EXHIBIT 99.2
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 20, 2001
among NORTEL NETWORKS LIMITED, NORTEL NETWORKS INC., and the BANKS listed on the
signature pages hereof (the "Banks").
WITNESSETH:
WHEREAS, Nortel Networks Limited, as Guarantor, Nortel Networks Inc.,
as Borrower, and the banks parties thereto have heretofore entered into a Credit
Agreement dated as of June 14, 2001 among Nortel Networks Limited, Nortel
Network Inc., the banks parties thereto, Credit Suisse First Boston, as
Syndication Agent, and JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank, as Administrative Agent, for which Citibank, N.A. was
Documentation Agent (as amended by Amendment No. 1 dated as of July 31, 2001,
the "Agreement"); and
WHEREAS, the parties hereto desire to further amend the Agreement, as
set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement. (a) The
following definitions of Section 1.01 of the Agreement are amended and restated
in their entirety to read as follows:
"CONSOLIDATED TANGIBLE NET WORTH" means at any date the consolidated
stockholders' equity of the Company less its consolidated Intangible Assets, all
determined as of such date. For purposes of this definition, "Intangible Assets"
means the amount (to the extent reflected in determining such consolidated
stockholders' equity) of goodwill, patents, trademarks, service marks,
tradenames,
copyrights, acquired technology, purchased in process research and development
and other intangible assets. For purposes of Section 5.16, "Consolidated
Tangible Net Worth" shall exclude all amounts attributable to investments in
Equity Interests or capital contributions made by NNC or any Subsidiary of NNC
(other than the Company and its Subsidiaries) (each such Subsidiary of NNC, a
"SISTER COMPANY") after October 1, 2001, unless those investments or
contributions were made with (x) the proceeds of common stock, preferred stock
or any other instrument issued by NNC or a Sister Company, in each case only if
properly classified as equity under GAAP, (y) cash from operations of NNC or a
Sister Company, or (z) cash proceeds from the divestiture of a Sister Company.
"MATERIAL SUBSIDIARY" means any Subsidiary other than those set forth
on Annex B hereto, as the same may be amended from time to time by the Company,
with the consent of the Agent (not to be unreasonably withheld) (i) to include
Subsidiaries which cannot be (for legal or contractual reasons), or for which,
in the good faith discretion of the Company and the Agent, it would be unduly
burdensome (whether because of law, collateral value or otherwise) to be,
Subsidiary Guarantors or Lien Grantors, or (ii) to exclude Subsidiaries then set
forth on such Annex B; provided that the Subsidiaries listed on Annex B hereto
shall in no event, if aggregated and considered as a single Subsidiary, account
for more than 10% of consolidated revenues of the Company and its Subsidiaries
(excluding the revenues of the joint ventures identified in Annex B hereto) set
forth in the most recent audited consolidated financial statements of the
Company and its Consolidated Subsidiaries delivered to the Banks or made
publicly available.
"MORTGAGE" means any mortgage, deed of trust, charge, debenture,
hypothec, assignment of leases and rents, leasehold mortgage or other security
document granting a Lien on or in any Mortgaged Property or Leasehold Mortgaged
Property to secure the Secured Obligations. Each Mortgage shall be substantially
in the form attached to the Security Agreement, with such changes as are
reasonably recommended by counsel to the Agent in each jurisdiction in the
United States or Canada in which a Mortgaged Property is located, or in such
other form as such counsel reasonably recommends, in each case to the extent
necessary or appropriate to comply with local law or convention.
"TERMINATION DATE" means December 13, 2002, or, if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
(b) The following new definitions are added to Section 1.01 of the
Agreement in appropriate alphabetical order:
"AMENDMENT NO. 2 EFFECTIVE DATE" means the date on which each of the
conditions to effectiveness of the Amended and Restated Credit Agreement dated
as of December 20, 2001 are satisfied.
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"ASSET SALE" means any disposition of property or series of related
dispositions of property (including pursuant to a sale and leaseback
transaction) (i) described on Annex D hereto or (ii) that yields Net Cash
Proceeds to the Company or any of its Material Subsidiaries in excess of
$5,000,000, excluding dispositions described in Sections 5.13(a), (b), (e) and
(f) and dispositions of accounts receivable (or interests therein) permitted
pursuant to Section 5.10(v).
"CANADIAN BENEFIT PLANS" means all material employee benefit plans of
any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by any Credit Party having employees in Canada.
"CANADIAN PENSION PLANS" means each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to by
any Credit Party for its employees or former employees.
"CANADIAN SECURITY AGREEMENT" has the meaning specified in Section
5.19.
"CAPITAL LEASE OBLIGATIONS" of any Person means obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required under GAAP to be classified and accounted for as
capital leases on a balance sheet of such Person. The amount of such obligations
will be the capitalized amount thereof determined in accordance with GAAP.
"CAPITAL MARKETS EVENT" means the issuance or incurrence by the Company
or any of its Material Subsidiaries of (a) any Equity Interest which is not
classified as equity under GAAP, (b) any Debt for borrowed money in respect of
(1) debt securities issued in a public offering or a private placement or (2)
syndicated lines of credit or other credit facilities or (c) Debt pursuant to
any receivables securitization, but excluding (i) refinancings of outstanding
Debt, (ii) Debt permitted pursuant to Section 5.09(i) through (ix), (iii)
working capital facilities entered into by Foreign Subsidiaries of the Company
in compliance with this Agreement and (iv) any transaction described in clause
(a), (b) or (c) above consummated by a Foreign Subsidiary to the extent the Net
Cash Proceeds thereof cannot be dividended or otherwise distributed to the
Company or a Subsidiary other than a Foreign Subsidiary without resulting in
material adverse tax consequences to the Company or any of its Subsidiaries
(except to the extent such Net Cash Proceeds are in fact so dividended).
"COLLATERAL" means any and all "Collateral", "Mortgaged Property",
"Leasehold Mortgaged Property" and "Trust Property", as defined in any Security
Document, and all other property subject to any Security Document.
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"COLLATERAL AGENT" means JPMorgan Chase Bank, in its capacity as
Collateral Agent under the Security Agreement and the other Security Documents,
and its successors in such capacity.
"COLLATERAL AND GUARANTEE REQUIREMENT" means the requirement that:
(a) the Collateral Agent shall have received from each Credit Party
required to be a party thereto in accordance with Section 5.18 or 5.19, as the
case may be, either (i) a counterpart of the Security Agreement, the NNI Foreign
Pledge Agreement, the NNL Foreign Pledge Agreement or the Foreign Subsidiary
Guarantee, as the case may be, duly executed and delivered on behalf of such
Credit Party or (ii) in the case of any Person that becomes a Credit Party after
date of delivery of the relevant Security Document pursuant to Section 5.19, a
supplement thereto, in the form specified therein, duly executed and delivered
on behalf of such Credit Party;
(b) all outstanding Equity Interests in any Material Subsidiary of the
Company shall have been pledged to the extent required pursuant to the
applicable Security Document and the Collateral Agent shall have received all
certificates or other instruments representing such Equity Interests, together
with stock powers or other instruments of transfer with respect thereto endorsed
in blank;
(c) all documents and instruments, including Uniform Commercial Code
financing statements, financing statements (and the Quebec equivalent thereof)
under Canadian personal property security legislation and Mortgages (subject to
Section 5.19(b)), required by law or reasonably requested by the Collateral
Agent to be filed, registered or recorded to create the Liens in the real and
personal, movable and immovable property of the Company and its Subsidiaries as
required hereunder or intended to be created by the Security Documents and
perfect or record such Liens to the extent, and with the priority, required by
the Security Documents, shall have been filed, registered or recorded or
delivered to the Collateral Agent for filing, registration or recording (and all
mortgage recording taxes or similar taxes and recording fees shall have been
paid (or funds sufficient to pay such taxes and fees shall have been paid to the
Collateral Agent));
(d) the Collateral Agent shall have received with respect to each
Mortgaged Property and Leasehold Mortgaged Property, (i) counterparts of a
Mortgage, duly executed and delivered by the record owner of such Mortgaged
Property or owner of a leasehold interest in such Leasehold Mortgaged Property
(as applicable), (ii) a title report, commitment to issue title insurance or
title opinion, together with copies of all related documents, issued by a
nationally recognized title insurance company or law firm, (iii) such surveys,
abstracts and appraisals as are in existence on the first day of a Collateral
Period, and (iv) such
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legal opinions and other documents as the Collateral Agent or the Required Banks
may reasonably request;
(e) subject to Section 5.19(b), each Lien Grantor and Subsidiary
Guarantor shall have obtained all consents and approvals required to be obtained
by it in connection with the execution and delivery of all Security Documents to
which it is a party, the performance of its obligations (including, if
applicable, its guarantee) thereunder and the granting of the Liens granted by
it thereunder; and
(f) (i) each Lien Grantor shall have taken all other action required
under the Security Documents to perfect, register and/or record the Liens
granted by it thereunder and (ii) each Subsidiary Guarantor shall have taken all
other action required under its Foreign Subsidiary Guarantee for the validity or
enforceability of such Foreign Subsidiary Guarantee;
provided that if the Agent shall determine in its sole good faith discretion
that, with respect to any asset or Lien Grantor or Subsidiary Guarantor,
satisfaction of any or all of the conditions set forth above is impossible,
impractical or unreasonably burdensome (or has been substantially, but not
fully, completed), the Agent may, in its good faith discretion, consent to a
waiver of any or all of such conditions with respect to such asset or Lien
Grantor or Subsidiary Guarantor (which waiver may, at the option of the Agent,
be limited in duration).
"COLLATERAL PERIOD" means any period from and including the first day
when the Debt Rating is lower than BBB- by S&P or Baa3 by Moody's to but
excluding the first day when the Debt Rating is BBB (stable outlook) or higher
by S&P and Baa2 (stable outlook) or higher by Xxxxx'x.
"COMPANY'S AUGUST 2001 FORM 8-K" means the Company's current report on
Form 8-K dated August 8, 2001, as filed with the Securities and Exchange
Commission pursuant to the Exchange Act.
"COMPANY'S 2001Q3 FORM 10-Q" means the Company's quarterly report on
Form 10-Q for the period ended September 30, 2001, as filed with the Securities
and Exchange Commission pursuant to the Exchange Act.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) consolidated interest
expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) restructuring and other incremental provisions and charges as publicly
disclosed and (v) any other extraordinary, unusual or non-recurring charges for
such period (including but not limited to stock option compensation, purchased
in-process research and development and other non-cash or non-recurring
charges), and
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minus (b) without duplication and to the extent included in determining such
Consolidated Net Income, any extraordinary, unusual or non-recurring gains for
such period, all determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net income or loss
of NNC and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income of
any Person which is not a Subsidiary, except to the extent that dividends or
other distributions were actually paid by such Person to NNC or any Subsidiary
during such period, and (b) the income or loss of any Person accrued before (i)
the date it becomes a Subsidiary, (ii) the date it is merged into or
consolidated with NNC or any Subsidiary or (iii) the date its assets are
acquired by NNC or any Subsidiary.
"CREDIT AGREEMENTS" has the meaning set forth in the Security
Agreement.
"CREDIT PARTIES" means the Company, the Borrower, the Lien Grantors
(but excluding for purposes of Section 4.07 only, Qtera Corporation, Nortel
Networks (CALA) Inc., Nortel Networks Global Corporation and Nortel Networks
Capital Corporation) and the Subsidiary Guarantors.
"DEBT" of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) credit card charges of such Person on which interest
charges are payable, (d) all obligations of such Person under conditional sale
or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding accounts payable incurred in the
ordinary course of business), (f) all Debt of others secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Debt secured thereby has been assumed, (g) all Guarantees by such Person
of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, (k)
to extent not otherwise included, indebtedness or similar obligations
(including, if applicable, any net investment amounts) pursuant to any
receivables securitization and (l) all Equity Interests of such Person which are
subject to redemption otherwise than at the sole option of such Person. The Debt
of any Person shall include the Debt of any other entity (including any
partnership in which such Person is a general partner) to the extent that such
Person is liable therefor as a result of such Person's ownership interest in or
other relationship with such entity, except to the extent that contractual
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provisions binding on the holder of such Debt provide that such Person is not
liable therefor.
"DEBT RATING" means any rating by Moody's or S&P with respect to the
senior unsecured non-credit enhanced long-term debt of the Company.
"EQUITY INTERESTS" means (i) shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person or (ii) any
warrants, options or other rights to acquire such shares or interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company or any Subsidiary, is treated as a
single employer under Section 414(b) or (c) of the Internal Revenue Code or,
solely for purposes of Section 302 of ERISA and Section 412 of the Internal
Revenue Code, is treated as a single employer under Section 414 of the Internal
Revenue Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan
(except an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Internal
Revenue Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by the
Company or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Company or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Company or any ERISA Affiliate of
any liability with respect to withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"FOREIGN SUBSIDIARY" means a Subsidiary (which may be a corporation,
limited liability company, partnership or other legal entity) organized under
the laws of a jurisdiction outside the United States and Canada, and conducting
substantially all its operations outside the United States and Canada.
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"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, applied on a basis consistent (except for
changes concurred in by the Company's independent public accountants) with the
most recent audited consolidated financial statements of the Company and its
Consolidated Subsidiaries delivered to the Banks. It is understood that the
application of GAAP to the operation of the covenants in Article 5 is subject to
Section 1.02.
"GUARANTEE" by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Debt or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Debt or other obligation; provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"HEDGING AGREEMENT" means (a) any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest rate, currency exchange rate or commodity price hedging
arrangement, and (b) any hedging agreement in respect of the Company's common
stock entered into in order to hedge the Company's exposure under its stock
option plans or other benefit plans for employees, directors or consultants of
the Company and its Subsidiaries.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
"LEASEHOLD MORTGAGED PROPERTY" means each parcel of real property and
any improvements located thereon and rights appurtenant thereto leased by a Lien
Grantor that is subject to a Transaction Lien pursuant to Section 5.18 or 5.19.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such
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asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
"LIEN GRANTOR" means the Company and any of its Subsidiaries that is,
or is required to be, a party to any Security Document (other than a Foreign
Subsidiary Guarantee).
"LOAN DOCUMENTS" means this Agreement, the Notes and the Security
Documents.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, financial position, results of operations or prospects of the Company
and its Subsidiaries, taken as a whole. It is understood that a change in a Debt
Rating shall not, in itself, constitute a Material Adverse Effect.
"MATERIAL DEBT" means Debt (other than obligations in respect of the
Loans), or obligations in respect of one or more Hedging Agreements, of the
Company and/or one or more of its Subsidiaries in an individual principal amount
of at least $10,000,000 and which in aggregate principal amount exceeds
$100,000,000. For purposes of determining Material Debt, the "principal amount"
of the obligations of the Company and/or one or more of its Subsidiaries in
respect of any Hedging Agreement at any time will be the maximum aggregate
amount (after giving effect to any netting provisions or agreements) that such
Person would be required to pay if such Hedging Agreement were terminated at
such time.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGED PROPERTY" means each parcel of real property and any
improvements located thereon and rights appurtenant thereto owned by a Credit
Party that is either (i) identified as a Mortgaged Property on Annex C hereto or
(ii) subject to a Transaction Lien granted after the Effective Date pursuant to
Section 5.18 or 5.19.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means (a) in connection with any Asset Sale, the
proceeds thereof in the form of cash and Permitted Investments (including any
such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) received by the Company or any of its
Material Subsidiaries, net of reasonable attorney's fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of Debt
secured by a Lien expressly permitted hereunder (other than a Transaction Lien)
on any asset
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that is the subject of such Asset Sale, and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any Capital Markets Event, the cash proceeds received by the
Company or any of its Material Subsidiaries from such issuance or incurrence,
net of reasonable attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith. To the extent that any net amounts
described above are received by a non-wholly owned Material Subsidiary, only a
percentage thereof equal to the Company's direct or indirect percentage
ownership interest in such Material Subsidiary (or such greater amount as shall
have been actually dividended or otherwise distributed to the Company or a
wholly owned Material Subsidiary) shall constitute "Net Cash Proceeds".
Notwithstanding the foregoing, "Net Cash Proceeds" shall not include (i) the
first $1,000,000,000 of such net cash proceeds received in respect of Asset
Sales described in Annex D hereto ("ANNEX D ASSET SALES") and (ii) any such net
cash proceeds received in respect of Annex D Asset Sales to the extent that,
after application of the provisions of Section 2.09(b) and comparable provisions
of the other Credit Agreements, the sum of the commitments under all of the
Credit Agreements would be $3,000,000,000 or less.
"NNC" means Nortel Networks Corporation, a Canadian corporation, and
its successors.
"NNI FOREIGN PLEDGE AGREEMENT" has the meaning specified in Section
5.19.
"NNL FOREIGN PLEDGE AGREEMENT" has the meaning specified in Section
5.19.
"PERFECTION CERTIFICATE" means, collectively, certificates in the form
of Exhibit E to each of the agreements referred to in the definition of
"Security Agreement" or any other form approved by the Collateral Agent.
"PERMITTED INVESTMENTS" means investments in:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
or Canada (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States or Canada, as
the case may be), in each case maturing within one year from the date
of acquisition thereof;
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(b) commercial paper maturing within one year from the date of
acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P, Moody's or Dominion Bond
Rating Services Limited;
(c) certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States or any State thereof
or Canada which has a combined capital and surplus and undivided
profits of at least $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above;
(e) in the case of the Company or any Foreign Subsidiary, (i)
marketable direct obligations issued by, or unconditionally guaranteed
by, the sovereign nation in which such Person is organized and is
conducting business or issued by any agency of such sovereign nation
and backed by the full faith and credit of such sovereign nation, in
each case maturing within one year from the date of acquisition, so
long as the indebtedness of such sovereign nation is rated at least A
by S&P, A2 by Moody's or A mid by Dominion Bond Rating Service Limited
or carries an equivalent rating from a comparable foreign rating agency
or (ii) investments of the type and maturity described in clauses (b)
through (d) above of foreign obligors, which investments or obligors
have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies; and
(f) any other Investments made in compliance with Corporate
Procedure No. 303.30 of NNC with respect to cash investments and safe
custody arrangements, substantially as in effect on the Amendment No. 2
Effective Date.
"PERMITTED LIENS" means:
(a) Liens imposed by law for taxes, assessments, governmental
charges or levies (and related interest and penalties), in each case
that are not yet delinquent or in default or are being contested in
compliance with Section 5.06;
(b) carriers', warehousemen's, mechanics', materialmen's,
landlord's, repairmen's and other like Liens imposed by law, arising in
the
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ordinary course of business and securing obligations that are not
overdue by more than 90 days or are being contested in compliance with
Section 5.06;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (h) of Article 6;
(f) easements, zoning restrictions, rights-of-way, servitudes
and similar encumbrances on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary
obligation and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the
Company or any Subsidiary;
(g) with respect to each Mortgaged Property or Leasehold
Mortgaged Property, "Permitted Encumbrances" (as defined in the
Mortgage relating to such property); and
(h) liens of a bank, broker or securities intermediary on
whose records a deposit account or a securities account of the Company
or any Subsidiary is maintained securing the payment of customary fees
and commissions to the bank, broker or securities intermediary or, with
respect to a deposit account, items deposited but returned unpaid and
other unexercised bankers liens
provided that, except as provided in clauses (a) and (e) above, the term
"Permitted Liens" shall not include any Lien that secures Debt.
"PLAN" means any employee pension benefit plan (except a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the
Internal Revenue Code or Section 302 of ERISA, and in respect of which the
Company or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) a "contributing sponsor" as defined in
Section 4001(a)(13) of ERISA.
"PREPAYMENT EVENT" means any Asset Sale and any Capital Markets Event.
"REDUCTION PERCENTAGE" means the product of the Prepayment Event
Percentage and the Facilities Percentage. For purposes of this definition,
"PREPAYMENT EVENT PERCENTAGE" means, (i) with respect to Net
Cash Proceeds of Asset Sales described in Annex D hereto which
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are received when the sum of the commitments under all of the
Credit Agreements exceeds $3,000,000,000, 50%, (ii) with
respect to Net Cash Proceeds of Asset Sales other than Asset
Sales described in Annex D hereto when the Leverage Ratio is
less than 3.5:1, 50%, (iii) with respect to Capital Markets
Events permitted pursuant to Section 5.09(x) or (xi), 50%, and
(iv) in all other cases, 100%;
"LEVERAGE RATIO" means, on any day, the ratio of (x) the
aggregate principal amount of Debt of the Company and its
Subsidiaries outstanding as of such date (other than
contingent obligations of the Company or any Subsidiary as an
account party in respect of any letter of credit or letter of
guaranty unless such letter of credit or letter of guaranty
supports an obligation that constitutes Debt) to (y)
Consolidated EBITDA for the fiscal quarter of NNC most
recently ended before such day, annualized on a simple
arithmetic basis; and
"FACILITIES PERCENTAGE" means, (i) at any time when (and to
the extent that) the sum of the Commitments and the
commitments under the Other Credit Agreement (collectively,
the "JUNE AGREEMENTS COMMITMENTS") exceeds $1,000,000,000, a
fraction, expressed as a percentage, the numerator of which is
the Commitments and the denominator of which is the June
Agreements Commitments, and (ii) otherwise, a fraction,
expressed as a percentage, the numerator of which is the
Commitments and the denominator of which is the sum of the
commitments under all of the Credit Agreements which include
provisions substantially identical to Sections 2.09(b) and
2.11(b), (c) and (d) (and the related definitions); provided
that if the commitments under a Credit Agreement have
terminated, the aggregate principal amount of outstanding
loans thereunder shall be used instead in making the above
calculations.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interest in
the Company or any Material Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interest in the Company or any Material Subsidiary
(including, for this purpose, any payment in respect of any Equity Interest
under a Synthetic Purchase Agreement).
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
13
"SECURED OBLIGATIONS" has the meaning specified in Section 1 of the
Security Agreement.
"SECURED PARTIES" has the meaning specified in Section 1 of the
Security Agreement.
"SECURITY AGREEMENT" means, collectively, the U.S. Security Agreement
and the Canadian Security Agreement.
"SECURITY DOCUMENTS" means the Security Agreement, the NNI Foreign
Pledge Agreement, the NNL Foreign Pledge Agreement, the Mortgages and each other
security agreement, instrument or document executed and delivered to satisfy the
condition set forth in Section 3.02(g) or pursuant to Section 5.18 or 5.19 to
secure any of the Secured Obligations.
"SUBSIDIARY GUARANTORS" means the Borrower and each Subsidiary that is
a party to a Foreign Subsidiary Guarantee.
"SYNTHETIC PURCHASE AGREEMENT" means any swap, derivative or other
agreement or combination of agreements pursuant to which the Company or a
Subsidiary is or may become obligated to make (i) any payment in connection with
the purchase by any third party, from a Person other than the Company or a
Subsidiary, of any Equity Interest of the Company or a Subsidiary or any Debt
for borrowed money of the Company or a Subsidiary issued in a public offering or
private placement or (ii) any payment (other than on account of a permitted
purchase by it of any Equity Interest) the amount of which is determined by
reference to the price or value at any time of any such Equity Interest or Debt;
provided in the case of each of clauses (i) and (ii) that the purpose of such
agreement or agreements is to enable the Company or such Subsidiary to realize
the benefits of a transaction otherwise prohibited by Section 5.15(a).
"TRANSACTION LIENS" means the Liens on Collateral granted by the Credit
Parties under the Security Documents.
"U.S. SECURITY AGREEMENT" has the meaning specified in Section 5.19.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
(c) The following definitions are deleted from Section 1.01 of the
Agreement:
"Attributable Debt"
"Company's 2000 Form 10-K"
14
"Company's 2001Q1 Form 10-Q"
"Consolidated Net Tangible Assets"
"Financing Leases"
"Funded Debt"
"Purchase Money Mortgage"
SECTION 3. Amendment of Section 2.09 of the Agreement. Section 2.09 of
the Agreement is amended by deleting "Optional" from the heading, inserting
"(a)" before "During", and adding the following subsection (b) at the end
thereof:
(b) During the Revolving Credit Period, within three Domestic Business
Days after any Net Cash Proceeds are received by or on behalf of the Company or
any Material Subsidiary in respect of any Prepayment Event, the Commitments
shall automatically be permanently reduced by an amount equal to the Reduction
Percentage of such Net Cash Proceeds; provided that if the Prepayment Event is
an Asset Sale described in Annex D hereto or a Capital Markets Event permitted
by Section 5.09(x) or (xi), any reduction which would otherwise have occurred
prior to April 10, 2002 shall instead take place on April 10, 2002, and the
Commitments and the commitments under the Other Credit Agreement shall be
reduced only to the extent the sum of the commitments under all of the Credit
Agreements exceeds $3,000,000,000.
SECTION 4. Amendment of Section 2.11. Section 2.11 of the Agreement is
amended by deleting "Optional" from the heading, relettering subsection (b) as
subsection (e) and adding ", (b), (c) or (d)" before "above" therein,
relettering subsection (c) as subsection (f), and adding the following new
subsections (b), (c) and (d) immediately after subsection (a) thereof:
(b) If, on the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the aggregate principal amount of outstanding Loans
would exceed the total Commitments, the Borrower shall, concurrently with such
reduction, prepay Borrowings in an amount equal to such excess.
(c) After the Revolving Credit Period, within three Domestic Business
Days after any Net Cash Proceeds are received by or on behalf of the Company or
any Material Subsidiary in respect of any Prepayment Event, the Borrower shall
prepay Borrowings in aggregate principal amount equal to the Reduction
Percentage of such Net Cash Proceeds.
(d) The Borrower shall notify the Agent of any prepayment pursuant to
subsection (b) or (c) above of any Borrowing hereunder (i) in the case of the
Group of Base Rate Loans (or any Money Market Borrowing bearing interest at the
Base Rate), not later than three Domestic Business Days before the date of
prepayment and (ii) in the case of any Group of Euro-Dollar Loans, not later
than three Euro-Dollar Business Days before the date of prepayment. Each such
notice
15
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and a reasonably detailed calculation of the
amount of such prepayment.
SECTION 5. Amendment of Section 3.02 of the Agreement. Section 3.02 of
the Agreement is amended by adding "(except, in the case of any Borrowing used
only to repay maturing commercial paper, the representation and warranty in
Section 4.04(b))" after "warranties" in clause (e) thereof, deleting "and" at
the end of clause (e) thereof, replacing the period at the end of clause (f)
thereof with "; and", and adding the following clause (g) at the end thereof:
(g) in the case of any Borrowing during the Collateral Period,
the Collateral and Guarantee Requirement shall have been satisfied in
full.
SECTION 6. Amendment of Section 4.01 of the Agreement. Section 4.01 of
the Agreement is amended by replacing "Each of the Company and the Borrower"
with "Each Credit Party", "the Company and the Borrower, taken together" with
"such Credit Party", and "this Agreement" with "the Loan Documents".
SECTION 7. Amendment of Section 4.02 of the Agreement. Section 4.02 of
the Agreement is amended by replacing "by each of the Company and the Borrower
of this Agreement and by the Borrower of its Notes (i) are within such Person's"
with "by each Credit Party of the Loan Documents to which it is a party (i) are
within such Credit Party's", replacing "such Person" each other place it appears
with "such Credit Party", replacing "the Company and the Borrower, taken
together" with "each Credit Party" and replacing "this Agreement" with "the Loan
Documents".
SECTION 8. Amendment of Section 4.03 of the Agreement. Section 4.03 of
the Agreement is amended by replacing "This Agreement constitutes a valid and
binding agreement of each of the Company and the Borrower" with "The Loan
Documents constitute or, when executed, will constitute valid and binding
agreements of the Credit Parties which are parties to them".
SECTION 9. Amendment of Section 4.04 of the Agreement. Section 4.04 of
the Agreement is amended by inserting "(a)" before "Except" at the beginning
thereof, by replacing "2000 Form 10-K" with "August 2001 Form 0-X", "Xxxxx 31"
with "September 30", "quarter" with "three quarters", and "2001Q1" with
"2001Q3", and by adding the following subsection (b) at the end thereof:
(b) Since September 30, 2001, except as set forth in the
Disclosure Materials, there has been no material adverse change in the
business, financial position, results of operations or prospects of the
Company and its Consolidated Subsidiaries, taken as a whole.
16
SECTION 10. Amendment of Section 4.05 of the Agreement. Section 4.05 of
the Agreement is amended by replacing "the Company or the Borrower, taken
together to perform their obligations under this Agreement" with "a Credit Party
to perform its obligations under the Loan Documents to which it is party", and
by replacing "the Agreement or the Notes" with "the Loan Documents".
SECTION 11. Further Amendments of Article 4 of the Agreement. Article 4
of the Agreement is further amended by adding the following sections at the end
thereof:
SECTION 4.06. Taxes. Each of the Company and its Consolidated
Subsidiaries has timely filed or caused to be filed all tax returns and
reports required to have been filed by it and has paid or caused to be
paid all taxes required to have been paid by it, except (a) any taxes
that are being contested in good faith by appropriate proceedings and
for which the relevant obligor has set aside on its books adequate
reserves or (b) to the extent that failures to do so, in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.07. Solvency. (a) As of the Amendment No. 2
Effective Date, but only with respect to the Borrower, and as of the
first day of each Collateral Period, with respect to each party named
below, (i) the fair value of the assets of each Credit Party organized
under the laws of a jurisdiction within the United States (a "U.S.
CREDIT PARTY"), at a fair valuation viewing such Person as a going
concern, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the
property of each U.S. Credit Party will exceed the amount that will be
required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each U.S. Credit
Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute
and matured; and (iv) no U.S. Credit Party will have unreasonably small
capital with which to conduct the business in which it is engaged as
such business is now conducted and proposed to be conducted after each
date this representation is made.
(b) As of the Amendment No. 2 Effective Date, but only with
respect to the Company, and the first day of each Collateral Period,
with respect to any Credit Party that is subject to the insolvency laws
of Canada, (i) the aggregate property of such Person at fair valuation,
or if disposed of at a fairly conducted sale under legal process, is
sufficient to enable payment of all its obligations, due and accruing
due; (ii) the property of such Person is, at a fair valuation, greater
than the total amount of liabilities, including contingent liabilities,
of such Person; (iii) such
17
Person has not ceased paying its current obligations in the ordinary
course of business as they generally become due; and (iv) such Person
is not for any reason unable to meet its obligations as they generally
become due.
SECTION 4.08. ERISA; Canadian Plans. (a) No ERISA Event has
occurred or is reasonably expected to occur that, when taken together
with all other ERISA Events for which, at the time such representation
is made, liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. Based on the
assumptions used for purposes of Statement of Financial Accounting
Standards No. 87, with respect to each Plan, the present value of the
accumulated benefit obligations thereunder did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by
more than $10,000,000 the fair market value of the assets thereof.
(b) The Canadian Pension Plans are duly registered under all
applicable laws which require registration and no event has occurred
which is reasonably likely to cause the loss of such registered status.
All material obligations of each Credit Party (including fiduciary,
funding, investment and administration obligations) required to be
performed in connection with the Canadian Pension Plans and the funding
agreements therefor have been performed in a timely fashion. There have
been no improper withdrawals or applications of the assets of the
Canadian Pension Plans or the Canadian Benefit Plans. There are no
outstanding disputes concerning the assets of the Canadian Pension
Plans or the Canadian Benefit Plans which could reasonably be expected
to have a Material Adverse Effect. As of the date of the valuations
last filed with the applicable governmental authorities, which are
consistent with generally accepted actuarial principles, each of the
Canadian Pension Plans is fully funded on a solvency basis.
SECTION 12. Amendment of Section 5.01 of the Agreement. Section 5.01(c)
of the Agreement is amended by adding "(i)" before "stating" and by adding
before the semi-colon at the end thereof "and (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 5.16 and 5.17".
SECTION 13. Further Amendments of Article 5 of the Agreement. The
remainder of Article 5 of the Agreement is amended to read in its entirety as
follows:
SECTION 5.02. Notice of Material Events. As soon as
practicable, and in any event within the earlier of five Domestic
Business Days and seven days, after an Executive Officer acquires
knowledge thereof, the Company will furnish to the Agent and each Bank
prompt written notice of the following:
18
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or governmental authority
against or affecting the Company or any Subsidiary that has a
reasonable possibility of being adversely determined and, if adversely
determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) any change in any Debt Rating with negative implications;
(d) the occurrence of any ERISA Event or any failure to fund
fully in accordance with applicable law any Canadian Pension Plan or
Canadian Benefit Plan (such failure, a "Funding Failure") that, alone
or together with any other ERISA Events or Funding Failures that have
occurred and are continuing at such time, could reasonably be expected
to result in liabilities of the Company and its Subsidiaries in an
aggregate amount exceeding $100,000,000; and
(e) the occurrence of a Material Adverse Effect.
Each notice delivered under this Section (other than clause (c) above)
shall be accompanied by a statement of an Executive Officer setting
forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) During a
Collateral Period and any other period when the Debt Rating is not BBB
(stable outlook) or higher by S&P and Baa2 (stable outlook) or higher
by Xxxxx'x (a "Low Investment Grade Period"), the Company will furnish
to the Collateral Agent prompt written notice of any change in (i) any
Credit Party's corporate name or any trade name used to identify it in
the conduct of its business or any Credit Party's chief executive
office, its principal place of business, or any office or facility at
which Collateral owned by it is located (including the establishment of
any such new office or facility), (ii) any Credit Party's identity or
corporate structure (including, without limitation, its jurisdiction of
organization) or (iii) any Credit Party's Federal Taxpayer
Identification Number.
(b) Each year during a Collateral Period or a Low Investment
Grade Period, at the time annual financial statements with respect to
the preceding fiscal year are delivered pursuant to Section 5.01(a),
the Company will deliver to the Agent and the Collateral Agent a
certificate of an Executive Officer setting forth the information
required pursuant to Section A of the Perfection Certificate or
confirming that there has been no change in such information since the
date of the Perfection Certificate
19
delivered on the Amendment No. 2 Effective Date or the date of the most
recent certificate delivered pursuant to this subsection.
SECTION 5.04. Existence; Conduct of Business. Each of the
Company and its Material Subsidiaries will preserve, renew and keep in
full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and
trade names necessary or desirable to the normal conduct of the
business of the Company and its Subsidiaries, taken as a whole;
provided that the foregoing shall not prohibit any amalgamation,
merger, consolidation, liquidation or dissolution permitted under
Section 5.11 or, in the case of Subsidiaries, undertaken in connection
with Investments permitted under Section 5.12 structured as
amalgamations, mergers or consolidations or to facilitate intercompany
reorganizations that do not materially adversely affect the ability of
the Company and the Borrower, taken together, to perform their
obligations under this Agreement.
SECTION 5.05. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes. None of such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of buying
or carrying any "margin stock" within the meaning of Regulation U.
SECTION 5.06. Maintenance of Properties; Payment of
Obligations. Each of the Company and its Material Subsidiaries will
maintain all property material to the conduct of the business of the
Company and its Subsidiaries, taken as a whole, in good working order
and condition, ordinary wear and tear excepted. Each of the Company and
the Borrower will, and will cause each of its Subsidiaries to, pay its
obligations, including tax obligations, that, if not paid, could result
in a Material Adverse Effect, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Company,
the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, and (c) the
failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.07. Insurance. (a) Each of the Company and the
Borrower will, and will cause each of its Material Subsidiaries to,
maintain, with reputable insurance carriers, insurance in such amounts
and against such risks as are customarily maintained by companies
engaged in the same or similar business, owning similar properties, and
located in the same general areas in which the Company, the Borrower or
such Material
20
Subsidiary, as the case may be, operates, provided that insurance
coverage against terrorist acts shall be required only so long as such
coverage is available on commercially reasonable terms. It is
understood that the insurance policies maintained by the Company, the
Borrower and their Material Subsidiaries on the date hereof shall be
deemed adequate for purposes of this subsection.
(b) In addition, during the Collateral Period, any casualty
insurance covering the Collateral shall (w) provide that no
cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after
receipt by the Collateral Agent of written notice thereof, (x) name the
Collateral Agent as insured party or loss payee with respect to its
interest, as applicable (provided that so long as no Event of Default
has occurred and is continuing the Collateral Agent shall make such
proceeds available to the Company for the repair, reconstruction or
replacement of the damaged property), (y) if reasonably requested by
the Collateral Agent, include a breach of warranty clause and (z) be
reasonably satisfactory in all other respects to the Collateral Agent.
SECTION 5.08. Proper Records; Rights to Inspect. Each of the
Company and the Borrower will record, summarize and report all
financial information in accordance with GAAP, which information will
include information on such Person's Subsidiaries prepared on a
consolidated basis. Each Credit Party will permit any representatives
designated by the Agent or any Bank, upon reasonable prior notice, to
visit and inspect its properties (including, without limitation, the
Collateral during a Collateral Period), to examine and make extracts
from its books and records, and to discuss its affairs, finances and
condition and the Collateral with any officers designated for such
purpose by an Executive Officer and (after reasonable prior notice to
the Company and subject to the right of such designated officers to be
present during such discussions) independent accountants, all at such
reasonable times during normal business hours and as often as
reasonably requested; provided that unless an Event of Default has
occurred and is continuing, each of the Agent and the Banks may take
such actions only once during each fiscal quarter of the Company.
SECTION 5.09. Debt. Neither the Company nor any Material
Subsidiary will create, incur, assume or permit to exist any Debt,
except:
(i) Debt created under the Loan Documents;
(ii) Debt existing or committed on the date hereof and listed
in Schedule 5.09 hereto or specifically identified as relating to
Schedule 5.09 hereto in the Disclosure Materials and extensions,
renewals, replacements
21
and refinancings of any such Debt that do not increase the outstanding
principal or committed amount thereof;
(iii) Debt of the Company to any Subsidiary and Debt of any
Material Subsidiary to the Company or any other Subsidiary;
(iv) Debt of the Company or any Subsidiary to NNC or any
Subsidiary of NNC (other than the Company and its Subsidiaries),
provided that such Debt is not secured by any assets of the Company or
any of its Subsidiaries and is subordinate in right of payment to the
Notes on terms and conditions no less favorable to the Banks than those
set forth in Exhibit H hereto;
(v) Guarantees by the Company of Debt of any Material
Subsidiary or of NNC or any Subsidiary of NNC (other than the Company
and its Subsidiaries) and Guarantees by any Material Subsidiary of Debt
of the Company or any other Material Subsidiary; provided that
Guarantees by the Company of Debt of NNC or any Subsidiary of NNC
(other than the Company and its Subsidiaries) shall be subject to
Section 5.12(j);
(vi) Debt of the Company or any Material Subsidiary as an
account party in respect of trade or performance letters of credit
issued to support obligations entered into in the ordinary course of
business;
(vii) Debt of the Company or any Material Subsidiary secured
by accounts receivable, or rights in respect thereof or incurred
pursuant to any receivables securitization (including, if applicable,
any net investment amounts); provided that the aggregate principal
amount thereof outstanding, together with the aggregate amount of
outstanding accounts receivable or rights in respect thereof that have
been transferred, sold or disposed of, shall not at any time exceed
$750,000,000;
(viii) Guarantees in respect of vendor financings and related
securitizations entered into in the ordinary course of business;
(ix) obligations under "take-or-pay" or minimum purchase
contracts existing on the Amendment No. 2 Effective Date and disclosed
in the Disclosure Materials, to the extent constituting Guarantees of
Debt of the other parties;
(x) other unsecured Debt of the Company and the Borrower in an
aggregate principal amount not exceeding $1,000,000,000, less the
amount of Guarantees permitted pursuant to clause (viii) above, at any
time outstanding;
22
(xi) other secured Debt of the Company and the Borrower and
Debt of any other Material Subsidiary in an aggregate principal amount
which, when added to the aggregate market value of collateral securing
obligations under Hedging Agreements pursuant to Section 5.10(vi), does
not exceed $500,000,000; provided that the aggregate outstanding
principal amount of Debt of Material Subsidiaries permitted by this
clause shall not exceed $217,000,000 at any time; and
(xii) Debt not otherwise permitted hereunder, the issuance of
which constitutes a Capital Markets Event.
SECTION 5.10. Liens. Neither the Company nor any Material
Subsidiary will create or permit to exist any Lien on any property now
owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any
thereof, except:
(i) Transaction Liens;
(ii) Permitted Liens;
(iii) any Lien on any property of the Company or any
Subsidiary existing on the date hereof, including, without limitation,
those Liens listed in Schedule 5.10 hereto; provided that (A) such Lien
shall not apply to any other property of the Company or any Subsidiary
and (B) such Lien shall secure only those obligations which it secures
on the date hereof and extensions, renewals, replacements and
refinancings thereof that do not increase the outstanding principal
amount thereof;
(iv) Liens incurred pursuant to sale and leaseback
transactions permitted by Section 5.14;
(v) Liens on accounts receivable, and rights in respect
thereof, securing Debt permitted by clause (vii) of Section 5.09, and
transfers, assignments and dispositions of accounts receivable and
rights in respect thereof; provided that the aggregate principal amount
of any Debt outstanding secured by such Liens, together with the
aggregate amount of outstanding accounts receivable or rights in
respect thereof that have been transferred, sold or disposed of
pursuant to this clause, shall not at any time exceed $750,000,000.
(vi) Liens on cash, cash equivalents and Permitted Investments
securing obligations under Hedging Agreements; provided that the sum of
the aggregate market value of cash, cash equivalents and Permitted
Investments securing such Hedging Agreement obligations and Debt
23
outstanding pursuant to Section 5.09(xi) shall not at any time exceed
$500,000,000;
(vii) Liens securing secured Debt permitted pursuant to
Section 5.09(xi) or (xii); and
(viii) Liens securing obligations not constituting Debt in an
aggregate amount which shall not at any time exceed $10,000,000.
SECTION 5.11. Fundamental Changes. (a) Neither the Company nor
any Material Subsidiary will amalgamate, merge or consolidate with or
into any other Person, or liquidate or dissolve, or permit any other
Person to amalgamate, merge or consolidate with or into it, provided
that, if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing, (i) any
Subsidiary may amalgamate, merge or consolidate with or into the
Company in a transaction in which the Company (which shall include the
successor of any amalgamation of the Company and any Subsidiary) is the
surviving or resulting corporation, (ii) the Company may amalgamate
with NNC, (iii) any Subsidiary may amalgamate, merge or consolidate
with or into any Subsidiary in a transaction in which the surviving or
resulting entity is a Subsidiary and (if any party to such transaction
is a Subsidiary Guarantor or a Lien Grantor) is a Subsidiary Guarantor
or Lien Grantor, as the case may be, and (iv) any Subsidiary (except
the Borrower) may liquidate or dissolve if the Company determines in
good faith that such liquidation or dissolution is in the best
interests of the Company and would not materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement; provided that, if any such transaction involves a Person
that is not a wholly owned Subsidiary immediately before such
transaction, such transaction shall not be permitted unless also
permitted by Section 5.12. It is understood that an asset sale
permitted by Section 5.13 which is effected through an amalgamation,
merger or consolidation shall not contravene this Section 5.11.
(b) Neither the Company nor any Material Subsidiary will
engage to any material extent in any business except businesses of the
types conducted by the Company and its Subsidiaries on the date of this
Agreement and businesses reasonably related thereto.
SECTION 5.12. Investments, Loans, Advances, Guarantees and
Acquisitions. Neither the Company nor any Material Subsidiary will
purchase, hold or acquire (including pursuant to any merger with any
Person that was not a wholly owned Subsidiary before such merger) any
24
Equity Interest in or evidence of indebtedness or other security
(including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loan or advance to,
Guarantee any obligation of, or make or permit to exist any investment
or other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit (all of the foregoing
collectively referred to as "Investments"), except:
(a) Permitted Investments;
(b) Investments existing on the date hereof or under
consideration on the Closing Date or the Amendment No. 2 Effective Date
and the possibility of which was disclosed in the Disclosure Materials;
(c) intercompany Investments made in the ordinary course of
business or to facilitate intercompany reorganizations of businesses or
properties by the Company in any Subsidiary or by any Material
Subsidiary in the Company or any other Material Subsidiary;
(d) loans from the Company or any Subsidiary to NNC or a
Subsidiary of NNC (other than the Company or any of its Subsidiaries)
in an amount not exceeding, and for the purpose of funding, the payment
of interest on the NNC 4.25% Convertible Senior Notes Due 2008;
(e) Guarantees constituting Debt permitted by Section 5.09;
(f) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) Investments constituting vendor financings and related
securitizations in respect thereof entered into in the ordinary course
of business;
(h) warrants received from, and minority equity Investments
in, customers of and vendors to the Company and its Subsidiaries so
long as no cash is expended by the Company or any of its Subsidiaries
to purchase any of the foregoing;
(i) loans and advances to officers and employees of the
Company and its Subsidiaries in the ordinary course of business;
(j) loans or advances made by the Company or any Subsidiary
to, or Guarantees by the Company or any Subsidiary of Debt of, NNC or
any Subsidiary of NNC (other than the Company and its Subsidiaries);
25
provided that the aggregate principal amount of such loans, advances
and Guarantees outstanding at any time shall not exceed the aggregate
principal amount of Debt permitted pursuant to Section 5.09(iv) by more
than $250,000,000, and shall not in any event exceed $750,000,000;
(k) Investments in new Subsidiaries to facilitate the
Company's operations or intercompany reorganization;
(l) Guarantees not constituting Debt made in the ordinary
course of business or pursuant to performance guarantees or similar
instruments;
(m) Investments funded through the issuance of Equity
Interests in the Company, if it has amalgamated with NNC; and
(n) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Company or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $400,000,000;
provided that for the purpose of determining at any time the
utilization of such amount by Investments constituting Guarantees, the
amount of utilization shall equal the sum of the amount (determined in
accordance with the definition of "Guarantee") of then outstanding
Guarantees plus the amount actually funded after the date hereof in
connection with Guarantees made pursuant to this clause (n).
SECTION 5.13. Asset Sales. Neither the Company nor any
Material Subsidiary will sell, transfer, lease or otherwise dispose of
any property, including any Equity Interest owned by it, nor will any
Material Subsidiary issue any additional Equity Interest in such
Material Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments and sales, assignments or licenses (or
abandonments) of intellectual property or technology, all in the
ordinary course of business;
(b) sales, transfers and other dispositions to the Company or
a Subsidiary; provided that any such sales, transfers or dispositions
to a Subsidiary that is not a Material Subsidiary shall be at prices
not less favorable than could be obtained on an arm's-length basis from
unrelated third parties, it being understood that prices determined in
accordance with the Company's policies and relevant tax or regulatory
requirements as customarily applied by the Company will be deemed to be
on arms' length basis;
26
(c) sales, transfers and other dispositions under
consideration on the Closing Date or on the Amendment No. 2 Effective
Date and the possibility of which was disclosed in the Disclosure
Materials;
(d) sale and leaseback transactions permitted by Section 5.14
and sales of accounts receivable or rights in respect thereof permitted
by Section 5.10;
(e) (i) easements or other similar covenant agreements that
relate to and/or benefit the operation of the property of the Company
or any Subsidiary, do not materially or adversely affect the use and
operation of the same and are granted in the ordinary course of
business within reasonable commercial standards and (ii) leases or
subleases pursuant to arm's-length transactions;
(f) sales, transfers or other dispositions of assets or
property (including Debt, Equity Interests or rights thereto) acquired
or made pursuant to vendor financings permitted under Section 5.12; and
(g) sales, transfers and other dispositions of assets that are
not permitted by any other clause of this Section, the proceeds of
which give rise to a reduction pursuant to Section 2.09(b) or a
prepayment pursuant to Section 2.11(b) or (c);
provided that all sales, transfers, leases and other dispositions
permitted by this Section (except those permitted by clause (b) above)
shall be made for fair value as determined by the Company or as
necessary to comply with relevant tax or regulatory requirements as
customarily applied by the Company. In applying the provisions of this
Section 5.13 and Sections 5.12 and 5.15 to any reorganization of any
existing Investment of the Company or any Subsidiary, only the net
effect of such reorganization, after all intermediate steps have been
completed, shall be considered.
SECTION 5.14. Sale and Leaseback Transactions. Neither the
Company nor any Material Subsidiary will enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred, except for (i) any such
arrangement specified in the Disclosure Materials as relating to this
Section and (ii) other sales of fixed or capital assets made for
consideration (x) in an aggregate amount not to exceed $400,000,000 and
(y) not less than the fair value of such fixed or capital assets.
27
SECTION 5.15. Restricted Payments; Certain Other Payments. (a)
Neither the Company nor any Material Subsidiary will declare or make,
or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as (x) no Event of Default under Section 6.01(a)
shall have occurred and be continuing at such time (either before or
after giving effect thereto) and (y) solely if at such time any Loans
are outstanding, after giving effect thereto the Company shall be in
compliance with the provisions of Section 5.16, (i) the Company may
declare and pay dividends with respect to its capital stock payable
solely in additional shares of its common stock, (ii) the Company may
make Restricted Payments to any Material Subsidiary and any Material
Subsidiary may make Restricted Payments to the Company or any other
Material Subsidiary, (iii) the Company may make Restricted Payments
pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Company and its Subsidiaries,
(iv) the Company may declare and pay dividends with respect to any
series of its preferred shares, (v) the Company may declare and pay
cash dividends in an amount not exceeding, and for the purpose of
funding, dividends payable with respect to preferred stock or other
preferred Equity Interests properly classified as equity under GAAP
issued by NNC, 90% of the cumulative net proceeds of which have been
contributed as equity to the Company, (vi) the Company may declare and
pay cash dividends in an amount not exceeding, and for the purpose of
funding, the interest payable with respect to the NNC 4.25% Convertible
Senior Notes Due 2008, (vii) the Company or a Material Subsidiary may
make Restricted Payments under consideration on the Closing Date or the
Amendment No. 2 Effective Date and the possibility of which was
disclosed in the Disclosure Materials, and (viii) the Company and any
Material Subsidiary may make payments to NNC pursuant to arrangements
directly or indirectly to compensate employees of the Company or any
Material Subsidiary, provided that such payments to NNC are immediately
invested in the Company or a Material Subsidiary.
(b) The Company will not enter into or be party to, or make
any payment under, any Synthetic Purchase Agreement.
SECTION 5.16. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than
$1,880,000,000.
SECTION 5.17. Minimum Consolidated EBITDA. Consolidated EBITDA
for any period set forth below shall not be less than the amount set
forth below opposite such period:
28
Minimum
-------------
Consolidated
-------------
Period EBITDA
------ -------------
January 1, 2002 - March 31, 2002 ($500,000,000)
January 1, 2002-June 30, 2002 ($650,000,000)
January 1, 2002-September 30, 2002 ($700,000,000)
January 1, 2002-December 31, 2002 ($350,000,000)
April 1, 2002-March 31, 2003 $ 50,000,000
July 1, 2002-June 30, 2003 $ 300,000,000
October 1, 2002-September 30, 2003 $ 350,000,000
SECTION 5.18. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Amendment No. 2 Effective Date, the Company will,
within three Domestic Business Days after such Subsidiary is formed or acquired,
notify the Agent and the Banks thereof. If such additional Subsidiary is formed
or acquired after the date of delivery of the relevant Security Document
pursuant to Section 5.19 and is a Material Subsidiary, or if any Subsidiary
becomes a Material Subsidiary as a result of a modification to Annex B, then (i)
if such Subsidiary is (1) a Subsidiary of the Borrower, and (2) not a U.S.
Subsidiary, the Borrower will cause any Equity Interest in such Material
Subsidiary owned by the Borrower or any Subsidiary of the Borrower that is a
U.S. Subsidiary to be added to the Collateral subject to the NNI Foreign Pledge
Agreement, subject to the limitations set forth therein (or, at the option of
the Company, deliver a Foreign Subsidiary Guarantee, whereupon such Material
Subsidiary will become a "Subsidiary Guarantor" for purposes of the Loan
Documents), (ii) if such Subsidiary is (1) a Subsidiary of the Company, (2) not
a Subsidiary Borrower and (3) not a U.S. Subsidiary, the Company will cause any
Equity Interest in such Material Subsidiary owned by the Company or any
Subsidiary (other than the Borrower or any of its Subsidiaries) to be added to
the Collateral subject to the NNL Foreign Pledge Agreement, subject to the
limitations set forth therein (or, at the option of the Company, deliver a
Foreign Subsidiary Guarantee, whereupon such Material Subsidiary will become a
"Subsidiary Guarantor" for purposes of the Loan Documents), (iii) if such
Subsidiary is (1) a Subsidiary of the Borrower, and (2) a U.S. Subsidiary, the
Borrower will cause any Equity Interest in such Material Subsidiary owned by the
Borrower or any Subsidiary of the Borrower to be added to the Collateral subject
to the U.S. Security Agreement, subject to the limitations set forth therein,
and (iv) if such Material Subsidiary is organized under the laws of a
jurisdiction in the United States or Canada and is not prohibited by applicable
law or regulation from securing the Company's obligations hereunder, the
29
Company shall promptly cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Material Subsidiary (including by causing such
Material Subsidiary to become a party to the Security Agreement), whereupon such
Material Subsidiary will become a "Lien Grantor" for purposes of the Loan
Documents; provided that the Collateral and Guarantee Requirement as the same
relates to such Lien Grantor's Mortgaged Property or Leasehold Mortgaged
Property shall be deemed satisfied if such Lien Grantor complies with the
requirements of Section 5.19(h).
SECTION 5.19. Escrowed Security Documents; Further Assurances. (a) The
parties hereto acknowledge and agree (and the Company represents and warrants)
that on or prior to the Amendment No. 2 Effective Date the Company has delivered
to the Collateral Agent a form of U.S. Security Agreement and a form of Mortgage
to be used with respect to Real Property located in the United States.
(b) The parties hereto acknowledge and agree that (i) each of the
Company and the Borrower will use diligent efforts to deliver to the Collateral
Agent, within twenty (20) days of the Amendment No. 2 Effective Date, copies of
the Leases and all amendments thereto for the properties identified as Leased
Properties on Annex C (Part II) hereto for review, following which the
Collateral Agent or its counsel will promptly designate those properties with
respect to which Leasehold Mortgages are required to be delivered (subject to
landlord consent, if necessary), (ii) within sixty (60) days of the Amendment
No. 2 Effective Date, the Company or the Borrower shall deliver to the
Collateral Agent the Mortgages, each substantially in the form attached to the
Security Agreement, with such changes that are necessary or appropriate to
comply with local laws or conventions and (iii) the Company and the Borrower
shall use commercially reasonable efforts during such 60-day period (not to
include the payment of a material sum of money, incurrence of any additional
material obligations, or surrender, waiver or forfeiture of any material rights)
to obtain the consent of any necessary party, including landlords, to the
execution and delivery of the Mortgages. If the consent of a landlord is
required and such landlord does not grant the Company's or the Borrower's
request for consent (and evidence of such request and failure to grant is
delivered to the Collateral Agent), no Mortgage of such leasehold interest shall
be required. All of the Mortgages delivered pursuant to this subsection (b)
shall be delivered in escrow until the first day of a Collateral Period.
(c) The parties hereto acknowledge and agree that no later than January
15, 2002 the Borrower will, and the Company will cause each U.S. Subsidiary of
the Company (other than the Borrower) or the Borrower to, and the Company will
cause each U.S. Subsidiary of NNL (other than the Borrower and its Subsidiaries)
to deliver to the Collateral Agent (1) a duly executed U.S. Pledge and Security
Agreement substantially in the form of the draft dated the Amendment No. 2
30
Effective Date, with such changes thereto as the Collateral Agent shall have
approved in its discretion (the "U.S. SECURITY AGREEMENT"), (2) a duly completed
Perfection Certificate (as defined in the U.S. Security Agreement), (3) duly
executed Copyright Security Agreements, Patent Security Agreements, Trademark
Security Agreements and Issuer Control Agreements, each as defined in and to the
extent required by the U.S. Security Agreement, (4) certificates or other
instruments representing Equity Interests in any Material Subsidiary outstanding
as of such date, together with stock powers or other instruments of transfer
with respect thereto endorsed in blank, to the extent required by the U.S.
Security Agreement, and (5) duly executed UCC-1 financing statements, each in a
form necessary to be filed in the filing office indicated thereon. All of the
documents delivered pursuant to this subsection (c) shall be delivered in escrow
until the first day of a Collateral Period.
(d) The parties hereto acknowledge and agree that no later than
January 31, 2002 the Company will, and will cause each of its Canadian
Subsidiaries, to deliver to the Collateral Agent (1) a duly executed Canadian
Security Agreement in form and substance reasonably satisfactory to the
Collateral Agent (the "CANADIAN SECURITY AGREEMENT") pursuant to which the
Company and each Canadian Subsidiary will grant a security interest in
substantially all of their respective assets (other than Real Property and
Equity Interests in Subsidiaries) located in Canada (subject to such exceptions
as shall be consistent with the exceptions set forth in the U.S. Security
Agreement with respect to the Collateral covered thereby), other than in Quebec,
(2) with respect to all personal property located in Quebec, a duly executed
hypothec substantially in the form contemplated by the Canadian Security
Agreement, and (3) duly executed financing statements each in a form necessary
to be filed in the filing office indicated thereon. All of the documents
delivered pursuant to this subsection (d) shall be delivered in escrow until the
first day of a Collateral Period.
(e) The parties hereto acknowledge and agree that no later than
February 28, 2002:
(i) the Borrower will (1) deliver to the Collateral Agent a
duly executed NNI Foreign Pledge Agreement, in form and substance
reasonably satisfactory to the Collateral Agent (the "NNI FOREIGN
PLEDGE AGREEMENT"), pursuant to which the Borrower will pledge all
Equity Interests of any Subsidiary of the Borrower that is a Material
Subsidiary and is not a U.S. Subsidiary and which Equity Interests are
held directly by the Borrower; provided that the Borrower will not be
required to pledge the Equity Interests of any such Subsidiary to the
extent Equity Interests of any such Subsidiary representing more than
66% of all voting power of all Equity Interests in such Subsidiary
would be subject to such pledge (and it being understood that no
Subsidiary of the Borrower that is not a U.S. Subsidiary will be
required to pledge any of its assets, including without
31
limitation any Equity Interests held by such Subsidiary) and provided
further that, at the option of the Company, in lieu of pledging the
Equity Interests of any such Material Subsidiary, such Material
Subsidiary may enter into a Foreign Subsidiary Guarantee, (2) deliver
to the Collateral Agent such certificates or other instruments
representing Equity Interests pledged pursuant to the NNI Foreign
Pledge Agreement, together with stock powers or other instruments of
transfer with respect thereto endorsed in blank, to the extent required
by the NNI Foreign Pledge Agreement and (3) take such other actions as
shall be necessary or advisable, or as the Collateral Agent shall
reasonably request, in order to perfect a security interest in any
Equity Interests pledged pursuant to the NNI Foreign Pledge Agreement
under the laws of the jurisdiction of incorporation of the issuer
thereof (including without limitation executing and delivering pledge
agreements governed by, and containing such terms as are customary
under, such laws) or in order to ensure the validity and enforceability
of any Foreign Subsidiary Guarantee under the laws of the jurisdiction
of incorporation of the relevant guarantor;
(ii) the Company will, and will cause its Subsidiaries (other
than the Borrower or any of its Subsidiaries) to (1) deliver to the
Collateral Agent a duly executed NNL Foreign Pledge Agreement, in form
and substance reasonably satisfactory to the Collateral Agent (the "NNL
FOREIGN PLEDGE AGREEMENT") pursuant to which the Company and its
Subsidiaries (other than the Borrower or any of its Subsidiaries) shall
pledge all Equity Interests in any Material Subsidiary (other than any
Material Subsidiary that is a Subsidiary of the Borrower) held by each
of them; provided that, at the option of the Company, in lieu of
pledging the Equity Interests of any Material Subsidiary, such Material
Subsidiary may enter into a Foreign Subsidiary Guarantee, (2) deliver
to the Collateral Agent such certificates or other instruments
representing Equity Interests pledged pursuant to the NNL Foreign
Pledge Agreement, together with stock powers or other instruments of
transfer with respect thereto endorsed in blank, to the extent required
by the NNL Foreign Pledge Agreement and (3) take such other actions as
shall be necessary or advisable, or as the Collateral Agent shall
reasonably request, in order to perfect a security interest in any
Equity Interests pledged pursuant to the NNL Foreign Pledge Agreement
under the laws of the jurisdiction of incorporation of the issuer
thereof (including without limitation executing and delivering pledge
agreements governed by, and containing such terms as are customary
under, such laws) or in order to ensure the validity and enforceability
of any Foreign Subsidiary Guarantee under the laws of the jurisdiction
of incorporation of the relevant guarantor; and
(iii) the Company and the Borrower will, and will cause each
of their Subsidiaries that is a party to any Security Document to,
deliver to
32
the Collateral Agent such closing documents as are customarily
delivered in transactions of this type, including secretary's
certificates, certificates of good standing and opinions of counsel
with respect to perfection and attachment of security and insurance
certificates each in form and substance reasonably satisfactory to the
Collateral Agent.
All of the documents delivered pursuant to this subsection (e)
shall be delivered in escrow until the first day of a Collateral Period.
(f) The parties hereto acknowledge and agree that no later than March
31, 2002, the Company will cause the Borrower and each U.S. Subsidiary of the
Borrower to deliver to the Collateral Agent duly executed Deposit Control
Agreements, Issuer Control Agreements and Securities Account Control Agreements,
each as defined in the U.S. Security Agreement, with respect to the account or
accounts agreed upon between the Company and the Collateral Agent on or prior to
such date. All of the documents delivered pursuant to this subsection (f) shall
be delivered in escrow until the first day of a Collateral Period.
(g) Each of the Company and the Borrower agrees that on the first day
of a Collateral Period the Collateral Agent, without further action on the part
of the Company, the Borrower or any other Credit Party or any other Person,
shall be authorized to (and the Collateral Agent agrees that on such day it
shall), (i) release all Escrowed Security Documents and (ii) file, register or
record any Escrowed Security Documents in order to effect the execution and
delivery thereof or the perfection, registration or recordation of any Liens
created under any Security Document.
(h) During the Collateral Period, each Lien Grantor will execute and
deliver any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings mortgages, deeds of trust and
other documents), that may be required under any applicable law, or that the
Collateral Agent or the Required Banks may reasonably request, to cause the
Collateral and Guarantee Requirement to be and remain satisfied, all at the
Company's expense. The Company will provide to the Agent and the Collateral
Agent, from time to time upon request, evidence reasonably satisfactory to the
Agent and the Collateral Agent as to the perfection and priority of the
Transaction Liens created or intended to be created by the Security Documents.
(i) If any assets (including any real property or improvements thereto
or any interest therein) with a value of at least $5,000,000 (as reasonably
determined by the Company) are acquired by any Lien Grantor after the Amendment
No. 2 Effective Date (other than assets constituting Collateral that become
subject to Transaction Liens upon acquisition thereof), the Company will notify
the Agent,
33
the Collateral Agent and the Banks thereof, and, if requested by the Agent or
the Required Banks during a Collateral Period, the Company and the Borrower will
cause such assets to be subjected to a Transaction Lien securing the Secured
Obligations (reasonably structured for any jurisdiction imposing mortgage
recording or similar taxes) and will take, or cause the relevant Lien Grantor to
take, such actions as shall be necessary or reasonably requested by the
Collateral Agent to grant and perfect or record such Transaction Lien, including
actions described in Section 5.08(a), all at the Company's expense. For the
purpose of this Section 5.19(e), each of the Company and the Borrower will cause
to be delivered to the Collateral Agent Mortgages on real property acquired by
it or any Material Subsidiary to the extent such owned real property has a fair
market value of $5,000,000 or more and real property leased by it or any
Material Subsidiary pursuant to a new lease for manufacturing, distribution or
research and development space or office space (excluding, however, any lease of
property sold by a Material Subsidiary and leased back by such Subsidiary which
is permitted pursuant to Section 5.14) to the extent the term of any such lease
is in excess of five years and the annual base rental exceeds $1,000,000 and is
otherwise reasonably requested by the Agent, provided that if the consent of a
landlord is required to be obtained in connection with any such leasehold
mortgage, each of the Company and the Borrower shall use commercially reasonable
efforts during the 60-day period commencing on the date of the Collateral
Agent's request therefor (such efforts not to include the payment of a material
sum of money, incurrence of any additional material obligations, or surrender,
waiver or forfeiture of any material rights) to obtain such consent. If the
consent of a landlord is required and such landlord does not grant the Company's
or the Borrower's request for consent (and evidence of such request and failure
to grant is delivered to the Collateral Agent), no Mortgage of such leasehold
interest shall be required.
(j) For purposes of this Section 5.19, the following terms have the
following meanings:
"CANADIAN SUBSIDIARY" means, with respect to any Person, any Subsidiary
(which may be a corporation, limited liability company, partnership or other
legal entity) organized under the laws of Canada or any province therein, or
conducting substantially all its operations in Canada or any province therein.
"ESCROWED SECURITY DOCUMENTS" means the U.S. Security Agreement, the
Canadian Security Agreement, the NNI Foreign Pledge Agreement, the NNL Foreign
Pledge Agreement, each Foreign Subsidiary Guarantee, each Mortgage and each
other document or instrument delivered pursuant to subsections (b), (c), (d) (e)
or (f) of this Section 5.19 (but only if delivered prior to the first day of a
Collateral Period).
34
"FOREIGN SUBSIDIARY GUARANTEE" means a guarantee in form and substance
reasonably satisfactory to the Collateral Agent pursuant to which a Material
Subsidiary shall have guaranteed the obligations of the Company under the Loan
Documents.
"U.S. SUBSIDIARY" means, with respect to any Person, any Subsidiary
(which may be a corporation, limited liability company, partnership or other
legal entity) organized under the laws of the United States or any state
therein.
SECTION 5.20. Most Favored Lender. Each of the Company and the Borrower
will not, and will not permit any Subsidiary to agree to any amendment, waiver,
consent, modification, refunding, refinancing or replacement of any Restricted
Agreement, with terms the effect of which is to (i) include a Covenant which
imposes a restriction, limitation or obligation in favor of another lender not
imposed in favor of the Banks by this Agreement, (ii) revise or alter any
Covenant contained therein the effect of which is to impose a restriction,
limitation or obligation in favor of another lender not imposed in favor of the
Banks by this Agreement, (iii) provide collateral, a guaranty or other credit
support to the lenders under such Restricted Agreement, or (iv) increase
interest rates or fees payable to all lenders under such Restricted Agreement to
levels which exceed those set forth in this Agreement, unless the Company, the
Borrower or such Subsidiary concurrently (x) notifies the Banks and the Agent
thereof and (y) incorporates herein such additional, altered or revised
Covenant, provides such collateral, guaranty or other credit support ratably to
the Banks, or increases interest rates or fees correspondingly under this
Agreement, as the case may be. If the Agent at the time so elects by notice to
the Borrower and the Banks, the incorporation of each such additional or revised
Covenant or, to the extent practicable, provision of such collateral, guaranty
or other credit support or pricing increase shall be deemed to occur
automatically without any further action or the execution of any additional
document by any of the parties to this Agreement. If the Agent does not elect to
effect such an automatic incorporation or provision of collateral, guaranty or
other credit support or pricing increase, the Agent shall promptly tender to the
Company and the Borrower for execution by them an amendment (executed by the
Agent) incorporating such additional or revised Covenant or provision of
collateral, guaranty or other credit support or pricing increase and shall
promptly deliver a copy of such amendment to the Banks. For purposes of this
Section 5.20, "COVENANT" means any covenant (whether expressed as a covenant,
event of default or other agreement) contained therein, and "RESTRICTED
AGREEMENT" means any of the Credit Agreements other than this Agreement.
SECTION 14. Amendment of Section 6.01(b) of the Agreement. Section
6.01(b) of the Agreement is amended to read in its entirety as follows:
35
(b) the Company or the Borrower shall fail to observe or perform any
covenant contained in Sections 5.02, 5.04 (with respect to the existence of the
Company or the Borrower), or 5.09 through 5.17, or the Borrower shall fail to
observe or perform any covenant contained in Section 5.05.
SECTION 15. Amendment of Section 6.01(e) of the Agreement. Section
6.01(e) of the Agreement is amended to read in its entirety as follows:
(e) (i) the Company or any Subsidiary shall fail to make a payment or
payments (whether of principal or interest and regardless of amount) in respect
of Material Debt when the same shall become due, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise and such failure shall
continue beyond any applicable grace period; or (ii) any event or condition
occurs that results in Material Debt becoming due before its scheduled maturity
or that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of Material Debt or any trustee or agent on
its or their behalf to cause Material Debt to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, before its scheduled
maturity; provided that this clause (ii) shall not apply to secured Debt that
becomes due as a result of a voluntary sale or transfer of the property securing
such Debt;
SECTION 16. Amendment of Section 6.01(h) of the Agreement. Section
6.01(h) of the Agreement is amended to read in its entirety as follows:
(h) judgments or orders for the payment of money in excess of
$100,000,000 shall be rendered against the Company or any Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed for a period of 30
days, or a judgment creditor shall attach or levy upon any assets of the Company
or any Subsidiary to enforce any such judgment;
SECTION 17. Further Amendments of Section 6.01 of the Agreement.
Section 6.01 is further amended by replacing "hereunder" in clause (a) with
"under the Loan Documents", by replacing "this Agreement" each place it appears
with "the Loan Documents", and by adding the following clauses (j), (k) and (l)
immediately following clause (i):
(j) any Lien purported to be created under any Security Document
relating to one or more items of Collateral with an aggregate value determined
by the Collateral Agent in its sole discretion (which determination may be based
solely upon information furnished by the Company or the Collateral Agent) to
exceed $5,000,000 shall cease to be, or shall be asserted by any Credit Party
not to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (i) as a result of a sale
or other disposition of the applicable Collateral in a transaction permitted
under the Loan Documents or (ii) as a result of the Collateral Agent's failure
to maintain possession of any
36
stock certificates, promissory notes or other documents delivered to it under
the Security Agreement;
(k) (i) any Subsidiary Guarantor's Guarantee under its Foreign
Subsidiary Guarantee shall at any time fail to constitute a valid and binding
agreement of such Subsidiary Guarantor or any party shall so assert in writing
or (ii) the Guarantee by the Borrower under the U.S. Security Agreement shall at
any time fail to constitute a valid and binding agreement of the Borrower or any
party shall so assert in writing;
(l) an ERISA Event or a Funding Failure shall have occurred that, in
the opinion of the Required Banks, when taken together with all other ERISA
Events and Funding Failures that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
SECTION 18. Amendment of Section 10.05 of the Agreement. Section 10.05
of the Agreement is amended to change "(v)" to "(vi)", and to add the following
clause (v) before "or" at the end of clause (iv) thereof:
, (iv) change the ratings set forth in the definition of "Collateral
Period" or release all or any substantial part of the Collateral from the
Transaction Liens
SECTION 19. Amendment of Pricing Schedule. Annex A to the Agreement is
amended and restated to read as set forth in the attached Annex A.
SECTION 20. Governing Law. This Amended and Restated Credit Agreement
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 21. Counterparts; Effectiveness. This Amended and Restated
Credit Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Amended and Restated Credit Agreement
shall become effective as of the date hereof on the date when the Agent shall
have received (i) duly executed counterparts hereof signed by the Company and
the Banks (or, in the case of any party as to which an executed counterpart
shall not have been received, the Agent shall have received telegraphic, telex
or other written confirmation from such party of execution of a counterpart
hereof by such party), (ii) from the Company for the account of each Bank, an
amendment fee equal to 0.25% of such Bank's Commitment as in effect immediately
after giving effect to this Amended and Restated Credit Agreement, and (iii) one
or more opinions of counsel to the Company substantially to the effect set forth
in Exhibit E to the Agreement with respect to this Amended and Restated Credit
Agreement and the Agreement as amended hereby. The aggregate amount of the
Commitments under the Agreement as amended hereby is $915,000,000 and each
37
Bank's Commitment as amended hereby is the amount set forth opposite its name on
the signature pages hereto.
38
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed as of the date first above
written.
NORTEL NETWORKS LIMITED
as Guarantor
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
NORTEL NETWORKS INC.
as Borrower
By:
---------------------------------------
Name:
Title:
39
BANKS
COMMITMENT
$150,000,000 JPMORGAN CHASE BANK, formerly known
as THE CHASE MANHATTAN BANK
By:
---------------------------------------
Name:
Title:
$150,000,000 CREDIT SUISSE FIRST BOSTON
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
$150,000,000 CITIBANK, N.A.
By:
---------------------------------------
Name:
Title:
$150,000,000 HSBC BANK PLC
By:
---------------------------------------
Name:
Title:
40
$90,000,000 DEUTSCHE BANK AG,
NEW YORK
BRANCH AND/OR CAYMAN
ISLANDS BRANCH
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
$75,000,000 BNP PARIBAS
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
$75,000,000 ABN AMRO BANK N.V.
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
41
$75,000,000 BARCLAYS BANK PLC
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
42
ANNEX A - PRICING SCHEDULE
PRICING SCHEDULE
Each of "EURO-DOLLAR MARGIN" and "FACILITY FEE RATE" means, for any
date, the rate per annum set forth below in the row opposite such term and in
the column corresponding to the "PRICING LEVEL" that applies at such date:
Level I Level II Level III Level IV Level V Level VI
------- -------- --------- -------- ------- --------
Euro-Dollar
Margin:
Utilization < 33.3% 0.775% 1.00 1.20% 1.50% 1.625% 1.75%
-
Utilization > 33.3% but < 66.6% 0.90% 1.125% 1.325% 1.625% 1.75% 1.875%
-
Utilization > 66.66% 1.15% 1.375% 1.575% 1.875% 2.00% 2.125%
----- ----- ----- ----- ----- -----
Facility Fee Rate 0.10% 0.125% 0.175% 0.25% 0.375% 0.50%
----- ----- ----- ----- ----- -----
For purposes of this Schedule, the following terms have the following
meanings:
"LEVEL I PRICING" applies at any date if, at such date, the Company's
long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody's,
except as provided below under "Split Rating".
"LEVEL II PRICING" applies at any date if, at such date, (i) the
Company's long-term debt is rated BBB or higher by S&P or Baa2 or higher by
Moody's, and (ii) Level I Pricing does not apply, except as provided below under
"Split Rating".
"LEVEL III PRICING" applies at any date if, at such date, (i) the
Company's long-term debt is rated BBB- or higher by S&P or Baa3 or higher by
Moody's and (ii) neither Level I Pricing nor Level II Pricing applies, except as
provided below under "Split Rating".
"LEVEL IV PRICING" applies at any date if, at such date, (i) the
Company's long-term debt is rated BB+ or higher by S&P and Ba1 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing or Level III Pricing
applies, except as provided below under "Split Rating".
"LEVEL V PRICING" applies at any date if, at such date, (i) the
Company's long-term debt is rated BB or higher by S&P and Ba2 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing or
Level IV applies, except as provided below under "Split Rating".
"LEVEL VI PRICING" applies at any date if, at such date, none of Level
I Pricing, Level II Pricing, Level III Pricing, Level IV Pricing or Level V
Pricing applies.
A-1
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"PRICING LEVEL" refers to the determination of which of Level I, Level
II Level III, Level IV, Level V or Level VI applies at any date.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"UTILIZATION" means, on any day, the percentage equivalent of a
fraction, (i) the numerator of which is the aggregate outstanding principal
amount of the Loans on such day, after giving effect to any borrowing or payment
on such day, and (ii) the denominator of which is the aggregate amount of the
Commitments on such day, after giving effect to any reduction of the Commitments
on such day; provided that for any Euro-Dollar Loan included in a Borrowing made
pursuant to Section 2.01(b), Utilization will be deemed to exceed 66.6%.
"SPLIT RATING" applies if the Company has a split rating and the
ratings differential is two levels or more, in which case the ratings at
midpoint will apply. If there is no midpoint rating, the higher of the two
intermediate ratings will apply, except that if one rating is at Level III
Pricing and the other rating is at Level IV Pricing, Level IV Pricing shall
apply.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without third-party credit enhancement, and any rating assigned to any other
debt security of the Company shall be disregarded. The rating in effect at any
date is that in effect at the close of business on such date.
A-2
ANNEX B - SUBSIDIARIES NOT INCLUDED IN MATERIAL SUBSIDIARIES
COMPANY JURISDICTION RATIONALE % OF TOTAL REVENUE
------- ------------ --------- ------------------
Guangdong-Nortel
Telecommunications Equipment Co.
Ltd. Peoples Republic of China JV 4.76
Shenyang Nortel
Telecommunications Co., Ltd. Peoples Republic of China JV 0
Xxxx Xxxxx-Nortel Limited Liability
Company Peoples Republic of China JV 0
Nortel Networks Communications
Engineering Ltd. Peoples Republic of China JV 0
Matra Nortel Communications
S.A.S. France JV 2.78
NETAS - Northern Electric
Telekomunikasyon A.S. Turkey JV 0.63
ULTEL Turkey JV 0
VESNET Turkey JV 0
Nortel Networks Germany GmbH &
Co. KG Germany JV 3.68
Nortel Networks Germany
Verwaltungs-GmbH Germany JV 0
BROAD MEDIA S.A. Spain JV 0
Nortel Kapsch GmbH Germany JV 0
Nortel Networks Israel (Sales and
Marketing) Limited Israel JV 0.65
% OF TOTAL REVENUE
------------------
(Excluding JV's)
Nortel Networks (China) Limited Peoples Republic of China Regulatory 3.45
Periphonics Limited United Kingdom Regulatory 0.3
Nortel Comunicaciones de Tax
Colombia S.A. Colombia 0.00
Nortel Networks de Colombia S.A. Colombia Regulatory 0.08
Nortel Networks Optical
Components SAS France Regulatory 0.01
Nortel Networks (India) Private
Limited India Regulatory 0.01
Signiant Inc. Ontario Regulatory 0
Signiant Corporation Ontario Regulatory 0
Linedrive Communications Inc. Delaware Solvency 0
Northern Telecom France S.A. France Regulatory 0
Netgear, Inc. Delaware Regulatory 0
Nortel Taiwan Limited Peoples Republic of China Regulatory 0
Nortel Networks
Telecommunications Equipment
(Shanghai) Co. Ltd. Peoples Republic of China Regulatory 0
Nortel Networks Mauritius Ltd. Mauritius Regulatory 0
Nortel Networks India Technology Regulatory
Private Limited India 0
3052891 Nova Scotia Company Nova Scotia Regulatory 0
B-1
INACTIVE SUBSIDIARIES - LEGAL
Bay Networks Xxxxx xx Xxxxx xxxx
Xxxxxxxx Xxxxxxxxxxxx, XXX 0
BHG-teleCOM Telecommunication
Ltd. 0
BNR Europe Limited 0
Cambrian Systems Corporation 0
Clarify Asia Pacific Pty. Ltd 0
Clarify Australia Pty Ltd 0
Clarify Canada Inc. 0
Clarify K.K. 0
Clarify Singapore Pte Ltd 0
Cloud Investments Ltd/ 0
Communications Credit Corporation 0
Communications Funding Corporation 0
Comsys International Pty. Ltd. 0
Xxxx Electric Telecomunicacoes
Ltda. 0
Xxxx (Condensers) Limited 0
Xxxx Processes Limited 0
Data 100 Corporation 0
Data 100 Federal Systems, Inc. 0
Desc Ltd. 0
Xxxxxx Leasing Corporation 0
Hathaway Leasing Corporation 0
Illinois National Telecom, Inc. 0
Imagedisplay Ltd. 0
Integrated Networks Limited 0
IOMEC, Inc. 0
Jasmine Submarine
Telecommunications Company
Limited 0
JNIC Limited 0
LANcity Corporation 0
LSI Logic Limited 0
Matra Nortel Communications SCA 0
Matra Nortel Holding SCA 0
Matra Nortel Reseaux SCA 0
Micom Communications Corp.
(Europe) Limited 0
MICOM Communications Corp. do
Brasil Ltda. 0
Motorola Nortel Communicaciones,
S.A. de C.V. 0
Motorola Nortel Communications
Co. 0
Motorola NT Cellular Holding Inc. 0
National Telecom North, Inc. 0
National Telecom Service Corp. 0
National Telecom, Inc. 0
Nedco (1975) Ltd. 0
Nedco Ltd. 0
Need Electronics Limited 0
B-2
NetActive Inc. 0
Netwave Technologies Limited 0
Nor.Web DPL Limited 0
Nortel (Management) Limited 0
Nortel Europe S.A. 0
Nortel Limited 0
Nortel Networks (Northern Ireland) 0
Limited
Nortel Networks Canada Corporation 0
Nortel Networks Electronics Corporation 0
Nortel Networks London Limited 0
Nortel Networks Properties Limited 0
Nortel Networks Technology K.K. 0
Nortel Pacific Pty. Limited 0
Nortel Telecomunicacoes Industria E 0
Comercio Ltda.
Northern Teleco Elwro Sp.z.o.o 0
Northern Telecom (BAMS) Inc. 0
Northern Telecom (Europe) B.V 0
Northern Telecom (International) B.V 0
Northern Telecom (Kedah) Sdn. Bhd 0
Northern Telecom (Middle East) Limited 0
Northern Telecom (NEA) Limited 0
Northern Telecom (NMS) Inc. 0
Northern Telecom (Thailand) Limited 0
Northern Telecom (U.K.) Limited 0
Northern Telecom Acceptance Corporation 0
Northern Telecom Canada Limited 0
Northern Telecom Communications 0
Corporation
Northern Telecom Communications Service 0
Corporation
Northern Telecom Data Systems Limited 0
Northern Telecom Data Systems N.V. 0
Northern Telecom Data Systems S.P.A. 0
Northern Telecom Developpement S.A. 0
Northern Telecom Electronics Inc. 0
Northern Telecom Finance (Gibraltar) 0
Limited
Northern Telecom Finance Corporation 0
Northern Telecom International Sales 0
Corporation
B-3
Northern Telecom Maroc SA 0
Northern Telecom Pacific Limited 0
Northern Telecom Participations E.U.R.L. 0
Northern Telecom PCN Limited 0
Northern Telecom PLC 0
Northern Telecom PLC (1) 0
Northern Telecom S.P.A. 0
Northern Telecom Telecommunications 0
Limited
Northern Telecom UK Limited 0
Northern Telecom Venture Inc. 0
Northern Telecom World Trade Corporation 0
NT Components, Inc. 0
Nynex Meridian Systems 0
OY STC Electronic Services AB 0
Pacific Communications Associates, Inc. 0
Pactel Meridian Systems 0
Pactel Meridian Systems Inc. 0
Periphonics Asia Pacific Pty. Ltd. 0
Periphonics Malaysia Sdn Bhd 0
Phonepoint Ltd. 0
Prism Systems Inc. 0
Promatory Communications (UK) Limited 0
Promatory Communications Singapore Pte 0
Ltd.
Xxxxxx X.X. 0
Scorpion Logic Limited 0
Spectron International, Inc. 0
Standard Telephone Company Limited 0
Standard Telephones (Rentals) Limited 0
STC Communications and Information 0
Systems Limited
STC Components Inc. 0
STC Compower AS 0
STC Distributors Ltd. 0
STC Electronic Services AB 0
STC Government Systems Inc. 0
STC International Marine Limited 0
STC Limited 0
STC Marine Services (Benelux) Limited 0
STC Marine Services Ltd. 0
STC PLC 0
STC Submarine Systems Inc. 0
STC Submarine Systems Limited 0
STC Technology Limited 0
B-4
Sycor, Inc. 0
Systel Corporation 0
Taishing Electric (M) Sdn. Bdh. 0
Telephone Switching International 0
Limited
Telko S.A. 0
Unitel Distribution Limited 0
Zenith Electric Supply Limited 0
Zentronics Ltd. 0
INACTIVE OR MINIMAL ACTIVITY SUBSIDIARIES - TREASURY
Clarify Foreign Sales Corp. 0
Clarify Ltd. (U.K.) 0
Clarify sarl 0
HPOCS Spain 0
Nortel Networks Eastern Mediterranean 0
Ltd.
Nortel Networks Foreign Sales 0
Corporation
Nortel Networks International Inc. 0
Nortel Networks Israel (1996) Ltd. 0
Nortel Networks Optical Components IP 0
Inc.
Nortel Networks S.A. (Lux Entity) 0
Nortel Networks Southeast Asia Pte Ltd. 0
Nortel Networks Taiwan Technology Co. 0
Nortel Networks Technology (Thailand) 0
Ltd.
Northern Telecom (Ireland) Limited 0
Penril Datacomm Limited 0
PT Nortel Networks Indonesia 0
Frisken Investments Pty Limited
X. Xxxxx Investments Pty Limited 0
B-5
ANNEX C - MORTGAGED PROPERTIES
AND LEASED PROPERTIES
PART I
(MORTGAGED PROPERTIES - FEE OWNED)
PROPERTY ADDRESS NET BOOK VALUE ($K)
---------------- -------------------
2305 Mission College 21,866
Santa Clara
CA
XX
000 Xxxxxxx Xxxx 000,000
Xxxxxxxx 0
Xxxxxxxxx
XX
XX
0000 Xxxxxxxxxx Xxxxxx 15,130
Cary
NC
XX
000 Xxxxxxxxx Xxxxxx Xxxxx 00,000
Xxxxxxx
XX
XX
0000 Xxxxx Xxxx 00,000
Xxxxxxxx
XX
Xxxxxx
0000 00xx Xxxxxx X.X 00,000
Xxxxxxx
XX
Xxxxxx
0000 Xxxxxxxxx Xxxxx X.X 00,000
Xxxxxxx
XX
Xxxxxx
00 Xxxx Xxxx and Xxxxxx Xxxxx Rd. XXX
Xxxxxx
XX
Xxxxxx
0000 Xxxxxxx Xxxxxx 000,000
Xxxxxx
XX
Xxxxxx
2351 boulevard Xxxxxx Xxxxx 53,200
Xxxxx Xxxxxxx
XX
Xxxxxx
C-1
PROPERTY ADDRESS NET BOOK VALUE ($K)
---------------- -------------------
2341 boulevard Xxxxxx Xxxxx 31,000
Saint Laurent
PQ
Canada
2311 boulevard Xxxxxx Xxxxx 36,500
0000 Xxxxxxxxx-Xxxxxxx
Xxxxx Xxxxxxx
XX
Xxxxxx
7055 Xxxxxxxxx-Xxxxxxx 5,800
OPTO Syst House
Saint Laurent
PQ
Canada
0000 Xxxxx Xxxxxx Xxxxxxx 00,000
Xxxxx Xxxxxxx
XX
Xxxxxx
C-2
PART II
(LEASED PROPERTIES)
ADDRESS PRIMARY TYPE
------- ------------
0000 Xxxxxxxx Xxxx Spec Purp
Xxxxxx
XX
Xxxxxx
X0X 0X0
0000 Xxxxxxxx Xxxx X&X Xxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
0000 Xxxxxx Xx-Xxxxxxxx Xxxx Xxxxxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
18500 Von Xxxxxx Xxxxxx
Xxxxx 0000 & 0000
Xxxxxx
XX
XX
92612
0000 Xxxxxx Xxxxx Xxxxxx
Xxx Xxxxx
XX
XX
00000
4551 Great America Pkwy Mfg
(SC3)
Xxxxx Xxxxx
XX
XX
00000
6465 X. Xxxxxxxxx Xxxxx Xxxxxx
Xxxx.
Xxxxx 0000
Xxxxxxxxx
XX
XX
80111
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx
XX
XX
00000-0000
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx
XX
XX
00000-0000
C-3
ADDRESS PRIMARY TYPE
------- ------------
000 X. Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxxxxxx
XX
XX
00000-0000
000 Xxxxxxxxxx Xxxx Xxxxx Xxxxxx
Xxxxxxxxx
XX
XX
1821
0000 X. Xxxxxx-Xxxx Xxxxxx Xxx. Mfg.
Research Xxxxxxxx Xxxx
XX
XX
00000
000 Xxxxxx Xxxx Xxxxxx
Xxxxxxxx
XX
XX
00000
000 Xxxxxxx Xxxxx Xxxx Xxxxxxx
Xxxxxx X,X,X.X
Nashville
TN
US
37202
0000 X. Xxxxxxxxx Xxxxx Xxxx Xxxxxxx
Xxxxxxxxxx
XX
XX
00000
0000 Xxxxxxxxxx Xxxxxx Spec Purp
Xxxxxxxxxx
XX
XX
00000
0000 X. Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxxxx
XX
XX
00000
0000 Xxxxxxxx Xxxx. R&D Labs
Xxxxxxxxxx
XX
XX
00000
2325 Dulles Xxxxxx Xxxxxxxxx Xxxxxx
0xx, 00xx & 00xx Xxxxxx
Xxxxxxx
XX
XX
20170
C-4
ADDRESS PRIMARY TYPE
------- ------------
0000 Xxx Xxxxxxx Xxx., XX Xxxxxx
Xxxxx 000
Xxxxxxxx
XX
XX
98004-4504
000 Xxxxxxxxx Xxxxx Mfg
Part Xxx 0, Xxxxxxxxxxxx 0
Xxxxxx
XX
Xxxxxx
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
2932 and 0000 Xxxxxxxx Xxxx X&X Xxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
00 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
00 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxxxx Xxxx
Xxxxxx
XX
Xxxxxx
000 Xxxxxx Xxxxx Xxxxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
0000-0000 Xxxxxxxx Xxxx X&X Xxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
0000 Xxxxxxxx Xxxx X&X Xxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
C-5
ADDRESS PRIMARY TYPE
------- ------------
000 Xxxxxxxxxxxxx Xxxxxxxx Xxxxxx
Xxxxx XX
Xxxxxx
XX
Xxxxxx
X0X 0X0
00 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxxxxx Xxxxxx R&D Labs
Floor 15 - Expansion Space
Xxxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxx Xxxxx Xxxxxx
Xxxxxxxxx
XX
Xxxxxx
0000 Xxxxxxxx Xxxx. Xxxx Xxxxxx
Floors Ground, 4-6
Xxxxxxxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxxxxx Xxxxxx R&D Labs
Floors 00-00
Xxxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxxxxx Xxxxxx R&D Labs
0xx xxxxx
Xxxxxxx
XX
Xxxxxx
X0X 0X0
000 Xxxxxxxxxxxxx Xxxxxxxx Xxxxxx
Xxxxx X
Xxxxxx
XX
Xxxxxx
0000 Xxxxxxxx Xxx Xxxxxx
Xxxx Xxxxxx
XX
XX
00000-0000
C-6
ADDRESS PRIMARY TYPE
------- ------------
0000 Xxx Xxxxxxx Xxxxxx
Xxx Xxxx
XX
XX
00000
0000 Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx
XX
XX
00000
0000 Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx
XX
XX
00000
0000 Xxx Xxxxxxx Xxxxxx
Xxx Xxxx
XX
XX
00000
0000 Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx
XX
XX
00000
0000 Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx
XX
XX
00000
0000 Xxx Xxxxxxx Xxxxxx Xxxxxx
Xxx Xxxx
XX
XX
00000
0000 Xxxxxxx Xxxxxxx Xxxx Xxxxxx
(XX0)
Xxxxx Xxxxx
XX
XX
00000
0000 Xxxxxx Xxxxx Xxxx., XX Xxxxxx
Xxxx Xxxxx
XX
XX
00000
C-7
ADDRESS PRIMARY TYPE
------- ------------
000 Xxxxxxxxxx Xxxx Xxxxx Xxxxxx
Xxxxxxxxx
XX
XX
1821
1000 Technology Park Drive Office
Billerica
MA
US
1821
1200 Technology Park Office
Billerica
MA
US
1821
1100 Technology Park Drive Mfg
Billerica
MA
US
0000
Xxx Xxxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx
XX
XX
2108
0000 X. Xxxxxx-Xxxx Xxxxxx Xxx. Xxxxxx
Xxxxx Xxxxx (DDR)
Research Xxxxxxxx Xxxx
XX
XX
00000
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxx
XX
XX
00000
0000 Xxxxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxxxx
XX
XX
00000-0000
0000 Xxxxxxxx Xxxx. Xxxxxx
Xxxxxxxxxx
XX
XX
00000
C-8
ADDRESS PRIMARY TYPE
------- ------------
0000 X. Xxxxxxxxx Xxxxxx
Xxxx. X
Xxxxxxxxxx
XX
XX
00000-0000
0000 X. Xxxxxxxxx Xxxxxx
Xxxx. X
Xxxxxxxxxx
XX
XX
00000-0000
0000 Xxxxxxxxx Xxxxx Xxxxxx
XxXxxx
XX
XX
00000
C-9
ANNEX D - SALES OF NON-CORE ASSETS
PLANNED SALES AGGREGATE AMOUNT
------------- ----------------
DIVESTITURES OF NON-CORE ASSETS $200,000,000
SALES OF DISCONTINUED OPERATIONS 400,000,000
SALES OF NORTH AMERICAN REAL ESTATE 800,000,000
SALES OF MINORITY INVESTMENTS 150,000,000,
in each case as more fully described in the Disclosure Materials distributed to
the Banks on December 18, 2001.
D-1
SCHEDULE 5.09
NOTES PAYABLE
NOTES PAYABLE OUTSTANDING AS AT NOV. 30, 2001*
(US$ Million Equivalent)
ENTITY FACILITY AMOUNT DRAWN AMOUNT CURRENCY MATURITY GUARANTOR
COMMITTED CREDIT FACILITIES
NN (CHINA) LTD 48.0 0.0 RMB N/A NNL
100.0 0.0 RMB N/A NNL
-----
148.0
CHINA JV
SYNT 10.6 0.4 USD 20/12/2001 N/A
NN GERMANY 20.4 0.0 DEM Annual Renewal N/A
4.5 0.0 DEM Annual Renewal N/A
-----
24.9
NETAS 10.0 0.0 USD 8/11/2002 N/A
10.0 0.0 USD 20/11/2002 N/A
6.0 0.0 USD 26/11/2002 N/A
4.0 0.0 USD 11/6/2002 N/A
-----
30.0
TOTAL - COMMITTED FACILITIES 213.5 0.4
UNCOMMITTED CREDIT FACILITIES
NN SA 20.0 7.0 EUR Annual Renewal N/A
23.0 0.0 EUR Annual Renewal N/A
9.0 0.0 EUR Annual Renewal N/A
-----
7.0
MNC 15.0 0.0 EUR Annual Renewal N/A
8.0 0.0 EUR Annual Renewal N/A
2.0 0.0 EUR Annual Renewal N/A
-----
0.0
COLOMBIA
NT de Colombia SA 45.0 44.9 USD 9/1/2002 NNL
NT de Colombia SA 15.0 15.0 USD 21/12/2001 NNL
NT de Colombia SA 50.0 15.0 USD 0/0/0000 XXX
Xxxxxx Xxxxxxxxxxxxxxx Xx Xxxxxxxx XX 55.0 55.0 USD 15/11/2002 NNL
Nortel Communicaciones De Colombia SA 5.5 3.3 COP 00/0/0000 XXX
Xxxxxx Xxxxxxxxxxxxxxx Xx Xxxxxxxx XX 2.2 COP 0/0/0000 XXX
Xxxxxx Xxxxxxxxxxxxxxx Xx Xxxxxxxx XX 23.5 21.6 COP 24/1/2002 NNL
Nortel Communicaciones De Colombia SA 2.1 COP 28/1/2002 NNL
Nortel Communicaciones De Colombia SA 4.5 1.6 COP 27/2/2002 NNL
-----
160.7
BRAZIL
NT de Brazil 1.5 1.5 USD 16/5/2002 N/A
NT de Brazil 2.8 2.8 USD 12/6/2002 N/A
Nortel Do Brasil Comercio E Servicos
Ltda 7.3 7.3 USD 4/4/2002 N/A
Nortel Do Brasil Comercio E Servicos
Ltda 6.0 6.0 USD 17/12/2001 N/A
Nortel Do Brasil Comercio E Servicos
Ltda 6.3 6.3 USD 3/6/2002 N/A
Nortel Do Brasil Comercio E Servicos
Ltda 5.3 5.3 USD 12/6/2002 N/A
-----
29.2
CHINA JV'S
GDNT 10.0 10.0 USD 28/2/2002 N/A
GDNT 10.0 10.0 USD 19/2/2002 N/A
GDNT 10.0 10.0 USD 22/2/2002 N/A
GDNT 8.0 3.0 USD 21/2/2002 N/A
TGNT 7.5 4.5 USD N/A
3.7 USD 12/12/2001 N/A
-----
41.2
NN JAPAN 20.0 20.3 JPY 15/1/2002 XXX
00.0 00.0 XXX 00/0/0000 XXX
40.0 0.0 JPY Annual Renewal NNL
----- -----
80.0 32.5
NETGEAR INC. 12.0 12.0 USD N/A
TOTAL DRAWN - UNCOMMITTED 282.5
------
TOTAL NOTES PAYABLE 282.9
======
VARIOUS SUBSIDIARIES
* THESE FINANCINGS TOTALLING $282.9M MAY BE REPLACED WITH UP TO THE SAME
AMOUNT OF OTHER FINANCINGS AT VARIOUS SUBSIDIARIES
D-2
SCHEDULE 5.09
LONG-TERM DEBT
LONG TERM DEBT OUTSTANDING AS AT NOV. 30, 2001
(US$ Million Equivalent)
ENTITY FACILITY AMOUNT DRAWN AMOUNT CURRENCY MATURITY GUARANTOR
(COMMITTED)
NNL 300 300 USD 1/10/2002 N/A
XXX 000 000 XXX 0/0/0000 X/X
XXX 1,500 1,500 USD 15/2/2006 N/A
NNL 200 200 USD 1/9/2023 N/A
NNC 1,800 1,800 USD 1/9/2008 NNL
XXX 000 0 XXX 00/0/0000 X/X
XXX 250 0 USD 12/4/2004 N/A
----- -----
4,650 4,000
NNI
NNCC 150 150 USD 15/6/2006 N/A
NNCC 150 150 USD 15/6/2026 N/A
Networks Common 45 45 USD 2004 N/A
NNI 1350 0 USD 10/4/2002 NNL
NNI 500 0 USD 12/4/2004 NNL
----- -----
2,195 345
CHINA JV'S
GDNT Loan from NNL 18 18 USD 28/2/2002 N/A
GDNT HSBC-Shenzhen 61 16 USD 20/8/2004 N/A
----- -----
78 34
CALA
Brazil 3 3 Reais 15/10/2004 N/A
Brazil 3 3 Reais 15/10/2004 N/A
----- -----
6 6
NT LUX
Telrad 43 43 USD 31/8/2003 N/A
FRANCE
MNC 45.7 0 EUR Dec-03 N/A
MNC 45.7 0 EUR Dec-03 N/A
-----
91.4
----- -----
TOTAL LTD BEFORE CAPITAL LEASES 7,063 4,428
===== =====
Note: Long Term Debt includes LT debt due in 1 year and excludes Capital Leases
SCHEDULE 5.09
CAPITAL LEASES
CAPITAL LEASES AS AT SEPT 30, 2001(INCLUDING CURRENT PORTION)*
(US$ Thousand Equivalent)
ENTITY LEASE HOLDER OUTSTANDING BALANCE
NNL
Cambrian Cyber 156
Oracle 2,009
Comm. System 367
------
2,532
NNI
NNI NW Mutual Life Manufacturing 966
DMS 100/200 Oracle 3,165
DMS 100/200 Qwest - IRU 5,671
Qtera Corp Dominion 1,895
Qtera Corp Comm. Vest 3,022
Xros 579
Signiant Hewlett Packard 613
------
15,911
NORTEL PLC 2,225
NT LUX 949
NMC - ORACLE 121
HPOC 465
------
TOTAL RELATED TO CAPITAL LEASES 22,203
*THESE FINANCINGS TOTALING $22.2M MAY BE REPLACED WITH UP TO THE SAME AMOUNT OF
OTHER FINANCINGS AT VARIOUS OTHER SUBSIDIARIES.
SCHEDULE 5.09
OUTSTANDING LETTERS OF CREDIT
AS AT DECEMBER 17, 2001
OPENING EXPRIY ISSUER/ AMOUNT
Country/Beneficiary Curr. AMOUNT DATE DATE REFERENCE EXPORTER USD
------------------- ----- ------ ------- ------ --------- -------- ------
ARGENTINA
Laoui Inmobiliaria S.A USD 558,000 Feb. 4/98 Feb. 28/03 Lease/Edificio NN Argentina 558,000
Xxxxxx 1079
CANADA
Corp. of City of Kanata CAD 25,000 Nov 2/00 Nov 2/01 Palladium I Project NNL 15,851
Corp. of City of Kanata CAD 14,300 Nov. 30.99 May 1/02 Master Plan Phase 3 NNL 9,067
Zurich Canada USD 500,000 Oct. 27/98 May 15/04 Risk Managements XXX 000,000
Xxxx xx Xxxxxxx CAD 160,000 Aug. 24/00 Oct. 2/02 Indem.Agrmnt 0000-000 XXX 101,446
Corp. of City of Kanata CAD 250,000 Sept. 13/00 Sept. 14/01 Palladium II Project NNL 158,509
Corp. of the City of Nepean CAD 591,376 Oct. 31/00 May 3/02 Lab 10 NNL 374,953
Devon Estates Limited CAD 250,000 Mar. 1/01 Feb. 28/06 Option on Land NNL 158,509
GE Capital Canada CAD 241,368 Dec.31/08 Leased Furniture NNL 153,036
GE Capital Canada USD 1,609,123 Dec. 3108 Leased Furniture NNL 1,609,123
Bank of America USD 1,229,983 June 30/06 Leased Furniture NNL 1,229,983
----------
4,310,475
Korea Telecom America Inc. USD 18,559 Nov.5/99 Dec. 31/01 NN Singapore 18,559
Korea Telecom America Inc. USD 612,181 Nov. 30/99 Mar. 31/02 NN Singapore 612,181
----------
630,740
UNITED STATES
Liberty Mutal USD 14,600,000 July 18/97 July 18/01* Workmens' Comp. NNI 14,600,000
Travelers Property USD 6,750,000 July 18/97 July 18/01* Workmens' Comp. NNI 6,750,000
R.W. Electronics Inc. USD 5,160,000 Dec. 18/98 Dec. 17/00 Sale of Inventory NNI 5,160,000
Argonaut Insurance Co. USD 350,000 July 26/00 July 25/01* Workmens' Comp. NNI 350,000
The Realty Associates Fund III USD 31,794 July 19/00 Mar. 31/05 NNI 31,794
Xxxxxx Xxxxxxx USD 5,287,500 Dec. 20/01 Dec. 19/02 NNI 5,287,000
Lease of 4401/4301
Sobrato Interests USD 200,000 Oct. 20/00 Jan. 0/00 Xxx.Xxxxxxxx Xxxx. NNI 200,000
The Prudential Insurance
Company of America USD 19,380,000 Dec. 12/01 Dec. 11/02 Lease of 4555 NNI 19,380,000
Great America ----------
Parkway
51,758,794
*evergreen clause
57,258,009
==========
SCHEDULE 5.09
GUARANTEES
DATE ISSUED TO ON BEHALF OF AMOUNT USD EQUIV. EXPIRY FACILITY
---- --------- ------------ ------ ----------- ------ --------
12-Jul-00 HSBC NN U.K. GBP 16.6M 23,628,440 ongoing Various
21-Mar-96 Generale Bank NN NV, Brussels BEF 30M 660,277 ongoing O/D and bond facility
21-Mar-96 Generale Bank NN NV, Brussels BEF 450M 9,904,154 ongoing O/D and bond facility
Citibank NN Tunisia USD 1.2M 1,200,000 ongoing O/D and bond facility
15-Jun-00 St. Cloud NNL USD 7.5M 7,451,052 14-Jun-04 Vendor Financing
20-Dec-01 Societe Generale Canada NNL USD 2,683,116 20-Nov-03 Netas securitization
by Dec 31/01 Export Development Corp Haiti USD 42,390,238 ongoing Lay-off of Vendor
Telecommunications Finance Commitment
International, S.A
NTFC NNI USD 156,000,000 ongoing Vendor Financing Commitment
-----------
TOTAL 243,917,276
===========
SCHEDULE 5.10
Liens in relation to all Capital Lease Obligations referred to in the Debt
Schedule 5.09
Liens in relation to all puts/calls with respect to Equity Interests as outlined
in the disclosure materials
D-3
EXHIBIT H - SUBORDINATION PROVISIONS
SUBORDINATION PROVISIONS
Loans and advances from NNC and its Subsidiaries (other than the
Company and its Subsidiaries) (the "SUBORDINATED DEBT") shall be expressly made
subordinate and junior in right of payment to all obligations payable from time
to time by the Company and its Subsidiaries pursuant to the Loan Documents
(including, without limitation, all obligations for the payment of principal of
and interest (including interest accruing on or after, or which would accrue but
for, the filing of any petition in bankruptcy or for reorganization relating to
the Company or any of its Subsidiaries, whether or not a claim for post-petition
interest is allowed in such proceeding) on the Loans) (the "SENIOR DEBT"), by
provisions no less favorable to the holders of the Senior Debt than the
following:
(i) No payment or prepayment of any principal, premium (if
any) or interest on account of the Subordinated Debt and no repurchase,
redemption or other retirement (whether at the option of the holder or
otherwise) of the Subordinated Debt shall be made; provided that (A)
payments of interest may be made from any source, and (B) payments or
prepayments of principal may be made from any source (other than
proceeds (whether used directly or indirectly, and whether the purpose
of such use is immediate, incidental or ultimate) of Loans in excess of
$500,000,000), in each of clauses (A) and (B), if, at the time of such
payment of interest or payment or prepayment of principal and
immediately after giving effect thereto (x) there shall not exist a
default in the payment or prepayment of any principal of or interest on
any Senior Debt and (y) there shall not have occurred a default (other
than a default in the payment or prepayment of principal of or interest
on any Senior Debt) permitting (or which, with the giving of notice or
lapse of time or both, would permit) the holder or holders thereof to
accelerate the maturity thereof (unless such default shall have been
cured or waived);
(ii) In the event of any insolvency or bankruptcy proceedings,
or any receivership, liquidation, reorganization or other similar
proceedings, relative to the Company or any of its Subsidiaries or to
such Person's creditors, as such, or to its property, or in the event
of any proceeding for voluntary liquidation, dissolution or other
winding up of such Person, whether or not involving insolvency or
bankruptcy, then the holders of the Senior Debt shall be entitled to
receive payment in full in cash of all Senior Debt before the holders
of the Subordinated Debt are entitled to receive any payment on account
of the Subordinated Debt, and to that end the holders of the Senior
Debt shall be entitled to receive distributions of
any kind of character, whether in cash or property or securities, which
may be payable or deliverable in any such proceedings in respect of the
Subordinated Debt;
(iii) If any Subordinated Debt is declared or otherwise
becomes due and payable (under circumstances when the provisions of the
foregoing paragraphs (i) or (ii) are not applicable, whether as a
result of the occurrence of an event of default under such Subordinated
Debt or otherwise), the holders of Senior Debt outstanding at the time
such Subordinated Debt so becomes due and payable shall be entitled to
receive payment in full of all Senior Debt before the holders of the
Subordinated Debt are entitled to receive any payment on account of the
Subordinated Debt;
(iv) If, notwithstanding the restrictions set forth in
paragraph (i) or the occurrence of any of the events described in
paragraphs (ii) and (iii), any such payment or distribution of assets
of the Company or any of its Subsidiaries of any kind or character,
whether in cash, property or securities, shall be received by the
holders of Subordinated Debt before all Senior Debt is paid in full in
cash, or provision made for such payment in a manner satisfactory to
the Agent, such payment or distribution shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Senior Debt or their representative or representatives, as their
respective interests may appear, for application to the payment of all
Senior Debt remaining unpaid to the extent necessary to pay such Senior
Debt in full in cash, in accordance with its terms, after giving effect
to any concurrent payment or distribution to the holders of such Senior
Debt; and
(v) No holder of Senior Debt shall be prejudiced in its right
to enforce subordination of the Subordinated Debt by any act or failure
to act on the part of the Company or any of its Subsidiaries; provided
that the Subordinated Debt may provide that the foregoing provisions
are solely for the purpose of defining the relative rights of the
holders of Senior Debt, on the one hand, and the holders of
Subordinated Debt, on the other hand, and that nothing therein shall
impair, as between the Company or any of its Subsidiaries and the
holders of the Subordinated Debt, the obligation of the Company or any
of its Subsidiaries, which shall be unconditional and absolute, to pay
to the holders of the Subordinated Debt the principal and premium (if
any) thereof and interest thereon in accordance with its terms, nor
shall anything therein prevent the holders of the Subordinated Debt
from exercising all remedies otherwise permitted by applicable law or
the instruments pursuant to which the Subordinated Debt was issued upon
default thereunder, subject to the rights under paragraphs (i), (ii),
(iii) and (iv) above of holders of
Senior Debt to receive cash, property or securities otherwise payable
or deliverable to the holders or the Subordinated Debt.
