified in Section 2.01.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in
New York City or the city in which the
Collateral Trustee maintains its corporate trust office.
"COLLATERAL" means, collectively, all of the "Collateral" (as
defined in the Security Agreement) and all of the Additional Collateral.
"COLLATERAL ACCOUNT" has the meaning specified in Section 3.01.
"COLLATERAL DOCUMENTS" means this Agreement, the Intercreditor
Agreement, the Receivables Intercreditor Agreement, the Security Agreement and
each Successor Collateral Agreement.
"COLLATERAL TRUST ESTATE" means all of the right, title and
interest of the Collateral Trustee, whether now owned or hereafter acquired, in
and to the Collateral.
"COLLATERAL TRUSTEE" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL TRUSTEE'S FEES" means the fees and other amounts
payable to the Collateral Trustee pursuant to Sections 6.03, 6.04 and 6.05 and
amounts claimed and unpaid pursuant to Section 6.06.
"COMPANY" has the meaning specified in the Preliminary Statements.
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"COLLATERAL TRUSTEE" has the meaning specified in the recital of
parties to this Agreement.
"DEBT AGREEMENTS" has the meaning specified in the Preliminary
Statements and each agreement and instrument delivered by the Company pursuant
thereto, as the same may be supplemented, amended or modified from time to time
in accordance with the provisions thereof.
"DEFAULTED AGREEMENT PARTY" has the meaning specified in
Section 4.01.
"DISTRIBUTION DATE" means any date on which the Collateral Trustee
shall distribute moneys from the Collateral Account pursuant to Section 5.01.
"FIVE YEAR CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements.
"GRANTORS" has the meaning specified in the recitals of parties to
this Agreement.
"INDENTURE" has the meaning provided in the Preliminary Statements.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated
as of March 25, 2002, among the Senior Agents and the Junior Lien Creditor.
"JUNIOR LIEN CREDITOR" has the meaning specified in the Preliminary
Statements.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right or way or other encumbrance on title
to real property.
"MARKETABLE SECURITIES" means any of the following, to the extent
free and clear of all Liens other than Liens created under the Collateral
Documents and having a maturity of not greater than 180 days from the date of
acquisition thereof: (a) readily marketable direct obligations of the Government
of the United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government of the
United States, (b) insured certificates of deposit of or time deposits with any
commercial bank that (i) is a Senior Lender or a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) below, (iii) is organized under the laws of the United
States or any State thereof and (iv) has combined capital and surplus of at
least $500 million, (c) commercial paper in an aggregate amount of no more than
$25,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Xxxxx'x Investors Service, Inc. or
"A-1" (or the then equivalent grade) by Standard & Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies or (d) money market or mutual funds that
invest solely in Marketable Securities of the types described in clauses (a),
(b) or (c) above.
"MOODY'S" has the meaning specified in the Five Year Credit
Agreement.
"NOTE HOLDERS" means the holders of the Notes.
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"NOTES" has the meaning specified in the Preliminary Statements.
"PUBLIC DEBT RATING" has the meaning specified in the Five Year
Credit Agreement.
"RECEIVABLES INTERCREDITOR AGREEMENT" means the Intercreditor
Agreement dated as of March 25, 2002, among Citicorp North America, Inc. as
program agent, Avaya Receivables Funding LLC, as seller, the Company, as
borrower, originator and collection agent, and the Collateral Trustee.
"REPRESENTATIVES" means at any time, collectively, (a) the Senior
Agents, as the representatives hereunder for the Senior Lenders at such time and
(b) the Junior Lien Creditor, as the representative hereunder for the Note
Holders at such time.
"REQUIRED REPRESENTATIVES" means (a) so long as any Senior Secured
Obligation remains outstanding and unpaid, the Senior Agents acting together in
their own discretion or at the direction of the Required Senior Lenders at such
time or (b) thereafter, the Junior Lien Creditor, on behalf of itself and the
Secured Holders represented thereby; PROVIDED, HOWEVER, that amounts held at
such time by the Collateral Trustee on behalf of a Representative and such
Representative's Secured Holders in an account of the Collateral Trustee
established at the request of such Representative pursuant to Section 5.02
hereof shall be deemed to have been applied to repay the Secured Obligations of
such Secured Holders whether or not such amount has been so applied.
"REQUIRED SENIOR LENDERS" means Senior Lenders that own or hold
more than 50% of the aggregate amount of the outstanding Secured Obligations of
all Senior Lenders under the Senior Credit Facilities at such time.
"S&P" has the meaning specified in the Five Year Credit Agreement.
"SECURED AGREEMENTS" means, collectively, the Debt Agreements, any
agreement or document relating to any treasury management services provided by
the Senior Lenders or their affiliates to the Company or any of its
Subsidiaries, all agreements evidencing any other obligations of the Company
owing to Senior Lenders or their affiliates including, without limitation, all
letters of credit issued by the Senior Lenders or their affiliates for the
benefit of the Company or any of its Subsidiaries, all hedge agreements entered
into with the Company or any of its Subsidiaries by the Senior Lenders or their
affiliates, and each agreement or instrument delivered by any Grantor pursuant
to any of the foregoing (including, without limitation, the Collateral
Documents), as the same may be amended from time to time in accordance with the
provisions thereof but shall not include any obligations of the Company or any
Subsidiary to any Senior Lender or its affiliates in connection with any
receivables securitization program permitted pursuant to Section 5.07(viii) of
the Credit Agreement.
"SECURED HOLDERS" means, at any time, the Senior Secured Creditors
and the Note Holders.
"SECURED OBLIGATIONS" means at any time any obligations, whether
matured or unmatured, contingent or liquidated, of any Grantor arising out of or
evidenced by this
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Agreement or by the Secured Agreements, whether for principal, interest,
expenses, premiums, indemnities, fees or other amounts, whether or not such
obligations are due and payable at such time. For purposes of determining the
"Required Representatives" on any date, the aggregate amount of outstanding
Secured Obligations represented by each Representative on such date shall
include:
(a) in the case of the Secured Obligations of Secured Holders
represented by the Senior Agents under the Senior Credit Facilities, the
aggregate amount of the advances under the Senior Credit Facilities
outstanding at such time, and
(b) in the case of Secured Obligations of Secured Holders
represented by the Junior Lien Creditor under the Indenture, the aggregate
amount of the Notes outstanding at such time.
"SECURITY AGREEMENT" has the meaning specified in the Preliminary
Statements.
"SECURITY PERIOD" means the period beginning on the date hereof
until the date thereafter, if any, that (i) the Company's corporate credit
rating shall be at least BBB by S&P and the Company's Public Debt Rating shall
be at least Baa2 by Moody's and (ii) to the extent such corporate credit rating
shall be BBB by S&P or such Public Debt Rating shall be Baa2 by Moody's, such
rating shall not be accompanied by either (x) in the case of S&P, a negative
outlook, creditwatch negative or the equivalent thereof or (y) in the case of
Moody's, a negative outlook, a review for possible downgrade or the equivalent
thereof.
"SENIOR AGENTS" has the meaning specified in the Preliminary
Statements.
"SENIOR LENDERS" has the meaning specified in the Preliminary
Statements.
"SENIOR SECURED CREDITORS" means the Senior Lenders and such of
their affiliates as are party to any Secured Agreement and the Senior Agents,
including in their capacity as Representatives for the Senior Lenders and such
affiliates.
"SENIOR SECURED OBLIGATIONS" means the Secured Obligations owing to
the Senior Secured Creditors.
"SHARED BENEFIT" means, with respect to any of the Collateral or
any rights to share in any proceeds thereof, (i) so long as any Senior Secured
Obligation remains outstanding and unpaid, the equal and ratable interest
therein and rights in respect thereof of the Senior Secured Creditors in
accordance with the terms of the Secured Agreements based on their respective
pro rata shares of the Senior Secured Obligations and (ii) thereafter, the equal
and ratable interest therein and rights in respect thereof of the Secured
Holders in accordance with the terms of the Secured Agreements based on their
respective pro rata shares of the Secured Obligations.
"SUBSEQUENT INTERCREDITOR AGREEMENT" means an intercreditor
agreement entered into by the Collateral Trustee in accordance with
Section 8.01.
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"SUCCESSOR COLLATERAL" means, with respect to any Grantor, any
property and assets of such Grantor (or any of its successors and assigns) as
such Grantor (or any such successor or any such assign) may, from time to time,
upon notice to the Collateral Trustee, pursuant to the Debt Agreements or
otherwise, grant to the Collateral Trustee as additional collateral for its
benefit and in trust for the Shared Benefit of the Representatives, on their
behalf and on behalf of the Secured Holders.
"SUCCESSOR COLLATERAL AGREEMENTS" means all documents creating,
evidencing or relating to any of the Successor Collateral.
"364-DAY CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements.
SECTION 1.02. CERTAIN REFERENCES. In this Agreement, the words
"hereof," "herein" and "hereunder", and words of similar import, shall refer to
this Agreement as a whole and not to any particular provision of this Agreement.
All section, schedule and exhibit references set forth in this Agreement are,
unless otherwise specified, references to such section in, or schedule or
exhibit to, this Agreement.
ARTICLE II
CONFIRMATION AND CREATION OF SECURITY INTERESTS
SECTION 2.01. COLLATERAL TRUST ESTATE. Each Grantor hereby confirms
that, pursuant to the terms of the Collateral Documents to which it is a party,
such Grantor has pledged and assigned to the Collateral Trustee for its benefit
and in trust for the Shared Benefit of the Representatives and the Secured
Holders, and has granted the Collateral Trustee for its benefit and in trust for
the Shared Benefit of the Representatives and the Secured Holders a Lien on the
Collateral described therein. Each Grantor hereby further pledges and assigns to
the Collateral Trustee for its benefit and in trust for the Shared Benefit of
the Representatives, on its behalf and on behalf of the Secured Holders, and
hereby grants to the Collateral Trustee for its benefit and in trust for the
Shared Benefit of the Representatives, on their behalf and on behalf of the
Secured Holders, a Lien on the following (collectively, together with any
Successor Collateral, the "ADDITIONAL COLLATERAL"):
(i) the Collateral Account established pursuant to
Section 3.01(a) with the Collateral Trustee at its offices at its corporate
trust department in the State of
New York and is, and shall at all times
remain, under the sole dominion and control of the Collateral Trustee, all
funds held therein and all certificates and instruments, if any, from time
to time representing each Collateral Account;
(ii) all Marketable Securities held in the Collateral Account from
time to time and all certificates and instruments, if any, from time to
time representing or evidencing such Marketable Securities;
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(iii) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time delivered to or otherwise possessed
by the Collateral Trustee for or on behalf of any Grantor in substitution
for or in addition to any or all of the then existing Additional
Collateral;
(iv) all interest, income, dividends, instruments and other
property and assets from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Additional Collateral referred to in clauses (i) through (iii) of
this Section 2.01(a); and
(v) all proceeds of any and all of the foregoing Additional
Collateral (including, without limitation, proceeds that constitute
property and assets of the types described in clauses (i) through (iv) of
this Section 2.01(a)) and, to the extent not otherwise included, all (A)
payments under any indemnity, warranty or guaranty payable with respect to
any of the foregoing Additional Collateral, and (B) cash.
SECTION 2.02. SECURITY FOR SECURED OBLIGATIONS. All of the right,
title and interest of the Collateral Trustee in and to the Collateral Trust
Estate secures the payment of all of the Secured Obligations now or hereafter
existing under or in respect of the Secured Agreements and the performance of,
and the compliance with, all of the covenants and conditions of this Agreement,
the other Collateral Documents and the Secured Agreements.
ARTICLE III
COLLATERAL ACCOUNT
SECTION 3.01. COLLATERAL ACCOUNT. (a) The Collateral Trustee shall
establish and maintain a non-interest bearing cash collateral account (the
"COLLATERAL ACCOUNT") for the Representatives and the Secured Holders at its
offices at its corporate trust department in the State of
New York in accordance
with the terms of this Agreement. All moneys that are received by the Collateral
Trustee upon the occurrence and during the continuance of an Actionable Default,
upon liquidation or otherwise in respect of the Collateral shall be deposited in
the Collateral Account and, thereafter, shall be held and applied by the
Collateral Trustee in accordance with the terms of this Agreement.
(b) The Collateral Trustee shall, subject to the provisions of
Article IV and Article VIII, from time to time (i) invest amounts on deposit in
the Collateral Account in Marketable Securities and (ii) invest interest paid on
such Marketable Securities, and reinvest other proceeds of any such Marketable
Securities that may mature or be sold, in additional Marketable Securities, in
each case at the written direction of (x) the Company so long as no Actionable
Default Notice has been received by the Collateral Trustee that has not been
withdrawn and (y) the Required Representatives if an Actionable Default Notice
has been received by the Collateral Trustee that has not been withdrawn.
Interest and proceeds that are not invested or reinvested in Marketable
Securities as provided in the immediately preceding sentence shall be deposited
and held in the Collateral Account. Notwithstanding the foregoing, the
Collateral Trustee shall, to the extent possible, invest any funds to be
distributed on a Distribution Date in Marketable Securities that shall mature or
become liquid on or prior to such
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Distribution Date. All Marketable Securities made in respect of the Collateral
Account and all interest and income received thereon and therefrom and the net
proceeds realized on the maturity or sale thereof shall be held in the
Collateral Account as part of the Collateral Trust Estate pursuant to the terms
hereof.
(c) The Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or regulatory authority, as
are in effect from time to time.
ARTICLE IV
ACTIONABLE DEFAULTS; REMEDIES
SECTION 4.01. ACTIONABLE DEFAULT NOTICE. (a) If, at any time, (x)
any event or circumstance of the types described in Section 6(g) or (h) of the
Five Year Credit Agreement shall have occurred with respect to any Grantor or
(y) a payment default under any Debt Agreement shall have occurred and be
continuing, and, as a result thereof, any Representative or any Secured Holder
under, or the percentage of Secured Holders specified in, such Debt Agreement
(any such party or percentage of Secured Holders being a "DEFAULTED AGREEMENT
PARTY") has the right thereunder (without the delivery of any further notice or
the requirement that any further time elapse) to declare all of the Secured
Obligations of the Grantors under such Secured Agreement to be due and payable
prior to the stated maturity thereof or (z) a Defaulted Agreement Party shall
have declared all of the Secured Obligations of the Grantors under such Secured
Agreement to be due and payable prior to the stated maturity thereof (any such
default being an "ACTIONABLE DEFAULT"), and if such Defaulted Agreement Party
gives the Collateral Trustee, with a copy to the Company, a written notice (an
"ACTIONABLE DEFAULT NOTICE") stating:
(i) the nature of the Actionable Default;
(ii) the action requested to be taken by the Collateral Trustee
with respect to the Collateral and the Collateral Documents (which action
may include, without limitation, the calling of a meeting of the
Representatives or the institution of any remedies provided by law or this
Agreement or any Collateral Document); and
(iii) that such Defaulted Agreement Party has polled the
Representatives with respect to such action,
then the Collateral Trustee shall forthwith send a copy of the Actionable
Default Notice to each Representative. The Representatives shall provide the
Collateral Trustee with a certificate that shall state whether or not they favor
the Collateral Trustee taking such action. If the Required Representatives shall
have directed the Collateral Trustee to commence the action set forth in the
Actionable Default Notice (whether or not such poll shall have been taken or
completed), then, subject to Section 4.01(b) and the right of the Collateral
Trustee to commence such action under the Collateral Documents, the Collateral
Trustee shall forthwith undertake such action subject to the provisions of
Section 7.05(d) and shall, to the extent practicable, use commercially
reasonable efforts to give prior written notice of such action to the Company.
The Collateral Trustee shall, subject to Sections 4.01(b), 4.08 and 6.06, follow
the directions of the Required Representatives with respect to the time, method
and place of taking any action requested in an
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Actionable Default Notice. The Collateral Trustee shall assume conclusively that
no Actionable Default has occurred and is continuing until it receives an
Actionable Default Notice.
(b) If the Actionable Default which was the basis for the giving
of an Actionable Default Notice shall be cured or waived in accordance with the
terms of the applicable Debt Agreement, the Defaulted Agreement Party which gave
such Actionable Default Notice shall promptly notify the Collateral Trustee in
writing of such cure or waiver, upon receipt of such written notice of a cure or
waiver (i) such Actionable Default Notice shall be deemed withdrawn, (ii) the
Collateral Trustee shall deliver to each Representative such writing evidencing
the cure or waiver of a Default Notice as it may have received pursuant to this
Section (b) and (iii) any direction to the Collateral Trustee to take any action
in connection with such Actionable Default Notice shall be deemed immediately
rescinded. If in connection solely with such withdrawn Actionable Default Notice
the Collateral Trustee shall have been directed to take, and shall have
commenced taking but shall not have completed, any action, the Collateral
Trustee shall promptly terminate any such action which it shall not also have
been directed to take in connection with an Actionable Default Notice other than
that withdrawn.
SECTION 4.02. DIRECTION BY REQUIRED REPRESENTATIVES. As to any
matters not expressly provided for under this Agreement or the other Collateral
Documents (including, without limitation, matters relating to enforcement and
collection of the Secured Obligations), the Collateral Trustee shall not be
required to exercise any discretion or to take any action under this Agreement
or the other Collateral Documents, or in respect of the Collateral, but subject
to the provisions of Section 7.05(d) shall be required to act or to refrain from
acting (and shall be fully protected in acting or refraining from acting) in
accordance with the written instructions of the Required Representatives which
instructions shall reference Section 6.06 hereof.
SECTION 4.03. RIGHT TO INITIATE JUDICIAL PROCEEDINGS, ETC. (a) Upon
the occurrence of and during the continuance of any Actionable Default and the
receipt by the Collateral Trustee of an Actionable Default Notice that has not
been withdrawn pursuant to Section 4.01(b) above, the Collateral Trustee (i)
shall have the right and power to institute and maintain such suits and
proceedings as it or the Required Representatives may deem appropriate to
protect and enforce the rights vested in it by this Agreement and the other
Collateral Documents and (ii) may proceed by suit or suits at law or in equity
to enforce such rights and to foreclose upon the Collateral and to dispose of,
collect or otherwise realize upon, all or any portion of the Collateral Trust
Estate under the final non-appealable judgment or decree of a court of competent
jurisdiction.
(b) If a receiver of the Collateral Trust Estate shall be
appointed in judicial proceedings, the Collateral Trustee may be appointed as
such receiver. Notwithstanding the appointment of a receiver, the Collateral
Trustee shall be entitled to retain possession and control of all cash held by
or deposited with it or its agents or co-trustees pursuant to any provision of
this Agreement or any other Collateral Document.
SECTION 4.04. REMEDIES NOT EXCLUSIVE. (a) No remedy conferred upon
or reserved to the Collateral Trustee herein or in the Collateral Documents is
intended to be a limitation exclusive of any other remedy or remedies, but every
such remedy shall be cumulative
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and shall be in addition to every other remedy conferred herein or in the
Collateral Documents or now or hereafter existing at law or in equity or by
statute.
(b) No delay or omission of the Collateral Trustee to exercise
any right, remedy or power accruing upon any Actionable Default shall impair any
such right, remedy or power or shall be construed to be a waiver of any such
Actionable Default or any acquiescence therein; and every right, power and
remedy given by this Agreement or any Collateral Document to the Collateral
Trustee may be exercised from time to time and as often as may be deemed
expedient by the Collateral Trustee.
(c) In case the Collateral Trustee shall have proceeded to
enforce any right, remedy or power under this Agreement or any Collateral
Document and the proceeding for the enforcement thereof shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Trustee, then and in every such case the Grantors, the
Collateral Trustee, the Representatives and Secured Holders shall, subject to
any determination in such proceeding, severally be restored to their former
positions and rights hereunder and under such Collateral Document with respect
to the Collateral Trust Estate, the Collateral Account and in all other
respects, and thereafter all rights, remedies and powers of the Collateral
Trustee shall continue as though no such proceeding had been taken.
(d) Each Grantor expressly agrees that all rights of action and
rights to assert claims upon or under this Agreement and the Collateral
Documents may be enforced by the Collateral Trustee without the possession of
any debt instrument or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Collateral
Trustee shall be brought in its name as Collateral Trustee and any recovery of
judgment shall be held as part of the Collateral Trust Estate; PROVIDED that
nothing in this Section 4.04(d) shall constitute a waiver of any defense that
the Company or any other Grantor may have, including the right to challenge the
amounts outstanding under the Secured Agreements or the continued existence of
the Lien on the Collateral.
SECTION 4.05. WAIVER OF CERTAIN RIGHTS. Each Grantor, on behalf of
itself and all who may claim through or under it, including, without limitation,
any and all subsequent affiliates, creditors, vendees, assignees and lienors,
expressly waives and releases, to the fullest extent permitted by law, any,
every and all rights to demand or to have any marshalling of the Collateral
Trust Estate upon any enforcement of any Collateral Document, including, without
limitation, upon any sale, whether made under any power of sale herein granted
or pursuant to judicial proceedings or upon any foreclosure or any enforcement
of any Collateral Document or this Agreement and consents and agrees that all
the Collateral Trust Estate in any such sale may be offered and sold as an
entirety.
SECTION 4.06. LIMITATION ON COLLATERAL TRUSTEE'S DUTIES IN RESPECT
OF COLLATERAL. Beyond the duties set forth in this Agreement, the Collateral
Trustee shall not have any duty to any Grantor, any Secured Party or the
Representatives as to any Collateral in the Collateral Trustee's possession or
control or in the possession or control of any agent or nominee of the
Collateral Trustee or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto and, with respect
to such possession or control, the
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Collateral Trustee shall not have any liability except for its failure to
exercise ordinary care in the handling of moneys and securities and other
property actually received by it.
SECTION 4.07. LIMITATION BY LAW. All rights, remedies and powers
provided by this Article 4 may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Article 4 are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable in
whole or in part or, if the Representatives elect that this Agreement should be
recorded, registered or filed, not entitled to be recorded, registered, or filed
under the provisions of any applicable law.
SECTION 4.08. ABSOLUTE RIGHTS OF SECURED HOLDERS AND
REPRESENTATIVES. Notwithstanding any other provision of this Agreement or any of
the other Collateral Documents but subject to the Intercreditor Agreement, the
Receivables Intercreditor Agreement and any Subsequent Intercreditor Agreement,
each of the Representatives and each of the Secured Holders has an absolute and
unconditional right to receive payment of all of the Secured Obligations owing
to such Representative or such Secured Holder, as the case may be, when the same
becomes due and payable and at the time and place and otherwise in the manner
set forth in the applicable Secured Agreements, and the right of each such
Representative and each such Secured Holder to institute proceedings for the
enforcement of such payment on or after the date such payment becomes due and to
assert its position as a secured creditor in a proceeding under the Bankruptcy
Code in which any Grantor is a debtor, and the obligation of such Grantor to pay
all of the Secured Obligations owing to each of the Representatives and each of
the Secured Holders at the time and place expressed therein, shall not be
impaired or affected without the consent of such Representative or such Secured
Holder. In addition, the right of any Secured Holder or any Representative, on
behalf of itself or on behalf of any such Secured Holder, to receive payment or
security from sources other than the Collateral shall not be, and is not hereby,
impaired or affected in any manner. Without limiting the generality of the
foregoing provisions of this Section 4.08, no Secured Holder and no
Representative, on behalf of itself or on behalf of any Secured Holder, shall be
obligated to share with any other Secured Holder or any other Representative any
proceeds of any collateral, guaranty or right of setoff other than pursuant to,
and to the extent expressly required under, this Agreement, the other Secured
Agreements, the Intercreditor Agreement, the Receivables Intercreditor Agreement
and any Subsequent Intercreditor Agreement; nor shall any Secured Holder's or
any Representative's right to receive its ratable share of any amounts
maintained in the Collateral Account, if any, or any proceeds of any of the
Collateral, or any part thereof, under the terms of this Agreement, the other
Collateral Documents, the Intercreditor Agreement the Receivables Intercreditor
Agreement and any Subsequent Intercreditor Agreement be diminished or affected
in any way by its right to receive proceeds of any other collateral or right of
setoff, or payment upon a guaranty or from any other source.
SECTION 4.09. TERMS OF SECURITY. This Agreement is intended solely
to comply with the provisions of the Indenture and the Notes to secure the
unpaid Secured Obligations arising thereunder and under the Notes in accordance
with the terms set forth therein, it being understood that the Lien hereunder in
favor of the Junior Lien Creditor, as Representative for the Note Holders, shall
remain at all times junior to the Lien of the Senior Secured Creditors in
accordance with the terms of the Intercreditor Agreement.
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ARTICLE V
APPLICATION OF PROCEEDS
SECTION 5.01. APPLICATION OF PROCEEDS. (a) If, following the
acceleration of the principal amount of the Secured Obligations under any
Secured Agreement and pursuant to the exercise of any remedy set forth in any
Collateral Document, any Collateral is sold or otherwise realized upon by the
Collateral Trustee, the proceeds received by the Collateral Trustee in respect
of such Collateral shall be deposited in the Collateral Account, and all moneys
held by the Collateral Trustee in the Collateral Account shall, to the extent
available for distribution, be distributed by the Collateral Trustee on each
date upon which a distribution is made (each, a "DISTRIBUTION DATE") as follows:
FIRST, to the payment, without duplication, of all reasonable legal
fees and expenses and other reasonable costs or expenses or other
liabilities of any kind incurred by the Collateral Trustee as a secured
party under any Collateral Document or otherwise in connection with any
Collateral Document or this Agreement (including, without limitation,
any reasonable costs or expenses or liabilities incurred in connection
with the sale of any assets covered by any Collateral Document, or in
the operation or maintenance of any of the assets covered by any
Collateral Document), including the reimbursement to any Representative
of any amounts theretofore advanced by such Representative for the
payment of such fees, costs and expenses, except only for any such fees,
expenses, costs or liabilities incurred by the Collateral Trustee as a
result of its gross negligence or willful misconduct in performing or
failing to perform any of its duties to the parties hereto expressly set
forth herein; PROVIDED, HOWEVER, that nothing herein is intended to
relieve any Grantor of its duties to pay such costs, fees, expenses and
liabilities otherwise payable to the Collateral Trustee from funds
outside of the Collateral Account, as required by this Agreement;
SECOND, to the Collateral Trustee (without duplication) in an
amount equal to the Collateral Trustee's Fees which are unpaid as of the
Distribution Date and to any Representative which has theretofore
advanced or paid any the Collateral Trustee's Fees in an amount equal to
the amount thereof so advanced or paid by such Representative prior to
such Distribution Date; PROVIDED, HOWEVER, that nothing herein is
intended to relieve any Grantor of its duties to pay such fees and
claims from funds outside of the Collateral Account, as required by this
Agreement;
THIRD, in accordance with paragraph (b) below, ratably to the
Senior Agents, as Representatives for the Senior Secured Creditors, on
behalf of the Senior Secured Creditors for application to the Secured
Obligations of the Senior Secured Creditors, or, to be held by such
Representatives (or by the Collateral Trustee on behalf of such
Representatives pursuant to Section 5.02 or otherwise) pending such
application;
FOURTH, to the Junior Lien Creditor, as Representative for the Note
Holders, on behalf of the Note Holders for application to the Secured
Obligations of the Note Holders, or, to be held by such Representative
(or by the Collateral Trustee on behalf of such Representative pursuant
to Section 5.02 or otherwise) pending such application; and
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FIFTH, any surplus remaining after the payment in full in cash of
the Secured Obligations shall, pursuant to the provisions of Section
8.02, be paid to the Company, its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same as a court of
competent jurisdiction may direct.
(b) In order to determine the ratable amount to be distributed to
each of the Representatives entitled to a distribution pursuant to clause THIRD
above on each Distribution Date, unless otherwise directed in writing by the
Senior Agents, the Collateral Trustee may conclusively rely, and shall be fully
protected in relying, on a certificate of the Chief Financial Officer, Treasurer
or Controller of the Company setting forth the Secured Obligations (identified
by type and amount) outstanding under each Secured Agreement on such
Distribution Date. The ratable portion of the aggregate amount available for
distribution hereunder on any Distribution Date which shall be distributed to
each Senior Agent entitled to a distribution on such Distribution Date shall be
a fraction, (i) the numerator of which shall be the aggregate amount of Senior
Secured Obligations of the Secured Holders represented by such Senior Agent, and
(ii) the denominator of which shall be the aggregate amount of Secured
Obligations of all the Senior Secured Creditors; PROVIDED, HOWEVER, that the
aggregate amount distributable to such Senior Agent on such Distribution Date
shall not exceed the aggregate amount of Senior Secured Obligations which are
then payable by any Grantor to the Secured Lenders of such Senior Agent; and,
PROVIDED, FURTHER, that, for such purposes, amounts distributable to a Senior
Agent on a prior Distribution Date and held on behalf of such Senior Agent and
the Secured Lenders of such Senior Agent pursuant to Section 5.02 of this
Agreement shall be deemed to have been applied to the Senior Secured Obligations
of the Secured Lenders represented by such Senior Agent, regardless of whether
such application has occurred.
SECTION 5.02. APPLICATION OF WITHHELD AMOUNTS. If on any
Distribution Date any amounts on deposit to the Collateral Account are
distributable pursuant to Section 5.01 to any Representative, and if such
Representative shall have given notice to the Collateral Trustee on or prior to
such Distribution Date that all or a portion of such proceeds which are
otherwise distributable to such Representative pursuant to Section 5.01 shall be
held by the Collateral Trustee on behalf of such Representative for the benefit
of the Secured Holders of such Representative, then, subject to the last
sentence of this Section 5.02, the Collateral Trustee shall hold such amount in
a separate non-interest bearing cash collateral account of the Collateral
Trustee for the benefit of such Representative and such Secured Holders, until
such time as such Representative shall deliver a written request for the
delivery thereof from such account to such Representative or as such
Representative may otherwise direct in such notice. If thereafter the Secured
Obligations of the Secured Holders represented by any such Representative shall
have been repaid in full in cash on any date, then (a) upon the written request
of the Company (or any other Representative) certifying as to such payment in
full, and (b) after delivery of such notice by the Collateral Trustee to such
Representative, the Collateral Trustee shall not have received a written notice
of objection from such Representative within 10 Business Days after such
Representative's receipt of such notice, promptly following such 10th Business
Day (or the earlier receipt by the Collateral Trustee of the written consent of
such Representative), any amounts held on account for such Representative
pursuant to this Section 5.02 shall be again deposited by the Collateral Trustee
to the Collateral Account and thereafter distributed as provided in Section
5.01. The Collateral Trustee shall invest amounts on deposit to any such account
in such Marketable Securities as the applicable Representative may direct from
time to time.
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SECTION 5.03. RELEASE OF AMOUNTS IN COLLATERAL ACCOUNT. Amounts
distributable to a Representative on any Distribution Date pursuant to
Section 5.01 shall either be paid to such Representative for the benefit of such
Representative and its Secured Holders by the Collateral Trustee (or deposited
to an account for the benefit of such Representative and its Secured Holders
pursuant to Section 5.02) upon receipt by the Collateral Trustee of a written
certificate of such Representative setting forth appropriate payments
instructions for such Representative. If no such notice is delivered by a
Representative within 10 Business Days thereafter, the Collateral Trustee shall
deposit amounts otherwise distributable to such Representative to an account for
the benefit of such Representative and its Secured Holders pursuant to Section
5.02 hereof.
ARTICLE VI
AGREEMENTS WITH THE COLLATERAL TRUSTEE
SECTION 6.01. DELIVERY OF AGREEMENTS. The Company will deliver to
the Collateral Trustee a true and complete copy of each Secured Agreement,
including each Collateral Document, as in effect on such date. The Company
agrees that, promptly upon the execution thereof, the Company will deliver to
the Collateral Trustee a true and complete copy of any and all Collateral
Documents entered into subsequent to the date hereof and a true and complete
copy of any and all amendments, modifications or supplements to any of the
foregoing.
SECTION 6.02. INFORMATION AS TO REPRESENTATIVES. The Company agrees
that it shall deliver to the Collateral Trustee from time to time upon written
request of the Collateral Trustee a list setting forth, for each Secured
Agreement, (a) the aggregate principal amount outstanding thereunder, (b) the
accrued and unpaid interest thereunder, (c) the accrued and unpaid fees (if any)
thereunder, (d) the names of the Representatives and of the Secured Holders (to
the extent known to the Company) thereunder, and all other unpaid amounts
thereunder known to the Company, owing to each such Representative, for its own
account and on behalf of such Secured Holders and (e) such other information
known to the Company regarding the Representatives, such Secured Holders and the
Secured Agreements as the Collateral Trustee may reasonably request. In
addition, the Company shall deliver to the Collateral Trustee, each time a
distribution from the Collateral Trust Estate or the Collateral Account is to be
made pursuant to the terms hereof, not later than two Business Days after
receipt of a copy of the applicable distribution request delivered by a
Defaulted Agreement Party pursuant to Section 5.04 hereof, a certificate of the
Chief Financial Officer, Treasurer or Controller of the Company, setting forth
the amounts to be distributed and the Persons to whom such distributions are to
be made, including appropriate payment instructions therefor, PROVIDED, that if
any distribution is directed to be made to any Representative, if such
Representative shall have notified the Collateral Trustee in writing that such
Representative is unable to accept such distribution, such distribution shall be
made instead to an account established pursuant to Section 5.02 hereof for the
benefit of such Representative and its Secured Holders. The Company will furnish
to the Collateral Trustee, with a copy to each Representative, a list setting
forth the name and address of each Representative and each Person to whom
notices must be sent under the Secured Agreements and the Company agrees to
furnish promptly to the Collateral Trustee any changes or additions to such list
of which the Company is made aware. Unless otherwise specified herein, the
Collateral Trustee may for all purposes hereunder, rely on such information
given by
15
the Company unless (i) the Collateral Trustee shall have actual knowledge of an
inaccuracy or (ii) any Representative shall provide contrary information in
writing with respect to such Representative.
SECTION 6.03. COMPENSATION AND EXPENSES. The Company agrees to pay
to the Collateral Trustee and any co-trustees or successor trustees appointed
hereunder, from time to time upon demand, (a) such compensation for their
services hereunder and under the Collateral Documents and for administering the
Collateral Trust Estate, the Collateral Account and any account or accounts
established pursuant to Section 5.02 hereof as set forth in the fee letter
between the Company and the Collateral Trustee, as such fee letter may be
amended, supplemented or otherwise modified by the written agreement of the
Company and the Collateral Trustee from time to time and (b) all the reasonable
fees, costs and expenses incurred by any of them (including, without limitation,
the reasonable fees and disbursements of one counsel) (i) arising in connection
with the preparation, execution, delivery, modification and termination of this
Agreement and each Collateral Document or the enforcement of any of the
provisions hereof or thereof or (ii) incurred or required to be advanced in
connection with (A) the administration of the Collateral Trust Estate, the
Collateral Account, the Collateral Documents and any account or accounts
established pursuant to Section 5.02 hereof, (B) the custody, preservation,
operation of, or the sale or other disposition of Collateral pursuant to any
Collateral Document, collection from or other realization upon, any of the
Collateral, (C) the exercise or enforcement of any of the rights of the
Collateral Trustee, the Representatives or the Secured Holders hereunder, (D)
the preservation, protection or defense of its rights under this Agreement and
in and to the Collateral, the Collateral Account, any account or accounts
established pursuant to Section 5.02 hereof and the Collateral Trust Estate or
(E) the failure by any Grantor to perform or observe any of the provisions of
any Collateral Document. As security for such payment, the Collateral Trustee
shall have a prior Lien upon all Collateral and other property and funds held or
collected by the Collateral Trustee as part of the Collateral Trust Estate. The
Company's obligations under this Section 6.03 shall survive the termination of
this Agreement.
SECTION 6.04. STAMP AND OTHER SIMILAR TAXES. The Company agrees to
indemnify and hold harmless the Collateral Trustee, each Representative and each
Secured Holder from any present or future claim for liability for any stamp or
other similar tax and any penalties or interest with respect thereto, which may
be assessed, levied or collected by any jurisdiction in connection with this
Agreement, any Collateral Document, the Collateral Trust Estate, the Collateral
Account, any account or accounts established pursuant to Section 5.02 hereof or
any Collateral. The obligations of the Company under this Section 6.04 shall
survive the termination of this Agreement.
SECTION 6.05. FILING FEES, EXCISE TAXES, ETC. Without limiting
Section 7.02, the Company agrees to pay or to reimburse the Collateral Trustee
and each Secured Holder, as the case may be, for any and all amounts paid by the
Collateral Trustee, if any, or such Secured Holder, as the case may be, in
respect of all reasonable search, filing, recording and registration fees,
taxes, excise taxes and other similar imposts which may be payable or determined
to be payable in respect of the execution, delivery, performance and enforcement
of this Agreement and each Collateral Document. The obligations of the Company
under this Section 6.05 shall survive the termination of this Agreement.
16
SECTION 6.06. INDEMNIFICATION. (a) The Company agrees to pay,
indemnify, and hold harmless the Collateral Trustee and each of the agents
thereof from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, the costs and expenses
of defending any claim against any of them) with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and the
Collateral Documents other than to the extent arising from the gross negligence
or willful misconduct of the Collateral Trustee or such of the agents thereof or
any failure of the Collateral Trustee or any such agent to exercise ordinary
care in the handling of moneys and securities and other property actually
received by the Collateral Trustee or any such agent. As security for such
payment, the Collateral Trustee shall have a prior Lien upon all Collateral and
other property and funds held or collected by the Collateral Trustee as part of
the Collateral Trust Estate.
(b) In any suit, proceeding or action brought by the Collateral
Trustee under or with respect to any Collateral Document or the Collateral for
any amount owing thereunder, or to enforce any provisions thereof, the Company
will save, indemnify and hold harmless the Collateral Trustee from and against
all expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction of liability whatsoever of the obligee
thereunder (other than to the extent that such expense, loss or damage is caused
by the gross negligence or willful misconduct of the Collateral Trustee or the
failure of the Collateral Trustee to exercise ordinary care in the handling of
moneys and securities and other property actually received by the Collateral
Trustee), arising out of a breach by any Grantor of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such obligee or its successors from such Grantor and all such
obligations of such Grantor shall be and remain enforceable against and only
against such Grantor and shall not be enforceable against the Collateral
Trustee, any Representative or any Secured Holder. The agreements in this
Section 6.06 shall survive the termination of this Agreement.
SECTION 6.07. FURTHER ASSURANCES. Each Grantor agrees, at its own
expense to perform its obligations under Section 7 of the Security Agreement.
ARTICLE VII
THE COLLATERAL TRUSTEE
SECTION 7.01. DECLARATION OF TRUST. The Collateral Trustee, for
itself and its successors, hereby accepts the trusts created by this Agreement
upon the terms and conditions hereof, including those contained in this Article
VII. Further, the Collateral Trustee, for itself and its successors, does hereby
declare that it will hold all of the estate, right, title and interest in (a)
the Collateral Trust Estate and the Collateral Account for the Shared Benefit of
the Representatives and the Secured Holders as provided herein, and (b) each
account as may be established pursuant to Section 5.02 at the request of a
Representative upon the trust herein set forth and for the benefit of such
Representative on behalf of its applicable Secured Holders as provided herein.
SECTION 7.02. EXCULPATORY PROVISIONS. (a) The Collateral Trustee
shall not be responsible in any manner whatsoever for the correctness of any
recitals, statements,
17
representations or warranties contained herein or in the Collateral Documents,
all of which are made solely by each Grantor which is a party thereto. The
Collateral Trustee makes no representations as to the value or condition of the
Collateral Trust Estate, the Collateral Account or any part thereof, or as to
the title of any Grantor thereto or as to the security afforded by the
Collateral Documents or this Agreement, or as to the validity, execution (except
its own execution), enforceability, legality or sufficiency of this Agreement,
any Collateral Document or any Secured Agreement, and the Collateral Trustee
shall incur no liability or responsibility in respect of any such matters. The
Collateral Trustee shall not be responsible for insuring the Collateral Trust
Estate or for the payment of taxes, charges, assessments or liens upon the
Collateral Trust Estate or otherwise as to the maintenance of the Collateral
Trust Estate or the Collateral Account, except that in any event that the
Collateral Trustee enters into possession of a part or all of the Collateral
Trust Estate or the Collateral Account, the Collateral Trustee shall preserve
the part in its possession. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Trustee shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not
Representative or any Secured Holder has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Collateral
Trustee shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property.
(b) The Collateral Trustee shall not be required to ascertain or
inquire as to the performance by any Grantor of any of the covenants or
agreements contained herein, in any other Collateral Document or in any Secured
Agreement.
SECTION 7.03. DELEGATION OF DUTIES. The Collateral Trustee may
execute any of the trusts or powers hereof and perform any duty hereunder either
directly or by or through agents or attorneys-in-fact (which shall not include
officers and employees of the Company or any affiliate of the Company). The
Collateral Trustee shall be entitled to rely upon advice of reasonably selected
counsel and other professionals concerning all matters pertaining to such
trusts, powers and duties. The Collateral Trustee shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact reasonably
selected by them in without gross negligence or willful misconduct.
SECTION 7.04. RELIANCE BY COLLATERAL TRUSTEE. (a) Whenever in the
administration of the trusts of this Agreement or, pursuant to any other
Collateral Document, the Collateral Trustee shall deem it necessary or desirable
that a matter be proved or established in connection with the taking, suffering
or omitting any action hereunder by the Collateral Trustee unless otherwise
provided herein (including, without limitation, the determination of the
composition of the Required Representatives), such matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved or established by a certificate of an officer or the
Controller of the Company delivered to the Collateral Trustee and the
Representatives, and such certificate shall constitute a full warranty to the
Collateral Trustee for any action taken, suffered or omitted in reliance thereon
unless (i) the Collateral Trustee shall have actual knowledge of an inaccuracy
therein or (ii) any
18
Representative shall provide contrary information in writing with respect to
such matter within 10 days of the date of such certificate.
(b) The Collateral Trustee may consult with independent counsel,
independent public accountants and other experts selected by it (including,
counsel to or any employee of any Grantor or any affiliate of the Grantor), and
any opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder in
accordance therewith unless the Collateral Trustee has actual knowledge of the
incorrectness of such opinion or the facts upon which such opinion are stated to
be based are wrong. The Collateral Trustee shall have the right at any time to
seek instructions concerning the administration of the Collateral Trust Estate
or the Collateral Account or any account established pursuant to Section 5.02
hereof from the Required Representatives or any court of competent jurisdiction.
(c) The Collateral Trustee may rely, and shall be fully protected
in acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
it reasonably believes to be genuine and to have been signed or presented by the
proper party or parties or, in the case of telecopies and telexes, to have been
sent by the proper party or parties. In the absence of its gross negligence or
willful misconduct, the Collateral Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any notices, certificates or opinions furnished to the Collateral Trustee
that conform to the requirements of this Agreement or any Collateral Document.
SECTION 7.05. LIMITATIONS ON DUTIES OF THE TRUSTEES. (a) The
Collateral Trustee undertakes to perform only the duties expressly set forth
herein and no implied covenant or obligation shall be read into this Agreement
against the Collateral Trustee.
(b) The Collateral Trustee may exercise the rights and powers
granted to it by this Agreement and the Collateral Documents, but only pursuant
to the terms of this Agreement, and the Collateral Trustee shall not be liable
with respect to any action taken or omitted by it in accordance with the
direction of the Required Representatives.
(c) Except as herein otherwise expressly provided, the Collateral
Trustee shall not be under any obligation to take any action which is
discretionary with the Collateral Trustee under the provisions hereof or under
any Collateral Document (including, without limitation, the giving of any
consent, notice or request) except upon the written request of the Required
Representatives. The Collateral Trustee shall make available for inspection and
copying by each Representative each certificate or other paper furnished to the
Collateral Trustee by any Grantor, by any Representative, or by any other
Person, under or in respect of this Agreement, any Collateral Document or any of
the Collateral Trust Estate.
(d) The Collateral Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement or any other
Collateral Document at the request or direction of any Representatives pursuant
to this Agreement, unless such Representatives shall have offered to the
Collateral Trustee, prepayment, security or indemnity satisfactory to the
19
Collateral Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(e) The Collateral Trustee shall have no duty or responsibility
with respect to the preparation, filing, or recording of any financing
statements or continuation statement, or similar documents, or of the giving of
any notice, except that the Collateral Trustee will, upon written request,
execute such of the same as may have been prepared for filing, recordation, etc.
by the Company provided the Collateral Trustee does not believe it will be
exposed to liability by reason of its executing the same; PROVIDED FURTHER that
the Company shall have confirmed to the Collateral Trustee that it shall be
entitled to rely on the indemnification provisions of Section 6.06 in connection
with the foregoing.
SECTION 7.06. MONEYS TO BE HELD IN TRUST. All moneys received by
the Collateral Trustee under or pursuant to any provision of this Agreement or
any Collateral Document shall be segregated and held in trust for the purposes
for which they were paid or are held and the Collateral Trustee shall exercise
ordinary care in the handling of any such moneys actually received by it.
SECTION 7.07. RESIGNATION AND REMOVAL OF COLLATERAL TRUSTEE. (a)
The Collateral Trustee may at any time, by giving 30 days' prior written notice
to the Company and the Representatives, resign and be discharged of its
responsibilities hereby created, such resignation to become effective upon the
appointment of a successor trustee or trustees by the Required Representatives,
the acceptance of such appointment by such successor trustee or trustees and,
unless an Actionable Default has occurred and is continuing, the consent to the
appointment of such successor trustee or trustees by the Company. If an
Actionable Default has occurred, the Company's consent to any such resignation
shall not be required. The Collateral Trustee shall be entitled to its fees and
expenses accrued to the date of the resignation becoming effective. The
Collateral Trustee may be removed at any time (with or without cause) and a
successor trustee or trustees appointed by the affirmative vote of the Required
Representatives, subject to, unless an Actionable Default has occurred and is
continuing, the consent of the Company, PROVIDED that the Collateral Trustee
shall be entitled to its fees and expenses accrued to the date of removal. If
the Collateral Trustee resigns or is removed as provided in this Section 7.07,
the consent to the appointment of a successor trustee or trustees shall not be
unreasonably withheld and shall be deemed to have been given if the Company
shall not have reasonably objected to any proposed successor trustee or trustees
within five Business Days of receipt of notice of the identity thereof from the
Representatives. If no successor trustee or trustees shall be appointed and
approved within 30 days from the date of the giving of the aforesaid notice of
resignation or within 30 days from the date of such vote for removal, the
Collateral Trustee, shall, or any Representative may, apply to any court of
competent jurisdiction to appoint a successor trustee or trustees to act until
such time, if any, as a successor trustee or trustees shall have been appointed
as above provided. Any successor trustee or trustees so appointed by such court
shall immediately and without further act be superseded by any successor trustee
or trustees approved by the Representatives as above provided.
(b) If at any time the Collateral Trustee shall become incapable
of acting, or if at any time a vacancy shall occur in the office of the
Collateral Trustee for any other cause, a successor trustee or trustees shall be
promptly appointed by the Required Representatives,
20
subject to, unless an Actionable Default has occurred and is continuing, the
consent of the Company, which consent shall not be unreasonably withheld, and
the powers, duties, authority and title of the predecessor trustee or trustees
terminated and cancelled without procuring the resignation of such predecessor
trustee or trustees, and without any formality (except as may be required by
applicable law) other than appointment and designation of a successor trustee or
trustees in writing, duly acknowledged, delivered to the predecessor trustee or
trustees and the Grantors and filed for record in each public office, if any, in
which this Agreement is required to be filed.
(c) The appointment and designation referred to in Section
7.07(b) shall, after any required filing, be full evidence of the right and
authority to make the same and of all the facts therein recited, and this
Agreement shall vest in such successor trustee or trustees, without any further
act, deed or conveyance, all of the estate and title of its predecessor, and
upon such filing for record the successor trustee or trustees shall become fully
vested with all the estates, properties, rights, powers, trusts, duties,
authority and title of its predecessor; but such predecessor, on the written
request of the Required Representatives, the Company or its successor trustee or
trustees, shall execute and deliver an instrument transferring to such successor
all the estates, properties, rights, powers, trusts, duties, authority and title
of such predecessor hereunder and shall deliver all securities and moneys held
by it to such successor trustee or trustees. Should any deed, conveyance or
other instrument in writing from any Grantor be required by any successor
trustee or trustees for more fully and certainly vesting in such successor
trustee or trustees the estates, properties, rights, powers, trusts, duties,
authority and title vested or intended to be vested in the predecessor trustee
or trustees, any and all such deeds, conveyances and other instruments in
writing shall, on request of such successor trustee or trustees, be executed,
acknowledged and delivered by such Grantor.
(d) Any required filing for record of the instrument appointing a
successor trustee or trustees as hereinabove provided shall be at the expense of
the Company. The resignation of any trustee or trustees and the instrument
removing any trustee or trustees, together with all other instruments, deeds and
conveyances provided for in this Article VII shall, if permitted by law, be
forthwith recorded, registered and filed by and at the expense of the Company,
wherever this Agreement is recorded, registered and filed.
SECTION 7.08. STATUS OF SUCCESSORS TO TRUSTEE. Every successor to
the Collateral Trustee appointed pursuant to Section 7.07 shall be a bank or
trust company in good standing and having power so to act, incorporated under
the laws of the United States or any State thereof or the District of Columbia
and having its principal corporate trust office within a state acceptable to the
Required Representatives, and shall also have capital, surplus and undivided
profits of not less than $100,000,000, if there be such an institution with such
capital, surplus and undivided profits willing, qualified and able to accept the
trust upon reasonable or customary terms.
SECTION 7.09. MERGER OF THE COLLATERAL TRUSTEE. Any corporation
into which the Collateral Trustee may be merged, or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Collateral Trustee shall be a party, shall be the Collateral Trustee
under this Agreement without the execution or filing of any paper or
21
any further act on the part of the parties hereto, but shall comply with the
requirements of Section 7.08 as if it were a successor.
SECTION 7.10. ADDITIONAL CO-TRUSTEES; SEPARATE TRUSTEES. (a) If at
any time or times it shall be necessary or prudent in order to conform to any
law of any jurisdiction in which any of the Collateral shall be located, or the
Collateral Trustee shall be advised in writing by counsel satisfactory to it
that it is so necessary or prudent in the interest of the Representatives on
behalf of the Secured Holders, or the Representatives shall in writing so
request by notice to the Collateral Trustee and the Company, or the Collateral
Trustee shall deem it desirable for its own protection in the performance of its
duties hereunder, or the Grantor shall in writing so request by notice to the
Collateral Trustee with the consent of the Required Representatives, the
Collateral Trustee and each Grantor shall execute and deliver all instruments
and agreements necessary or proper to constitute another bank or trust company,
or one or more persons approved by the Collateral Trustee, the Company and the
Representatives, either to act as co-trustee or co-trustees of all or any of the
Collateral, jointly with the Collateral Trustee originally named herein or any
successor, or to act as separate trustee of any such property. In the event any
Grantor shall not have joined in the execution of such instruments and
agreements within 10 days after the receipt of a written request from the
Collateral Trustee so to do, or in case an Actionable Default Notice has been
received by the Collateral Trustee that has not been withdrawn, the Collateral
Trustee may act under the foregoing provisions of this Section 7.10 without the
concurrence of such Grantor (but with the concurrence of the Required
Representatives), and each Grantor hereby appoints the Collateral Trustee as its
agents and attorneys to act for it under the foregoing provisions of this
Section 7.10 in either of such contingencies.
(b) Any separate trustee and any co-trustee (other than any
trustee which may be appointed as successor to the Collateral Trustee pursuant
to Section 7.07) shall, to the extent permitted by law, be appointed and act and
be such, subject to the following provisions and conditions, namely:
(i) all rights, powers, duties and obligations conferred upon the
trustees in respect of the custody, control and management of moneys,
papers or securities shall be exercised solely by the Collateral Trustee
originally named herein or its successors appointed pursuant to
Section 7.07;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Trustee hereunder shall be conferred or imposed
and exercised or performed by the Collateral Trustee and such separate
trustee or co-trustee, jointly, as shall be provided in the instrument
appointing such separate trustee or co-trustee, except to the extent that
under any law of any jurisdiction in which any particular act or acts are
to be performed the Collateral Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such separate trustee or
co-trustee;
(iii) no power given hereby to, or which it is provided hereby may
be exercised by, any such co-trustee or separate trustee, shall be
exercised hereunder by such
22
co-trustee or separate trustee, except jointly with, or with the consent in
writing of, the Collateral Trustee, anything herein contained to the
contrary notwithstanding;
(iv) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(v) the Grantors and the Collateral Trustee, at any time, by an
instrument in writing, executed by them jointly, may accept the resignation
of or remove any such separate trustee, and in that case, by an instrument
in writing executed by the Grantors and the Collateral Trustee jointly, may
appoint a successor (who shall be acceptable to the Required
Representatives) to such a separate trustee or co-trustee, as the case may
be, anything herein contained to the contrary notwithstanding. In the event
that the Grantors shall not have joined in the execution of any such
instrument within 10 days after the receipt of a written request from the
Collateral Trustee so to do, or in case an Actionable Default Notice has
been received by the Collateral Trustee that has not been withdrawn, the
Collateral Trustee shall have the power to accept the resignation of or
remove any such separate trustee or co-trustee and to appoint (with the
consent of the Required Representatives) a successor without the
concurrence of the Grantors and the Grantors hereby appoint the Collateral
Trustee its agents and attorneys to act for it in such connection in either
of such contingencies. In the event that the Collateral Trustee shall have
appointed a separate trustee or co-trustee or as above provided, they may
at any time, by an instrument in writing, accept the resignation of or
remove any such separate trustee, the successor to any such separate
trustee to be appointed by the Grantors and the Collateral Trustee, or by
the Collateral Trustee alone, as hereinbefore provided in this Section
7.10.
SECTION 7.11. TRUSTEES APPOINTED ATTORNEYS-IN-FACT. Subject to
Section 17 of the Security Agreement, each Grantor hereby irrevocably
constitutes and appoints the Collateral Trustee and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full power and authority in the name of such Grantor or
their own name and in the place and stead of such Grantor and in the name of
such Grantor, from time to time at the direction of the Required
Representatives, to take, subject to Section 4.09, any action and to execute any
instrument which the same may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, endorse
and collect all instruments made payable to such Grantor representing any
dividend, interest payment or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same in accordance with the
terms of the Collateral Documents. Each Grantor acknowledges and agrees that the
foregoing power of attorney is coupled with an interest and may not be revoked
or modified except with the consent of the Collateral Trustee or as otherwise
provided herein.
SECTION 7.12. ORDINARY CARE. The Collateral Trustee shall be deemed
to have exercised ordinary care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Collateral Trustee accords its own
property, it being understood that the Collateral Trustee shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Collateral Trustee has or is
23
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
ARTICLE VIII
RELEASE OF COLLATERAL
SECTION 8.01. PARTIAL RELEASE OF COLLATERAL. (a) Each Grantor may,
from time to time so long as no Actionable Default Notice has been received by
the Collateral Trustee that has not been withdrawn, request the release of the
Lien of the Collateral Documents in any portion of the Collateral of such
Grantor proposed to be sold or otherwise disposed of by such Grantor to any
other Person, upon notice to the Collateral Trustee from the Chief Financial
Officer, Treasurer or Controller of the Company (a "NOTICE OF PARTIAL RELEASE"),
which Notice of Partial Release shall be delivered to the Collateral Trustee and
to each Senior Agent at least ten Business Days prior to the date of the
proposed sale or other disposition of such Collateral (unless a shorter period
of time is acceptable to the Collateral Trustee and to each Senior Agent) and
shall
(i) specify the Collateral to be so sold or otherwise disposed of
and the proposed date of such sale or other disposition, and
(ii) certify that the sale or other disposition of such Collateral
is in compliance with the terms of the Secured Agreements, and no
Grantor is, and after giving effect to such release, would not be, in
default under any of the Secured Agreements.
If a Notice of Partial Release is delivered to the Collateral Trustee in
accordance with the immediately preceding sentence and the Required
Representatives shall have confirmed to the Collateral Trustee in writing prior
to the date of the proposed release that each such Required Representative
consents to such release (which consent shall be given if (x) no default has
occurred and is continuing under the applicable Debt Agreements and (y) such
release (and the application of proceeds thereof) is in compliance with the
provisions of the applicable Debt Agreements, the security interest in such
Collateral shall automatically, without further action, be released and the
Collateral Trustee shall execute and deliver to the Company, on the date of the
proposed release, a release or releases (including, without limitation, Uniform
Commercial Code release statements and instruments of satisfaction, discharge
and/or reconveyance) in recordable form provided by the Company as to the
Collateral specified in such Notice of Partial Release from the Liens evidenced
by the Collateral Documents, which release shall state that it is effective as
of the date of such disposition and, in the case of any release related to a
receivables financing permitted by Section 5.02(viii) of the Five Year Credit
Agreement or a real estate financing permitted by Section 5.17(ii)(D) of the
Five Year Credit Agreement, shall enter into such intercreditor agreements as
shall be approved by each of the Senior Agents; PROVIDED, HOWEVER, that, if
prior to the time that the Collateral Trustee delivers a release pursuant to
this Section 8.01(a), the Collateral Trustee shall have received notice of a
default under a Senior Credit Facility that shall not have been withdrawn prior
to such time and the Required Senior Lenders shall have directed the Collateral
Trustee either not to deliver such a release or not to deliver releases
generally, then the Collateral Trustee shall so notify the Company and shall not
sign any release or releases in connection with such disposition.
24
(b) If, at any time, the Collateral Trustee shall receive a
written notice from the Chief Financial Officer, Treasurer or Controller of the
Company, (i) stating that any promissory note or other similar or related
instrument evidencing obligations payable to any Grantor and included in the
Collateral has been paid in full in accordance with its terms (or will be so
paid concurrently with the surrender thereof), and (ii) identifying such note or
other instrument in reasonable detail (including, without limitation, by its
date of issuance, the name of its payee and the principal amount thereof), then
the Collateral Trustee shall promptly deliver a copy of each such notice to each
Representative and, unless any Representative shall have disputed the accuracy
of such notice within five Business Days after the delivery of such notice, the
Collateral Trustee shall promptly deliver such note or other instrument to the
Company, and promptly execute and deliver a release or releases (including,
without limitation, Uniform Commercial Code release statements) in recordable
form provided by the Company as to any such note or other instrument from the
Liens evidenced by the Collateral Documents, which release shall state that it
is effective as of the date of its delivery.
SECTION 8.02. FULL RELEASE OF COLLATERAL UPON SATISFACTION OF
CERTAIN CONDITIONS. (a) Unless the Collateral Trustee shall have received an
Actionable Default Notice that has not been withdrawn, the Collateral Trustee
shall promptly release in accordance with Section 8.03 all the Collateral upon
the earlier of (i) the date on which all Secured Obligations shall have been
paid in full after the Maturity Date applicable to each of the Senior Credit
Facilities, (ii) the termination of the Security Period and (iii) the date on
which the aggregate of the loans and available commitments under the Senior
Credit Facilities (or any refinancing thereof) shall be not less than
$400,000,000 and the Senior Lenders (or the lenders under such refinancing)
shall have agreed that such loans and available commitments shall not be secured
by a Lien.
(b) In furtherance of the undertaking set forth above in Section
8.02(a), the Collateral Trustee shall, upon the request of the Company
accompanied by a certificate of the Chief Financial Officer, Treasurer or
Controller of the Company, upon which the Collateral Trustee may conclusively
rely without independent verification, to the effect that (x) the Security
Period has terminated, (y) all Secured Obligations under the Secured Agreements
have been, or will, concurrently with the release of the Collateral be, paid in
full in cash and all commitments under the Senior Credit Facilities terminated
or (z) the aggregate of the loans and available commitments under the Senior
Credit Facilities (or any refinancing thereof) is not less than $400,000,000 and
the Senior Lenders (or the lenders under such refinancing) shall have agreed
that such loans and available commitments shall not be secured by a Lien,
deliver a notice by registered mail to each Representative containing the
following:
(i) a statement as to the total amount of moneys in the Collateral
Account and any account which has been established at the request of any
Representative pursuant to Section 5.02; and
(ii) a statement that the Collateral Trustee intends to release all
the Collateral unless it receives a written notice from each Representative
within 10 days saying that it has not received cash payment in full of all
the Secured Obligations owed to the respective Secured Holders under the
respective Secured Agreements, or in the case of the Senior Agents, that
all commitments of the Senior Lenders under the Senior Credit
25
Facilities have not been terminated, or, if such Secured Obligations are to
be repaid and such commitments terminated concurrently with such release, a
statement that the Collateral Trustee will release such Collateral only
upon receipt from each Representative of instructions to do so.
If the Collateral Trustee does not receive a certificate from each
Representative within 10 days after the delivery of such notice stating that
such Secured Obligations have not been indefeasibly paid in full in cash (or
such commitments have not been terminated), or the Collateral Trustee receives a
direction from each Senior Agent so to release such Collateral, as the case may
be (and the Collateral Trustee shall not have received any notice that an
Actionable Default has occurred or is continuing), then the Collateral Trustee
shall release all the Collateral from the security interest in its favor and
deliver to the Company all Collateral in the possession of the Collateral
Trustee promptly after the expiration of such 10 day period or as specified in
such instruction, as the case may be; PROVIDED, HOWEVER, that the Company shall
have made adequate provision for the reasonable expenses of the Collateral
Trustee associated with such release of Collateral, fees and all other
reasonable expenses of, or payable to, the Collateral Trustee hereunder or under
any Collateral Document; and PROVIDED, FURTHER, that the failure of either
Senior Agent to provide a certificate to the Collateral Trustee pursuant to this
Section 8.02 shall in no way be deemed a waiver of, or otherwise impair in any
way, its rights to receive payment in respect of unpaid Secured Obligations. If
the Collateral Trustee shall have received such a certificate from each Senior
Agent within such 10 day period, or shall not have received an instruction so to
release such Collateral (or shall have received an Actionable Default Notice
which has not been withdrawn), as the case may be, the Collateral Trustee shall
not release the Collateral unless and until each Senior Agent or a court of
competent jurisdiction so directs the Collateral Trustee pursuant to a final,
non-appealable judgment (including a judgment that becomes non-appealable by
reason of expiration of any period of time limiting the right to appeal
therefrom).
SECTION 8.03. EFFECT OF RELEASE OF COLLATERAL. Upon the
effectiveness of the release of the Collateral pursuant to Section 8.02, all
right, title and interest of the Collateral Trustee and the Representatives on
behalf of the Secured Holders in, to and under the Collateral Trust Estate, the
Collateral and the Collateral Documents shall terminate and shall revert to the
applicable Grantor and its successors and assigns, and the estate, right, title
and interest of the Collateral Trustee therein shall thereupon cease; and in
such case, upon the written request of the Company, its successors or assigns,
and at the cost and expense of the Company, its successors or assigns, the
Collateral Trustee shall promptly execute and deliver a satisfaction of the
Collateral Documents and such instruments as are necessary or desirable to
terminate and remove of record any documents constituting public notice of the
Collateral Documents and the security interests granted thereunder and shall
promptly transfer, or cause to be transferred, and shall promptly deliver or
cause to be delivered to the Company, all property, including all moneys,
instruments and securities of the Grantors then held by the Collateral Trustee.
The cancellation and satisfaction of the Collateral Documents shall be without
prejudice to the rights of the Collateral Trustee or any successor trustee or
trustees to charge and be reimbursed for any reasonable expenditures which they
may thereafter incur in connection therewith.
26
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, SUPPLEMENTS AND WAIVERS. (a) (i) With the
written consent of each Senior Agent and the Collateral Trustee, any Grantor
may, from time to time, enter into written agreements supplemental hereto for
the purpose of adding to or waiving any provision of this Agreement or any of
the Collateral Documents or changing in any manner the rights or obligations of
the Collateral Trustee, the Representatives, the Secured Holders and the
Grantors hereunder or thereunder.
(ii) Any such supplemental agreement shall be binding upon the
Grantors, the Representatives, the Secured Holders and the Collateral Trustee
and their respective successors.
(iii) The Collateral Trustee shall not enter into any such
supplemental agreement unless it shall have received a certificate of the Chief
Financial Officer, Treasurer or Controller of the Company to the effect that
such supplemental agreement will not result in a breach of any provision or
covenant contained in any of the Secured Agreements.
(v) The Collateral Trustee shall not enter into any such
supplemental agreement unless it shall have received a certificate of each
Senior Agent to the effect that, upon receipt of the Collateral Trustee's
written consent, this Section 9.01(a) has been complied with and an instruction
letter requesting the Collateral Trustee to execute such supplemental agreement.
(b) Notwithstanding the provisions of paragraph (a), the
Collateral Trustee and the Grantors may, at any time and from time to time,
without the consent of each Senior Agent and any other Representative or any
Secured Holders, enter into additional Collateral Documents or one or more
agreements supplemental hereto or to any Collateral Document, in form
satisfactory to the Collateral Trustee,
(i) to add to the covenants of any Grantor, for the benefit of the
Representatives or any Secured Holder, or to surrender any right or power
herein conferred upon any Grantor;
(ii) to pledge or grant a security interest in favor of the
Collateral Trustee as additional security for the Secured Obligations any
property or assets which are required to be pledged, or in which a security
interest is required to be granted, to the Collateral Trustee pursuant to
any Collateral Document or otherwise; or
(iii) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of
this Agreement, provided such action shall not adversely affect the
interests of the Secured Holders.
SECTION 9.02. ADDITIONAL ACTIONS OF REPRESENTATIVES. Whether or not
there shall be an Actionable Default, the Collateral Trustee shall comply and
shall be fully protected in
27
complying with any reasonable request of (a) the Required Representatives, to
take or refrain from taking certain actions with respect to the Collateral or
the Representatives, and (b) more than 50% of the Secured Holders represented by
any Representative which has requested that an account be opened pursuant to
Section 5.02, to take or refrain from taking certain actions with respect to
such account, PROVIDED, in each case, that the Collateral Trustee shall have
been indemnified as provided in Section 7.05(d) and the Collateral Trustee shall
not take or refrain from taking such actions if to do so would violate
applicable law or the terms of this Agreement, the Collateral Documents or the
applicable Secured Agreements.
SECTION 9.03. NOTICES. All notices, requests, demands and other
communications provided for or permitted hereunder shall, unless otherwise
stated herein, be in writing (including telex and telecopy communications) and
shall be sent by mail (by registered or certified mail, return receipt
requested), overnight prepaid courier, telex, telecopier or hand delivery:
(a) If to any Grantor, to the address of the Company at 000 Xxxxx
Xxxx Xxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx 00000, Attention: Treasurer, with a
copy to Attention: General Counsel, or at such other address as shall be
designated by it in a written notice to the Collateral Trustee;
(b) If to the Collateral Trustee, at 0 Xxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxx, Facsimile No. 000 000-0000,
or at such other address as shall be designated by it in a written
notice to the Company and each Representative; and
(c) If to any Representative, to it at the address specified from
time to time in the list provided by the Company to the Collateral
Trustee pursuant to Section 6.02 with copies to whomever (other than the
Company) is specified by the Company pursuant to Section 6.02 as a
Person to whom notice must be sent under the Secured Agreements,
PROVIDED that in the case that no address is known for a Representative,
notice shall be given to it in the manner specified by the related
Secured Agreement, and, in the absence of any such specified means of
giving notice, by such notice in the national edition of THE WALL STREET
JOURNAL or as the Collateral Trustee shall determine to be reasonable.
For purposes of notice by publication, one notice is sufficient and
shall be deemed made on the date of its publication.
All such notices, requests, demands and communications shall be deemed to have
been duly given, made or delivered, (i) effective when delivered by hand, (ii)
five business Days after being deposited in the mail, postage prepaid, (iii) the
next Business Day if delivered by an overnight prepaid courier, (iv) when
telexed with answerback, (v) when telecopied or (vi) when published in the THE
WALL STREET JOURNAL or such other publication; PROVIDED, HOWEVER that any
notice, request, demand or other communication to the Collateral Trustee or to
any Grantor or either Senior Agent shall not be effective until received and,
PROVIDED, FURTHER, that any notice to the Collateral Trustee from the Company
shall be signed by an officer or the Controller of the Company, unless otherwise
specifically set forth herein.
28
SECTION 9.04. HEADINGS. Section, subsection and other headings used
in this Agreement are for convenience only and shall not affect the construction
of this Agreement.
SECTION 9.05. SEVERABILITY. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.06. TREATMENT OF PAYEE OR INDORSEE BY COLLATERAL TRUSTEE.
(a) The Collateral Trustee may treat the registered Secured Holder of any
registered note, and the payee or indorsee of any note or debenture which is not
registered, as the absolute owner thereof for all purposes hereunder and shall
not be affected by any notice to the contrary, whether such promissory note or
debenture shall be past due or not.
(b) Any person, firm, corporation or other entity which shall be
designated as the duly authorized representative of one or more Representatives
to act as such in connection with any matters pertaining to this Agreement or
any Collateral Document or the Collateral shall present to the Collateral
Trustee such documents, including, without limitation, opinions of counsel, as
the Collateral Trustee may reasonably require, in order to demonstrate to the
Collateral Trustee the authority of such person, firm, corporation or other
entity to act as the representative of such Representatives.
SECTION 9.07. DEALINGS WITH THE GRANTORS. Upon any application or
demand by the Company to the Collateral Trustee to take or permit any action
under any of the provisions of this Agreement, the Company shall (unless
otherwise waived by the Collateral Trustee in writing) furnish to the Collateral
Trustee a certificate signed by its Chief Financial Officer, Treasurer or
Controller stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with, except that
in the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Agreement relating
to such particular application or demand, no additional certificate need be
furnished.
SECTION 9.08. CLAIMS. This Agreement is made for the benefit of the
Representatives on behalf of the Secured Holders, and the Representatives may
from time to time enforce their rights as explicit beneficiaries hereunder.
SECTION 9.09. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of each of the parties hereto and shall inure to the
benefit of the Representatives on behalf of the Secured Holders and their
respective successors and assigns and nothing herein or in any Collateral
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement, any Collateral
Document, the Collateral, the Collateral Account or the Collateral Trust Estate
or any part thereof.
SECTION 9.10. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of
New York.
29
SECTION 9.11. EFFECTIVENESS. This Agreement shall become effective
on the execution and delivery hereof and shall remain in effect so long as the
Collateral Trustee shall have any obligations hereunder.
SECTION 9.12. REEXECUTION OF AGREEMENT. This Agreement shall be
reexecuted at any time and from time to time, at the request of the Required
Representatives, with such changes in the form hereof (including, without
limitation, changes on the cover page and adding supplemental signatures and
notary statements) solely for the purposes of and as may be required by law to
comply with the filing or recording requirements of any jurisdiction where this
Agreement is to be filed.
SECTION 9.13. EFFECT ON DEBT AGREEMENTS. Nothing in this Agreement
shall operate or be deemed to prevent any amendment, modification or waiver of
the Debt Agreements by the parties thereto in accordance with the terms thereof.
SECTION 9.14. COUNTERPARTS. This Agreement may be executed in
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
or caused this Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
THE BANK OF
NEW YORK,
not in its individual capacity, but solely as
Collateral Trustee
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Title: Vice President
AVAYA INC.,
a Delaware corporation, as Grantor
By /s/ Xxxxxx Xxxxxx
---------------------------------------
Title: Vice President
AVAYA TECHNOLOGY CORP., a
Delaware corporation, as Grantor
By /s/ Xxxxxx Xxxx
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Title: Vice President
Executed as a Deed by
AVAYA (GIBRALTAR) LIMITED, a
corporation organized under the laws of
Gibraltar, as Grantor, and signed by a
director and an Authorised Signatory
By /s/ Xxxxxxx Xxxxxx
---------------------------------------
Title: Director
By /s/ Xxxxxxxxxxx Xxxxxxx
---------------------------------------
Title: Authorized Signatory
