Exhibit 99.3
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
LUCENT TECHNOLOGIES INC.
and certain of its Subsidiaries
in favor of
JPMorgan Chase Bank, N.A.,
as Collateral Agent
Dated as of August 11, 2006
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINED TERMS.......................................................2
1.1 Definitions.........................................................2
1.2 Other Definitional Provisions......................................11
SECTION 2. GUARANTEE..........................................................11
2.1 Guarantee..........................................................11
2.2 Right of Contribution..............................................12
2.3 No Subrogation.....................................................12
2.4 Amendments, etc. with respect to the Guaranteed Obligations........13
2.5 Guarantee Absolute and Unconditional...............................13
2.6 Reinstatement......................................................14
2.7 Payments...........................................................14
SECTION 3. GRANT OF SECURITY INTEREST.........................................14
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................15
4.1 Title; No Other Liens..............................................15
4.2 Perfected First Priority Liens.....................................15
4.3 Jurisdiction of Organization.......................................16
4.4 [Intentionally Omitted]............................................16
4.5 Farm Products......................................................16
4.6 Investment Property................................................16
4.7 Receivables........................................................16
4.8 Intellectual Property..............................................17
4.9 Principal Properties and Restricted Securities.....................17
4.10 Secured Indebtedness and Attributable Debt.........................17
4.11 Control Agreements.................................................17
SECTION 5. COVENANTS..........................................................17
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper......................................................17
5.2 Maintenance of Insurance...........................................17
5.3 Payment of Obligations.............................................17
5.4 Maintenance of Perfected Security Interest; Further
Documentation......................................................18
5.5 Changes in Locations, Name, etc....................................18
5.6 Notices............................................................18
5.7 Investment Property................................................18
5.8 Receivables........................................................19
5.9 Intellectual Property..............................................19
5.10 Maintenance of Control Agreements..................................20
5.11 Compliance.........................................................20
SECTION 6. REMEDIAL PROVISIONS................................................20
6.1 Certain Matters Relating to Receivables............................20
6.2 Communications with Obligors; Grantors Remain Liable...............21
6.3 Deposit Accounts and Investment Property...........................21
6.4 Pledged Stock......................................................21
6.5 Proceeds to be Turned Over To Collateral Agent.....................22
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6.6 Application of Proceeds............................................22
6.7 Code and Other Remedies............................................22
6.8 Registration Rights................................................23
6.9 Deficiency.........................................................24
SECTION 7. THE COLLATERAL AGENT...............................................24
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc............24
7.2 Duty of Collateral Agent...........................................25
7.3 Execution of Financing Statements..................................26
7.4 Authority of Collateral Agent......................................26
SECTION 8. MISCELLANEOUS......................................................26
8.1 Amendments in Writing..............................................26
8.2 Notices............................................................26
8.3 No Waiver by Course of Conduct; Cumulative Remedies................26
8.4 Enforcement Expenses; Indemnification..............................27
8.5 Successors and Assigns.............................................27
8.6 Set-Off............................................................27
8.7 Counterparts.......................................................27
8.8 Severability.......................................................28
8.9 Section Headings...................................................28
8.10 Integration........................................................28
8.11 GOVERNING LAW......................................................28
8.12 Submission To Jurisdiction; Waivers................................28
8.13 Acknowledgements...................................................28
8.14 Additional Grantors; Additional External Sharing Debt..............29
8.15 Releases...........................................................29
8.16 WAIVER OF JURY TRIAL...............................................30
8.17 Collateral Sharing Agreement.......................................31
8.18 Judgment Currency..................................................31
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization
Schedule 5 Existing Intellectual Property
Schedule 6 Existing External Sharing Debt
Schedule 7 Principal Properties
Schedule 8 Restricted Securities
Schedule 9 Secured Indebtedness and Attributable Debt
Schedule 10 Permitted Liens on Investment Property
Schedule 11 Excluded Foreign Collateral Countries
ANNEXES
Annex 1 Form of Assumption Agreement
Annex 2 Form of External Sharing Debt Supplement
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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of
August 11, 2006, made by each of the signatories hereto (together with any other
entity that may become a party hereto as provided herein, the "GRANTORS"), in
favor of JPMorgan Chase Bank, N.A., as Collateral Agent (in such capacity, the
"COLLATERAL AGENT") for the Secured Parties (as defined below).
W I T N E S S E T H:
WHEREAS, the Grantors and the Collateral Agent are parties to that
certain Amended and Restated Guarantee and Collateral Agreement, dated as of
October 1, 2004 (as amended, supplemented or otherwise modified prior to the
date hereof, the "EXISTING GUARANTEE AND COLLATERAL AGREEMENT");
WHEREAS, Lucent Technologies Inc., a Delaware corporation (the
"BORROWER"), has requested that certain banks and other financial institutions
(the "L/C BANKS") and JPMorgan Chase Bank, N.A., as administrative agent for the
L/C Banks, amend and restate the Amended and Restated Letter of Credit Issuance
and Reimbursement Agreement, dated as of October 1, 2004 (such Amended and
Restated Letter of Credit Issuance and Reimbursement Agreement, dated the date
hereof, as amended, supplemented or otherwise modified from time to time, the
"L/C AGREEMENT");
WHEREAS, the Borrower, has requested that certain banks and other
financial institutions (the "ESD BANKS"; together with the L/C Banks, "the
BANKS") and JPMorgan Chase Bank, N.A., as administrative agent for the ESD
Banks, amend the External Sharing Debt Agreement, dated as of October 1, 2004
(such Amended and Restated External Sharing Debt Agreement, dated the date
hereof, as amended, supplemented or otherwise modified from time to time, the
"ESD AGREEMENT"; together with the L/C Agreement, the "CREDIT AGREEMENTS");
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreements will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreements;
WHEREAS, it is a condition precedent to the obligation of the Banks
to make their respective extensions of credit to the Borrower under the Credit
Agreements that the Grantors shall have executed and delivered this Agreement to
the Collateral Agent for the benefit of the Secured Parties; and
WHEREAS, the Borrower desires, to the extent permitted by the Credit
Agreements, to extend the benefits of this Agreement to the holders of the
External Sharing Debt (as defined below);
NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent and the Banks to enter into the Credit Agreements and to induce
the Banks to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent, for the
benefit of the Secured Parties, as follows:
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SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) The following terms are used herein as defined in the
New York UCC: Accounts, Certificated Security, Chattel Paper, Documents,
Equipment, Farm Products, General Intangibles, Instruments and Inventory. The
following terms have the meanings set forth in the Preamble and Recitals hereto:
Banks, Borrower, Credit Agreements, Collateral Agent, ESD Agreement, ESD Banks,
Existing Guarantee and Collateral Agreement, Grantors, L/C Agreement and L/C
Banks.
(b) The following terms shall have the following meanings:
"ADMINISTRATIVE AGENT": the collective reference to (i) the
"Administrative Agent", as defined in the L/C Agreement, and (ii) the
"Administrative Agent", as defined in the ESD Agreement. Each reference to the
Administrative Agent shall, unless the context otherwise requires, be deemed to
be a reference to each such "Administrative Agent" acting jointly with the other
such "Administrative Agent".
"AFFILIATE": when used with respect to a specified Person, another
Person that directly or indirectly Controls or is Controlled by or is under
common Control with the Person specified.
"AGREEMENT": this Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.
"ALCATEL MERGER": the consummation of the transactions contemplated
pursuant to the Agreement and Plan of Merger dated as of April 2, 2006 by and
among the Borrower, Alcatel and Aura Merger Sub, Inc., as may be amended,
supplemented or modified from time to time.
"ALTERNATE BASE RATE": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"ATTRIBUTABLE DEBT": as defined in the Indenture.
"BORROWED DEBT": that portion of any Grantor's Obligations that
constitutes indebtedness for borrowed money which is created, assumed, incurred
or guaranteed in any manner by such Grantor or for which such Grantor is
otherwise responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds to invest in, others) and which, if secured by any
Restricted Collateral, would constitute Secured Indebtedness.
"BORROWER OBLIGATIONS": the collective reference to all obligations
and liabilities of the Borrower to the Administrative Agent and the Banks
(including the reimbursement obligations payable under the Credit Agreements,
and all other obligations and liabilities of the Borrower in respect of the
Loans and the Letters of Credit or any of them and interest thereon as provided
for in any Credit Agreement, any interest accruing after the maturity of such
obligations and liabilities and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
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with, any Credit Agreement, this Agreement, any Loan, any Letter of Credit, any
other Credit Document or any other document (other than any other document
evidencing or governing External Sharing Debt) made, delivered or given in
connection with any of the foregoing, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Collateral Agent, the
Administrative Agent or the Banks that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements) or otherwise.
"BUSINESS DAY": any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of New York) on which banks are open for business
in New York City.
"CAPITAL LEASE OBLIGATIONS": with respect to any Person, the
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 to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH COLLATERAL ACCOUNT": the collective reference to (i) the "Cash
Collateral Account", as defined in the L/C Agreement, and (ii) the "Cash
Collateral Account", as defined in the ESD Agreement.
"CMO TRANSACTION": any financing arrangement involving (i) the
incurrence of Indebtedness supported by Liens (or Indebtedness secured by Liens)
on real estate owned by the Borrower or any Subsidiary, or on the Capital Stock
of any Subsidiary formed exclusively to hold any direct or indirect interest in
such real estate, and on related assets (including reserve accounts) or (ii) the
issuance of Capital Stock of a Real Estate Subsidiary.
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established by the
Collateral Agent as provided in Section 6.1 or 6.5.
"COLLATERAL SHARING AGREEMENT": the Amended and Restated Collateral
Sharing Agreement to be executed and delivered by the Collateral Agent and the
Borrower, substantially in the form of Exhibit B to each of the Credit
Agreements.
"COMMITMENTS": as defined in the L/C Agreement.
"CONSOLIDATED NET TANGIBLE ASSETS": as defined in the Indenture.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL": the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting shares, by contract or otherwise. "Controlling"
and "Controlled" have meanings correlative thereto.
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"CONTROL AGREEMENT": as defined in Section 5.10.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee, granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and sell
materials derived from any Copyright.
"COPYRIGHTS": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in SCHEDULE 5), all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"CREDIT DOCUMENTS": the collective reference to (i) the "Credit
Documents", as defined in the L/C Agreement, and (ii) the "Credit Documents", as
defined in the ESD Agreement.
"CREDIT PARTIES": the collective reference to the Borrower and each
Subsidiary Guarantor.
"DEPOSIT ACCOUNT": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation, any
demand, time, savings, passbook or like account maintained with a depositary
institution.
"DISPOSITION": with respect to any property, any sale, lease (other
than an operating lease), sale and leaseback, assignment, conveyance, transfer
or other disposition thereof. The terms "Dispose" and "Disposed of" shall have
correlative meanings.
"DOLLARS" or "$": lawful money of the United States of America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States of America.
"EVENT OF DEFAULT": the collective reference to (i) an "Event of
Default", as defined in the L/C Agreement, and (ii) an "Event of Default", as
defined in the ESD Agreement.
"EXCLUDED FOREIGN COLLATERAL": the collective reference to (a) any
accounts receivable and other contract rights to payment payable by non-U.S.
Persons organized in the countries specified on SCHEDULE 11 to the Borrower or
any Domestic Subsidiary, (b) inventory of the Borrower or any Domestic
Subsidiary physically located outside of the United States and (c) any accounts
receivable and other contract rights to payment payable by non-U.S. Persons to
any Foreign Subsidiary.
"EXTERNAL SHARING DEBT": the collective reference to: (i) External
Specified Debt in existence on the date hereof and listed on SCHEDULE 6, and
(ii) such other additional External Specified Debt designated as External
Sharing Debt in accordance with Section 8.14(b).
"EXTERNAL SHARING DEBT OBLIGATIONS": the unpaid principal of and
interest on the obligations of the Borrower or any Subsidiary in respect of the
External Sharing Debt and all other obligations and liabilities of the Borrower
or any of its Subsidiaries (including, without limitation, interest accruing at
the then applicable rate provided in the applicable agreement evidencing or
governing such External Sharing Debt after the maturity of the obligations
thereunder and interest accruing at the then applicable rate provided in the
applicable agreement evidencing or governing such External Sharing Debt after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or
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like proceeding, relating to the Borrower or any of its Subsidiaries, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent or any other Secured Party, whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, any
agreement evidencing or governing such External Sharing Debt, this Agreement or
any other document made, delivered or given in connection with any of the
foregoing (or, in the case of any cash management or other operating
arrangement, any procedures or policies relating thereto), in each case whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Collateral Agent or to the other Secured Parties
that are required to be paid by the Borrower or any of its Subsidiaries pursuant
to the terms of any of the foregoing agreements).
"EXTERNAL SHARING DEBT SUPPLEMENT": an External Sharing Debt
Supplement, substantially in the form of ANNEX 2 hereto or in such other form as
shall be reasonably acceptable to the Collateral Agent.
"EXTERNAL SPECIFIED DEBT": obligations of the Borrower or any of its
Subsidiaries under or in respect of (including pursuant to Guarantees or other
credit support): (i) letters of credit and similar obligations opened for the
account of the Borrower or a Subsidiary thereof, (ii) loans, advances and other
Indebtedness for borrowed money to the Borrower or a Subsidiary thereof, (iii)
foreign exchange and derivative transactions or Hedging Agreements with the
Borrower or a Subsidiary as the counterparty, (iv) Vendor Financing Exposures,
(v) existing cash management and other operating arrangements and any other cash
management and other operating arrangements entered into in the ordinary course
of business and (vi) real estate lease, fleet lease, purchase and credit card
programs, receivable discounting programs and such other Indebtedness as may be
agreed to by the Administrative Agent and the Borrower, such agreement not to be
unreasonably withheld.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received JPMorgan Chase Bank, N.A.
from three federal funds brokers of recognized standing selected by it.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"FOREIGN SUBSIDIARY VOTING STOCK": the voting Capital Stock of any
Foreign Subsidiary.
"GAAP": subject to Section 1.03 of each of the Credit Agreements,
generally accepted accounting principles, applied on a consistent basis.
"GOVERNMENTAL AUTHORITY": the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE": with respect to any Person (the "guarantor"), any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness 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,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to
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purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (ii) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (iii) 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 Indebtedness or other obligation or (iv)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; PROVIDED, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"GUARANTEED OBLIGATIONS": (i) in the case of the Borrower, the
External Sharing Debt Obligations of any Subsidiary of the Borrower (it being
understood and agreed that, with respect to any item of External Sharing Debt,
the Borrower shall not guarantee such External Sharing Debt pursuant to Section
2 to the extent the Borrower has separately guaranteed the payment of all or any
portion of such item of External Sharing Debt and such guarantee is in full
force and effect) and any obligations arising under any Letter of Credit issued
or renewed pursuant to the L/C Agreement or renewed under the ESD Agreement at
the request of a Wholly Owned Subsidiary of the Borrower and under any Loan made
under the L/C Agreement and (ii) in the case of each Subsidiary Guarantor, the
Borrower Obligations and the obligations of the Borrower, direct or contingent,
now existing or hereafter incurred, in respect of the External Sharing Debt
Obligations (including to the extent guaranteed by the Borrower pursuant to
Section 2).
"GUARANTOR OBLIGATIONS": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any
other Credit Document to which such Guarantor is a party, in each case whether
on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Collateral Agent or to the other
Secured Parties that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Credit Document).
"GUARANTORS": the collective reference to each Grantor in its
capacity as a guarantor pursuant to Section 2.
"HEDGING AGREEMENT": (i) any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement
and (ii) any hedging agreement in respect of the Borrower's common stock entered
into in order to hedge the Borrower's exposure under its stock option plans or
other benefit plans for employees, directors or consultants of the Borrower and
its Subsidiaries.
"INDEBTEDNESS": with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person
upon which interest charges are customarily paid (excluding current accounts
payable incurred in the ordinary course of business), (iv) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (v) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (vi) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
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 Indebtedness
secured thereby has been assumed, (vii) all Guarantees by such Person of
Indebtedness of others, (viii) all Capital Lease Obligations of such Person,
(ix) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit, performance bonds and letters of
guaranty, (x) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances and (xi) to the extent not
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otherwise included, indebtedness or similar obligations (including, if
applicable, net investment amounts) pursuant to any receivables securitization.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent 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 the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDENTURE": the Indenture, dated as of April 1, 1996, between the
Borrower and The Bank of New York, as Trustee.
"INSURANCE SUBSIDIARY": First Beacon Insurance Company, a captive
insurance company organized under the laws of the State of Vermont.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to
xxx at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom; PROVIDED that
"Intellectual Property" shall not include any Copyright License, Patent License
or Trademark License to the extent that the terms thereof (after giving effect
to any consent that has been obtained, it being understood that no Grantor is
obligated to obtain any such consent) prohibit the grant by the applicable
Grantor of a security interest pursuant to this Agreement in its right, title
and interest therein without the consent of any other party thereto or give any
other party thereto the right to terminate its obligations thereunder; PROVIDED,
FURTHER, that the foregoing limitation shall not affect, limit, restrict or
impair the grant by such Grantor of a security interest pursuant to this
Agreement in any Receivable or any money or other amounts due or to become due
or other right to payment under any such Copyright License, Patent License or
Trademark License.
"INTERCOMPANY NOTE": any promissory note evidencing loans made by any
Grantor to the Borrower or any of its Subsidiaries.
"INVESTMENT PROPERTY": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of the New
York UCC (other than any Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock") and (ii) whether or not constituting "investment
property" as so defined, all Pledged Notes and all Pledged Stock; PROVIDED that
"Investment Property" shall not include any of the foregoing items issued by any
Person (other than a Subsidiary of the Borrower) to the extent that the terms of
any applicable shareholder or similar agreement (after giving effect to any
consent that has been obtained, it being understood that no Grantor is obligated
to obtain any such consent) prohibit the grant by the applicable Grantor of a
security interest pursuant to this Agreement in its right, title and interest
therein without the consent of any other party thereto; PROVIDED, further, that
the foregoing limitation shall not affect, limit, restrict or impair the grant
by such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due or other right to
payment under any such Investment Property.
"ISSUERS": the collective reference to each issuer of any Investment
Property; PROVIDED that, for purposes of Section 5.01(a) of the L/C Agreement
and Section 4.01(a) of the ESD Agreement, "Issuer" shall mean each Subsidiary of
the Borrower that is an issuer of any Investment Property.
"LETTERS OF CREDIT": the collective reference to (i) the "Letters of
Credit", as defined in the L/C Agreement, and (ii) the "Letters of Credit", as
defined in the ESD Agreement.
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"LIEN": with respect to any asset, (i) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (ii) 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 asset and (iii) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LOAN": as defined in the L/C Agreement.
"MATERIAL FOREIGN SUBSIDIARY": any Foreign Subsidiary that is a
Material Subsidiary.
"MATERIAL SUBSIDIARY": (i) prior to the Alcatel Merger, any
Subsidiary of the Borrower, the consolidated assets or revenues of which are, at
the time of determination, equal to or greater than 2.5% of the consolidated
assets or consolidated revenues, respectively, of the Borrower and its
Subsidiaries at such time (determined, in the case of revenues, in respect of
the most recent period of four consecutive fiscal quarters of the Borrower for
which the relevant financial information is available) and (ii) following the
Alcatel Merger, each Subsidiary of the Borrower which immediately prior to the
Alcatel Merger satisfied the conditions set forth in clause (i). Such
determinations shall, where applicable, be made excluding intercompany
receivables and revenues that would be eliminated upon consolidation in
accordance with GAAP.
"MOODY'S": Xxxxx'x Investors Service, Inc.
"NEW YORK UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"NOTICE OF SOLE CONTROL": with respect to any Deposit Account or
Investment Property subject to a Control Agreement, any notice which, upon
receipt by any bank, other financial institution or securities intermediary
party to such Control Agreement, shall grant the Collateral Agent exclusive
dominion and control over such Deposit Account or Investment Property.
"OBLIGATIONS": (i) in the case of the Borrower, the Borrower
Obligations, its External Sharing Debt Obligations and its Guarantor
Obligations, and (ii) in the case of each Subsidiary Guarantor, its Guarantor
Obligations and its External Sharing Debt Obligations.
"ORDINARY COURSE BUYERS": with respect to goods only, buyers in the
ordinary course of business to the extent provided in Section 9-320(a) of the
Uniform Commercial Code as in effect from time to time in the applicable
jurisdiction.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in SCHEDULE 5, (ii) all applications for
letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing Class 1 patent applications referred to in SCHEDULE 5, and
(iii) all rights to obtain any reissues or extensions of the foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent.
"PERSON": any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
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"PLEDGED NOTES": the collective reference to (a) each Intercompany
Note at any time issued to any Grantor in a principal amount greater than
$10,000,000 and (b) each other promissory note issued to or held by any Grantor
(other than promissory notes issued in connection with extensions of trade
credit by any Grantor in the ordinary course of business) in a principal amount
greater than $10,000,000; PROVIDED that "Pledged Notes" shall not include any of
the foregoing items issued by any Person (other than a Subsidiary of the
Borrower) to the extent that the terms of any applicable shareholder or similar
agreement (after giving effect to any consent that has been obtained, it being
understood that no Grantor is obligated to obtain any such consent) prohibit the
grant by the applicable Grantor of a security interest pursuant to this
Agreement in its right, title and interest therein without the consent of any
other party thereto; PROVIDED, FURTHER, that the foregoing limitation shall not
affect, limit, restrict or impair the grant by such Grantor of a security
interest pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due or other right to payment under any such Pledged
Notes.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect; PROVIDED that in no event shall (i) any Capital Stock of any Subsidiary
other than a Material Subsidiary be required to be pledged hereunder, (ii) more
than 65% of the total outstanding Foreign Subsidiary Voting Stock of any Foreign
Subsidiary be required to be pledged hereunder or (iii) any Capital Stock of the
Insurance Subsidiary be required to be pledged hereunder; PROVIDED that "Pledged
Stock" shall not include any of the foregoing items issued by any Person (other
than a Subsidiary of the Borrower) to the extent that the terms of any
applicable shareholder or similar agreement (after giving effect to any consent
that has been obtained, it being understood that no Grantor is obligated to
obtain any such consent) prohibit the grant by the applicable Grantor of a
security interest pursuant to this Agreement in its right, title and interest
therein without the consent of any other party thereto; PROVIDED, further, that
the foregoing limitation shall not affect, limit, restrict or impair the grant
by such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due or other right to
payment under any such Pledged Stock.
"PROCEEDS": all "proceeds" as such term is defined in Section
9-102(a)(64) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"PRIME RATE": the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with
extensions of credit to debtors).
"PRINCIPAL PROPERTIES": as defined in the Indenture.
"RATING AGENCIES": the collective reference to S&P and Moody's.
"REAL ESTATE SUBSIDIARY": any special purpose Subsidiary formed in
connection with and to facilitate a sale-leaseback transaction or a CMO
Transaction and designated as such by the Borrower in a notice to the Collateral
Agent and that engages in no operations or activities other than those related
to or contemplated by such transaction or as are incidental thereto.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
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"RECEIVABLES SUBSIDIARY": any special purpose, bankruptcy-remote
Subsidiary that acquires, on a revolving basis, Receivables generated by the
Borrower or any of its Subsidiaries and that engages in no operations or
activities other than those related to receivables securitizations.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESTRICTED COLLATERAL": the collective reference to all Principal
Properties and Restricted Securities, whether now owned or hereafter acquired,
which, to the extent securing the Obligations, would cause the Obligations
constituting Borrowed Debt to be Secured Indebtedness under the Indenture.
"RESTRICTED SECURED INDEBTEDNESS": at any time, the portion of the
sum of the outstanding principal amount of the Obligations constituting Borrowed
Debt that is equal to the maximum aggregate principal amount of outstanding
Obligations constituting Borrowed Debt that may be secured at such time without
causing the Indebtedness under the Indenture to be required to be equally and
ratably secured.
"RESTRICTED SECURITIES": as defined in the Indenture.
"S&P": Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SECURED INDEBTEDNESS": as defined in the Indenture.
"SECURED PARTIES": the collective reference to the Collateral Agent,
the Administrative Agents, the other Agents (as defined in the L/C Agreement),
the Banks and the holders of the External Sharing Debt Obligations.
"SECURITIES ACT": the Securities Act of 1933, as amended.
"SUBSIDIARY": any corporation, partnership, limited liability company
or other entity, a majority of the Voting Shares or other ownership interests
having ordinary voting power (other than only by reason of the happening of a
contingency) of which are at the time owned or controlled, directly or
indirectly, by the Borrower or by one or more Subsidiaries of the Borrower,
excluding any such Person that (i) would not constitute a consolidated
subsidiary of the Borrower in accordance with GAAP and (ii) is not Controlled
(directly or indirectly) by the Borrower. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTORS": each Wholly Owned Material Domestic
Subsidiary (other than any Receivables Subsidiary, any Real Estate Subsidiary or
the Insurance Subsidiary).
"TRADEMARKS": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in SCHEDULE 5, and (ii) the right to obtain all renewals thereof.
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"TRADEMARK LICENSE": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.
"UNRESTRICTED COLLATERAL": all Collateral other than the Restricted
Collateral.
"VENDOR FINANCING EXPOSURE": Guarantees or other credit support in
respect of Indebtedness under Vendor Financings, to the extent such Indebtedness
is held by any Person other than the Borrower or any of its Subsidiaries or is
the subject of a securitization.
"VENDOR FINANCINGS": credit facilities and other financing
arrangements providing for loans or other extensions of credit to customers or
prospective customers of the Borrower or any of its Subsidiaries (or Affiliates
of such customers or prospective customers).
"VOTING SHARES": as to shares of a particular corporation,
outstanding shares of stock of any class of such corporation entitled to vote in
the election of directors, excluding shares entitled so to vote only upon the
happening of some contingency.
"WHOLLY OWNED MATERIAL DOMESTIC SUBSIDIARY": any Wholly Owned
Subsidiary of the Borrower that is a Domestic Subsidiary and a Material
Subsidiary.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof", "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
(d) For the purposes of this Agreement, (i) the words "include", "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation", (ii) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights and (iii) references to
agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Collateral Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower or the Subsidiaries of the Borrower, as applicable,
when due (whether at the stated maturity, by acceleration or otherwise) of the
Guaranteed Obligations.
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(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Guaranteed Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Collateral Agent or any other Secured
Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full force
and effect until all the Borrower Obligations and the External Sharing Debt
Obligations and the obligations of each Guarantor in respect of the Borrower
Obligations and the External Sharing Debt Obligations under the guarantee
contained in this Section 2 shall have been satisfied by payment in full and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreements the Borrower may be free from any Borrower
Obligations or External Sharing Debt Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Collateral Agent
or any other Secured Party from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Guaranteed Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Guaranteed Obligations or any payment
received or collected from such Guarantor in respect of the Guaranteed
Obligations), remain liable for the Guaranteed Obligations up to the maximum
liability of such Guarantor hereunder until the Guaranteed Obligations are paid
in full and the Commitments are terminated.
2.2 RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby agrees that to
the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Collateral Agent and the other Secured Parties, and each
Subsidiary Guarantor shall remain liable to the Collateral Agent and the other
Secured Parties for the full amount guaranteed by such Subsidiary Guarantor
hereunder.
2.3 NO SUBROGATION. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Collateral Agent or any other Secured Party, no Guarantor shall be entitled to
be subrogated to any of the rights of the Collateral Agent or any other Secured
Party against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Collateral Agent or any other Secured
Party for the payment of the Guaranteed Obligations, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the Borrower
or any other Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Collateral Agent and the other Secured Parties by
the Borrower on account of the Guaranteed Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Guaranteed
Obligations then due shall not have been paid in full, such amount shall be held
by such Guarantor in trust for the Collateral Agent and the other Secured
Parties, segregated from other funds of such Guarantor,
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and shall, forthwith upon receipt by such Guarantor, be turned over to the
Collateral Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the Collateral Agent, if required), to be applied against the
Guaranteed Obligations, whether matured or unmatured, in the order specified in
the Collateral Sharing Agreement.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE GUARANTEED OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Guaranteed
Obligations made by the Collateral Agent or any other Secured Party may be
rescinded by the Collateral Agent or such Secured Party and any of the
Guaranteed Obligations continued, and the Guaranteed Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Collateral
Agent or any other Secured Party, and the Credit Agreements, the other Credit
Documents, any agreement evidencing or governing External Sharing Debt and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent (or the Administrative Agent, the Required Banks, the Required ESD Banks,
the Required Lucent Banks (as such terms are defined in the Credit Agreements),
all Banks or any holder of External Sharing Debt Obligations, as the case may
be) may deem advisable from time to time, and any collateral security, guarantee
or right of offset at any time held by the Collateral Agent or any other Secured
Party for the payment of the Guaranteed Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Collateral Agent nor any other
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Guaranteed Obligations or
for the guarantee contained in this Section 2 or any property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by the Collateral Agent or any
other Secured Party upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Guaranteed Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower,
any Subsidiary and any of the Guarantors, on the one hand, and the Collateral
Agent and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower, any Subsidiary or any of the Guarantors with respect to
the Guaranteed Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of any Credit Agreement or any other Credit Document,
any agreement evidencing or governing External Sharing Debt, any of the
Guaranteed Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Collateral Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Collateral Agent or any other Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower or any Subsidiary for the Guaranteed
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Collateral Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or
14
against any collateral security or guarantee for the Guaranteed Obligations or
any right of offset with respect thereto, and any failure by the Collateral
Agent or any other Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Collateral Agent or any other Secured Party against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any other Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Collateral Agent without set-off or counterclaim in Dollars (or,
in the case of External Sharing Debt Obligations, the currency required under
the applicable instrument or agreement evidencing or governing the same) at its
offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (or, in the case of any currency
other than Dollars, such office or offices as the Collateral Agent shall specify
with respect thereto). Any and all payments by any Guarantor hereunder shall be
made free and clear of, and without deduction for, any and all present or future
Taxes (as defined in the Credit Agreements).
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral Agent,
and hereby grants to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
15
(i) all Inventory;
(j) all Investment Property;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
Notwithstanding the foregoing, (i) the Collateral shall not include
Excluded Foreign Collateral, (ii) all of the foregoing Collateral shall ratably
secure all the Obligations (other than Obligations in respect of Borrowed Debt),
(iii) all of the Unrestricted Collateral shall also ratably secure the
Obligations in respect of Borrowed Debt and (iv) all of the Restricted
Collateral shall also secure the Restricted Secured Indebtedness.
It is understood and agreed that the cash collateral accounts
established pursuant to the Cash Collateral Agreement (as defined in the L/C
Agreement) and the cash collateral agreement referred to in Section 2.06 of the
ESD Agreement and the deposits made therein and investments made from time to
time with such deposits and earnings shall not constitute Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Banks to enter into the
Credit Agreements and to induce the Banks to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Collateral Agent and each Bank that:
4.1 TITLE; NO OTHER LIENS. Except for the security interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreements, such Grantor owns each item of the Collateral free and clear of any
and all Liens. No financing statement or other public notice with respect to all
or any part of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Collateral Agent, for the benefit
of the Secured Parties, pursuant to this Agreement or as are permitted by the
Credit Agreements.
4.2 PERFECTED FIRST PRIORITY LIENS. The security interests granted pursuant
to this Agreement, upon completion of the filings and other actions specified on
SCHEDULE 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Collateral Agent in completed and duly
executed form) and, with respect to Collateral acquired after the date hereof
and Grantors that become a party hereto after the date hereof, such other
filings and other actions as may be necessary under any Requirement of Law, (a)
will constitute valid perfected security interests in all of the Collateral in
favor of the Collateral Agent, for the benefit of the Secured Parties, as
collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor (other than Ordinary
Course Buyers) and (b) are prior to all other Liens on the Collateral in
existence on the date of such filings or other actions (i) except for Liens
permitted by the Credit Agreements which have priority over the Liens on the
Collateral, (ii) except to the extent that any Collateral consists of any
Instrument, Certificated Security or Chattel Paper in an amount up to and
including $5,000,000 and such Instrument, Certificated Security or Chattel Paper
has not been delivered to the Collateral Agent (it being understood and agreed
that the failure of the Collateral Agent to take possession of any such
Instrument or Certificated Security shall not impair in any respect the
perfection of the security interest hereunder in such Instrument or Certificated
Security to the extent perfected by filing), (iii) except, with respect to
16
Collateral located outside the United States and with respect to which the
Collateral Agent has not perfected its security interest therein under
applicable foreign law, to the extent that perfection in such foreign
jurisdiction would require filings or other actions outside of the United
States, (iv) except, with respect to any Investment Property with respect to
which the Collateral Agent has not obtained "control" (within the meaning of the
applicable Uniform Commercial Code), to the extent that the Collateral Agent
does not have such "control", (v) except, with respect to any Intellectual
Property, to the extent that such Intellectual Property is not listed in a
filing made pursuant to this Agreement with the United States Patent and
Trademark Office or the United States Copyright Office, as applicable (it being
understood and agreed that the failure to list any such Intellectual Property in
any such filing with the United States Patent and Trademark Office or the United
States Copyright Office shall not impair in any respect the perfection of the
security interest hereunder in General Intangibles) and (vi) except, with
respect to any Deposit Account, to the extent that a Control Agreement that is
required to be in effect pursuant to Section 5.10 with respect to such Deposit
Account shall not be in effect.
4.3 JURISDICTION OF ORGANIZATION. On the date hereof, such Grantor's
jurisdiction of organization is specified on SCHEDULE 4.
4.4 [Intentionally Omitted]
4.5 FARM PRODUCTS. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.
4.6 INVESTMENT PROPERTY. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor (other than
any Subsidiary of such Grantor that is not a Material Subsidiary) or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each such relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) Each of the Pledged Notes in a principal amount in excess of
$10,000,000 constitutes the legal, valid and binding obligation of the obligor
with respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(d) Except as set forth on SCHEDULE 10, such Grantor is the record and
beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens of any other Person,
except the security interest created by this Agreement and except for Liens
permitted by the Credit Agreements.
4.7 RECEIVABLES. (a) No amount in excess of $5,000,000 payable to such
Grantor under or in connection with any Receivable constituting Collateral
hereunder is evidenced by any Instrument or Chattel Paper, unless such
Instrument or Chattel Paper has been delivered to the Collateral Agent or is
held by such Grantor free and clear of any Lien in favor of any Person other
than the Collateral Agent.
(b) The amounts represented by such Grantor to the Secured Parties from
time to time as owing to such Grantor in respect of the Receivables constituting
Collateral hereunder will at such times be accurate in all material respects.
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4.8 INTELLECTUAL PROPERTY. SCHEDULE 5 lists all material U.S.
Copyrights, Patents and Trademarks (including Class 1 applications for Patents
but excluding, in each case, all other applications therefor) owned by such
Grantor in its own name on the date hereof.
4.9 PRINCIPAL PROPERTIES AND RESTRICTED SECURITIES. SCHEDULE 7 and
SCHEDULE 8 list all Principal Properties and Restricted Securities,
respectively, owned by any Grantor on the date hereof which, to the extent
securing the Obligations, would cause the Obligations constituting Borrowed Debt
to be Secured Indebtedness under the Indenture.
4.10 SECURED INDEBTEDNESS AND ATTRIBUTABLE DEBT. Except as set forth on
SCHEDULE 9, on the date hereof, there is no outstanding Secured Indebtedness
(other than in respect of the Credit Agreements and the External Sharing Debt)
or Attributable Debt. As of June 30, 2006, 15% of Consolidated Net Tangible
Assets was not less than $[1,400,000,000].
4.11 CONTROL AGREEMENTS. Each Control Agreement currently in effect is, and
upon the execution and delivery of any additional Control Agreement and the
agreement by each securities intermediary or bank that it will comply with
entitlement orders or instructions of the Collateral Agent without further
consent of the Borrower, each such additional Control Agreement will be,
effective to establish "control" within the meaning of Article 8 or Article 9,
as the case may be, of the Uniform Commercial Code in the relevant jurisdiction
by the Collateral Agent over the account subject to such Control Agreement.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent that,
from and after the date of this Agreement until the Obligations shall have been
paid in full and the Commitments shall have terminated, but subject to Section
5.11:
5.1 DELIVERY OF INSTRUMENTS, CERTIFICATED SECURITIES AND CHATTEL PAPER. If
any amount in excess of $5,000,000 payable under or in connection with any of
the Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall either (a) be delivered to the Collateral Agent, duly indorsed in a
manner satisfactory to the Collateral Agent, to be held as Collateral pursuant
to this Agreement, (b) be held by such Grantor free and clear of any Lien in
favor of any Person other than the Collateral Agent or (c) be subject to a Lien
permitted by the Credit Agreements.
5.2 MAINTENANCE OF INSURANCE. All insurance required to be maintained
pursuant to Section 6.07 of the L/C Agreement and Section 5.07 of the ESD
Agreement in the nature of casualty insurance covering the Collateral shall (a)
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, (b) name the Collateral Agent as
insured party or loss payee, (c) if reasonably requested by the Collateral
Agent, include a breach of warranty clause and (d) be reasonably satisfactory in
all other respects to the Collateral Agent.
5.3 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all material taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could
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not reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
5.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION. (a)
Such Grantor shall maintain the security interest created by this Agreement as a
perfected security interest (to the extent that perfection would be required for
the representation in Section 4.2 to be accurate) having at least the priority
described in Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Collateral Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts and any other relevant
Collateral, taking any actions necessary to enable the Collateral Agent to
obtain "control" (within the meaning of the applicable Uniform Commercial Code)
with respect thereto.
5.5 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except upon 15
days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of all additional executed financing statements and other
documents reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein :
(a) change its jurisdiction of organization from that referred to in
Section 4.3; or
(b) change its name, identity or corporate or other organizational
structure to such an extent that any financing statement filed by the Collateral
Agent in connection with this Agreement would become misleading.
5.6 NOTICES. Such Grantor will advise the Collateral Agent promptly, in
reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreements) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
5.7 INVESTMENT PROPERTY. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Collateral Agent
and the other Secured Parties, hold the same in trust for the Collateral Agent
and the other Secured
19
Parties and deliver the same forthwith to the Collateral Agent in the exact form
received, duly indorsed by such Grantor to the Collateral Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as
additional collateral security for the Obligations; PROVIDED that no Grantor
shall be required to deliver any such certificate or stock power with respect to
the Capital Stock of any Subsidiary that is not a Credit Party or a Material
Subsidiary. Any sums paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer at any time that an Event of Default
has occurred and is continuing shall be paid over to the Collateral Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case at any time that an Event of Default has occurred and is continuing any
distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Investment
Property shall be received by such Grantor at any time that an Event of Default
has occurred and is continuing, such Grantor shall, until such money or property
is paid or delivered to the Collateral Agent, hold such money or property in
trust for the Collateral Agent and the other Secured Parties, segregated from
other funds of such Grantor, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Collateral Agent, such Grantor
will not create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement and except for Liens permitted by the Credit Agreements.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it and (ii) the terms of Sections 6.4(c) and 6.8 shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
pursuant to Section 6.4(c) or 6.8 with respect to the Investment Property issued
by it.
5.8 RECEIVABLES. (a) Such Grantor will continue to collect, service and
administer the Receivables in a manner consistent with its past practice except
as may otherwise be required in the ordinary course of business or to realize or
recover the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables of the Grantors.
5.9 INTELLECTUAL PROPERTY. No later than 30 days after the end of each
fiscal quarter (starting with the fiscal quarter ending September 30, 2006), the
Borrower shall deliver to the Collateral Agent a true, correct and complete list
of each material U.S. Copyright, Patent and Trademark (including Class 1
applications for Patents but excluding, in each case, all other applications
therefor) owned by the Grantors as of the last day of such fiscal quarter. Upon
request of the Collateral Agent, the applicable Grantor shall execute and
deliver, and have recorded, any and all agreements, instruments, documents, and
papers as the Administrative Agent may reasonably request to evidence the
Collateral Agent's and the other Secured Parties' security interest in any such
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.
20
5.10 MAINTENANCE OF CONTROL AGREEMENTS. Such Grantors collectively shall
cause at all times an aggregate amount of at least $1,000,000,000 of cash and
Permitted Investments to be held in deposit or custody accounts that are subject
to control agreements, duly executed by such applicable Grantor and the
applicable bank, other financial institution or securities intermediary at which
each such account is maintained, in form and substance reasonably satisfactory
to the Administrative Agent (each a "CONTROL AGREEMENT"), and which agreements
shall grant the Collateral Agent "exclusive dominion and control" over such
accounts and entitle the Collateral Agent to block any withdrawal of assets
therefrom upon the occurrence and during the continuance of an Event of Default.
5.11 COMPLIANCE. Notwithstanding the foregoing, (i) prior to consummation
of the Alcatel Merger, no Grantor shall be required to comply with Section 5.1,
the first sentence of Section 5.7(a) and Section 5.9; PROVIDED, that if the
closing of the Alcatel Merger shall not occur by or before March 31, 2007, then
each Grantor shall be required to satisfy the requirements of Section 5.1 and
the second sentence of Section 5.9 by or before April 30, 2007 and (ii)
following consummation of the Alcatel Merger, no Grantor shall be required to
comply with Sections 5.1 to 5.10.
SECTION 6. REMEDIAL PROVISIONS
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES. (a) The Collateral Agent shall
have the right to make test verifications of the Receivables constituting
Collateral hereunder in any manner and through any medium that it reasonably
considers advisable no more than once a year and, if an Event of Default shall
have occurred and be continuing, as often as reasonably requested and agreed to
between the Borrower and the Collateral Agent, and each Grantor shall furnish
all such assistance and information as the Collateral Agent may require in
connection with such test verifications, PROVIDED that the Collateral Agent
shall not communicate with the obligors under such Receivables except as
permitted by Section 6.2. At any time and from time to time, upon the Collateral
Agent's request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others satisfactory to the Collateral
Agent to furnish to the Collateral Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, such Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables constituting Collateral hereunder, subject to the
Collateral Agent's direction and control, and the Collateral Agent may curtail
or terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Collateral Agent at any
time after the occurrence and during the continuance of an Event of Default, any
payments of such Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.6, and (ii) until so turned over, shall be held by such Grantor in
trust for the Collateral Agent and the other Secured Parties, segregated from
other funds of such Grantor. Each such deposit of Proceeds of such Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) Upon the occurrence and during the continuance of an Event of Default,
at the Collateral Agent's request, each Grantor shall deliver to the Collateral
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables constituting
Collateral hereunder, including, without limitation, all original orders,
invoices and shipping receipts.
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6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables constituting Collateral hereunder to verify
with them to the Collateral Agent's satisfaction the existence, amount and terms
of any such Receivables.
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables constituting Collateral hereunder that such
Receivables have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that payments in respect thereof shall be made directly to
the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Collateral Agent nor any other Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Party of any payment relating thereto, nor shall the
Collateral Agent or any other Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.3 DEPOSIT ACCOUNTS AND INVESTMENT PROPERTY. (a) The Collateral Agent in
its own name or in the name of others may at any time communicate with any bank,
other financial institution or securities intermediary with which a Deposit
Account or Investment Property in the name of the Borrower or any Subsidiary
Guarantor is maintained to verify to the Collateral Agent's satisfaction the
amounts on deposit in each such Deposit Account or securities account that
constitutes Investment Property.
(b) Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have full authority to give a Notice of Sole Control
to any bank, other financial institution or securities intermediary party to a
Control Agreement. The Collateral Agent shall have no obligation to rescind or
revoke such Notice of Sole Control until such time as the Event of Default has
been waived or cured and no other Event of Default is then continuing.
6.4 PLEDGED STOCK. (a) Unless an Event of Default shall have occurred and
be continuing and the Collateral Agent shall have given notice to the relevant
Grantor of the Collateral Agent's intent to exercise its corresponding rights
pursuant to Section 6.4(b), each Grantor shall be permitted to receive all cash
dividends paid in respect of the Pledged Stock and all payments made in respect
of the Pledged Notes, to the extent permitted in the Credit Agreements, and to
exercise all voting and corporate or other organizational rights with respect to
the Investment Property; PROVIDED, HOWEVER, that no vote shall be cast or
corporate or other organizational right exercised or other action taken which,
in the Collateral Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
any Credit Agreement, this Agreement or any other Credit Document.
(b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and make application thereof to the Obligations in the order
specified in the Collateral Sharing Agreement, and (ii) any or all of the
Investment Property shall be registered in the
22
name of the Collateral Agent or its nominee, and the Collateral Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Collateral Agent of any right, privilege or option pertaining to
such Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.
6.5 PROCEEDS TO BE TURNED OVER TO COLLATERAL AGENT. In addition to the
rights of the Collateral Agent and the other Secured Parties specified in
Section 6.1 with respect to payments of Receivables constituting Collateral
hereunder, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Collateral Agent and the other
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Collateral Agent
in the exact form received by such Grantor (duly indorsed by such Grantor to the
Collateral Agent, if required). All Proceeds received by the Collateral Agent
hereunder shall be held by the Collateral Agent in a Collateral Account
maintained under its sole dominion and control. All Proceeds while held by the
Collateral Agent in a Collateral Account (or by such Grantor in trust for the
Collateral Agent and the other Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.6.
6.6 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon by the
Borrower and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent's election, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, in payment of the Obligations in
the order specified in the Collateral Sharing Agreement.
6.7 CODE AND OTHER REMEDIES. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof,
23
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Collateral Agent or any
other Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Collateral Agent or
any other Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Collateral Agent's request, to
assemble the Collateral and make it available to the Collateral Agent at places
which the Collateral Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. Notwithstanding the foregoing, it is understood and
agreed that any assignment of any Patent to the Collateral Agent or any other
Person shall be subject to any licenses (and the rights granted therein)
existing at the time of such assignment with respect to such Patent. The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant
to this Section 6.7, after deducting all reasonable costs and expenses of every
kind incurred in connection therewith or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Collateral Agent and the other Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in the order specified in the Collateral
Sharing Agreement, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Collateral Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and demands
it may acquire against the Collateral Agent or any other Secured Party arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
6.8 REGISTRATION RIGHTS. (a) If the Collateral Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.7, and if in the opinion of the Collateral Agent it is necessary or advisable
to have the Pledged Stock, or that portion thereof to be sold, registered under
the provisions of the Securities Act, the relevant Grantor will cause the Issuer
thereof to (i) execute and deliver, and cause the directors and officers of such
Issuer to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of the Collateral
Agent, necessary or advisable to register the Pledged Stock, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its
reasonable best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Collateral
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other
24
terms less favorable than if such sale were a public sale and, notwithstanding
such circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. The Collateral Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit the Issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its reasonable best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.8 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.8 will cause irreparable injury to the Collateral Agent and the
other Secured Parties, that the Collateral Agent and the other Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.8 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under any
Credit Agreement.
6.9 DEFICIENCY. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent or any other Secured Party to collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a) Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any Receivable
constituting Collateral hereunder or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the purpose
of collecting any and all such moneys due under any such Receivable or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property referred to in Section 4.8 or
5.9, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Agent may request to
evidence the Collateral Agent's and the other Secured Parties' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and
the costs thereof;
25
(iv) execute, in connection with any sale provided for in Section 6.7 or
6.8, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due thereunder directly
to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or
demand for, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as
the Collateral Agent may deem appropriate; (7) subject to any licenses (and
the rights granted therein) existing at the time of such assignment, assign
any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do, at
the Collateral Agent's option and such Grantor's expense, at any time, or from
time to time, all acts and things which the Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral and the Collateral Agent's
and the other Secured Parties' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor might
do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein after notice of its failure to do so, the Collateral Agent, at
its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the Alternate Base Rate plus 2.00% from the
date of payment by the Collateral Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 DUTY OF COLLATERAL AGENT. The Collateral Agent's sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, any other Secured
Party nor any of their respective officers, directors, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or any other
Person or to take any
26
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Collateral Agent and the other Secured Parties hereunder
are solely to protect the Collateral Agent's and the other Secured Parties'
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any other Secured Party to exercise any such powers. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to any applicable law, each
Grantor authorizes the Collateral Agent to file or record financing statements
and other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction. Each Grantor authorizes the Collateral Agent to use the collateral
description "all personal property" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Collateral Agent of any
financing statement with respect of the Collateral made prior to the date
hereof.
7.4 AUTHORITY OF COLLATERAL AGENT. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the other
Secured Parties, be governed by the applicable Credit Agreement, the Collateral
Sharing Agreement and such other agreements with respect thereto as may exist
from time to time among them, but, as between the Collateral Agent and the
Grantors, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.07 of each of the Credit Agreements.
8.2 NOTICES. All notices, requests and demands to or upon the Collateral
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 10.01 of the L/C Agreement and Section 9.01 of the ESD Agreement;
PROVIDED that (a) any such notice, request or demand to or upon the Collateral
Agent shall be addressed to it at 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx
00000, Attention of Xxxxxxx Xxxxxxx (Facsimile No. 713-750-2878) and (b) any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Collateral Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Collateral Agent or any other Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A
27
waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or such Bank would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Guarantor agrees to pay
or reimburse the Collateral Agent for all its costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Credit Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel to the Collateral Agent.
(b) Each Guarantor agrees to pay, and to save the Collateral Agent harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Collateral Agent harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement to the extent the Borrower would be required to
do so pursuant to Section 11.05 of the L/C Agreement and Section 10.05 of the
ESD Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreements and the
other Credit Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent and the other Secured Parties and their successors and assigns;
PROVIDED that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Agent.
8.6 SET-OFF. If an Event of Default shall have occurred and be continuing
under clause (a) or (b) of Article IX of the L/C Agreement and Article VIII of
the ESD Agreement, or if any Letters of Credit shall be surrendered and
terminated pursuant Article IX of the L/C Agreement and Article VIII of the ESD
Agreement, each Grantor hereby irrevocably authorizes the Collateral Agent, each
Bank and each of the Banks' respective Affiliates, at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by the Collateral Agent, such Bank
or Affiliate to or for the credit or the account of such Grantor against any of
and all the obligations and liabilities of such Grantor now or hereafter
existing under this Agreement or any other Credit Document held by the
Collateral Agent or such Bank, irrespective of whether or not the Collateral
Agent or such Bank shall have made any demand under this Agreement or such other
Credit Document and although such obligations, liabilities or claims may be
contingent or unmatured. The rights of the Collateral Agent and each Bank under
this Section are in addition to other rights and remedies (including other
rights of setoff) which the Collateral Agent or such Bank may have.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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8.8 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Credit Documents represent
the agreement of the Grantors, the Collateral Agent and the other Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Agent or
any other Secured Party relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Credit Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Grantor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
8.13 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents to which it is a
party;
29
(b) neither the Collateral Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Credit Documents, and the
relationship between the Grantors, on the one hand, and the Collateral Agent and
the other Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among Secured
Parties or among the Grantors and the Secured Parties.
8.14 ADDITIONAL GRANTORS; ADDITIONAL EXTERNAL SHARING DEBT. (a) Each
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to Section 6.11 of the L/C Agreement or Section 5.11 of the ESD
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
(b) The Borrower may, to the extent permitted by the Credit Agreements,
designate additional External Specified Debt (including, without limitation,
incremental increases in the aggregate principal amount of Indebtedness
constituting External Sharing Debt) as External Sharing Debt; PROVIDED, that,
(i) with respect to each such item of additional External Specified Debt, the
Borrower shall have delivered to the Collateral Agent a completed and executed
External Sharing Debt Supplement and (ii) the conditions set forth in Section
5.02 of the L/C Agreement and Section 4.02 of the ESD Agreement shall have been
satisfied prior to and after giving effect to such designation. It is understood
that after an item of External Sharing Debt is designated as such on SCHEDULE 6
or in an External Sharing Debt Supplement accepted by the Collateral Agent, (i)
the holder of such External Sharing Debt shall be entitled to the benefits of
this Agreement and (ii) it shall not be necessary to designate increases in the
amount outstanding in respect of such External Sharing Debt unless the amount so
outstanding is to exceed the maximum amount thereof specified on SCHEDULE 6 or
in the External Sharing Debt Supplement relating thereto, as applicable;
PROVIDED, that no later than 15 days after the end of each fiscal quarter, each
holder of External Sharing Debt shall provide to the Collateral Agent a summary
of the amount of External Sharing Debt outstanding as of the last day of such
fiscal quarter.
8.15 RELEASES. (a) Upon the earlier of (x) the consummation of the Alcatel
Merger and (y) such time as the Borrower Obligations and the External Sharing
Debt Obligations shall have been paid in full or fully cash collateralized and
the Commitments have been terminated, the Collateral shall be released from the
Liens created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Collateral Agent and each
Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors; PROVIDED, that in the case of External Sharing Debt
Obligations that are calculated on a xxxx-to-market basis, "fully cash
collateralized" shall mean (i) the deposit of cash collateral in an amount equal
to 100% of the market value of such Obligation on the date of termination of
this Agreement and any customary interest, fees, expenses or charges that the
holder of such Obligation may require, and (ii) either (x) the execution and
delivery by the Borrower to the holder of such Obligation of a suitable
amendment to any ISDA and CSA agreements (or if such agreements are not in
place, any new ISDA and CSA Agreements, as applicable) applicable to such
Obligation on terms and conditions mutually satisfactory to the Borrower and the
holder of such Obligation or (y) the close out of such position which
constitutes such Obligation. At the request and sole expense of any Grantor
following any such termination, the Collateral Agent shall execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
30
(b) If any of the Collateral shall be Disposed of by any Grantor in a
transaction permitted by the Credit Agreements or if any of the Collateral is
the subject of any sale-leaseback, CMO Transaction or receivables securitization
not prohibited by the Credit Agreements or that has been consented to under
Section 11.07 of the L/C Agreement and Section 10.07 of the ESD Agreement
respectively, then such Collateral shall thereupon be released from the Liens
created hereby.
(c) A Subsidiary Guarantor shall be released from its obligations hereunder
in the event that all the Capital Stock of such Subsidiary Guarantor shall be
Disposed of in a transaction permitted by the Credit Agreements or in the event
that a portion of the Capital Stock of such Subsidiary Guarantor shall be
Disposed of in a transaction permitted by the Credit Agreements and, after
giving effect to such transaction, such Subsidiary Guarantor ceases to be a
Subsidiary. The Borrower shall notify the Collateral Agent if any Subsidiary
Guarantor is so released and such notice shall identify the relevant Subsidiary
Guarantor and the terms of the Disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreements and the other Credit Documents.
(d) Upon the request of the Borrower , the Collateral Agent shall release
from the Liens created hereby any Collateral that constitutes any accounts
receivable and other contract rights to payment payable to the Borrower or any
Domestic Subsidiary in an amount not to exceed $25,000,000 per fiscal quarter;
so long as no Default or Event of Default has occurred and is continuing or
would result from the sale or assignment thereof.
(e) The Collateral Agent will, at any time, upon the written instruction of
the Administrative Agent, at the sole expense of the relevant Grantor, execute
and deliver to the relevant Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on the
Collateral specified by the Administrative Agent in such instruction.
(f) At the request and sole expense of any Grantor following any release of
Collateral under this Section, the Collateral Agent shall deliver to such
Grantor such released Collateral held by the Collateral Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such release.
(g) When any Control Agreement shall no longer be required by the terms of
this Agreement, the Collateral Agent will, upon the written request of the
relevant Grantor, and at the sole expense of such Grantor, execute and deliver
to the relevant Grantor and the bank which is party to such Control Agreement
(i) a written notification that the security interests of the Collateral Agent
in the relevant account have been terminated, and (ii) any other documents
reasonably necessary or desirable to effect the termination of such Control
Agreement pursuant to the terms thereunder.
(h) By acceptance of the benefits hereof, each Secured Party acknowledges
and consents to the provisions of this Section 8.15, agrees that the Collateral
Agent shall incur no liability whatsoever to any Secured Party for any release
effected by the Collateral Agent in accordance with this Section 8.15 and agrees
that the Administrative Agent shall incur no liability whatsoever to any Secured
Party for any release directed or consented to by it in accordance with the L/C
Agreement.
8.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
31
8.17 COLLATERAL SHARING AGREEMENT. By becoming a party to this Agreement,
each Grantor agrees to be bound by the terms of the Collateral Sharing Agreement
and, without limiting the generality of the foregoing, expressly agrees that all
obligations and liabilities of a Grantor thereunder apply to such Grantor with
the same force and effect as if such Grantor were a signatory thereto.
8.18 JUDGMENT CURRENCY. (a) If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Collateral Agent could purchase
the first currency with such other currency in the city in which it normally
conducts its foreign exchange operation for the first currency on the Business
Day preceding the day on which final judgment is given.
(b) The obligation of each Grantor in respect of any sum due from it to the
Collateral Agent hereunder shall, notwithstanding any judgment in a currency
(the "JUDGMENT CURRENCY") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the "AGREEMENT
Currency"), be discharged only to the extent that on the Business Day following
receipt by the Collateral Agent of any sum adjudged to be so due in the Judgment
Currency the Collateral Agent may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency; if the amount of
Agreement Currency so purchased is less than the sum originally due to the
Collateral Agent in the Agreement Currency, such Grantor agrees notwithstanding
any such judgment to indemnify the Collateral Agent against such loss, and if
the amount of the Agreement Currency so purchased exceeds the sum originally due
to the Collateral Agent, the Collateral Agent agrees to remit to such Grantor
such excess.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
LUCENT TECHNOLOGIES INC.
By: /S/ XXXX XXXXXXX
----------------
Title: Vice President & Treasurer
LUCENT TECHNOLOGIES INTERNATIONAL INC.
By: /S/ XXXXXXX X. XXXXXXX
----------------------
Title: Vice President
ASCEND COMMUNICATIONS, INC.
By: /S/ XXXXXXX X. XXXXXXX
----------------------
Title: Vice President
STRATUS COMPUTER, INC.
By: /S/ XXXXXXX X. XXXXXXX
----------------------
Title: Vice President
STRATUS WORLD TRADE CORPORATION
By: /S/ XXXXXXX X. XXXXXXX
----------------------
Title: Vice President
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended and
Restated Guarantee and Collateral Agreement dated as of August 11, 2006 (the
"AGREEMENT"), made by the Grantors parties thereto for the benefit of JPMorgan
Chase Bank, N.A., as Collateral Agent. The undersigned agrees for the benefit of
the Collateral Agent and the other Secured Parties as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The terms of Sections 6.4(c) and 6.8 of the Agreement shall apply
to it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
pursuant to Section 6.4(c) or 6.8 of the Agreement.
[NAME OF ISSUER]
By:
------------------------------------
Name:
Title:
Address for Notices:
------------------------------------
------------------------------------
------------------------------------
Fax:
Annex 1 to
GUARANTEE AND COLLATERAL AGREEMENT
ASSUMPTION AGREEMENT, dated as of ________________, 200_, made by
______________________________ (the "ADDITIONAL GRANTOR"), in favor of JPMorgan
Chase Bank, N.A., as Collateral Agent (in such capacity, the "COLLATERAL AGENT")
for the banks and other financial institutions or entities (the "BANKS") parties
to the Credit Agreements referred to below. All capitalized terms not defined
herein shall have the meaning ascribed to them in the Guarantee and Collateral
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, in connection with the Credit Agreements, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Amended and Restated Guarantee and Collateral Agreement, dated as of August
11, 2006 (as amended, supplemented or otherwise modified from time to time, the
"GUARANTEE AND COLLATERAL AGREEMENT"), in favor of the Collateral Agent for the
benefit of the Secured Parties referred to therein;
WHEREAS, the Credit Agreements require the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. GUARANTEE AND COLLATERAL AGREEMENT. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section
8.14(a) of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement is true and correct on and as the date
hereof (after giving effect to this Assumption Agreement) as if made on and as
of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
2
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
---------------------------------------
Name:
Title:
Annex 1-A to
ASSUMPTION AGREEMENT
SUPPLEMENT TO SCHEDULE 1
SUPPLEMENT TO SCHEDULE 2
SUPPLEMENT TO SCHEDULE 3
SUPPLEMENT TO SCHEDULE 4
SUPPLEMENT TO SCHEDULE 5
SUPPLEMENT TO SCHEDULE 6
SUPPLEMENT TO SCHEDULE 8
SUPPLEMENT TO SCHEDULE 9
SUPPLEMENT TO SCHEDULE 10
SUPPLEMENT TO SCHEDULE 11
Annex 2 to
GUARANTEE AND COLLATERAL AGREEMENT
FORM OF EXTERNAL SHARING DEBT SUPPLEMENT
JPMorgan Chase Bank, N.A.,
as Collateral Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Re: ADDITIONAL EXTERNAL SHARING DEBT
Ladies and Gentlemen:
Pursuant to Section 8.14(b) of the Amended and Restated Guarantee and
Collateral Agreement, dated as of August 11, 2006 (the "GUARANTEE AND COLLATERAL
AGREEMENT", the terms defined therein being used herein as therein defined),
made by Lucent Technologies Inc., a Delaware corporation, and the other Grantors
referred to therein in favor of JPMorgan Chase Bank, N.A., as Collateral Agent,
the Borrower hereby designates the Indebtedness, liabilities and other
obligations described on the attachment hereto as "External Sharing Debt".
The holder of the External Sharing Debt designated herein, by its
acknowledgement hereof, (a) confirms the accuracy of the description of such
External Sharing Debt, including the type, maximum amount and relevant currency
thereof, (b) confirms that it has received a copy of each of the Guarantee and
Collateral Agreement and the Collateral Sharing Agreement and agrees that, by
its acceptance of the benefits of such agreements, it agrees to the terms of
such agreements, (c) acknowledges that the administration of the collateral
described in the Guarantee and Collateral Agreement and in the Mortgages
delivered pursuant to any of the Credit Agreements will be made in the sole
discretion of the Administrative Agent, (d) acknowledges that upon payment in
full of the Borrower Obligations and External Sharing Debt Obligations and
termination of the Commitments, the Guarantee and Collateral Agreement shall
terminate and the Collateral shall be released from the Liens created thereby,
(e) acknowledges that the Borrower shall not guarantee, pursuant to Section 2 of
the Guarantee and Collateral Agreement, the payment of the External Sharing Debt
designated herein if the Borrower has separately guaranteed the payment of all
or any portion of such External Sharing Debt and such guarantee is in full force
and effect and (f) confirms that its address for notices is as set forth below
the signature of such holder.
It is understood that after this External Sharing Debt Supplement is
accepted by the Collateral Agent, (a) the holder of the External Sharing Debt
designated herein shall be entitled to the benefits of the Guarantee and
Collateral Agreement and (b) it shall not be necessary to designate increases in
the amount outstanding in respect of such External Sharing Debt unless the
amount so outstanding is to exceed the maximum amount thereof specified herein;
PROVIDED that no later than 15 days after the end of each fiscal quarter, the
holder of the External Sharing Debt designated herein shall provide to the
Collateral Agent a summary of the amount of External Sharing Debt outstanding as
of the last day of such fiscal quarter.
Very truly yours,
LUCENT TECHNOLOGIES INC.
By:
--------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
-----------------------------------
[Name of Holder of External Sharing Debt]
By:
--------------------------------
Name:
Title:
Address:
------------------------
Attention:
----------------------
Telephone:
----------------------
Facsimile:
----------------------
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
By:
--------------------------------
Name:
Title:
[Please attach a spreadsheet or other description of the
External Sharing Debt to be designated hereby, including
the type, maximum amount and relevant currency thereof.]
